Rep. Nadler Proposes The RIAA Bailout Act Of 2012

from the riaa-bailout dept

Ah, the whole fight over licensing and royalty rates for internet radio had been quiet for a little while, but has sprung back up thanks to Rep. Jerry Nadler proposing a music royalty bill that would effectively bump up the rates that cable and satellite radio stations have to pay to make them more aligned with the insanely high rates that internet streamers are supposed to pay (rates so high, and set by a group of judges who don't appear to know what the internet is half the time, that no real business can be built off of them). This is in contrast to a different, but similar, attempt by Rep. Jason Chaffetz to basically bring the internet rates back down to the same rates as those other providers.

Of course, this is all somewhat related to the RIAA's ongoing push for a Performance Rights Act, which would force radio stations to pay extra royalties for when they play music. Under existing law, radio stations only pay the composers/songwriters for songs played on the air, due to the recognition that radio airplay is basically a massive advertisement for the musicians and it's silly to have stations pay the copyright holders for advertising their works. In fact, it's doubly crazy when you realize that the history of radio is filled with pretty indisputable evidence that the major music labels find tremendous value in radio play: payola. Payola is all about the labels increasing the airplay, knowing that it leads to all sorts of revenue elsewhere. But the RIAA is so insanely greedy these days that it's been begging for this form of a "bailout" for quite some time -- seeking to get radio stations to pay them for playing the same music that the labels are paying the stations (indirectly, of course, thanks to all the payola settlements) to play!

These proposals don't directly address that issue, but are clearly based on this idea. In fact, Nadler is incredibly upfront that he views taxing internet radio is his way of making up the money that isn't being collected from terrestrial radio:
“The lack of a performance royalty for terrestrial radio airplay is a significant inequity and grossly unfair. We can’t start a race to the bottom when it comes to royalty rates and compensation for artists," Nadler said in a statement. "The Interim FIRST Act would provide artists with fair compensation for the valuable creations they share with all of us."
In other words, because we can't fund an RIAA bailout off the backs of terrestrial radios (thanks in part to the powerful lobbying of the NAB), we'll instead increase the existing (and already crippling) tax on the useful and innovative services that are trying to help drag the RIAA (kicking and screaming) into the future.

Pandora is, quite reasonably, worried about this turn of events, noting that this new tax would be "astonishingly unfair."

Nadler seems to think that Chaffetz's plan is unfair because it would mean lower royalties from the internet streamers, but that's a gross distortion for a few reasons. First off, it assumes a perfectly static market, which is wrong. Second, it seems to assume that the identical number of services and the identical number of listens will occur. That's not true. As it stands now, the rates are so damaging that Pandora -- the top player in the space -- has made it clear it may never be profitable. Yes, never. Nadler's bill would effectively make sure that no one else in that market would be profitable either. The end result? Many of these services don't exist or never get started. That would actually mean fewer services, fewer listeners and lower royalties.

It's almost as if he has no concept of price elasticity. Lower prices can create higher total income. Also, the idea that any particular Congressional Rep. should be (effectively) determining what the "fair" price is for anything is, well, horrifying.

If these royalties are going to exist, is it really so crazy to think that perhaps (just perhaps) keeping the rates low, to encourage these useful new services to come along and grow, might be a good thing? But, instead, the RIAA and its members are so greedy for the largest payout per music listen, that they're clearly willing to kill off useful legal streaming services like Pandora. In the long run, that's not good (at all) for the record labels and the RIAA, but they've never been particularly good at seeing beyond the price per listen.

Either way, can anyone explain just why the government is bailing out the RIAA in the first place?


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    Tim K (profile), Aug 23rd, 2012 @ 7:54am

    Either way, can anyone explain just why the government is bailing out the RIAA in the first place?

    Because if the RIAA goes away then members of congress will be missing a good bit of money from their pockets.

     

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      Loki, Aug 23rd, 2012 @ 12:50pm

      Re:

      It's not the money they'll be missing from their pockets, it's the cushy jobs they'll get when they finally leave (or get booted out of) Congress that they can use to justify the fact they are still "working" for their money and not simply living of the perks and benefits Congress extols to set them for life.

       

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    Vog (profile), Aug 23rd, 2012 @ 8:32am

    Can we just skip to the part where the artists start paying the labels to perform their own music?

     

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      DannyB (profile), Aug 23rd, 2012 @ 10:24am

      Re:

      Can we just skip to the part where artists pay labels, in advance, for the right to compose their next music?

      If you don't pay, then don't complain when the private RIAA copyright police bust down your door, burn your house down, shoot your pet, and fine you for composing music without having paid a copyright license on the music to be composed.

       

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      johnny canada, Aug 23rd, 2012 @ 10:52am

      Re: Can we just skip to the part where the artists start paying the labels to perform their own music?

      Read up on John Fogerty

       

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    Anonymous Coward, Aug 23rd, 2012 @ 9:37am

    "Either way, can anyone explain just why the government is bailing out the RIAA in the first place?"

    Actually, since it would go to all artists, including your friends and fellow flunkies who get their music in the air, it would seem that it's fair to all involved.

