Why Did Pandora Sign Away Its Right To Petition The Copyright Royalty Board For Lower Rates?

from the well,-that's-obnoxious dept

It's already quite troubling that Pandora appears to be supporting the RIAA bailout tax against radios (Pandora's competitors), but now we have a better understanding of why, thanks to a little birdie who highlighted what's going on. Among the nasty little hidden gems in the recently agreed to webcaster settlement agreement (pdf) is that, if you want the lower rates in the settlement, you have to remove any objections to previous rate arbitrations and not participate in any future Royalty Board fights over royalties:

Article 6

Non-Participation In Further Proceedings
CPB and any Covered Entity making Web Site Transmissions in reliance on this Agreement shall not directly or indirectly participate as a party, amicus curiae or otherwise, or in any manner give evidence or otherwise support or assist, in any further proceedings to determine royalty rates and terms for digital audio transmission or the reproduction of Ephemeral Phonorecords under Section 112 or 114 of the Copyright Act for all or any part of the Term, including any appeal of the Final Determination of the Copyright Royalty Judges, published in the Federal Register at 72 FR 24084 (May 1, 2007), any proceedings on remand from such an appeal, or any other related proceedings, unless subpoenaed on petition of a third party (without any action by CPB or a Covered Entity to encourage such a petition) and ordered to testify in such proceeding.

Basically, this takes away the right of any company to fight for more reasonable royalty rates in the future -- which doesn't seem like it should be allowed. Based on this, there's basically no one left who can protest future rate increases -- which means that the RIAA/SoundExchange will easily be able to repeatedly push through greater rate increases.

Thus, since Pandora and the other webcasters won't be able to protest higher and higher rates, it needs to drag others into the fight to get help protesting constant massive rate increases: hence its support of the Performance Rights tax. In theory, if the NAB (who represents radio broadcasters) gets dragged into the fight, then there's a big dog who isn't subject to the draconian clause above, and can push back on the Copyright Royalty Board for lower performance rights taxes. Of course, that assumes that the NAB would fight for lower overall rates, rather than just focusing on rates for radio, and leaving the webcasters to fend for themselves...

No matter how you look at this, it's stunning that Pandora and other webcasters would sign away their right to state their own case in front of the CRB. RIAA/SoundExchange are laughing all the way to the bank. They get to make their case to increase royalty rates... while those who get stuck with the royalty rates have to shut up and take it. Regulatory capture at its finest. Again, we're left wondering why the Copyright Royalty Board even exists. Why are a group of old judges setting the price of music anyway?

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From Russia, With Stupidity: Band Must Pay Fines To Itself

from the in-russia-songs-copyright-you dept

Reader Wesha sends in the news that the band Deep Purple has been fined for performing its own songs in Russia without first getting a license from the Russian Authors' Society (NGO). And it wasn't a small fine either, approximately $1,000 per song. Oh, but wait, it gets better. According to one news organization, the money will be passed along to the victim, a band called... Deep Purple. Yes, that's right. Apparently, the band needs to pay a fine for performing the songs without properly licensing them from itself... so now it'll pay the fine and the fine will be given to the band (minus a commission to the Russian Authors' Society, of course.) Common sense just died.

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How The Recording Industry Changes Its Own Story

from the anything-for-the-money dept

We've already discussed how silly the Performance Rights Act is -- and how it's basically an attempt by the record labels to get their own bailout courtesy of radio stations. There are all sorts of problems with it, and Jess Walker does an amazing job explaining just how ridiculous the Performance Rights Act is. In doing so, he highlights one point that is quite a common trick in the RIAA's bag of tricks, but which doesn't get enough attention: how it changes the story to flip things around to its advantage over and over and over again. Case in point: the RIAA is arguing that it needs to get royalties to performers for radio air play to "even out" the situation, since radio is the "only" platform where performers don't get royalties. For example, they point to internet radio and satellite radio, where artist do get paid.

So, the RIAA claims, this is unfair... after all, why should they get paid for all of those, but not radio?

Except, the RIAA conveniently wants us all to forget history. That's because it was the RIAA who argued that satellite radio, internet radio and other forms of broadcasting were different from terrestrial radio, and therefore required different royalty structures. In other words, the only reason why this "unfair" dichotomy exists in the first place is because the RIAA lobbied for it by claiming that satellite radio and internet radio were different.

Now it wants everyone to forget that and pretend that it's some weird "anomaly" that terrestrial radio doesn't include performance royalties? Don't buy it. This is the sort of thing the industry has pulled off for years -- pushing one country to extend copyright laws, and then moving to other countries and working up a lobbyist campaign about how that country isn't keeping up with other, more reasonable countries, concerning copyright laws. Have you noticed what's happening in Canada these days? That's a direct example of this sort of thing.

Walker also takes on other points to show how silly and dangerous the Performance Rights Act would be. It benefits no one but the record labels. It harms radio stations. It harms independent musicians. It harms big musicians as well (since most of the money doesn't go to them, but to the record labels). Who does it help? The RIAA, of course:

And for what? Imagine, as a thought experiment, that this bill were passed and, simultaneously, payola were made fully legal. Does anyone doubt that more money would flow toward the radio stations than away? Radio remains the primary means by which the music industry promotes its product. By pushing for this fee, the labels are essentially asking their advertisers to pay them for the service of selling their stuff.

