SoundExchange Backs Off DRM for Webcasters

Radio Free Europe writes "The big news is not that SoundExchange has repackaged the same royalty proposal that small webcasters rejected in May, but that SoundExchange has dropped its previous insistence that DRM be a part of any agreement. 'On the bright side, it doesn't appear as if DRM is part of the terms this time around. Previously, SoundExchange stated that webcasters who agree to the deal must actively "work to stop users from engaging in 'streamripping'." This began a war of words between the Digital Media Association (DiMA) and SoundExchange, with DiMA accusing SoundExchange of using rate negotiations to push mandatory DRM. SoundExchange's letter leaves the much-maligned streamripping issue out of the discussion, clearing at least that hurdle.'"

Comments

How to Run a Company into the Red

[Anonymous Coward]

SoundExchange has no idea how to create a viable business model. The money is not in charging the broadcasters, rather its in free promotion coupled with aggressive web marketing.

They should cut a deal with broadcasters that offers free music in exchange for relevant ads and links to store fronts were a listener can purchase the music. They should also offer discounts on packaged songs that they want to push on the market.

They could be influencing lesser known genres such as indie and techno, and popularize and brand a new line of music.

They could completely rule this new medium and reap the rewards, instead they are going to force broadcasters overseas and lose even more money to pirates.

I am just sitting here shaking my head in disbelief at the shear stupidity of their business model.

Re:How to Run a Company into the Red

[Chandon Seldon]

SoundExchange has no idea how to create a viable business model. The money is not in charging the broadcasters, rather its in free promotion coupled with aggressive web marketing.

That depends what you think their business model is.

Personally, I think the business model of getting Congress to pass a law saying that all music streamed on the internet is subject to a royalty payment to be payed to Sound Exchange - even for music being streamed by the copyright holder or with their direct authorization - is a pretty damn good way to make a profit.

Re:How to Run a Company into the Red

[loganrapp]

Last time I checked, sheep farmers don't skin their source of revenue.

Re:How to Run a Company into the Red

[djasbestos]

Business model is the same as any other perfect enterprise in this country: have people throwing money at you for doing nothing because it's the law. GREED.

In the words of Lewis Black: "Piggy, piggy, piggy, fuck, piggy, piggy." or "Even the greediest people in the world said: 'Wow...that's fuckin' greedy!'"

Re:How to Run a Company into the Red

[Abcd1234]

SoundExchange has no idea how to create a viable business model.

That's because they aren't a fucking for-profit business.

SoundExchange is a non-profit organization charged with dispensing licensing fees to artists, fees charged based on a compulsory licensing scheme set up by the government. A scheme that is *optional* (the broadcasters can always deal with the artists directly, if they're willing to shoulder that cost burden). Further, they are simply the *default* collecting agency. An artists is free to register a different one with the CRB if they like.

Re:How to Run a Company into the Red

[Abcd1234]

even for music being streamed by the copyright holder or with their direct authorization

Christ, this is so wrong it makes me want to cry. Broadcasters have *always* had the option to secure rights with the artists, themselves. The compulsory license is simply another route for broadcasters who don't want to jump through those hoops. The point being, if you have direct authorization from the artist, you can tell SE to go fuck themselves.

Honestly, how is it people here get this shit so completely wrong?

Re:How to Run a Company into the Red

[Chandon Seldon]

The point being, if you have direct authorization from the artist, you can tell SE to go fuck themselves.

That would make this situation slightly closer to being reasonable (but still pretty bad). Do you have any evidence that that is really how it works?

Re:How to Run a Company into the Red

[Abcd1234]

If you have authorization from the artist, SE has no standing to demand fees, as you've already negotiated a license. It's the very nature of a compulsory license that this is possible. Otherwise, the government would be removing from the artist the right to negotiate copyright on their own materials, which is *exceedingly* unlikely. Do I have any proof on hand? No. But anything else would be sheer, utter insanity.

Re:How to Run a Company into the Red

[Abcd1234]

Do you have any evidence that that is really how it works?

I do now, after some basic Google searching. See this page. To quote:

Does the Intended User Have to Use a Compulsory License?

No. The person wishing to make and distribute phonorecords of a nondramatic musical work may negotiate directly with the copyright owner or his or her agent. But, if the copyright owner is unwilling to negotiate or if the copyright owner cannot be contacted, the person intending to record the work may use the compulsory licensing provisions of the copyright law.

Re:How to Run a Company into the Red

[Abcd1234]

I should point out, I can't find any method of register a receiving agent with the CRB, so that part of my comment could very well be incorrect. The rest still stands, however.