    Further, let's be fair. Payola is no longer a real deal, because airplay doesn't directly lead to selling more recording anymore. It might lead to selling concert tickets or something, but unless the artist is on a label that has a 360 deal involved, it would be a painful waste of money.

    Nice rant, but it shows perhaps that you just don't work in the music industry and have really no clue what is going on anymore.

     

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      Anonymous Coward, Aug 23rd, 2012 @ 9:45am

      Re:

      "Nice rant, but it shows perhaps that you just don't work in the music industry and have really no clue what is going on anymore."

      I think everyone can see exactly what is going on here. That is the problem. Corruption used to be covert.

       

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      Anonymous Coward, Aug 23rd, 2012 @ 9:47am

      Re:

      I would add a couple of points.

      1. The RIAA is merely an industry association. It is not a label, but, among other roles, serves as a lobbying group on behalf of the labels. Of course, those who have business interests that may not intersect with those of the RIAA have their own lobbying groups.

      2. This is merely a bill. It most certainly is not legislation passed by Congress and awaiting signature by the President. That would happen, if at all, well into the future.

       

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        Anonymous Coward, Aug 23rd, 2012 @ 10:06am

        Re: Re:

        I would like to add another point.

        Today is Thursday.

         

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          Anonymous Coward, Aug 23rd, 2012 @ 10:08am

          Re: Re: Re:

          I guess I should add a fourth point to this list.

          You have a pointed head when it comes to discussions such as this one.

           

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            Anonymous Coward, Aug 23rd, 2012 @ 10:14am

            Re: Re: Re: Re:

            I'll add a fifth point:


            .

             

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            Anonymous Coward, Aug 23rd, 2012 @ 10:15am

            Re: Re: Re: Re:

            I was merely unaware that condescendingly chiming in with meaningless, obvious, irrelevant points constituted a discussion.

             

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              Anonymous Coward, Aug 23rd, 2012 @ 10:23am

              Re: Re: Re: Re: Re:

              He's here to defend his spot as "Shill of the Week" (the competition has been fierce this week). Of course meaningless, obvious and irrelevant points constitute a discussion to him. It's all he has.

               

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              Anonymous Coward, Aug 25th, 2012 @ 8:39am

              Re: Re: Re: Re: Re:

              It's not irrelevant to point out that the RIAA is a lobbying organization for labels when there are comments suggesting that they're lobbying for artists.

               

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          DannyB (profile), Aug 23rd, 2012 @ 10:30am

          Re: Re: Re:

          I'll add a point.

          His point was that since this isn't a law, you should not get excited yet, no need to take any action. Everything is still ok.

          In the future, he will post something like this:

          This is merely a bill awaiting the president's signature. It is not signed yet. That would happen, if at all, well into the future.

          Implied message: nothing to see here. Don't get excited. Especially no need to take any action. Stay asleep.

           

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      John Fenderson (profile), Aug 23rd, 2012 @ 10:43am

      Re:

      Nice rant, but it shows perhaps that you just don't work in the music industry and have really no clue what is going on anymore.


      This is the third time in as many days that I've seen a variation on this statement.

      You see, it's irrelevant. We may or may not know the inner workings of the big label music biz nowadays, but we absolutely know what they've been doing to society at large.

      That is our concern. We are concerned that they behave like honest, forward-thinking businessmen rather than what they do right now. It's not necessary to be an industry insider to recognize bad behavior and push to fix it. In fact, doing that appears to be impossible if you're an industry insider.

       

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        Chosen Reject (profile), Aug 23rd, 2012 @ 11:12am

        Re: Re:

        You're wrong. The feudal barons that forced King John of England to sign the Magna Carta were not kings, so they had no clue what was going on. They should have kept their stupid Magna Carta to themselves and let real kings run the country.

         

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        James Plotkin (profile), Aug 23rd, 2012 @ 11:37am

        Re: Re:

        John,

        My concern is the pollution of the minds of the people on here with false or at the very best misleading information.

        Journalistic integrity seems to mean almost nothing to him so long s he can get on his soap box and write something controversial against the RIAA or MPAA...

        I'm not a proponent of these groups. I'm certainly not here to defend them. But Mike makes it hard for me to do anything else. It's most upsetting. Oh well...I guess I do it to myself...right?

         

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          silverscarcat (profile), Aug 23rd, 2012 @ 12:20pm

          Re: Re: Re:

          Find me 20 good things that the RIAA and MPAA has done in the past 10 years...

          To make it challenging, they have to have done it by themselves without going into a deal with someone (no iTunes or netflix examples)

           

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          John Fenderson (profile), Aug 23rd, 2012 @ 1:02pm

          Re: Re: Re:

          My concern is the pollution of the minds of the people on here with false or at the very best misleading information.


          Then you should actually point out the false or misleading information. I don't think this was a good example of that. I'd be surprised if many people were "misled".

          But 9 times out of 10, whenever some AC comes here to try and point out something false or misleading, they're either wrong or they're harping on some really minor point that doesn't affect the big picture at all.

