Webcasting Non-RIAA Music In Protest May Only Make The RIAA Wealthier

from the and-the-RIAA-may-keep-the-money dept

Following the latest webcasting rates that will likely put many webcasters out of business, one suggestion was that webcasters should simply play non-RIAA music. In theory this would help in multiple ways — giving those independent musicians more publicity while avoiding the draconian webcasting rates. In practice… however, that won’t work. Slashdot points us to an article dissecting the fine print, where you’ll discover that SoundExchange, which is the RIAA’s collection body, actually gets to collect money for non-RIAA members as well. In other words, even for independent artists who don’t want webcasters to have to pay, webcasters will still need to pay up.

The story actually gets even worse. As we noted a few years ago, part of the deal is that SoundExchange and the RIAA get to keep any unclaimed money for themselves. Even better, SoundExchange can simply pretend not to be able to find the musicians (as they’ve done with a ton of big name musicians in the past). So, chances are, many independent artists have no idea that SoundExchange is hanging onto a bunch of money they didn’t even want collected and there’s almost no chance they’ll claim it — meaning that if you try to avoid the webcasting rates by playing non-RIAA music, there’s a good chance you’re actually enriching the RIAA even more.

Just for fun, why don’t we compare two situations? The RIAA tells people that simply listening to music without paying for it is a terrible crime that people should be punished for. Yet… the RIAA getting money for non-RIAA music and not paying the deserving artists that money is perfectly legal? Damn, the RIAA lobbyists are good.


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Comments on “Webcasting Non-RIAA Music In Protest May Only Make The RIAA Wealthier”

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79 Comments
Mike (user link) says:

Re: Legal "oops!"

Well, what I can tell you is that I will not be honoring any cease-and-dissist order from the RIAA, SoundExchange or any other entity for non-payment of royalties for non-participating artists. Why? We only play local artists who are unsigned (Dallas area) where we have received not only written, but personal permission from the only holder of any intellectual property rights to the music – the artits themselve (most are personal friends of ours). Remember a couple of things: This collection of royalties for non-participating artists is merely the RIAA’s *interpretation* of the Copyright Board’s ruling. The Congress of the United States cannot, by edict, transfer ownership of property (intellectual or real) from one entity to another without due process and/or fair compensation. By claiming the right to collect royalties for non-participating artists (and taking about half for themselves in the form of “service charges”), the RIAA is, in effect, claiming that the Copyright Board transferred to them, at no cost (other than possible bribes and lobbying costs) and with no due process, the performance rights of all artits in the United States. Therefore, any attempt to collect royalties “on behalf” of the artists we play will be greeted with an invoice to compensate the bands IN FULL for their performance roylties, at a rate the artist sees fit. Under the current structure, SoundExhange would claim that they are not “taking” the money, just “holding” it for the artits until they can collect. That would be the same as me demanding payment for your rent or mortgage even though I have no prior legal claim (don’t own the property, etc). THEN, I will charge you a “processing fee”, which would amount to about half of what I took, in order for you to reclaim the money spent on my unwanted “service”. Furthermore, the RIAA oftentimes “pretends” they cannot locate the artist to pay the royalties (and they do this to national acts, not just indies). And after three years of not looking, they get to keep ALL of the royalties collected. In giving them a big middle finger, I would also ask the RIAA their official position. Do they believe that:

A) the owner of intellectual property rights gets to determine the cost of usage of those rights, and to negotiate those rates with whomever they see fit

or…

B) owners of intellectual property rights DO NOT get to determine the cost of usage of those rights, and DO NOT get to negotiate those rates with homever they see fit.

You see the problem? The RIAA would answer “A for anything *we* own and B for anything *you* own”, which is not a legally firm position. They cannot claim that they can set royalty fees as they see fit, with whomever they see fit and also claim that indie artists cannot do the same. Remember, this is about intellectual property rights, who owns them, and what the owner can and cannot do with them. None of this has been challenged in court. I would love to see it done.

Mike (user link) says:

Re: Re: Legal "oops!"

