Slashdot Mirror
Experimental Fees Settle Royalty War For Internet Radio
S-100 writes "SoundExchange has reached an agreement for royalty rates with a consortium of Internet radio broadcasters. The parties are ecstatic that the issue is finally resolved, and that the new rates are below the previous 'death to Internet radio' levels that had previously been imposed by the CARB. According to NewsFactor, Pandora founder Tim Westergren proclaims that 'the royalty crisis is over!', and other large broadcasters are equally pleased. One unheard-from group is less likely to be pleased: small Internet radio broadcasters. Buried in the details are a new minimum royalty payment: $25,000 per year. So say goodbye to all of the small Internet radio stations that you have been listening to, as they will no longer afford to operate legally."
The rich take advantage of the less rich:
"Buried in the details are a new minimum royalty payment: $25,000 per year. So say goodbye to all of the small Internet radio stations that you have been listening to, as they will no longer afford to operate legally."
Just theoretically, what if a station played only music in the public domain? Would they have to cough up the minimum payment? I'm curious whether the fee is for playing music over the internet, or for playing copyrighted music over the internet.
12:50 - press return.
In the USA maybe. I have a suspicion other countries might have a different notion of how that might work out...
Shoes for Industry. Shoes for the Dead.
Does this only pertain to the US, or is it all over the world?
According to NewsFactor, Pandora founder Tim Westergren proclaims that 'the royalty crisis is over, and we don't have to worry about any small competitors sneaking up and taking our business!'. I may have added that last part, but I'm sure he was thinking it. Like most regulations, it serves mainly to fuck small business and eliminate competition.
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If I understand, that's just for the right to not be sued for broadcasting the music. Broadcasters still have to pay to buy the music, for bandwidth to stream the music, hardware to do that, people to select music, build websites themselves, manage online communities, manage advertising relationships, etc.
AND that's the minimum. So if you have zero listeners, you have to pay $25 000 per year just to start.
Perhaps now is a good time for all the upstart talent out there to be heard before getting their work corrupted by the recording industry. Small broadcasters should set up their own organization to collectively promote new talent by sharing their newly found content with each other for broadcasting. All that would be needed is some sort of vetting system to ensure the work isn't already owned by someone other than the artist that created it.
8==8 Bones 8==8
A big reason that traditional radio stations are in the hands of conglomerates only is because the cost of the antenna, broadcast equipment, and the scarcity of available frequency makes it extremely expensive to start a new terrestrial radio station. A Net radio station only needs a Net connection and some open source applications. The 25K means individuals are no longer able to run a free Net radio station. It will also knock out college radio stations who simultaneously stream the terrestrial broadcasts they deliver for no fee. Hobby Net radio is dead in this country. Of course, the agreement only applies to the US so overseas folk can pick up the slack...for now. A shame really and not the win Pandora calls it. It just helps the mid-sized VC-funded
Look at it this way. You and 99 of your friends can now have all-you-can-eat streaming music for US$250/yr + costs, as long as your costs are US$100k (royalties are 25% of costs or revenue, whichever is higher) - running it as a coop means no revenue.
Even better, you can offer it to everyone!
Sounds like a great way to have a large, legal, on-demand music collection.
Not only does this new deal not cover every country (the Internet has this global presence to it) but this new deal doesn't cover all music which is legally redistributable in the US. Support artists who aren't signing their copyrights away to the huge few corporate labels, support musicians who share with you under terms that allow you to share further, and you'll find there's a lot of good music out there to be enjoyed. Small radio stations would do well to stop trying to emulate the major radio stations and develop audiences that appreciate something different and new.
Digital Citizen
Nobody makes music free, son.
SOMEONE stole it from my music empire.
Are you referring to the mathematical near-certainty that a song's hook will inevitably match that of at least one of the millions of songs in BMI and ASCAP's repertory? Or the precedent set in Bright Tunes Music v. Harrisongs Music that accidentally copying the hook of a song heard a half-decade ago is just as much a copyright infringement as what happens in the warez scene? Or both?
Perusing the info on SoundExchange, the wording is ambiguous. In the press release, they clearly say that all "Pure Play" webcasters, small and large, are subject to the $25,000 per year minimum fee against royalties. But in another section of the web site, they list the $25,000 fee in the section for large webcasters and say nothing about a minimum fee in the following section about small broadcasters. So there's a chance that the fee may not apply to small webcasters.
It should also be said that this "special deal" is opt-in, and not compulsory. Webcasters are still free to adopt the rate structure established earlier by the CRB, however it was those rates that caused the revolt by webcasters in the first place, since those rates are so high that a typical small station could end up owing over 100% of revenues to Sound Exchange.
That would be ASCAP, not the RIAA.