           

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          Anonymous Coward, Aug 23rd, 2012 @ 1:10pm

          Re: Re: Re:

          Mike isn't a journalist. He doesn't claim to be. This is not a news site, this is an opinion and discussion blog. If you want news, go check out CNN or the BBC or something, but for gods' sakes, stop assuming this is a news site.

           

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          MrWilson, Aug 23rd, 2012 @ 1:34pm

          Re: Re: Re:

          I'm concerned that you're insulting the intelligence of the readers of this blog. We're perfectly capable of fact-checking and being skeptical of Mike's writing. We're perfectly capable of reading linked articles to see if they support his conclusions. If you spent any time here over the last few years, you'd see that long time readers don't always agree with Mike on every topic. We don't need a patronizing pedant to protect us from what he perceives as misinformation.

           

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          Anonymous Coward, Aug 25th, 2012 @ 8:43am

          Re: Re: Re:

          I'm certainly not here to defend them.


          And yet that's invariably what you do. Now you would have us believe, in spite of that clear and consistent record, that it's just a coincidence and you really have some other, altruistic purpose? Please.

           

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      James Plotkin (profile), Aug 23rd, 2012 @ 10:46am

      Re:

      yes...and the most important thing...THE RIAA HAS NOTHING TO DO WITH THE COLLECTION OF PERFORMANCE ROYALTIES!

      They have nothing to do with this bill. I think Mike knows that when he writes "RIAA" people get all flustered and angry at the world...He exploits the average persons lack of knowledge of the music business and copyright law. It's irresponsible journalism...

      Either that or he's unaware that the RIAA (in this case) has no interest and definitely isn't doing ASCAP and BMI a "favor" by lobbying on their behalf...

       

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        Anonymous Coward, Aug 23rd, 2012 @ 11:22am

        Re: Re:

        Having a royalty for copyright owners on radio-play would just send US of America in line with the rest of the western world. I see no huge conspiracy in it unless we are talking about a worldwide conspiracy.
        How high those rates should be? I would never entrust any politician with such a job! Let the recording companies create their own collection societies and let those collection societies negotiate deals with the interest groups for internet radio, broadcast radio and satellite/cable radio. Then we are getting somewhere.

        I would like politicians to stay as far away from national regulations in favour of record industry and instead focus on determining how to protect other groups than right holders in copyright law and make international deals with those included. I must be living in a dreamworld?

         

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        Ninja (profile), Aug 23rd, 2012 @ 11:26am

        Re: Re:

        You do know that we use the term RIAA generally and very loosely around here often referring to the labels that are part of it or as random smearing such as: Mike, you are a RIAAtard.

        We also tend to further generalize organized crime, mafia, MPAA and anti-piracy outfits around the world in the term MAFIAA because they fit so well.

        Take it easy ;)

         

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          James Plotkin (profile), Aug 23rd, 2012 @ 11:30am

          Re: Re: Re:

          Ninja,

          I do realize that. However, it's just plain wrong to generalize ASCAP and BMI under the RIAA. They don't represent record labels...they represent artists.

          If people in the comment section want to call them the MAFIAA (grow up) all power to them!

          Mike, on the other hand, should show a little integrity. After all, he's a journalist, right? he's reporting on issues that mean something to him, right? doesn't he owe it to himself and his readers to not shover enriched BS down their throats?

          I'm sorry, but there's no excuse for this flagrantly one sided and poorly explained article.

           

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            John Fenderson (profile), Aug 23rd, 2012 @ 11:39am

            Re: Re: Re: Re:

            I do realize that. However, it's just plain wrong to generalize ASCAP and BMI under the RIAA. They don't represent record labels...they represent artists.


            Yes, although ASCAP & BMI also engage in reprehensible behavior that resembles that of RIAA et al., so it's not out of bounds to refer to them with RIAA et al as a group using some kind of shorthand.

            "RIAA" isn't technically correct, and "Big Content" is too vague. What would you suggest?

             

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              James Plotkin (profile), Aug 23rd, 2012 @ 11:46am

              Re: Re: Re: Re: Re:

              I would suggest calling ASCAP and BMI...ASCAP and BMI.

              I don't call you Mike Masnick even though you often comment on his writings.

              If that sounded patronizing, that wasn't my intention. I just see no reason to refer to entities as anything other than what they are. Especially because ASCAP/BMI doesn't represent record labels...at all! It's misleading for the sake of being inflammatory...uncool!

               

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                Anonymous Coward, Aug 23rd, 2012 @ 11:53am

                Re: Re: Re: Re: Re: Re:

                Why are you bothering to talk to these bozos?

                 

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                John Fenderson (profile), Aug 23rd, 2012 @ 1:05pm

                Re: Re: Re: Re: Re: Re:

                I've tried taking that route, but it just leads to unwieldy sentences fragments like "RIAA, MPAA, ASCAP, BMI, etc."

                It doesn't matter who these group represent. What matters is their behavior with regards to the world at large. And when it comes to that, they are often all operating from the same playbook. So why isn't it appropriate to refer to them collectively in that context?