And yes, most of this hysteria is in fact a misunderstanding of the phrase “compulsory license”. Please read the wiki link above for a legal definition. Basically it allows use of works without seeking prior permission under certain circumstances, so long as you’re willing to pony up when SoundExchange or the artist(s) come calling.

Mike (user link) says:

Re: Re: Legal "oops!"

And yes, most of this hysteria is in fact a misunderstanding of the phrase “compulsory license”. Please read the wiki link above for a legal definition. Basically it allows use of works without seeking prior permission under certain circumstances, so long as you’re willing to pony up when SoundExchange or the artist(s) come calling.

college dude (user link) says:

why hasn't anyone done anything about it?!

So… if I wanted to webcast music that I recorded here in my living room, I would somehow need to pay the RIAA? How would they even know I am webcasting? Why would anybody webcasting non-RIAA music go through an RIAA agency to webcast their music?! This doesn’t make any sense at all. Maybe I should do my own content production, and all the truly non-RIAA webcasters could put out their music through my internet radio instead. Or is there some law preventing me from doing that?

Tashi says:

Ditto. I can’t even fathom how that is possible. Even when businesses pay protection money to gangs and organized crime, the gang in question provided the service of protecting that property from rival gangs and random crime. In this scenario, you’re not even afforded that luxury. Essentially a gangster comes by your place of business, takes your money and renders absolutely no service whatsoever. That’s insane… more insane than what organized crime does… oh wait this is organized crime, on a whole different level.

Evostick says:

Definition of music?

When does something become a piece of music? If there is a webcast of me talking in monotone, then that’s alright. But if I start talking in a tuneful voice, do I have to pay?

Or the otherway round. What if I sound like I’m rapping around? Will they still squeeze me? (hey this sh*t is easy!)

Evostick says:

Re: Re: Definition of music?

You are right! It’s not just music that gets taxed. This is in the non-commercial section.

“The NRBNMLC further proposes that for news, talk, business, teaching/talk, or sports stations the aforementioned annual fee alternatives drop to $100 and $250 respectively. Mixed format stations would pay a pro rata share of these annual fees based on the demonstrated music-talk programming breakdown.”
(p26)

Tashi says:

ooooh I gotcha

If I understand it correctly, the issue is broadcast over the internet or internet radio, i.e. the webcaster. Someone, anyone broadcasting a song, ANY song over the internet, Sound Exchange has the right to collect a royalty on it. So buy the music being webcast, the artist’s rights, even if you own the copyright is automatically circumvented.

If said artists wants a piece of that royalty pie, the artist must join and therefore pay a fee to Sound Exchange.

In short, internet radio has been hijacked. It is a horrible precedent as no doubt other media will follow.

mike allen says:

they are ********

The point is this
1 you have to pay if you are not even playing music
2 if you write and play all instruments and sing the track yourself then stream you have to pay and if lucky get a small percent of your money back.
3 at the moment if you are outside the US then it dont concern you but for how long as the IRAA put pressure on other countries to do the same. As I own a talk station I have no intention of paying for music we do not even play. At the moment not in US but how long before this is forced on us.

Tom says:

I’m sure a year from now youtube will be paying royalties to the MPAA for the right to broadcast MY home videos, which will force them to pass the cost on to me by charging me to submit videos. Then a year after that everything everyone writes on this and every other website will be the property of… I duno, Simon & Schuster or something. In short: terrible precedent being set here. It’s not right and it shouldn’t be legal.

Anonymous Coward says:

Re: Re: Is it legal?

oddly enough, there are large amounts of the population who are sure that income tax is illegal in the US, and there is no law explicitly stating you have to pay them. Basicly, something as large as income tax requires an amendment to the constitution because the constitution itself stipulates explicitly what the government can and cannot tax. Nowhere in the constitution does it say you can tax income. Unfortunatly its one of those things that has to hit the Supreme Court to be overturned, and be ruled unconstitutional, because Congress did not institute income tax, the IRS did. Congress only set up a body to oversee and manage the US’s income gained through taxable means. There is no way in HELL the rest of the government would let a case on it get closer than say.. pluto, to the Supreme Court.