Re:How to Run a Company into the Red

[The_Wilschon]

And most small webcasters probably don't have the money to spend N months in court just to say "Look, the artist gave me permission."

Re:How to Run a Company into the Red

[Reziac]

The concept is sound enough. The problem is that there is no other central body available to register artists who don't want to go thru SE.

Last time this topic went around, I suggested that outfits like CDBaby, as existing proven-reliable shared-profit music distribution entities, should institute a program where their artists can use them for these compulsory royalties -- and trust CDBaby (et al.) to set a rate as reasonable as they have for their other services.

At least it would be another option, that wouldn't require chasing down individual artists (who have a tendency to fall off the planet).

Re:How to Run a Company into the Red

[Abcd1234]

Months in court? What the fuck are you talking about? You go to court, you provide the license agreement, maybe subpoena the copyright holder, and the case is dismissed. And this is assuming the case was brought to trial in the first place (assuming a criminal prosecution is being attempted). Fortunately, your average prosecutor will likely not bother trying a case when there's clear evidence of no wrongdoing.

Honestly, how the fuck do you think the legal system works??

Re:How to Run a Company into the Red

[The_Wilschon]

Honestly, how the fuck do you think the legal system works?? Badly. It should work as you describe, but then again, it doesn't. Otherwise, when the RIAA sues a grandmother who has never even used a computer, she'd just walk in on her court day and say "I've never used a computer." and that would be that. Too bad it doesn't work that way. Also, I was definitely talking (and still am) about civil courts, since copyright infringement is not usually a criminal offense (you have to break the law really hard to make it criminal). I would be very surprised if SE did not sue webcasters who don't dance to their tune, even if those webcasters are perfectly legal. Lawsuits, even when they have no basis whatsoever, can be dragged out as long as the party wanting to drag it out still has some money. It's an abuse of the legal system, and it is a nasty strongarm tactic, but it works. Bankrupt your opponent in court, and then everyone else will be cowed by the example, so you can collect more protection racket money.

Re:How to Run a Company into the Red

[Abcd1234]

Also, I was definitely talking (and still am) about civil courts

Ah, then you truly are misinformed. SE has no standing regarding civil suits. They simply act as a receiving and dispensing agency for license fees. Only the copyright holder or a designated agent thereof can bring forth a civil suit.

Streamripping?

[Renig]

Isn't it legal to record your own version off of radio, etc. anyway? Why would that be legal but not recording off of a pc if it is legally played?

Re:Streamripping?

[advocate_one]

Streamripping produces a perfect copy of what was "transmitted" which can be copied perfectly ad infinitum. Recording off the radio onto tape produces a lower fidelity analog copy and subsequent generations of copying of that copy introduces more noise at each generation.

Re:Streamripping?

[bmo]

"Recording off the radio onto tape produces a lower fidelity analog copy and subsequent generations of copying of that copy introduces more noise at each generation."

You just time traveled from what decade?

FM Radio cards:

http://www.cel-soft.com/RadioCard.htm

http://www.tigerdirect.com/applications/SearchTool s/item-details.asp?EdpNo=2905632&CatId=1425

USB radio:

http://www.engadget.com/2004/07/13/usb-radio-dongl e/

http://www.redferret.net/?p=7760

So how is saving a stream off the net any different than recording from one of these?

--
BMO

Re:Streamripping?

[sssssss27]

Does HD Radio have any sort of DRM? I personally believe the best way is to set up the rules the same for Internet Radio as they do for traditional radio. That's as long as the Internet Radio is only streaming music to you like a traditional radio instead of allowing you to choose what is playing, when it's playing, etc.

Re:Streamripping?

[noidentity]

Case in point, I recently downloaded some nice drum and bass mix sets that were apparently recorded from some station called "Radio One" in England or something about ten years ago. My copy is a perfect duplicate of the original recording made from the air.

Re:Streamripping?

[scalarscience]

The copies that you 'found' somewhere have travelled long & far from where they would have been pushed via mainstream "music industry" backed means, meaning that as a promotional mechanism new frontiers have been found. You now know about "Radio One" and might google it and tune in via the internet, you might also search out more mixes by those D&B artists or even search out some of the individual tracks in the mixes. You might not also, but getting those files to you from the 'copy of the broadcast" cost Radio One and the artists represented nothing once it was recorded by the end user. Certainly they gained nothing *yet* at that point either, but since there was no cost *to Radio One* to get the music to you it's still balanced in theory. In practice the interests that dominate the industry perceive every digital copy as a 'loss' in the same way that allowing the public to have access to analog recording means was once considered a loss by them. And meanwhile terrestrial radio is stagnating to the point of being 'muzak' that you will replace with what you are 'really into' any chance you're given. Incidental to this is the fact that Radio One also still broadcasts online in a lower bitrate crappy realaudio stream for most of these programs, even as the BBC is attempting to pioneer broadband television.