                 

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                Anonymous Coward, Aug 23rd, 2012 @ 2:06pm

                Re: Re: Re: Re: Re: Re:

                I had to remove my ASSCAP to take a BM... seems appropriate

                 

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            John Fenderson (profile), Aug 23rd, 2012 @ 11:41am

            Re: Re: Re: Re:

            After all, he's a journalist, right?


            No, as Mike himself repeats frequently here, he is not a journalist.

             

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              James Plotkin (profile), Aug 23rd, 2012 @ 11:43am

              Re: Re: Re: Re: Re:

              Oh. My mistake. No sarcasm here. I honestly didn't know that.

              I apologize Mike. I'll no longer hold you to the standard I thought you aspired to. (wow...that sounded rude even though I really didn't mean for it to).

               

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            Leigh Beadon (profile), Aug 23rd, 2012 @ 11:57am

            Re: Re: Re: Re:

            See my other comment for great detail about why this is about SoundExchange, labels, and the RIAA. Your assumption about ASCAP/BMI is erroneous and based on a misunderstanding of what "performance" means in this context. It is specifically referring to the public performance of a sound recording, which currently exists under the quite clearly named Digital Performance Right in Sound Recording act. Those royalties are collected by SoundExchange, and paid to copyright holders of recordings -- not to ASCAP/BMI & songwriters

             

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              James Plotkin (profile), Aug 23rd, 2012 @ 12:24pm

              Re: Re: Re: Re: Re:

              Agreed. That act deals with sound recordings...no argument here.

              I didn't "misunderstand". I misinterpreted because the reference was ambiguous. Mike never referred to the above Act. Had he done so, I would have properly interpreted what he meant by performance.

              As I wrote bellow. When a person refers to performance royalty without any qualification, the base assumption is that they are talking about the performance of the musical work, not the sound recording. The former right predates the latter (for obvious reasons) and when unqualified, performance refers to the underlying work. This is standard.

              Again, as I wrote bellow, I jumped the gun and I apologize to Mike for that. The ambiguity led to a misinterpretation on my part.

               

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                Joe Dirt, Aug 23rd, 2012 @ 12:59pm

                Re: Re: Re: Re: Re: Re:

                Actually, this was about a bumping up the royalty rates for cable and satellite providers have to pay, correct? to quote fron the article above...
                "...thanks to Rep. Jerry Nadler proposing a music royalty bill that would effectively bump up the rates that cable and satellite radio stations have to pay to make them more aligned with the insanely high rates that internet streamers are supposed to pay (rates so high, and set by a group of judges who don't appear to know what the internet is half the time, that no real business can be built off of them)."

                I see no ambuguity there. Just saying.

                 

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                  James Plotkin (profile), Aug 23rd, 2012 @ 1:27pm

                  Re: Re: Re: Re: Re: Re: Re:

                  The royalty could have technically been for either the composition or the sound recording. Simply saying performance gives the impression of the former.

                  Again, I was wrong...but it was ambiguous.

                   

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        saulgoode (profile), Aug 23rd, 2012 @ 4:23pm

        Re: Re:

        "yes...and the most important thing...THE RIAA HAS NOTHING TO DO WITH THE COLLECTION OF PERFORMANCE ROYALTIES! "
        From the SoundExchange homepage:

        The Copyright Royalty Board, which is appointed by The U.S. Library of Congress, has entrusted SoundExchange as the sole entity in the United States to collect and distribute these digital performance royalties on behalf of featured recording artists, master rights owners (like record labels), and independent artists who record and own their masters.

        SoundExchange started out as a division of the RIAA and was later spun off as an independent organization; yet that "independent" organization has on its Board of Directors two representatives from the RIAA and six representatives who are RIAA members (including the four largest music labels: Sony, EMI, UMG, and Warner).

        SoundExchange is a founding member of the musicFirst lobbying coalition (in a somewhat controversial situation of a non-profit funding political lobbying), which is one of the primary advocates of the "performance rights" interests.
        "Either that or he's unaware that the RIAA (in this case) has no interest and definitely isn't doing ASCAP and BMI a 'favor' by lobbying on their behalf..."
        Perhaps you could express your complaint more clearly, because Mr Masnick made no mention of either of those two collection agencies -- appropriately so, as apparently neither BMI nor ASCAP has any involvement with the collection of performance royalties on digital recording. As to RIAA involvement in that issue, there is significant evidence suggesting a connection.

         

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        techflaws (profile), Aug 23rd, 2012 @ 10:17pm

        Re: Re:

        I think Mike knows that when he writes "RIAA" people get all flustered and angry at the world.

        Noone is getting angry at the world, just at the dinosaur industries for acting like they do.

         

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        Karl (profile), Aug 24th, 2012 @ 8:38am

        Re: Re:

        THE RIAA HAS NOTHING TO DO WITH THE COLLECTION OF PERFORMANCE ROYALTIES!

        You are absolutely, 100% wrong on this point. The "Performance Rights Act" stipulates that royalties get paid to performing artists, not songwriters. This is in addition to the rates paid to songwriters and publishers.

        So the PRO's (BMI, ASCAP, and SESAC) are the ones who have nothing to do with these bills. Those entities those that hold the copyright on the underlying compositions. They do not represent those that hold the copyright on the sound recordings.