Ah, you say, but what about the independent artists who don't get big promotional pushes from the major music labels? Surely they'd benefit from a new revenue stream? Actually, they'll be even worse off. The economic mission of most commercial radio stations is to deliver audiences to the sponsors whose spots are aired between tunes. So programmers have a built-in preference for music whose mass appeal has already been proven. If you increase the cost of playing a record, that just intensifies the incentive: The more you pay to play a song, the more conservative you'll be about which songs you play. The marginal cost of playing each track is the same, but the commercial payoff is greater for established artists.

Generally speaking, the more it costs to run a station, the more risk-averse it will be. That's one reason low-power and Web outlets are more experimental: They don't have as much money on the line. But those stations--the ones that go out of their way to play diverse and unfamiliar material--are precisely the ones that have the hardest time paying the song tax. The proposed law acknowledges the problem by introducing a sliding scale, with the least profitable outfits paying $500 a year. But while that may be chump change for a big broadcaster, it's a pretty big piece of the operating budget for a low-power, volunteer-run community or student station.

Nor is it the only cost the law will impose. "The record labels are completely out of touch as to how college radio stations operate," Warren Kozireski, president of College Broadcasters Inc., recently complained on his organization's website. "The extensive record keeping requirements that will be required by the Copyright Royalty Board alone will add hundreds, if not thousands of dollars to the true cost of a performance fee." It's relatively easy to do that book-keeping if you have a narrow playlist and rarely deviate from it, as is the case with most large commercial radio stations. But if you have a library of thousands of albums and 45s, many of which were never reissued on CD, and if you allow your DJs to choose which ones they play--or even to bring in still more music from their personal collections of rare soul or jazz or bluegrass or electronica obscurities--then tracking the data suddenly becomes a full-time job.

Worse yet: Though the rhetoric around the proposal focuses on the benefits to musicians, much of the money won't make it to the artists in the first place. In part that reflects the fact that the fees go not just to the performers but to the copyright owner, which frequently means the record company. But it also reflects the corruption in the industry, which legislation like this has probably abetted.

As we've seen time and time again, if the RIAA supports it, it's not good for consumers. It's not good for musicians. It's not good for anyone but a small selection of record labels. Hopefully, Congress recognizes this for the pure money grab it is and shuts it down.

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Performance Rights Society Goes After Childrens' Charity

from the that-hard-up-for-money,-huh? dept

We've noted in the past that the Performance Rights Society (PRS), which is in charge of collecting performance rights royalties throughout the UK, has basically been pushing the boundaries of the definition of a "public performance" -- and it's reaching the point where if anyone else hears the music you're playing, you may owe PRS a royalty. For example, they first went after car repair shops where mechanics in the garage area were apparently listening to personal radios loud enough for customers in the shop to hear. Then, they went after police stations that had personal radios playing loud enough for others to hear.

The latest in its effort to look about as obnoxious as possible is to (seriously) go after a non-profit children's community center for using a TV, radio and CD player to keep kids entertained. As the folks who run the community center note, they already have a TV license, and have purchased the CDs legally. Yet, PRS wants them to pay again -- and not a small sum, either. It'll be another £3,000 to actually use these products that were legally purchased. It's almost as if the folks on the "royalties" side of the music business want to look as evil as is humanly possible.

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Dear Bands: No Matter How Much You Dislike John McCain, He Can Most Likely Use Your Song

from the can-we-get-this-over-with? dept

The latest in a long line of musicians complaining about Presidential candidate John McCain for his use of their music at campaign stops would be the band the Foo Fighters. Now, as we've pointed out in the past, there are two separate issues to keep in mind here:

1. In most cases, there's nothing these bands can do from a legal standpoint. Assuming the venue where the music is being played has paid its standard ASCAP license, they can play whatever they want. So when the Foo Fighters make statements like: "It's frustrating and infuriating that someone who claims to speak for the American people would repeatedly show such little respect for creativity and intellectual property" is somewhat misleading. It implies that McCain is somehow breaking intellectual property laws. He is not. No matter how much a musician dislikes it, they can't stop these kinds of uses, thanks to the way performance licenses work.
2. That said, it still seems rather dumb, from a PR standpoint, for the McCain campaign to keep doing this. By now, it should be clear that in a highly-charged political campaign, a band will speak up against the use of a song, if they don't like the candidate. That just leaves the campaign open to more negative press coverage in a way in which many people will sympathize with the musician against the politician -- even though the politician may be on the legally correct side.

Since the McCain campaign has so far ignored these requests in the past, I'm guessing it will continue to do so. But, to avoid these sorts of stories, it would be smart to start asking musicians whether or not they support the candidate before using their song. Or, perhaps, just start using public domain music.

