AdamR alerts us to the news that a bunch of castmembers from the hit TV show Glee are apparently quite upset that they're not seeing royalties from the super successful CD from the TV show.

After their latest record, "Glee: The Music -- Journey to Regionals" landed at No. 1 on the Billboard 200 chart in June, star Mark Salling said he'd seen "not a dime" of royalty payments from label Sony Music.

Co-star Corey Montieth told Toby Knapp's DC 99.5 radio show: "I got 400 bucks from it going No. 1. But you know what, that's OK, because if I'm patient, and if this thing does really well, maybe I'll see another 400 bucks."

... "The 'Glee' cast is furious because they feel they were misled by Sony," a source said. "They have all complained to Ryan that they want a bigger share of the royalties."

Well, that's how RIAA accounting works. Though, amusingly, the article notes that this is leading castmembers to make sure not to sign directly with Sony for recording deals, choosing to work with competitors instead (of course, with the major labels, they all cut deals like this). Either way, with the cast suddenly learning about music royalties, it makes you wonder if the show will stop ignoring them.

Well, well, well. A few years back, we noted that Eminem's publisher was upset about the royalty cut they were getting from sales on iTunes, and they eventually sued both Apple and Universal Music over this (though, I'm still confused why Apple is involved). The issue is a contractual one: as is standard in lots of recording industry deals, musicians make very little money from each album sold. However, when their music is "licensed" for other things -- such as a commercial, movie or video game, they make a much larger percentage. The reasoning, of course, is that there are a lot more "costs" that go into making and selling a CD, which the label is taking on.

But here's where it gets tricky: what is a sale via iTunes? Is that a "sale" like a CD (meaning a small percentage royalty)? Or is it a "license" like for a movie (meaning a much bigger royalty)? Conceptually, you can make a reasonable argument for either side. After all, from the consumers' perspective, it's very much like buying a CD. But... from a technological perspective, it's really a lot more like licensing, since you don't have the same production, physical goods, shipping and distribution costs. A jury originally sided with Universal Music, saying that it's really just like a CD sale, and thus, the lower royalties should apply.

However, the 9th circuit appeals court has just ruled the opposite way, saying that the contract is "unambiguous" that iTunes sales count as a license, for which the higher royalties apply: This could have a major impact on how much Universal has to pay out to musicians for iTunes sales. Of course, Universal Music is downplaying the ruling, saying that it's unique to Eminem's contract, and that the company plans to fight the ruling. However, Universal Music (and others, potentially) may be in bigger trouble than they care to admit over this ruling. There are other, similar cases underway as well. While I'm sure its more recent contracts are quite specific on this point, for large segments of the back catalog, Universal could be looking at actually having to pay out significantly more in royalties. Of course that assumes they have accurate records somewhere -- which certainly is no given.

Get ready to hear all sorts of stories from record labels about how India is "anti-music" and a problem. That's because the Copyright Board in India just drastically changed the royalty structure for playing music on FM radios. Rather than a set hourly rate of approximately $25.60 - $35.50/hour (1200 to 1600 rupees), it's now saying that stations should just pay 2% of their net advertising. That turns out to be a massive change -- perhaps a drop of about 90% to the record labels, since the current hourly rates represent about 18% of net advertising revenue. Of course, as the article points out, the 18% rate was much higher than most of the rest of the world and crippling to radio stations. But, in the world we live in, the record labels will never accept the idea that they don't always deserve greater and greater rights to money.

The RIAA is in the middle of a big fight for new royalties (i.e., a performance rights tax) on songs played on the radio, going on and on about how anyone against those fees are "stealing" from them. Yet, when it comes to the royalties that RIAA members have to pay to others, suddenly those are worth fighting against. As you hopefully know, there are a few different copyrights related to music. There's the copyright on the recording itself, which is usually held by the record label. But there is also the copyright on the song or composition, which can be held by a music publisher or the songwriter.

For whatever reason, while there is a compulsory license setup for anyone doing a cover song, such that if you cover a song, you don't have to first get permission to do so, but you just have to pay an agreed upon rate, which is usually set by the Copyright Royalty Board (a group of judges who more or less pick a number out of a hat). There are all sorts of problems with having a group of judges trying to randomly set prices on royalties, but it is how the system is set up. What's amusing is that after a recent Copyright Royalty Board ruling on cover songs set the rate higher than the RIAA liked, the RIAA went to court to get those rates changed. A district court turned the RIAA down, and now an appeals court has done the same. Specifically, the RIAA got upset that the CRB said it had to pay late fees, and also that it says composition copyright holders should get a whopping 24 cents for every ringtone sold (way above the rate for songs on CDs). Instead, the RIAA argued that songwriters/publishers should receive a percentage of revenue. This one really makes me laugh. For years, various digital music startups have tried to license music from the RIAA -- and all of them go to the RIAA with a "percentage of revenue" offer. In every single case the RIAA turns them down, demanding huge upfront fees and guarantees on revenue. Funny that when it's their own money on the line, suddenly a percentage of revenue is the preferred option.