        If this bill passes, the PRO'S get no extra money at all. All the money goes to the RIAA clients.

        Grant Muller has a pretty decent take on it, here:
        http://grantmuller.com/making-sense-of-the-performance-rights-act/

         

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      Anonymous Coward, Aug 23rd, 2012 @ 11:39am

      Re:

      Right those fees actually make it to the small bands the sometimes pop up on my pandora station.

       

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    The Infamous Joe (profile), Aug 23rd, 2012 @ 9:45am

    Anger Management.

    It's enough to make me want to cancel my music streaming subscription I pay monthly for and pirate again.

     

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    Zakida Paul (profile), Aug 23rd, 2012 @ 9:46am

    I'm pissed off

    Last FM have had to get rid of a useful feature that gives listening freedom (unlimited skips) to it's subscribers because of licensing issues.

    I pay my monthly subscription so I should bloody well be able to skip as many songs as I want.

     

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    TaCktiX (profile), Aug 23rd, 2012 @ 9:54am

    I used to subscribe to Pandora in 2010-2011 until I found out I wasn't using the service, and I used it from 2007-2010 before then as a free listener. This debate isn't new, it was center-stage back in 2007 when the original totally retarded rates came into effect. And now they want to make it WORSE? Could we at least try to make the corruption less blatant?

     

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    Anonymous Coward, Aug 23rd, 2012 @ 9:56am

    "...fair compensation for the valuable creations they share with all of us."

    Compensation for sharing??!??! Where's my compensation for all the torrents I seed?????!!!

     

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    art guerrilla (profile), Aug 23rd, 2012 @ 9:59am

    (waving hand excitedly) oh, i know, i know ! ! !

    "Either way, can anyone explain just why the government is bailing out the RIAA in the first place?"

    um, motherfucking eagle ! ? ! ? ! ?

    art guerrilla
    aka ann archy
    eof

     

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    gorehound (profile), Aug 23rd, 2012 @ 10:12am

    The Government would "Bail Out" the RIAA as the RIAA SCUM pay them off in Millions of Dollars.
    There is no other reason why.

     

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    James Plotkin (profile), Aug 23rd, 2012 @ 10:18am

    Disingenuous Mike...They're not bailing out the RIAA...

    Geez Mike...

    Look, The RIAA is a non-profit organization. It isn't them getting "bailled out"...

    Also, the RIAA has nothing to do with performance rights...That's ASCAP and BMI. come on!

    On the substantive issue, I don't know that this law is a good idea. I'm also not sure that it's a bad idea.

    We have a model here in Canada where copyright collectives apply to the Copyright Board for tariffs on different types of uses. Radio broadcast (as well as Internet radio broadcast) are covered by tariffs and wouldn't you know it, our radio stations are still alive!

    The reason why this may not be the worst idea is because while imperfect (and I have my criticisms of them), collective licensing societies usually get a large part of their revenue to the artists. These royalties are accrued independent of how favorable or unfavorable your record deal is.

    Collectives like ASCAP and BMI should be able to collect for the performance of their catalog on the radio. I mean...why not?

    Why would the RIAA be lobbying for a "Performance Rights Act"? THEY DON'T COLLECT PERFORMANCE ROYALTIES!

    You have to inform yourself a little better Mike. This one is just sad...

     

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      Leigh Beadon (profile), Aug 23rd, 2012 @ 10:36am

      Re: Disingenuous Mike...They're not bailing out the RIAA...

      Why would the RIAA be lobbying for a "Performance Rights Act"? THEY DON'T COLLECT PERFORMANCE ROYALTIES!

      Performance royalties are collected by SoundExchange (spun off from the RIAA and still very much their buddy) and a lot of that money ends up in the pockets of labels (e.g. RIAA members)

      And you can debate whether or not it makes sense if you want, but it's true -- the number-one lobbying force behind the PRA is the musicFIRST coalition. Its key founding member? The RIAA.

      http://www.musicfirstcoalition.org/supporters/coalition

      Not as sad or uninformed as you think.

       

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        James Plotkin (profile), Aug 23rd, 2012 @ 11:05am

        Re: Re: Disingenuous Mike...They're not bailing out the RIAA...

        No. I stand behind what I said. Performance rights are administered by performance rights collectives (ASCAP and BMI).

        SoundExchage does administer performances of SOUND RECORDINGS (not the underlying musical works).

        Does this draft bill remunerate the sound recording makers or the musicians/song writers?

        I can't get a text of the draft bill so I can't tell. But Mike certainly hasn't made that clear. Everything I've read so far leads me to believe that it would be ASCAP/BMI administering these royalties, not the RIAA ro SoundExchange.

        If you say "performance royalty" without qualifying it, it leads one to believe your talking about performance rights on the composition. But of course Mike didn't specify that either.

        At best, this is confusing, at worst, it's disingenuous.

         

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          Leigh Beadon (profile), Aug 23rd, 2012 @ 11:50am

          Re: Re: Re: Disingenuous Mike...They're not bailing out the RIAA...

          It is very strange that, based on an admitted total lack of information yourself, you accuse someone else of being misinformed.