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McCain Campaign Ignores Cease-And-Desist; Keeps Playing 'Barracuda'

from the legal,-yes,-smart? dept

Last week, we noted that the band Heart had sent a cease-and-desist letter to the McCain campaign for its use of their song "Barracuda" as part of the intro for VP candidate Sarah Palin (nicknamed Sarah Barracuda -- or, as someone noted, Sarahcuda). As we pointed out, it appeared that the cease-and-desist was pretty worthless on legal grounds. As long as the venue had paid the proper performance license they could play whatever songs they wanted. However, just because it was perfectly legal, didn't mean that it made sense. After all, picking songs from artists who disagree with your positions seems like a recipe designed to give someone else a platform to speak out against you.

However, it looks like the McCain campaign is sticking with the fact that this is a perfectly legal use of the song, and is ignoring the cease-and-desist. Video Savant writes in to let us know that the campaign is still using the song at campaign appearances by the candidates.

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Heart Demanding McCain Campaign Stop Using Its Song

from the not-much-leverage dept

Last month it was singer Jackson Browne suing the McCain campaign for using his song in a commercial. As we noted at the time, since it was used in a commercial, it was most likely infringing, but if McCain wanted to use it at an event, he could as long as he paid the proper performance licensing fees. So, now we have another situation where exactly that scenario has happened. At the Republican National Convention earlier this week, the speakers played the Heart song "Barracuda" for VP candidate Sarah Palin (who apparently went by the nickname "Sarah Barracuda"). This is perfectly legal, assuming that the RNC has paid the required performance license, and there's no reason to think they didn't, given how much music was used at the convention.

But, that's apparently not good enough for the band, who complained and had its label, Sony BMG, and its publisher Universal Music Publishing send cease-and-desist letters to the campaign. On what legal basis? They don't seem to have an answer for that. The whole thing is kind of silly. There's almost certainly no legal leg to stand on here, but it's surprising that the RNC wouldn't check first, given how others, like Browne, have reacted and the fact that the press would almost certainly cover the story (as they are). So, while there may be no legal basis for the complaints, it still is surprising that the RNC and/or the McCain/Palin campaign wouldn't bother to first check with the band to see if the members would be upset about the usage.

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Music As Torture: Are Musicians Whose Music Is Blasted At Gitmo Compensated For Public Performance?

from the wondering... dept

A little over a year ago, we reported on the news about US military officials playing loud rock music as "torture." Basically, they would blast loud music over and over again at folks who they thought would be annoyed by it. When we wrote about it, we were wondering if the US government actually paid royalties on the public performance of the music. Apparently, we're not the only ones questioning that. Howard Knopf discusses a musician who is (reasonably) upset that his music is being used in this manner, and questions whether or not the various collection societies are getting their cut of these rather public performances.

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UK Police Accused Of Violating Copyright By Listening To Music In Police Stations

from the keep-quiet dept

While we've seen performing rights groups like ASCAP be overly aggressive in trying to collect money from anyone holding a "performance" of music, it seems that the UK's "Performing Right Society" (PRS) is pushing the boundaries even more. This is the same group that we noted last year had sued a bunch of auto mechanics for listening to radios in their garages loud enough that customers in the waiting room could hear them. Yes, the PRS insisted that this required a performance license.

It appears that PRS representatives just go around the UK these days trying to see if they can hear music anywhere. One den of piracy that they discovered? Police stations! Yes, they're now accusing 34 police stations with failing to pay for a license because officers were listening to music loud enough that others could hear it. These would be the same police that are out arresting people recently for "Conspiracy To Defraud The Music Industry." Perhaps they should be checking themselves out as well.

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If You Play Your Radio Loud Enough For Your Neighbor To Hear, Is It Copyright Infringement?

from the maybe-so dept

In the past, we've wondered about the business logic of various music performance societies suing restaurants and bars for playing a music without a license. However, we never denied that it was well within their legal rights to go after these places for not getting a license for performance rights. It just didn't seem very smart from the business side of things. Still, it's not hard to go from the question of whether or not restaurants should pay for performance rights when playing music to rather ridiculous situations. Take, for example, the case that reader El Nege points us to in the UK, where a car repair firm is being sued because its mechanics listened to their personal radios too loud.

It's not difficult at all to figure out what's going on here. The mechanics working out in the garage have radios playing while they work, and there's plenty of noise in the garage, so they're likely to turn those radios up. Customers in the enclosed area next to the garage are certainly likely to hear that music... but is it really a public performance? The Performing Rights Society in the UK certainly thinks so, which is why they're suing. The repair firm, Kwik-Fit, has a pretty weak response, saying that it's banned personal radios for ten years. Instead, it should be fighting back on the idea that this is a public performance in any way. Otherwise, you get into all sorts of trouble. If you have the windows open in your home and are listening to your legally owned music (or your TV!) and your neighbor can hear it, is that a public performance? What if you live in an apartment building with thin walls? What about when you're driving with the radio on and the windows open? What if you're in your cubicle and the folks in the cubicles around you can hear the music? At which point do we realize how silly this becomes? It's difficult to see how, with a straight face, anyone in the music industry can claim that any of these situations represents harm done to them.

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