"ASCAP protects the rights of its members by licensing and distributing royalties for the non-dramatic public performances of their copyrighted works. ASCAP's licensees encompass all who want to perform copyrighted music publicly."
http://www.ascap.com/about/
I've been listening to pandora since it came out - I'm a huge fan. I got this email yesterday... pretty interesting. Apparently I like their free service *too* much:
I hope this email finds you enjoying a great summer Pandora soundtrack.
I'm writing with some important news. Please forgive the lengthy email; it requires some explaining.
First, I want to let you know that we've reached a resolution to the calamitous Internet radio royalty ruling of 2007. After more than two precarious years, we are finally on safe ground with a long-term agreement for survivable royalty rates â" thanks to the extraordinary efforts of our listeners who voiced an absolute avalanche of support for us on Capitol Hill. We are deeply thankful.
While we did the best we could to lower the rates, we are going to have to make an adjustment that will affect about 10% of our users who are our heaviest listeners. Specifically, we are going to begin limiting listening to 40 hours per month on the web. Because we have to pay royalty fees per song and per listener, it makes very heavy listeners hard to support on advertising alone. Most listeners will never hit this cap, but it seems that you might.
We hate the idea of capping anyone's usage, so we've been working to devise an alternative for listeners like you. We've come up with two solutions and we hope that one of them will work for you:
Your first option is to continue listening just as you have been and, if and when you reach the 40 hour limit in a given month, to pay just $0.99 for unlimited listening for the rest of that month. This isn't a subscription. You can pay by credit card and your card will be charged for just that one month. You'll be able to keep listening as much as you'd like for the remainder of the month. We hope this is relatively painless and affordable - the same price as a single song download.
Your second option is to upgrade to our premium version called Pandora One. Pandora One costs $36 per year. In addition to unlimited monthly listening and no advertising, Pandora One offers very high quality 192 Kbps streams, an elegant desktop application that eliminates the need for a browser, personalized skins for the Pandora player, and a number of other features: http://www.pandora.com/pandora_one.
If neither of these options works for you, I hope you'll keep listening to the free version - 40 hours each month will go a long way, especially if you're really careful about hitting pause when youâ(TM)re not listening. Weâ(TM)ll be sure to let you know if you start getting close to the limit, and weâ(TM)ve created a counter you can access to see how many hours youâ(TM)ve already used each month.
Weâ(TM)ll be implementing this change starting this month (July), Iâ(TM)d welcome your feedback and suggestions. The combination of our usage patterns and the "per song per listener" royalty cost creates a financial reality that we can't ignore...but we very much want you to continue listening for years to come.
I'd like to see how you think a WMG lawyer would defeat reliance on a CC license.
Simply by taking them to court you can crush a lot of small stations. When given the option of A) shutting down and WMG will waive the fee B) paying some sort of large (but not huge) fee like $5000 or C) being sued for $50000+. Most stations, especially those ran by individuals in their spare time would simply choose to shut down. The fee could cause a sharp increase in operating costs so the "ad free" station suddenly has more ads then terrestrial radio. If they go to court, they might keep operating for some time, but eventually the court costs could drain their operating costs budget to where they can't afford it. Even if the internet radio people win, they still lose.
Taxation is legalized theft, no more, no less.
Some way to stream anonymously...P2P style, but untraceable? A freenet type thing for pirate internet radio, and that way, ANYONE could broadcast. Not a way really to make money, but, if someone wants to play DJ. You could set up nym email accounts, and communicate with your public, and still avoid identification.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
So say goodbye to all of the small Internet radio stations that you have been listening to, as they will no longer afford to operate legally."
Perhaps -- On the other hand, people who make music available without royalty (thus staying outside of the CARB system) -- such as Creative Commons licenses, or even non-CC licenses which simply explicitly allow On-Air radio stations that aren't part of CARB to play them -- might find themselves with a boon as they will then be the only music that small radio stations will be able to play.
If I was a small (or even not-so-small) musician that wanted my music to get play, I'd probably release my music on a license that allowed people who haven't signed up for CARB to play my music royalty free, but had standard fees for stations that had paid the CARB $25K minimum (I mean, why give up royalties that have already been allocated to me?).
That way, smaller stations can play my music, and the larger stations (that really make money) can give me my fair share of CARB royalties if/when I get big enough to attract the attention of the larger stations.
Free Software: Like love, it grows best when given away.
Yeah, except it hasn't happened yet and there's already been plenty of reasons to not listen to mainstream label music.
The main reason probably being that 99% of indie music really really sucks, and people don't want to have to look for that 1%.
I've had enough abrasive sigs. Kittens are cute and fuzzy.
Thankfully, Copyright law has a 'loser pays' rule which means that, once you show that you there's a CC licensed version of your song, it's up to the RIAA lawyers to prove (on the balance of the probabilites, with a tie being in your favor) that you were playing a non-CC version of that song.
