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

[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: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: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.

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.

[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.

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.

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.

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.

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.