Not That It Matters... But Appeals Court Rejects Webcasters' Challenge Over Copyright Royalties

from the and-ignores-constitutionality-issue dept

Last week, we noted that the DC Appeals court had rejected a challenge to the Copyright Royalty Board's rates set for satellite radio. Michael Scott notes that the same court has also rejected the challenge to webcasting rates. Of course, this is mostly a moot discussion, because just days before the decision, SoundExchange and some big webcasters worked out a deal -- though there are serious questions about how reasonable these rates really are to webcasters. Still, this latest ruling once again highlights just how out of touch the Copyright Royalty Board is with reality. If the current negotiated rates threaten to put a lot of webcasters out of business, and the CRB's original rates were even higher, doesn't that suggest a pretty serious problem both with the CRB and with the appeals process? Separately, it looks like the court had no problem at all ignoring the constitutional questions about the Copyright Royalty Board for a second time. It's as if no one wants to actually follow what the Constitution says...


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Hidden Force, Jul 15th, 2009 @ 12:09am

    Constitution?

    You're assuming that the Constitution has actually mattered to the government (*especially* the Judicial branch) since the early 20th century.

    As for the royalty rates, local non-profit radio station has had to shut off its stream because their rates have skyrocketed by 1000% over the past year or two, making it impossible to continue. What's more is that this station is having to pay MORE than other local for-profit stations. Where's the logic in that?

     

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  2.  
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    Anonymous Coward, Jul 15th, 2009 @ 12:50am

    For many of these webcasters 25% of revenue will be a MUCH lower rate than radio stations pay (when figured on a songs / dollar ratio). Too bad that there seems to be more need to write propaganda about the situation than actually interviewing the people from SOundExchange and such to find out why they really settled on that number.

     

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  3.  
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    tristin, Jul 15th, 2009 @ 1:08am

    Re: Constitution?

    "It's as if no one wants to actually follow what the Constitution says..."

    Dammit, don't say that! It's too sad...I'd rather just have a nagging feeling in the back of my mind than have it put right in front of me. Too real.

    As for royalty rates, Mr. Coward above Is a fool if he thinks webcasters will be paying less than radio stations of comparable size). Radio stations pay songwriters, but not performance rights (if I have the terms right), webcasters must pay both. Don't be a hypocrite, Mr. Coward; find out what is actually being claimed before making assumptions about it. Or if you actually have some data to back up your position, please show it to us so we can be corrected.

     

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  4.  
    identicon
    Anonymous Coward, Jul 15th, 2009 @ 1:21am

    You know, around here, we had a problem with people not following the constitution, so we did something about it. And by "we", I mean the supreme court, congress and military.

    Suddenly we were ostracised from almost every nation on earth.

    So apparently, it's not just the CRB, SoundExchange or Mel who don't believe in constitutions, it's the entire world. Now isn't that a cheery thought?

    (Yeah, so this has little to do with the actual topic, aside from a nod at the end, I'm feeling extra bitter tonight, so cope.)

     

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  5.  
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    Anonymous Coward, Jul 15th, 2009 @ 2:01am

    Re: Re: Constitution?

    If the webradio has $0 of income, what is 25% of nothing?

    Radio stations pay anyway - no choice.

    webradio only pays a higher rate if they get higher income. Since most of the are crying about not having income, how could they be paying more?

    So Mr tristan, would you care to back up your assertions with some numbers?

     

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  6.  
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    Mike Masnick (profile), Jul 15th, 2009 @ 2:49am

    Re: Re: Re: Constitution?

    If the webradio has $0 of income, what is 25% of nothing?

    There's still a base rate. Thought for smaller webcasters, the % number is lower. But it's not $0.

    webradio only pays a higher rate if they get higher income. Since most of the are crying about not having income, how could they be paying more?

    Except that's not true. Most are not complaining about having no income. They're complaining that most if not all of any potential profits are wiped out by this deal.

    So Mr tristan, would you care to back up your assertions with some numbers?

    Radio stations pay 0% on performance rights. 0. So, your argument is entirely wrong.

    They do pay songwriter/composer fees, which equal about 3% of revenue. But webcasters have to pay that as well.

    Your assertion that radio pays more is flat out, 100% wrong.

     

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  7.  
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    Anonymous Coward, Jul 15th, 2009 @ 3:30am

    Re: Re: Re: Re: Constitution?

    How much are webcasters paying in snogwriter / composer fees? How many of them were truly paying it?