          The original Performance Rights Act is easily found. Here is the full text:

          http://www.govtrack.us/congress/bills/111/hr848

          It was about the public performance of recordings, summarized well by Wikipedia:

          Under the [existing] Digital Performance Right in Sound Recordings Act, sound recordings have a limited public performance right in digital transmissions, such as webcasting.[2] This bill would expand the performance right to cover terrestrial broadcasts, such as AM/FM radio.

          Those royalties are collected by SoundExchange. That bill's biggest backer was the RIAA, largely through musicFIRST. You can also see them supporting it on their own blog:

          http://www.riaa.com/newsitem.php?id=7BE7264B-5BC4-C823-777D-73D5B410805A

          Nadler's new bill is not identical, but accomplishes much of the same stuff -- and is still expanding recording royalties collected by SoundExchange. It is, of course, also strongly backed by musicFIRST:

          "The only real solution is for Congress to create a legal performance right, but raising terrestrial radioís digital royalties is an important interim step towards that goal. By effectively reimbursing performers for lost income, Rep. Nadlerís draft legislation recognizes the injustice of denying fair pay for airplay," said Ted Kalo, executive director of the musicFIRST Coalition, in a statement. "The discussion draft proposes a 21st century marketplace standard that treats artists and platforms fairly and equally."

          Perhaps more of this background information could have been included in the post but, as you can see, it's all out there -- and the conclusions you've jumped to are incorrect.

           

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            James Plotkin (profile), Aug 23rd, 2012 @ 12:18pm

            Re: Re: Re: Re: Disingenuous Mike...They're not bailing out the RIAA...

            Leigh,

            You're right and I was wrong. It is about the performance of sound recordings. Although, quite frankly, I wasn't the one reporting a story here.

            Like a lot of other people, this post confused me. I read every word twice and looked at all the sites Mike linked to. I also did a search of my own. It seems the other sites that have covered this issue wrote much the same thing as Mike (hence why he cites them but doesn't add anything).

            I've read the text of the old proposed act. You're absolutely right, it covers performances of sound recordings. But you must understand that this article was totally ambiguous. How is one supposed to know? When I hear the term "performance royalty" without any further qualification, it means performance of the musical work, not the sound recording. There are historical reasons for this...one significantly predates the other.

            I'm a big boy and can admit when I jump the gun. That said, my original criticism remains valid!

             

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              Anonymous Coward, Aug 23rd, 2012 @ 1:16pm

              Re: Re: Re: Re: Re: Disingenuous Mike...They're not bailing out the RIAA...

              He talked about streaming. Streaming is done on the web. Who collects royalties for streaming? Soundexchange. Nothing at all ambiguous, you just missed a few words.

               

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              Brent (profile), Aug 23rd, 2012 @ 7:11pm

              Re: Re: Re: Re: Re: Disingenuous Mike...They're not bailing out the RIAA...

              Thank you, Leigh! I was reading these comments and couldn't help but feel this entire argument was counter-intuitive. One cannot claim another is misinformed after admitting their only source of information is the one from whom they have just claimed is misinformed. That is called 'denial': (from merriam-webster) "a psychological defense mechanism in which confrontation with a personal problem or with reality is avoided by denying the existence of the problem or reality."

              All of his subsequent comments further indict him as a troll. He states that he read the article twice, read all the links provided in the article and then 'did his own search'. In other words, he had little or no information on this topic prior to reading Mike's article, then only after reading it, sought to disprove it and proceeded to draw both mis- and un- informed conclusions on the topic while accusing Mike of doing the exact same thing. His comments continuously claim Mike's article is ambiguous while ambiguously citing the reason as a difference between acronyms of organizations, a minor point to the larger topic. Finally, he admits to his error, only after being called out, but does not cede his point, instead choosing outright denial and maintaining his 'victory' (grow up).

              From Wikipedia: Troll (Internet): In Internet slang, a troll is someone who posts inflammatory, extraneous, or off-topic messages in an online community, such as a forum, chat room, or blog, with the primary intent of provoking readers into an emotional response or of otherwise disrupting normal on-topic discussion.

              Therefore, with no power whatsoever to do so, I both create and present this commenter with the Repentant Troll Award. "Because its one thing to troll then repent but its a greater feat to troll and repent whilst still trolling."

              That said, +1 for not being an AC and I forgive you.

               

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    rubberpants, Aug 23rd, 2012 @ 10:18am

    Quid Pro Quo?

    All legislation is fund-raising at this point. Congress is a corrupt, ineffectual institution.

     

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    Mike Martinet (profile), Aug 23rd, 2012 @ 10:22am

    More Inequity

    How much do I need to pay a congressperson to get a tax put on the internet so I can get paid when people view my artwork?

    It's not fair that people can see it for free.

     

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      rubberpants, Aug 23rd, 2012 @ 10:37am

      Re: More Inequity

      Hire a lobbying firm with former congressmen and staffers on the payroll. Have them hold large fundraisers for the top members of the committee that oversees the area of your concern. Send checks to these people as well. Figure out how you can get want you want and stil have let the representatives explain it as protecting the children, national security, or supported small business owners. Also look at getting it attached to a major defense spending bill or congressional pay-raise bill.