Now let's discuss the 'no loss' in an mp3 recorded from that FM broadcast on Radio One 10 years ago (I'm not sure if they had DAB yet then, more on that in a second).. Certainly any FM transmission is not 'pure' but subject to some level of interference, crosstalk and distortion from EMF fluctions around it and flaws in the transmission & recieving devices. Then it must be 'digitized' which is quite often done with $0.50 ADC and crappy op amp, hideously innaccurate digital clock run into a cheap soundcard which is cpu bound and has 0 shielding on its line input. Some of the even cheaper computers double up the Line In and Mic In and simply attentuate the signal with a switch when you choose Line In. Hardly the paragon of transparent recording devices, and yes this includes almost all of the computer soundcards shipping to the non-pro audio sector back then. Turtle Beach and the AWE64 Gold were a bit better but still nothing that could be called 'perfect' or better than your Boom Box's tape deck.

That was 10 years ago... These days Radio One is broadcast via digital radio in the UK called "DAB" and most of the sets I've seen 'floating around' online are ripped directly from this. DAB is encoded into AAC I believe, 128Kbit or so. I could be wrong as I only know of it through people I know in the UK. However here the industry again waves the 'perfect copy' flag, much like it does (did?) with Satellite radio here in the US. However consider that 128Kbit AAC isn't "perfect" to begin with, and has introduced loss of quality and distortions into the original recording.

Did I mention that DAB devices exhibit dropouts and digital 'glitching' on occasion and so the transmission & decoding process isn't 'perfect' either?

Now your mp3 version is a 'reencode' and that means that the audio was converted from AAC to mp3, and I suspect not in a single step. Many of the applications that inexperienced users would have would convert from the 32bit AAC format to a PCM encoded format (WAV or AIFF) which may truncate things to 16bit, with or without dither (even with it's probably only TPDF which is used during the mixing stage and is NOT a 'mastering' quality and weighted dither). Then it gets encoded back mp3 to reach you. Users who don't know about Replaygain may even accidentally clip the data if it was already normalized to 0dBf before encoding to AAC. For Radio One over DAB it's more likely to be normalized to -0.3dBf after being heavily squashed dynamically (see the discussion on dynamics compression yesterday) and so a bit less likely, but it still happens.

In any case assume an ideal transcode from AAC to mp3 by an experienced user with a decent app

Re:Streamripping?

[MooUK]

DAB is *lower* quality than FM radio. The people responsible split the available spectrum into so many channels that each one is rather low quality. (Or so I understand it; I've naturally not seen firsthand proof, but then who has?)

Re:Streamripping?

[TheRaven64]

Why talk about FM? With a DAB receiver, you can record an exact digital copy of what was broadcast, without any noise coming from analogue transmission.

Re:Streamripping?

[rantingkitten]

Yeah, but most streaming radio stations aren't that high quality to begin with. There are a few out there that broadcast at 128k or sometimes even higher, but most don't. My own darkwave radio station (plug!) broadcasts at 96k, actually, and I do this for a few reasons, which are also the same reasons other broadcasters do it.

First, because it's a reasonably decent fidelity without hammering the connection (mine or yours). 96k isn't that fantastic but it's still quite a bang for the buck, as it were. Second, I don't believe you should get a perfect reproduction of the music I'm playing -- it's supposed to be analogous to an actual radio, where the fidelity isn't perfect either, and furthermore my station is free to listen to, and if you like the music you can go buy the albums or songs. I even provide a bunch of links to Amazon for currently featured artists I'm playing at the moment. My station is not intended to be a perfect copy.

All of this comes together to mean that you could streamrip mirrorshades radio all day long but you're not going to get something you'd want to burn to CD or put on your iPod. The quality is fine for a stream you're likely listening to at work or as background music for home, but if you were to rip it it'd be about the same as taping a song off the radio.

Most broadcasters I know or listen to operate the same way. Digitally Imported's free streams are 96k, Corrosion Radio streams at 64k mono, and most of the stations on live365 are 64k or below. I know afterhoursdjs goes up to 192k but they're one of few that do.