    What are the net numbers? Tossing percentages out there without numbers to show what they truly represent is meaningless.

    "Except that's not true. Most are not complaining about having no income. They're complaining that most if not all of any potential profits are wiped out by this deal."

    If they are only profitable without paying for the raw materials (music), then they had a bad business model. You are suggesting that somehow they should get a free pass as "music advertisers" and profit from it, offering a service that the music industry isn't looking for (but would be forced somehow to tolerate and support?)

    "There's still a base rate. Thought for smaller webcasters, the % number is lower. But it's not $0."

    What is that base rate? What is the base rate + composer / song writer fees? Net, what is it costing them per listener hour to run their stations? Without actual numbers, this is a discussion about apples and oranges.

     

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  8.  
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    Andy, Jul 15th, 2009 @ 5:10am

    25% of 0 = ouch

    From the NYT article: "All stations will be required to pay an annual minimum fee of $25,000, which they can apply to their royalty payments."
    I run a rather popular podcast, and have always wanted to add a streaming radio station component, but this makes it impossible, even though I'd be streaming music by bands that I know personally, that I recorded personally, in my own living room.
    Meanwhile, I have had one major record label offer to pay me off with freebies in return for playing their music on my podcast. Here's a better idea - just don't sue the people who are advertising your product for free!

     

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  9.  
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    Woogieman, Jul 15th, 2009 @ 6:37am

    Not That It Matters... But Appeals Court Rejects Webcasters' Challenge Over Copyright Royalties

    Like I stated before. They don't even know who gets the money. They just want checks and no play lists. They operate on the principle that you must be playing some of their songs just because you have a Radio Station. Now I may be stupid since I went to school in the United States. But don't you need a list of songs played in order to distribute royalties?
    My old friend wrote the song 'Fascination' back in the roaring 20's and got ASCAP. ASCAP sends him a check for $4,000.00 every year and no stats. I know that's not a popular song now but it would be nice to know how many times it was actually played.
    indies are not considered publishable. We started a publishing company and released a cd and ASCAP said it wasn't real. So songs from my cd get played on internet Radio, but I get no royalties.
    Where is the RIAA protecting my copyrights? How is that fair? I can't belong because I'm an indie. They discriminate.
    This is what you get when you pay the government for a copyright to protect your work. I paid the government the money for the copyright. I secured the governments services to protect my copyright. They failed by giving the protection of my work to a private company that only understands profit.
    Since we pay a fee to the government to protect our copyright then the government is the only entity who can legally police my copyright, not a private firm. The entire setup is like the mob and needs to be RICO'd. My bumper sticker reads: RICO the RIAA

     

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  10.  
    identicon
    Grocery Store Music Critic, Jul 15th, 2009 @ 6:49am

    Simple solution

    Dont listen.

    And furthermore, why do some business establishments feel the need to have music playing over the loudspeaker system ? Their taste in music is terrible and it can be very annoying. So why waste good money when it just bothers the customers ?

     

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  11.  
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    PPNSteve (profile), Jul 15th, 2009 @ 7:07am

    Deal Breaker

    From the NYT article: "All stations will be required to pay an annual minimum fee of $25,000, which they can apply to their royalty payments."
    This is a deal breaker for smaller or non-profit stations who may webcast for a hobby/to friends or as a reg'd 501(c) .org

    Something needs to be done about this GREED that has prevailed over this industry for a while now. Make the entry into this easier and competitive. Oh wait.. that's right, they DON'T want you broadcast their artists/music at all. well good luck to them ALL when the bottom falls out from all the gunshots in their feets.

     

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  12.  
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    Hephaestus (profile), Jul 15th, 2009 @ 7:17am

    This is to funny ..... I can see the future ....

    The Copyright Royalty Board increases fees....

    Some web based stations shut down ....

    The Copyright Royalty Board has to increase fees again to maintain the same level of profit for the industry....

    More web based broadcaster shut down ....

    Someone comes along and does an end run around the Copyright Royalty Board with artists that want to be heard online with no fee ...

    A central database of fee to play and free play is created....

    YouTube signs up, allowing free play songs in videos
    and links back to the artists sites....

    Formerly unknown artists start making more than the label promoted ones....

    YouTube drops the record labels and refuses to pay them anymore ....

    Most web based broadcaster switch over, and new webcasters spring up, and radio stations add additional webcasts of these artists .....

    The Copyright Royalty Board slowly looses it power and control ....

    The big record labels play less and less of a role ....