       

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        Mike Martinet (profile), Aug 23rd, 2012 @ 11:23am

        Re: Re: More Inequity

        Hire a lobbying firm with former congressmen and staffers on the payroll.

        Hm.

        I have sort of a chicken-22 going on here.

        I actually need to sell some artwork so that I can in turn invest in some legislation so I can sell more artwork, etc.

        But thanks for the tips.

         

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          That One Guy (profile), Aug 23rd, 2012 @ 12:43pm

          Re: Re: Re: More Inequity

          Please, selling stuff is so last decade, all you have to do now is throw together a vaguely worded copyright, add 'on the internet' to it somewhere to get it accepted, and then start sending out some shakedown letters to carefully handpicked targets(opening the phonebook to a random page and picking a name at random is the current accepted method).

          Voila, instant cash for no real work needed!

          And now to see how many trolls I can sucker in to agreeing before this last line.

           

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    Danny, Aug 23rd, 2012 @ 10:24am

    Weird Math

    As it stands now, the rates are so damaging that Pandora -- the top player in the space -- has made it clear it may never be profitable. Yes, never. Nadler's bill would effectively make sure that no one else in that market would be profitable either. The end result? Many of these services don't exist or never get started. That would actually mean fewer services, fewer listeners and lower royalties.
    It looks like record label folks and the people at RIAA went to the EA School of Business Mathematics (yes the game company). Where else can one learn that it's better to have 1 person $100 than for 1000 people to pay $10?

     

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    Anonymous Coward, Aug 23rd, 2012 @ 10:29am

    this fucking idiot needs stringing up by the bollocks! has he got no sense at all? does he think that there will be no other industries that demand to be 'bailed out' if the RIAA are? why doesn't he do the opposite and insist that they talk to and listen to what customers say and want from the industry before trying to save them from themselves and their own complete failure to join the digital world. how the fuck do these absolute fucking morons ever get into the political arena in the first place, let alone become senators? my prick has more sense than this. at least it knows when to keep it's mouth shut and back away to a safe distance before making a mistake it could regret for a very long time!!

     

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    Anonymous Coward, Aug 23rd, 2012 @ 10:30am

    Silly wabbit

    'can anyone explain just why the government is bailing out the RIAA in the first place?'

    Campaign contributions.

     

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    Kevin H (profile), Aug 23rd, 2012 @ 10:54am

    I am just waiting for the Born Music Tax.

    Its a new tax on all newborn children. Said child may here some music at some point and they did not pay for that music. This tax is levied against the parents and should be equal to no less than 10% of the fee paid for said birth.

     

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    Ninja (profile), Aug 23rd, 2012 @ 11:19am

    I think the Government should pass a NINJA BAILOUT ACT. You know, my comments are too valuable to be streamed like that on the internet.

    Notice how I used the magic phrase on the internet it certainly adds weight and credibility to my demands these days.

     

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    Kent, Aug 23rd, 2012 @ 11:23am

    Keep in mind that, in Canada, the radio broadcast tariffs are nowhere near 70% of revenue. I believe they were around 7.5%.

    Also, the Interim FIRST Act will require artist distributions to go to SoundExchange as presently written. The Performance Rights Act also required this.

     

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    Kent, Aug 23rd, 2012 @ 11:48am

    ASCAP and BMI represent composers. Since composers are artists, you're not wrong when you say that. They don't, however, represent performers (except for those who happen to also be composers). In fact, ASCAP and BMI at least initially opposed the Performance Rights Act for fear that it would either cut into their royalties by reducing the number of radio stations playing their members' music and/or would cheapen their work by giving the performers far higher royalties than what their members get.

    The current royalty structure requires webcasters (as well as cable and satellite radio) to write checks to ASCAP, BMI and SESAC while writing a separate check to SoundExchange. SoundExchange currently takes a percentage of the royalties paid for "administrative functions" and splits the remainder 50/50 between the artists and the record labels.

    The Interim FIRST Act doesn't change the mechanics of the royalty payments. It simply changes the standard used to determine what those payments will be. Section 801(b) requires, among other things, to consider damage done to the industry. Interim FIRST would put everyone on the "willing buyer/willing seller" standard, which is guaranteed to substantially raise everyone's rates.

     

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    anon, Aug 23rd, 2012 @ 12:00pm

    Solution

    Why not encourage them to do what they want, let them raise rates by 300%, or even 500%, on all forms of content, movies /music/e-books/airplay cost etc.

    Then there content will be more valuable to them, when they release a movie they can charge a minimum of $50 for the dvd and up the price for an e-book to $20 and a music track to $5. Yes they will lose a lot of customers but hey if they cannot afford it they do not have to consume it.Most if not all radio stations will be unable to stay onair with the costs involved so it will make space for others to improve there signal, there will be no internet radio's but hey why have them, let the content providers up the prices so high that only a minimum amount of people can afford it.