Anonymous Coward says:

Basically, at this point I consider the RIAA to be little more than a crime syndicate and extortion racket and I’ve stopped caring what they claim their (or any record labels or artists that support them) so-called “rights” are. Given the number of duplicitous and outright immoral infractions this organization has continually and increasingly perpetrated, even any possible legitimate claims have no merit any more as far as I’m concerned. Someone who earns their living “stealing” from others, has little room to criticize if they, in turn, are “robbed”.

Jesse-James (user link) says:

Re: Re:

In my opinion crooks have no rights anywhere in the world. Including the US Government. Each year some damn politician comes up with an idea to take another little piece of our rights, and who actually votes these laws into the books ? I DON’T NOR HAS ANY OF THE VOTERS I HAVE TALKED TO. People should ask themselves these questions when they go to the poles and vote for government officials.

The infamous Joe says:

Haha, this is a May Fool's Joke, Right?

This is insane– I need one of those RIAA fanboys to come and tell me how, exactly, this is legal.

What I really want to know is how the have the *legal right* to do this… I need to do some research. What happens if I’m webcasting some music I, and only I, made and then refuse to pay them? Do I get sued, and for what? Do I go to jail?

This has to be a joke.

An Angry Gamer says:

Band Together!!

As Americans and human beings, we should band together and call for the complete and total deconstruction of the RIAA. Once we’ve established a process of SFRB (Stupid Federal Regulatory Bodies) disestablishment, we hit the FCC with our new BIG (“Ban-Idiots-from-Government”) bat.

You never know says:

Everyone says, “Band together!” and asks “Is this legal?” The problem is it’s to late to band together, and it doesn’t matter if it’s legal or not, no one can afford to fight it. As I have said before, no, ranted before, we do not have the voice or the power to do anything but quite latterly, pay the piper. Big corporation has found the way to wring money out of us the users in almost every aspect using the very legal system designed to protect us the people. For music, for software, for services, and about everything you can imagine, we will have to pay and keep paying, as we can not “own” any of it. Even if you do drag out your soap boxes and shout into the wend how long will it take before you find yourself in a court room facing litigation just because some one took offence and sees a way to make money. Even our words will be up for scrutiny as someone will clame patent rights to our phrases and speeches. The only chance there is to taking control of the beast is to starve it, and they know damn well we are not about to give up our little indulgences. The only bright side there is to this scenario is that it is self defeating. Eventually they will run out of people to sue, there will be no music other than that sanctioned by the corporation, there will be no free speech other than what they want to hear. There will be no creativity other than that contracted by the business. When people quit caring then the system will collapse and we can start over again. Lets pray our kids will have better sense than let It happen again.

Greg (user link) says:

This is pretty messed up, right here. I’d have a hard time believing this was even true, if it weren’t right in front of me.

That’s more than a little strange, that SoundExchange is in a position to collect money on other people’s copyrights, with little to no obligation to pay the actual owners, and no way to opt out. Good job industry lobbyists, I guess.

John (user link) says:

I’ve been asking from day 1: Who gets the money from this so called Copyright Royalty Board? Where does the money go and what gives them the right to claim this money?

I’m glad to see that Congress has stepped up as a result of the SaveNetRadio.org campaign. However, the real solution isn’t a delay, postponing rate increases until 2010, nor is it keeping a revenue share model rather than per song per listener per stream fee. The solution is a serious rewrite of what a copyright is, what a performance right is, how each affect musicians and artists etc. Take lobbyists organizations out of the loop.

Kurt Hanson has a good explanation here:
http://www.kurthanson.com/archive/news/031607/index.shtml. He explains a great deal and has some more appropriate solutions than just delaying the changes of the CRB.

Nick says:

sharing copyrighted music.

thought I’d throw a little fuel on the fire here. A few years ago a friend of mine got an email from RIAA asking him to stop sharing copyrighted music, or they would have to prosecute him. His response was very simple. Bring it, The only music that he had shared was his own. Now they have found a way to prevent that.