The main bullet point you should be taking away from my entire speech here is that despite SoundExchange's whinging, streamripping is an extremely minor concern. Most people don't know it can be done, most of those who know it can be done don't know how, and even if they do, who cares if they get a low-quality copy of a song?

Dump SoundExchange artists instead?

[BillGatesLoveChild]

SoundExchange http://en.wikipedia.org/wiki/SoundExchange is a subsidiary of the RIAA. Why do webcasters, radio stations and everyone else continue to play their game? There is a lot of good music out there; Always has been, but now it's a listener's market. The web means we no longer need the RIAA to choose which acts we should listen to. So why don't these guys, instead of waltzing with the RIAA, tell them to get bent and promote other artists instead?

Can you imagine the looks on the faces of the RIAA Shill Lawyers when the webcasters say: "You're absolutely right. We're not going to give a single one of your artists a second of airtime again. Now get out before we call the cops. Watch that step. Ooooh that's a dozy! Doris, if he doesn't pick himself off the floor in thirty seconds have security bring the Rottweiler. Oops sorry I trod on your hand." You get the idea... So webcasters, stop acting like wusses.

Re:Dump SoundExchange artists instead?

[Short Circuit]

I love Pandora, and I listen to it for five or six hours every day. However, they won't stream anything you can't buy on CD, which means some music is hard to come by. The soundtrack to MechWarrior 2, for example. Or the Doom series and Quake series soundtracks. Or the vast quantities of module-format music out there that I've grown to love. (Granted, the quality of that last can be dreadful...)

It's unfortunate. There's lots of great music out there (even music you can legally download for free), but Pandora's stuck on the CD model.

Re:Dump SoundExchange artists instead?

[BootNinja]

The problem with your suggestions is that SoundExchange, while being a subsidiary of the RIAA is still authorized to collect all compulsory royalties due whether or not they are due to RIAA members. So your suggestion holds no water.

Re:Dump SoundExchange artists instead?

[SaturnNiGHTS]

that's correct...soundexchange is still legally allowed to take royalties on any music that is taken at any time, in case that the artist later signs with the riaa, to possibly take some of their ill-collected royalties back.

Sox doing DRM?

[flyingfsck]

Good grief, why would Sox get involved with DRM? Maybe to add some echo?

DRM is dead!

[Newer Guy]

This doesn't surprise me. DRM is dead. How could SoundExchange possibly require it when most of the RIAA members now favor retail sales of DRM free music? Even WalMart is getting into the act. Why? because they found that they can charge MORE for DRM free music and the consumer will pay it. It only took the music industry TEN YEARS to figure out what most of US knew all along!

Re:DRM is dead!

[beakerMeep]

As much as I would like to agree with you, there isn't anything that says they won't re-introduce DRM later in the negotiations. DRM was ALWAYS a bargaining chip and it was always in play. What they did at first was to say "well here are these exorbitantly high rates -- accept them or else." Then they pretended to throw a bone by saying "well, we'll delay the rate but you need to include DRM" but now they are just going right back to where they started, just this time it's the other way around. They are using DRM as a bargaining chip to push high rates. They don't appear to be making any compromises here other than cosmetic PR junk.

This easily could have been SoundExchange's plan all along. Somehow I think we're just going around in circles here until the issue fizzsles from public outrage to public apathy. People will get tired of hearing about it and start to wonder why all these whiny radio stations dont just pay. And since SoundExchange will (and is demanding) that the deal be retroactive, it wont matter much to them. The only real threat to SoundExchange is the Internet Radio Equality Act

Soundexchange???

[newgalactic]

So, I've heard of Soundexchange but I don't know who they are and why we have to listen to them. What do they have to do with internet radio stations who play non-RIAA music. I ask that because I heard that they put the "squeeze" on everyone, no matter what they play. NPR has even been talking about them.

Re:Soundexchange???

[beakerMeep]

http://en.wikipedia.org/wiki/SoundExchange

basically, they were created as an arm of the RIAA and then spun off to a independent (and I use the characterization lightly here) non-profit and the government designated them to collect royalties for all artists. I think it boils down to the fact that this allows for small artists to know where they need to go to find out if anyone has been playing their music and to get paid for it. how well this part works i have no idea -- but that is the justification behind it I think. And because of this, it made a bunch of lawmakers feel better about passing the DMCA.

Re:Soundexchange???

[Cold-NiTe]

[...]that this allows for small artists to know where they need to go to find out if anyone has been playing their music and to get paid for it. how well this part works i have no idea[...]