    We should have left the studios to change the laws exactly as they wanted and let them destroy themselves, at least then they would be half dead by now and maybe realise that the customer holds the purse strings.
    And yes some people would pay for the content at a raised price, maybe not many but there are a good few families that could afford to buy 20 tracks a month or a few movies to watch a month. They might lose 90% of there customers and have to close 90% of the theatres but hey they will still be making money, and the 90% of the population that cannot afford there content will look elsewhere and I am sure find other forms of entertainment to entertain themselves with.

    I think the big mistake we keep making is even considering the studios and artists, I mean they just want our money, they don't care if we can afford to pay, they only want the rich to consume there content , well I for one say let them do what they want, we will all still torrent things we really want to consume, they will get the high prices on there music, and everyone will be happy.
    I don't know why people are so interested in the studios getting a better business model which involves free, leave them to it , they will soon hang themselves if we give them enough rope.
    We should be calling for them to be allowed to change copyright as they see fit, exactly how they want. I mean most of the population disregards copyright now as being unfair so why encourage them to make it better, let them do what they want , don't advise them don't discuss it with them, just torrent whatever you can't afford and everyone will be happy, just don't let them try to take my freedom away from me, my freedom to share with others and all will be fine.

     

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    Thomas (profile), Aug 23rd, 2012 @ 12:43pm

    So how much...

    is the RIAA paying to have the law proposed/passed? I always wondered how much you have to pay, and do you pay cash or what.

     

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      Anonymous Coward, Aug 23rd, 2012 @ 6:01pm

      Re: So how much...

      You donate money to a Political Action Committee, such as the one formed for Rep. Nadler, Jerry's PAC. Afterward, the politican is said to be in "political debt" to you, which is usually repaid with legislation favorable to you (and/or unfavorable to your enemies).

       

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        The eejit (profile), Aug 24th, 2012 @ 4:57am

        Re: Re: So how much...

        Which is quite possibly the least sane mechanism I can think of for funding campaigns.

         

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          Niall (profile), Aug 27th, 2012 @ 5:03am

          Re: Re: Re: So how much...

          It's no less sane than having states able to make up the rules that (dis)allow people to exercise their Constitutional right to vote in Federal elections, or have those votes go through an electoral college that may completely ignore what they voted.

          It makes almost as much sense as voting in Sheriffs, etc...

           

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    gyffes, Aug 23rd, 2012 @ 12:47pm

    This is an Onion article, right?

     

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    Anonymous Coward, Aug 23rd, 2012 @ 1:08pm

    From everything I've read about the RIAA, in the past ten years. The only people who bennefit from the RIAA, is the RIAA. So let them go broke, the sooner the better.

     

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    Anonymous Coward, Aug 23rd, 2012 @ 1:13pm

    Gotta love our "Free market" where failing businesses almost fail but are given money by the government to keep from becoming irrelevant.

    Which of course means nothing will be given back to the public or to the people who actually paid for their continued existence, bravo USA.

     

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    Anonymous Coward, Aug 23rd, 2012 @ 1:20pm

    Not a single cent of this proposed tax will go to artists either.

     

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    Anonymous Coward, Aug 23rd, 2012 @ 1:43pm

    best option is for radio stations to stop playing music altogether. make sure the public know exactly why it's going to happen and when and that the only reason for it is, yet again, the greed of the entertainment industries. i doubt if it would take more than a few weeks before there was a massive plea from those industries to start playing music again as before. but i could be wrong. they are really good at kicking themselves in the balls whilst blaming dirty fighters for the injury

     

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      Anonymous Coward, Aug 23rd, 2012 @ 6:05pm

      Re:

      "Radio died because of piracy! We need more anti-piracy laws! Also, we need more bailout money because of the loss of income from radio."

       

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    Anonymous Coward, Aug 23rd, 2012 @ 8:32pm

    This would just turn radio stations into versions of MTV.

     

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    Tex Arcana (profile), Aug 26th, 2012 @ 3:52pm

    Y'all asked: "...can anyone explain just why the government is bailing out the RIAA in the first place?"

    Answer: Because our so-called "elected officials" (who are supposed to work for us) have been bribed and paid for by the aforementioned MAAFIA, and are now working for the toward yet another taxpayer ripoff.

    I mean, the banks did it; why shouldn't they?? It's all free money, they have a right to steal it too!!


    Yeah, right. It might be time to sharpen those pitchforks...

     

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    StepInside Music (profile), Nov 14th, 2012 @ 9:40am

    Royalties straight to Musicians

    This blog post fails to understand that performance royalty rates are not paid only to record labels, but also to independent artists that promote themselves. Internet radio, like Pandora, is not obligated to play specific music - as with terrestrial radio, ClearChannel, and top 40s. In fact, the music selected is based on the userís preference and their music library is vast. Despite this bill, the RIAAís profits will continue to decrease as more musicians are choosing to produce, publicize, and distribute their own music on the Internet. As such, these performance royalties will be going straight to the musicians themselves, as long as they are not signed with a label. I think this bill is a great way for musicians (not signed with a label) to receive some form of income in addition to live music and merchandising. Considering royalties for publishing and songwriting is managed by ASCAP, BMI, and SESAC, performance royalties may be the only way that independent artists are able to receive 100% of the profits for having their music played.

     

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