In both cases, the court rules against the RIAA, pointing out that, even though the RIAA doesn't like the ruling, the CRB is well within its legal mandate to make both decisions. To be honest, I actually think the RIAA is correct that these rates and the reasoning behind them are ridiculous and not at all sensible. The ringtone rate, in particular, is particularly egregious, and make it difficult for creative business models that embrace things like free ringtones to exist.

However, I find it to be quite hilarious to see the RIAA arguing so vehemently against these rate rulings, when it's demanding similar rulings on its own behalf. Apparently, the RIAA really only supports such rates when it gets to collect them. When it has to pay out, suddenly those royalties are a problem. Funny how that works...

Reader mick writes in to alert us to a group of photographers in Australia who seem absolutely livid that the government's latest toursim campaign sought to crowdsource photographs that could be used as part of the campaign. To me, that seems like a perfectly reasonable idea -- in fact, a good idea in engaging people and getting them to take part in the campaign. But the problem comes from the fact that Tourism Australia asked people to let it use the photographs for free. That's when a bunch of groups went ballistic:

The National Association for the Visual Arts, the Australian Copyright Council and the Arts Law Centre of Australia are protesting the conditions.

They are demanding the agency relicense any photographs used in the campaign to pay royalties to the artists.

Let me get this straight. Even though the whole thing is completely optional, and photographers, who don't like the terms, have every right to just not participate, they're pissed off that others can participate -- of their own free will -- by letting the Tourism campaign use their photographs freely. If the photographers don't mind the terms, why should others? The reality is that these groups are trying to stomp out amateur competition. This whole hissy fit is about limiting the market to professionals, and keeping the amateurs out.

Arts Law Centre of Australia chief executive Robyn Ayres says the copyright rules set a "worrying precedent".

"The creative industries play a huge role in our economy and our culture," she said in a statement.

Of course the creative industries play a huge role in the economy and culture. But what does that have to do with willing participants letting the Tourism campaign use their images for free of their own free will?

"Refusing to license these photographic works in an appropriate way sends a message that it (government) does not value creative work in the same way as it values other economic assets."

No, it shows that the Tourism group realizes that some people are more than willing to contribute their works for free for reasons other than direct payment.

Last year, we wrote about an effort by the Australian performance collection society, the Phonographic Performance Company of Australia (PPCA) to massively boost royalty rates played by gyms, who often use music in exercise classes. This followed a similar effort with massively boosting rates at clubs and bars, which led those clubs and bars to stop playing covered music. It looks like the same thing is happening in gyms as well. Reader Shadzzy sends over news that the Australian Copyright Tribunal (who knows what they were thinking) has approved the massive boost in royalty rates. Where gyms used to have to pay $0.968 per class, they now have to pay $1 per participant per class. That's a massive increase, and makes it impossible for many gyms to pay those royalty rates.

What it means, of course, is that the music is being played less. The gyms are looking for alternatives, because it simply doesn't make sense to pay tens of thousands of dollars to promote music to its members. PPCA is, of course, in denial. It's claiming that people are complaining about gyms not playing popular music, and that fitness centers who won't play popular music at such extortionate rates are treating its members "with utter contempt."

"We've seen a groundswell of discontent from gym members and fitness instructors who've been ordered to use cover music."

I would imagine that those members would find having to get a massive increase in their membership bill creates a much bigger "groundswell of discontent," and would find that it's actually PPCA that's treating everyone with "utter contempt," by making the situation worse for everyone. The musicians PPCA "represents," now get their music played significantly less. Gyms have to offer a "worse" overall service, and members get a somewhat worse experience. The problem is that PPCA (and the Copyright Tribunal's) view of what is a reasonable royalty rate is simply out of line with reality. But since the entertainment industry has been able to set up this system where the government sets the price, and the industry influences those setting the price, then it gets to set rates that have no connection to reality.

Beyond being a world famous musician, engineer, producer and journalist, Steve Albini has long been pretty outspoken about the music business itself -- and while I don't always agree with him, I appreciate that he speaks his mind and often presents his arguments in ways that make me think and reconsider some of my own positions. herodotus points us to the news of some comments Albini recently made at a conference about the music business, with a great quote about the focus of so many on royalties:

"Royalties are a means to pay producers in the future -- and in perpetuity -- based on record sales," said Albini, who is also a music journalist. "If a band does a show, blows a whole bunch of minds and a bunch of people become fans and go out and buy millions of records, the producer gets paid. I think that's ethically unsustainable.