I wrote my congressman twice on this issue, and only got automated responses. I didn’t reallize that it was going to be voted on so soon, or I would have written a few more times.

Arg

nick.

Yet Another anonymous coward says:

RICO perhaps?

RIAA is like a union, and they collect fees whether you are a member or not. This is classic abuse of capitalism and democracy into a puppet dictatorship that has cajoled the government into bypassing any anti-trust laws to grant them carte-blanch to control the music industry.

So, let’s try this tactic: don’t call it music. Let’s make up some words, like the Scientologists do, and we can webcast xyzzy’s and we can enjoy the result as mxplxyt.

Or, we can just start building webcast farms in the Caribbean, where the weather is better anyway.

Quantum John (profile) says:

Two Alternatives

There are 2 alternatives that leave SoundExchange and the RIAA penniless:

  1. The groups producing the music can submit their music to a webcaster with the stipulation that they webcaster may webcast their music for free. There are no royalities to be collected by anyone.
  2. The groups producting the music could pay a webcaster to play their music (based on flat fees or by auction). There are no royalities to be collected by anyone.
Anonymous Coward says:

Re: Re: Re: Two Alternatives

SoundExchange can demand anything they want, but if you aren’t playing RIAA tracks, haven’t signed a contract with SoundExchange, and the sources of your music don’t require you to pay royalties, they have no legal basis for their claim.

Yes, they do have a legal basis, now. That’s the whole point. They paid off enough politicians to get laws passed to give them a legal basis. And since it’s a federal law the FBI and federal SWAT teams can enforce it (funded by your tax dollars). Sweet.

ehrichweiss says:

The skinny...

Ok, to answer some of the questions, here is my understanding of what’s going on…

As a webcaster, if you want to play RIAA-backed music you have to sign a license with SoundExchange, and once you’ve signed that agreement you fall under this provision.

If you have not signed an agreement with SoundExchange, you’re in the clear so long as you don’t play any RIAA-backed music.

Got it now?

Overcast says:

My question has been for some time…

Is the benefits of owning music really worth all this?
I can just listen to the radio, and really not have to worry about it.

To me, it’s just not. I don’t bother downloading it, as I don’t see fit to swipe it all. But buying it? CD’s are too pricey and digital media is mostly too costly, especially when you take into consideration all the DRM issues.

Frankly, I’m tired of even thinking about it all. The RIAA and these artists can keep the music to themselves. If the radio’s left just playing old hits from the 50’s, 60’s, 70′, 80’s, etc… that’s ok.

It says a lot when songs from the 80’s make it back onto the charts again, anyway.

I personally think they all can stick their BS where the sun don’t shine…

Anonymous Coward says:

Re: Don't do what they say

If you really want to stick it to the RIAA, you shouldn’t play non-RIAA music; PLAY RIAA MUSIC! Vigilante, pirate radio! Protest the RIAA by not doing what they say. Don’t be afraid to stand up to them.

If you do, you better be located in some country that is willing to protect you from US force because that is what it ultimately boils down to.

SailorRipley says:

Too late to band together...?

I don’t agree…

“We” just need to get organized…

1) band together, on a site like for example (I quickly googled it, I don’t know if this is the best one) http://www.boycott-riaa.com/

2) more importantly, TAKE action…we all (including me) like to bitch and complain about what the RIAA is doing, but that’s pretty much all most of us do…
How about we start actually doing something, like educating the general public…go to stores that sell CDs, counter the FUD, hand out pamphlets, explaining some of the crap the RIAA gets up to (like fixing legislation so they can collect money for any artist, even ones that aren’t members, keeping money for arists they “can’t find”,…), have people sign a petition, etc…

You’d be amazed how fast things can change when the “public opinion” is involved…after all, doesn’t matter how much money corporate america gives politicians, it doesn’t help them if they don’t get elected

I would have no problem spending whatever time necessary, and even a little $ to draw a line in the sand and say, you’ve gone way too far, this is ridiculous and we won’t stand for it…fix it or else…

The Observer says:

This sounds familiar...