If they fail to do so (and they're likely to fail if they're suing on false pretenses), then they're the ones who end up paying your court costs.
Free Software: Like love, it grows best when given away.
I don't know if you've noticed, but 99% of commercial music sucks, too. It just has better marketing.
Check out my sci-fi/humor trilogy at PatriotsBooks.
I you were a starting entrepreneur who wanted to become one of those large internet radio stations some day your view might be different. Artificially high barriers of entry into an industry are rarely beneficial to society. From a purely economic standpoint, competition is generally a good thing.
The point of traditional radio stations is to cover costs (and preferably make a profit) with revenue from advertisers by distributing their material to the populace. The populace generally isn't interested in listening to advertisements all day long, so the radio stations must provide material the populace is interested in, with advertisements thrown in periodically. Range "Y" is an artifact of radio broadcasting and power limitations imposed by the FCC to allow wider use of radio spectrum. I agree that the internet's nearly infinite supply of spectrum eliminates the need for any kind of range limitations. Genre "X" limitations are similarly a radio spectrum issue and need not exist on the internet.
Try turning that around: "What can the large one offer that the smaller one cannot if they are both free?" Really, I would expect a larger entity to develop into a far more bureaucratic system, making it slow to respond to listener's changing interests and requests. Further, large entities are somewhat resilient to legal action and more difficult to reconstruct, making them more easily controlled by external parties such as large copyright holders. Such legal action on a small entity would likely crush it, but a new one could quickly sprout up in the hole left by the original. Going back to the original question: "What can the small one offer that the larger cannot i they are both free?" Simply put, adaptability and resistance against external corruption. These qualities do not mesh well with the music industry's legacy business model, thus the attempt to eliminate them with a $25,000 minimum charge. I would be interested to see what kind of logical knots they try to tie in their attempts to defend this minimum.
For some cases you are obviously correct.
However in the case of the smaller stations this can be a daunting if not insurmountable price.
Consider, a station which plays primarily alternative music sources, but plays *one song* from the RIAA catalog, once, in a year. Still out $25k for that one song.
The pricing structure is clearly designed to exclude smaller and/or less mainstream stations.
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Friends don't let friends enable ecmascript.
Wrong. EVERYTHING is under SoundExchange's jurisdiction. They have legal authority to collect fees for EVERYTHING, even artists not under the RIAA umbrella.
Music is rythm, not melody. And as a Techo lover I have to disagree with your statements.
Here be signatures
I bet the only reason it got cheaper now, is because those "big" radios finally bought into Payola.
For $25,000 they now can play everything they want, as long as it's what the RIAA tells them to play.
Luckily, I and my Internet radios never cared, and never will!
Some of them are even illegal by government rules (like the idiotic UK laws), which makes them real analog "pirate" radios too!
But I either listen to them or to my mp3s. I could never go back to that pop shit that is "normal" radio stations. My musical knowledge of rare bands of the UK, Russia, Japan, UK, France, etc, grew massively since I listen to Internet radio. To me it's the second most important killer feature of the Internet. Right after porn!
Any sufficiently advanced intelligence is indistinguishable from stupidity.
Slashdot Error: The minimum is $500, not $25,000, as the Slashdot story says. In all these years, the company that owns Slashdot has not learned the basic elements of editing.
I assumed, in my grandparent comment, that the Slashdot story was correct, and was shocked at the amount.
This government PDF file seems to say $500, also: Final Determination Of Rates And Terms, Docket No. 2005-1 CRB DTRA (PDF) Quote: "(b) Minimum fee. Each Commercial Webcaster and Noncommercial Webcaster will pay an annual, nonrefundable minimum fee of $500 for each calendar year or part of a calendar year of the license period during which they are Licensees pursuant to licenses under 17 U.S.C. 114."
From Wikipedia:
From the Library of Congress, Section 3f2: ( http://thomas.loc.gov/cgi-bin/query/F?c104:1:./temp/~c104dVWooD:e844: )
Emphasis mine.
You really do need to deal.
And you've been here a while too. I see your posts, from time to time and that's actually something given all the users we've got passing through now.
If there is a gaffe, it's corrected in the comments and that's just how the site is. We've got at least as many users not reading the article, hosing up the summary, not reading the comments, making ASSumptions and god knows what else!
There is kind of an unspoken agreement that the object of interest is the interest, not the meta-surrounding it and ./ Don't get me wrong, we like meta --look at my contribution this morning!
Bottom line is the site is not devalued for this kind of editing gaffe. We use ./ as a rolling point of discussion and as a loose community where lots of good ideas abound, along with a lot of shit too. The shit to signal ratio varies, but is usually tolerable at best.
So then, harping on the editorial quality seen on the front page here is theraputic, but futile --as is my post, quite likely!