"I don't think you should pay a doctor extra because a patient doesn't die. I think the doctor should be busting his ass for every patient. I don't think I should get paid for someone else's success."

I'm guessing that we'll get a fair amount of disagreement in the comments, but I think it's a point worth considering. So many creative industries get really hung up on royalties and collective licensing and other aspects -- when those are basically lottery tickets, relying very much on what other people do, not on the work you actually do. And it leads to this entitlement mentality that we see all the time, where certain content creators feel they need to get paid every time their content is used -- even if they didn't do any additional work on it. This is what all the ongoing legal battles about collective licensing and royalty rates are about. This is what the Hollywood writers' strike from a few years ago were about. They're ongoing attempts to keep getting paid over and over again for one thing you did in the past. Most jobs don't work that way -- and that's the point that Albini is making.

Now, some will argue, of course, that the entertainment industry is "different," because it involves more speculation: no one knows if the content you create will be a hit, so the concept of royalties is a way to deal with that. But that assumes a rather static market, and pays little attention to the entitlement mentality that it creates. If you have a hit, charge more for future work -- rather than focusing so much on getting paid over and over and over again just for that one piece of work you did in the past.

So lots of people have been submitting versions of the story about how Pink Floyd is suing EMI, claiming that EMI isn't paying the band what it owes for iTunes downloads. I'd avoided posting this, because it's basically the same contractual dispute we've seen from other acts, where they claim that their labels are accounting for iTunes downloads improperly in order to avoid paying the bands. This story is as old as the recording industry itself. The labels have always worked hard to avoid actually paying bands anything.

But what made it worth mentioning is that the lawsuit has come out at just about the same time that the record labels are now hilariously trying to claim that radio stations are "pigs" who refuse to pay musicians. In one of the more juvenile pranks out there, a lobbying group supported by the labels is going around with a giant inflatable pig, mocking radio stations for "refusing to pay musicians for their work ."

You would think that the record labels would be smart enough to avoid making an argument that could so easily be turned against them. How about before you go blame the radio stations for not paying the labels to promote your acts, you start out by paying money to some of your top selling acts who claim they've never seen a dime in royalties. Given the labels' propensity to blatantly lie to artists about how much they're owed, you'd think the last thing they'd want to do is call attention to who is "refusing to pay musicians for their work."

One of the earlier fun things on Twitter was the lyric of the day bot @lotd. Basically, if you sent a Twitter message to lotd, it would automatically repost the lyric for other lotd fans to read. Neat! But is it copyright infringement? Well... we've seen claims that lyrics online need to be licensed, and there have been a few discussions around whether or not you can copyright a tweet, but would anyone seriously try to collect royalties on Twittered lyrics?

Apparently the answer may be yes. Reader Anshar points us to a story claiming that Japan's collection society JASRAC is putting together plans to collect royalties on Twittered lyrics. Honestly, the whole thing sounds so ridiculous that I'm hoping the original report is coming from the Japanese version of The Onion (please, someone tell me that's the case). But this is JASRAC we're talking about -- which attacked YouTube quite early on for not stopping all copyrighted songs from appearing on the site.

According to the report, JASRAC said: "We want everyone to recognize that Internet is not your private place," in defending the plan to charge royalties for such lyrical tweets. No, it's not your private place, but that also means it's not the industry's private place to automatically demand the right to collect money any time anyone utters a snippet of a lyric. Japan's copyright law is a lot less well developed than the US, and it doesn't really have fair use within the law (notably, Japan has been a big supporter of ACTA).

Either way, if this story is true and not just some joke (please, please, tell me it's a joke), it's really quite ridiculous. People tweeting lyrics are not harming anyone by any stretch of the imagination. They're fans. They're encouraging more people to find out about a song or to remember an old song. They're not taking away licensing rights or revenue or anything. They're sharing lyrics, which is something JASRAC should be encouraging.

Just in time for the holiday season, SteveD alerts us to the news that PPL, Phonographic Performance Limited -- a separate UK licensing group, which collects for performers and producers (unlike PRS, which is for songwriters/record companies) -- is pushing forward with demands for charity shops to pay up for a license on top of the license they already pay PRS. In the past, the UK government exempted charities from having to pay the PPL license, but they've now removed that exemption, and like so many music collections societies, PPL didn't bother to consider how it would look to shake down charity shops, and apparently just drove forward with plans. Nice of them. This is what happens, of course, when you create the statutory ability to shake down anyone who plays music. That right just expands more and more, and the musicians and songwriters never have to actually give people a reason to buy: they just sit back and collect.