    Business evolution in action .... big ole GRIN


    Most of the pieces for this scenerio are already out there all that is needed is an independant set of standards for this to occur. The standards would include accounting, billing, contracts, databases of music and allowable uses and fees, etc.

     

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  13.  
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    Hephaestus (profile), Jul 15th, 2009 @ 7:20am

    Re: Deal Breaker

    its feet not feets

    Foot .... one
    Feet .... multiple

     

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  14.  
    identicon
    Anonymous Coward, Jul 15th, 2009 @ 7:21am

    Re: Re: Re: Constitution?

    If the webradio has $0 of income, what is 25% of nothing?

    Err, webcasting rates are not based on income alone.

     

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  15.  
    identicon
    PRMan, Jul 15th, 2009 @ 7:21am

    Re: Re: Re: Re: Re: Constitution?

    "You are suggesting that somehow they should get a free pass as "music advertisers" and profit from it, offering a service that [1% of] the music industry isn't looking for (but would be forced somehow to tolerate and support?)"

    The problem is that the other 99% of the music industry would love free advertising to try to compete with the 1% that is backed by the big 6 labels. The problem is that you can't set up an internet radio station to play the other 99% because the dollars will never work thanks to the cartel forcing the 1% to collect for the 99% (but never "find" them), even if you never play music from the 1%.

    See the problem?

     

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  16.  
    identicon
    fogbugzd, Jul 15th, 2009 @ 7:23am

    Hit from both ends

    Radio stations being played on the loudspeakers is probably a thing of the past now that businesses are getting hit with performance fees for doing that.

    This means fewer people listening to the radio (or more important from a business standpoint) fewer people listening to the ads. For years radio stations have worked to get people to listen to the radio at work, and to have businesses play their stations as background.

    So radio stations are getting hit at both ends. They have to pay higher rates, and at the same time they are having a very significant audience eliminated. How is that good for the music industry? It encourages more talk radio rather than music, and it restricts the audience for music.

    This is what happens when you have so many royalty boards and collection societies. Common sense is out the window, the market has been so distorted that it is becoming non-viable, and no one in government cares as long as the industry's campaign contributions keep rolling in.

     

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  17.  
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    chris (profile), Jul 15th, 2009 @ 7:45am

    Re: Re: Re: Re: Re: Re: Constitution?

    The problem is that you can't set up an internet radio station to play the other 99% because the dollars will never work thanks to the cartel forcing the 1% to collect for the 99% (but never "find" them), even if you never play music from the 1%.

    See the problem?


    it's not a problem. it was engineered to stop the free streaming of independent music and it's working very well.

    your problem is that you can't just listen to top40 radio and buy CD's at walmart. the sooner you hippies get in line, the sooner all this internet nonsense will stop.

     

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  18.  
    identicon
    Anonymous Coward, Jul 15th, 2009 @ 7:47am

    Re: Re: Re: Re: Re: Constitution?

    What are the net numbers? Tossing percentages out there without numbers to show what they truly represent is meaningless.

    It seems to me that talking about basis of the rates is entirely appropriate because the actual "numbers" will vary for each individual station. I'm not particularly interested in individual stations, I'm interested in the overall picture and using percentages is a good way to talk about that. Of course, I can see how the record industry wouldn't want people talking about it.

     

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  19.  
    identicon
    John, Jul 15th, 2009 @ 8:07am

    Re: Re: Re: Re: Re: Constitution?

    To "follow what the Constitution says" is un-American...

    No one des it... Bush, the police, Copyright Royalty Board ... everyone.

    Stop whining and start being more American!

     

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  20.  
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    btr1701 (profile), Jul 15th, 2009 @ 8:09am

    Nothing New

    > It's as if no one wants to actually follow
    > what the Constitution says...

    This is hardly new or limited to copyright. The U.S. government hasn't been following the Constitution since the early 20th century, when the Supreme Court ruled in Wickard v. Filburn that a person's mere existence affects interstate commerce, thereby effectively repealing the 10th Amendment and expanding the Commerce Clause to the point where the federal government has jurisdiction over absolutely everything, which is direct contravention of the text of the Constitution and the Founders' explicit intentions.

     

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  21.  
    identicon
    Anonymous Coward, Jul 15th, 2009 @ 8:26am

    Re: Re: Re: Re: Re: Re: Constitution?

    "See the problem?"

    Yes, I see made up numbers.

    Even if I work from your numbers, I would say likely that the 1% actually sells 99% of the music.

    See the problem?

     

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