And if people use ./ the way it is meant to be used, they find your comment and realize that there is actually some value to vetting what they see on the front page. Call it a healthy reminder that we need to do a bit of digging ourselves. I like it that way actually.
Cheers and greets! Haven't exchanged words with you in a while.
Blogging because I can...
You are correct, but the amounts don't seem to change. This is apparently the correct information, from the Proceedings page of the Copyright and Royalty Board (CRB). The link titled "Notice of agreement 74 FR 9293 March 3, 2009" is a PDF file: PDF. See page 9303 of the U.S. Federal Registry:
4. Minimum Annual Fees
(a) In General. For each year from 2006-2015, an Eligible Small Webcaster shall pay annual minimum fees as follows:
(1) $500 for electing Microcasters, which shall constitute the only royalty payable hereunder by an electing Microcaster, except that an electing Microcaster also shall pay a $100 annual fee (the ''Proxy Fee'') to SoundExchange for the reporting waiver discussed in Section 6(a), and the provisions of Section 5(d) shall apply;
(2) $2,000, for Eligible Small Webcasters other than electing Microcasters that had Gross Revenues during the prior year of not more than $50,000 and reasonably expect Gross Revenues of not more than $50,000 during the applicable year; or
(3) $5,000, for Eligible Small Webcasters that had Gross Revenues during the prior year of more than $50,000 or reasonably expect Gross Revenues to exceed $50,000 during the applicable year. (b) The amounts specified in Section 4(a) shall be paid by January 31 of each year. (c) All minimum fees (but not the Proxy Fee for the reporting waiver for Microcasters) shall be fully creditable toward royalties due for the year for which such amounts are paid, but not any other year.
Who says that an agreement between one set of parties binds others who were not party to the agreement?
Congress created copyright law, and by law a copyright holder can sue you in court for copyright infringement, and the courts will enforce it and if necessary bring in gun-toting police to enforce the authority of the court.
But then it gets more complicated. Congress passed a new law specifically to deal with "internet radio" webcasting. This law set up something called CARP - the Copyright Arbitration Royalty Panel - an the law authorized this panel to listen to industry lobbyists and set "reasonable" copyright payment rates for webcasters. The panel was directed to set the rates according to what willing-buyers and willing-sellers would agree to pay on their own under normal free market conditions. The payment rates set by this panel have the force of law.
What then happened is that the RIAA represents a multi-billion dollar industry with huge influence in Washington and with an army of lawyers and with an army of lobbyists and with effective monopoly power to dictate manipulative contract terms. The RIAA then made a deal with Yahoo (and maybe one or two others others) to license Yahoo to webcast the RIAA's copyrighted music. The RIAA manipulated this deal to inflate the apparent royalty rate. The RIAA then submitted this inflated rate to CARP, as evidence of the "natural free market price that willing-buyers and willing-sellers would reach on their own", and the RIAA used all their industry power and Washington influence to influence the CARP process. Webcasting - being brand new and mostly small upstarts and things like college radio - their interests had little or no representation before the CARP panel, and of course they got STOMPED. CARP set impossibly high royalty rates webcasters had to pay. It set impossibly high rates that would exterminate both small and large webcasting. Rates that effectively prohibited any sort of internet radio.
Webcasters, both large-and-small, found themselves faced with retroactive bills they would have to pay, bills far larger than than any money they had and larger than any gross-revenues coming in from webcasting. College radio and similar small and indie webcasters would get smacked with huge retroactive bills and shut down, and larger webcasters would literally have to file for bankruptcy. Webcasters large and small all screamed that the CARP set unfair and impossibly high rates, and they increasingly got their act together as an "interest group" to challenge the CARP ruling, and it appears they were going to be successful in having to reversed.
The RIAA then made a NEW deal with large webcasters. A deal that eliminated the impossibly high per-song-per-listener fee, and allowed them to pay according to a completely different and lower cost payment system While this was a "private contract", according to the CARP system other webcasters would also have the right to opt-in to those terms if they wanted to. The terms of this contract set a vastly higher minimum fee specifically to lock out smaller webcasters. The original CARP system had a $500 minimum payment for college radio and other indie webcasters (with per-song-per-listener fees going up from there), the new deal set a $25,000 dollar yearly minimum fee.
So the RIAA has effectively split the webcaster interest group that were fighting to get the CARP rates reversed. The RIAA gave the large webcasters a deal they could survive with, and effectively eliminated the "big muscle" on the webcaster side fighting the original CARP rates. College radio and other indie webcasters lose the little corporate support and legal support and Washington lobby influence they had. The small webcasters are unlikely to be able to effectively oppose the CARP ruling on their own, and will likely be exterminated.
So small webcasters are *not* bound by this particular agreement, but they are still bound by the CARP panel fees backed by the force of Congressional law. In fact small webcaster
- - You can't take something off the Internet! That's like trying to take pee out of a swimming pool.