Not very well to be honest. From what we have previously seen, I believe this is used as more of an excuse to charge for someone else's music whom they have no rights to, and then force those small artists to come begging to them for money that (A.) they (the small artist) had never intended to charge (with regards to their music, having intended it to be free in the first place) and (B.) should have gone immediately to the small artist in the first place, instead of some kind of anonymous group of thugs using strong arm tactics to charge for protection money.

Not only does this serve the motives of it's parent organization, it's proof that this entire conflict has escalated beyond simply music. Wrote a suddenly popular independent song and distributed it freely recently? SoundExchange is going to bill them anyways, regardless about your intentions or how you feel. They may not even tell you they did it.

Think about how wrong that is for a second...

Re:Soundexchange???

[Anonymous Coward]

SoundExchange collects royalties for the broadcast of music. They are effectively (but not technically) part of the RIAA, but due to a law that mentions them SPECIFICALLY, they have a government-granted monopoly to collect royalties for ALL music broadcast, not just music from RIAA artists. The idea behind that law, in principle, is to make it easier for artists to collect the royalties they're due by giving them one go-to-guy for getting the money from. Without such a system, broadcasters would have to work out a separate deal with each copyright holder whose music they wanted to play in order to get the rights. (And they still have the option of doing so if they want to avoid dealing with SoundExchange.)

In practice this system doesn't work so well because SoundExchange has some pretty stringent requirements for an artist to become a "member" and get the money they're owed, like promising not to make other royalty arrangements besides using SoundExchange. (Which rather neuters the caveat about broadcasters still being able to strike their own agreements with copyright holders.) Also, they charge fairly high fees for the service they provide in collecting these royalties, making the final payout for artists who don't get large amounts of playtime very small. As such, most of their members are the big labels.

One of SoundExchange's powers is that they get to set the standard royalty rate that broadcasters pay them. They have to review and renew these rate agreements every so often or they expire. Back in 2006, the rates they had set for internet radio expired, and since they didn't have a new rate structure ready to roll out, they said everyone could keep paying the old rates on a probationary basis until they figured out a new rate structure.

In early 2007, they announced the new rates they were going to put in place for internet radio. The rates were shocking - literally an order of magnitude greater than what other kinds of broadcasters had to pay. Part of this is because their definitions of a "performance" and a "channel" inflated the number of times internet broadcasters had to pay compared to other broadcasters. (ex: Seven people listening to the same sattelite radio broadcast requires payment for one performance, but seven people listening to the same internet radio broadcast requires payment for seven performances.) Also, SoundExchange removed the option to pay royalties as a portion of the station's income, requiring a set fee per performance. (Previously, many internet radio stations that don't turn a profit stayed afloat by paying a percentage of the $0 they made - $0.) Furthermore, the new rates would be retroactive back to when the old rates expired in 2006, meaning many radio stations would suddenly owe SoundExchange astounding amounts of money for things they did believing they were paid up under the old rates system.

Some say these new rates were fueled by a concerted effort to kill independent internet radio, which is a threat to payola-controlled terrestrial radio. Others say they were fueled merely by a total lack of understanding about how the internet works, such as treating every listener as a new broadcast. Regardless, a hue and cry went up from the internet radio broadcasters saying this would bankrupt all the independent broadcasters and even some of the largest broadcasters. Court cases were filed, radio stations began threatening to move overseas, bills were placed before Congress that would limit the royalties, SaveNetRadio.org was started up so people could alert their congresspersons about how they felt, negotiations began between broadcasters and SoundExchange - search Slashdot for the dozen other posts on this topic if you want to hear specifics. And that leaves us where we are today - ostensibly the new rates should have gone into effect a few months ago, but SoundExchange has held off while negotiations are ongoing.

RE; FM Radio cards:

[Technician]

FM Radio cards:

http://www.cel-soft.com/RadioCard.htm

http://www.tigerdirect.com/applications/SearchTool s/item-details.asp?EdpNo=2905632&CatId=1425

USB radio:

http://www.engadget.com/2004/07/13/usb-radio-dongl e/

http://www.redferret.net/?p=7760

The Tigerdirect link is also a TV tuner card. You can record more than just the radio.

I have one in my Ubuntu box. It's kind of a pain to tune with the command line, but it works well. As an added bonus, it ignores Macrovision for converting your old VHS tapes. (oops is saying that a DMCA violation?)

Re:RE; FM Radio cards:

[5of0]

It's kind of a pain to tune with the command line, but it works well.

May I suggest MythTV?
I tried it back with 6.06 and it was way more of a pain than I was willing to go through (I don't even have a TV tuner), but I just tried it with 7.04 (Feisty Fawn) and it's in the repositories and worked like a charm - it was dead easy to set up. Now as I said, I don't have a TV tuner, so I don't know how much more effort that would be. But if you've already got it working on the command line, I would guess it should work fine. If you haven't given it a try, or have with previous versions, I'd recommend looking at it again. I've got it running FCEUltra/MAME/ZSNES just fine. (All with games that I own...of course...)

Re:RE; FM Radio cards:

[Technician]

May I suggest MythTV?

Absolutely. I have had this hardware for only a month and I don't have all the toys installed yet. I just built the Core 2 Duo box and tossed Feisty on it last month. Give me time to finish configuration. Priority is first getting DVD Author to work to burn captured VHS tapes to DVD.

They know exactly what they are doing.

[twitter]

SoundExchange has no idea how to create a viable business model. The money is not in charging the broadcasters, rather its in free promotion coupled with aggressive web marketing. They should cut a deal with broadcasters that offers free music in exchange for relevant ads and links to store fronts were a listener can purchase the music.

You are kidding?

SoundExchange has been given monopoly status. Everyone has to pay fees to them, and this tiny concession is meaningless when you consider the big picture: they get to pick and chose who runs internet "radio" stations. They can block all but RIAA members and force membership. As soon as they are sure of control, all the concessions will be undone and prices will be hiked up to terrestrial broadcast levels. Kiss variety, choice and artistic freedom goodbye.

It's a license to extend their little analog empire into the future. They are going to keep limiting who the "winners" are. A small number of acts will continue to be "pushed" as you put it, at the exclusion of all others. Bands that want to give their music away and advertise in the way you think would be best for them are not going to be able to do it. They are going to have to crawl on their knees and "prove" themselves in some "target" market, just like they do now, before internet radio stations will "risk" playing them. Without the odious fees the old industry is going to impose, the costs of running a web broadcast are very low, there are no risks and everyone is free to give their music away.

There is absolutely no justification for this. There is no scarce public resource involved and therefore no reason to regulate the internet. Your rights have been sold and the RIAA is going to keep raking in the cash at everyone else's expense.

Re:They know exactly what they are doing.

[iminplaya]

Your rights have been sold and the RIAA is going to keep raking in the cash at everyone else's expense.

I wish they were sold. I might have collected a healthy profit. No, what happened is that they were given away... by us.

Re:They know exactly what they are doing.

[jmccay]

IANAL, but isn't maintaining and creating a monopoly illegal in the US? The RIAA, and all their bastard children, just use mob enforcement tactics to raise money. Isn't this just more shakedowns from these guys? While I doubt we'll get anywhere with them. Their existence needs to be challenged. They are attempting to stifle there only real competition--internet radio.

      The only sure way to stop them is to stop feeding them. Stop buying CDs. Stop going to concerts. Stop buying t-shirts. Every time you buy this stuff, you are feeding their hunger and greed for more. Don't be surprised if there's a new digital format forced down your throat that requires a per listening fee. Stop feeding the RIAA and there scumbag children. If you want music go to independent music.

Re:They know exactly what they are doing.

[Anonymous Coward]

Karma whoring for fun and profit!

Re:They know exactly what they are doing.

[Abcd1234]

SoundExchange has been given monopoly status.

Jesus Christ, every time this damn conversation comes up, it's clear no one here has any idea how this actually works...

SoundExchange was selected by the Copyright Royalty Board as the default arbiter for royalties paid under the compulsory licensing scheme. There is *nothing* stopping an artist from selecting a different arbiter, and registering it with the CRB, at which point any compulsory licensing fees will be handled by that group. There is no "monopoly" here, because there is no business. At best, SoundExchange covers their operating costs. But there is no profit to be had. This is not a commercial venture.

they can block all but RIAA members and force membership.

No, they can't, and this statement makes it obvious you're just making things up as you go along.

Any artist, *any one*, can register with SoundExchange, in order to receive their share of the royalties, and they can do so *for free*. Further, internet radio stations don't become "members" with SE. They simply pay their compulsory fees to them. And SE has no choice but to accept those fees, and pay them out to artists who have registered with them. Such is the arrangement between SE and the CRB.

The fact is, the only thing discriminatory about this setup is the fee structure, and SE is *not* responsible for determining that. The CRB is. It just happens that the CRB is effectively rubber stamping the rate structure proposed by SE, that's all. In fact, the compulsory licensing mechanism, *as a concept*, is a very very good idea, otherwise radio stations would have to negotiate with each and every artist in order to secure broadcasting rights. The problem is that the CRB has been hijacked by industry interests... 'course, that's just business as usual in Washington, so I fail to see how that's surprising.

Re:They know exactly what they are doing.

[Anonymous Coward]

This seems like a great time for all these little broadcasters to use the system against itself. Every artist who likes using net radio should join the SoundExchange. The resulting shift in power should enable them to disassemble the organization from the inside. Alternatively, these artists could form a new group and push for recognition by Congress as administrator of statutory licenses, alongside SoundExchange (see http://en.wikipedia.org/wiki/SoundExchange). It seems to me that there is more than enough people, and therefore power, to make this work, but it is not yet being focused in the right areas to be effective.

Re:They know exactly what they are doing.

[twitter]

SoundExchange was selected by the Copyright Royalty Board as the default arbiter for royalties paid under the compulsory licensing scheme. There is *nothing* stopping an artist from selecting a different arbiter, and registering it with the CRB, at which point any compulsory licensing fees will be handled by that group.

That would be wonderful, but I'm afraid that it's not true. Everything I've read tells me that SoundExchange is the only game in town ... forever.

Any artist, *any one*, can register with SoundExchange, in order to receive their share of the royalties, and they can do so *for free*. Further, internet radio stations don't become "members" with SE. They simply pay their compulsory fees to them.

What if you don't want fees to be collected? The growing scandal is that SE collects those fees anyway. To receive a portion of those fees back, you have to join them and agree that they have earned their "share" of your work. What this means is that the artist really has no choice in their representation.

The problem is that the CRB has been hijacked by industry interests... 'course, that's just business as usual in Washington, so I fail to see how that's surprising.

It's strange that you can say that after denying all of the particulars. I agree that the CRB needs a spine.

Re:They know exactly what they are doing.

[Abcd1234]

That would be wonderful, but I'm afraid that it's not true. Everything I've read tells me that SoundExchange is the only game in town ... forever.

Yeah, I did some digging, and it appears I was wrong, in that the CRB selects the designated agent. However, that doesn't change the fact that the compulsory license is still optional.

What if you don't want fees to be collected?

Then apply a blanket license to your material. As I've said elsewhere, the compulsory license is *optional* for broadcasters. You only need to pay it if you haven't already arranged a licensing agreement with the copyright holder. As this page says:

Does the Intended User Have to Use a Compulsory License?

No. The person wishing to make and distribute phonorecords of a nondramatic musical work may negotiate directly with the copyright owner or his or her agent. But, if the copyright owner is unwilling to negotiate or if the copyright owner cannot be contacted, the person intending to record the work may use the compulsory licensing provisions of the copyright law.

Re:They know exactly what they are doing.

[twitter]

The person wishing to make and distribute phonorecords of a nondramatic musical work may negotiate directly with the copyright owner or his or her agent.

That does not negate SoundExchange fees, and that's the beef artists have. According to them, SE collects fees anyway.

If that's true, you can't have a free internet radio station and everyone continues to play the RIAA game. Only a few very large, commercial internet players will be able to afford the SE fees. The RIAA takes it's slice either way and rules the roots. Artists are, once again, forced to beg and plead with the RIAA for promotion they could otherwise provide for themselves. All of the restrictions of the analog world and more would be rammed down everyone's throat.

Re:They know exactly what they are doing.

[Abcd1234]

That does not negate SoundExchange fees, and that's the beef artists have. According to them, SE collects fees anyway.

Really? Where are these statements? What artists have made these claims? Have you heard them yourself, or were they just passed on by someone equally ignorant on the subject?

If that's true,

It's *not*. Christ, read the regulations. You either pay SE, or you pay the artists. That's it, that's all. SE only collects an administrative fee if they're being charged with collecting royalties, but if they're not, they're *completely* out of the loop. Period. End of story. I mean, what fees can SE extract if no money is passing through their hands??

No Choice.

[twitter]

SoundExchange, while being a subsidiary of the RIAA is still authorized to collect all compulsory royalties due whether or not they are due to RIAA members.

That seems to be the size of it. Locking out competition, rather than finding and promoting excellence is what the RIAA member companies are all about.

Personally

[stonedcat]

I honestly thing SoundExchange needs to just fuck right off.
I don't care who decided they would be the group to collect these fees, no one needs to be profiting off online radio at all, it's a bunch of American-Nazi bullshit.

Agreement reached says SaveNetRadio.org

[beakerMeep]

I was digging around and just noticed that SaveNetRadio.org is claiming an agreement has been reached.

Here is the press release (pdf)

And more on their homepage

Note: it looks like this is just one detail that has been agreed upon but negotiations are ongoing.

Logical business move

[Shemmie]

Sweeten the deal, get it signed. We can change it to include DRM later.

Doesn't surprise me

[PhysicsPhil]

For all its bluster, SoundExchange is an organization with about 30 employees. They are set up to collect and administer royalty payments, not engage in large-scale litigation. Even if the broadcasters completely stonewalled, I doubt SoundExchange is in a practical position to do much.

As I've said before, the music industry and the broadcast industry are engaged in a standard contract negotiation, albeit one that is receiving a good deal more press than would be usual. Strictly from an economic perspective, the broadcasters would like to receive broadcast rights with no royalties or restrictions of any kind. The music industry would like to have a massive royalty payment and perfect and absolute DRM. Eventually they'll meet at somewhere in the middle where they both figure they can make a buck. It will all work out...

Re:Doesn't surprise me

[ScrewMaster]

Eventually they'll meet at somewhere in the middle where they both figure they can make a buck. It will all work out...

For them. Whether they'll be any room for the consumer in their perfect little world is another story entirely.

Now that the RIAA's clients are dropping DRM,

[crovira]

it would seem pretty stupid for them to insist on it.

Census reporting == nightmare.

[Anonymous Coward]

A faustian bargain: they cut the DRM crap, but they bought into /census reporting/.

So now every single webcaster is sending SoundExchange - and thus the RIAA - a list of every single thing they play, ever.

Implementation details of this census reporting aside - which, naturally, the stations get to pay for - this means SoundExchange now get a free statistical feed from all the webcasters.

They just gave away something most labels and AR types would kill for.

SoundExchange should be before the RICO judge

[crovira]

because its just an extortion racket.

Let me get this straight...

SoundExchange are going to collect $50k from each and every WebCaster radio station.

Then the artists have to find out wether they played their songs, or not, from every single WebCaster. (If you believe people are consistently that diligent, I have a bridge to sell you in Brooklyn.)

Then the artists have to figure out how much of those $50ks SoundExchange might owe the artist. (Some of these guys and gals can play great. Math, they're not so hot at.)

Then the artists have to try to collect, less the euphemistically called administration fees of course (can you say 110%.)

Get the "Piperazine"! I'm looking at a nastytape worm here.

Re:SoundExchange should be before the RICO judge

[Abcd1234]

because its just an extortion racket.

You might want to educate yourself before spouting off and making yourself look like an idiot.

Broadcasters have *always* had the option of negotiating broadcast licensing deals with artists directly. The compulsory licensing scheme exists for one reason, to make it easy for radio stations to broadcast music without having to deal with each and every artist.

Re:SoundExchange should be before the RICO judge

[Reziac]

When I was DJing at a station that was NOT obligated to pay royalties, we still kept meticulous playlists. With digital stations, you don't need this handwritten log, you just need an automated server log.

BTW, piperazine has no significant effect on tapeworms; it's for ascarids (roundworms, pinworms). For tapeworms you want fenbendazole or droncit or Yomesan. Too bad the LD50 for these drugs is so high. ;)

Word(s) of the day

[5of0]

I am just sitting here shaking my head in disbelief at the shear stupidity of their business model.

*ahem*
*raises forefinger*

Sheer

(adj) absolute, downright, out-and-out, rank, right-down, sheer (complete and without restriction or qualification; sometimes used informally as intensifiers) "absolute freedom"; "an absolute dimwit"; "a downright lie"; "out-and-out mayhem"; "an out-and-out lie"; "a rank outsider"; "many right-down vices"; "got the job through sheer persistence"; "sheer stupidity"

Shear

(n) shear ((physics) a deformation of an object in which parallel planes remain parallel but are shifted in a direction parallel to themselves) "the shear changed the quadrilateral into a parallelogram" (there isn't an adjective form)

I believe you're looking for the first one. Now you've learned something today.

</grammar nazi>

Duh

[Anonymous Coward]

If you can hear it, you can record it. No DRM is going to change that. Could the RIAA be any more stupid? Maybe users could cut off their ears and promise only to use them when the user is listening to RIAA-controlled, DRM-infested music? Now THERE'S some DRM...