At least on an abstract level.

I’m in Iowa (one of the fly-over states), and this year our legislature considered a bill which would have forced a company’s non-union employees to pay what amounted to a subset of union dues for “services rendered”. The bill was modified–this session at least–to only impact government workers, and was passed and signed into law.

Very similar to what’s going on with RIAA/SoundExchange. Not a member? Pay up anyway. Don’t want people charged for your music? Too bad…pay up anyway.

All about wealth transfer via unions.

mike says:

Re: And what if I don't webcast but set up downloa

they would try and do you or the people who downloaded it the RIAA sued people who downloaded a track from the group six inch nails who had given permission for the track to be downloaded. so had there record company the people who downloaded the track have been sued by the RIAA.

Anonymous Coward says:

Read the definitions. Performances, the things you are paying for, are portions of a sound recording played for a Listener, but _EXCLUDING_:

A performance of a sound recording that does not require a license (i.e. no copyright)

or

A performance for which the service has obtained a license from the copyright owner. (i.e. you own the copyright, or have permission from the owner to play it)

or

Incidental use, like transitions, etc.. Like short snippets of recordings.

So SoundExchange can NOT (legally) collect for public domain music, your own music, presumably certain Creative Commons licenses of music, etc…

Anonymous Coward says:

Re: Re:

Read the definitions. Performances, the things you are paying for, are portions of a sound recording played for a Listener, but _EXCLUDING_:…A performance for which the service has obtained a license from the copyright owner. (i.e. you own the copyright, or have permission from the owner to play it)

So do you mean that the RIAA and SoundExchange are publishing false statements about the law?

Anonymous Coward says:

re: definition of performance

Sorry, here is the link to the proceedings.

http://www.loc.gov/crb/proceedings/2005-1/rates-terms2005-1.pdf

The definition of a performance, referenced in comment above, is on page 104.

It seems clear from the definition that if you have a license agreement with the owner of the copyright, then the use of that work is not covered by the rates set by Royalty Judges.

However, if you do not have an agreement with the owner of the copyright, or possibly even if you do but can not prove it, then it appears that SoundExchange can collect payment.

smokebreak says:

At Digg.com they are censoring their stories about HD-DVD. It’s all due to the decryption key string that has been available for a week now. I personally am going to use this for my Linux box, much like i use De-Css.

09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0 – The number string that is causing censorship in blogs (HD-DVD key for Linux use)

Fight the DRM with information, I just thought that this would be most relevant to this story being you can download hd content to your pc, but only legally buy buying it, not if you already own it and want to transfer it to another medium

This is the website contact address that sent the cease and desist take down notices to Google….. Have fun with it (DOS-it? :P)
webmaster@proskauer.com

Dan Oblak - MacBigot.com (user link) says:

This thread is getting more annoying as I head dow

OK, several people have asked the same question, and all were mocked for daring to ask. But NONE were answered.

Here we go again: Who and/or what gives Sound Exchange their ‘right’ to collect funds from a webcaster that uses no RIAA-related content? The FCC? The SEC? The FDA?

Please somebody point me to an article that helps me understand why there would be any involvement at all if, say, a bunch of high school students wrote and recorded their own original music, and I contracted independently with them to give their songs ‘airtime’ — how and/or why is Sound Exchange a factor?

*Making fun of me for being so ignorant is not the same as answering my question. Pretending that you are a ‘victim’ and acting all hurt that I insulted your godlike omniscience about the webcasting world does not make me cower any lower in insignificance.

I’ve got nowhere to go but up, baby…

Mike (profile) says:

Re: This thread is getting more annoying as I head

Hi Dan,

Here we go again: Who and/or what gives Sound Exchange their ‘right’ to collect funds from a webcaster that uses no RIAA-related content? The FCC? The SEC? The FDA?

It’s the Copyright Royalty Board: http://www.loc.gov/crb/ which is part of the Library of Congress. All the background info can be found at that site.

James Stevens (profile) says:

Hmm...

This law is overlapping with copyright law. If you create something, an art, some music, it’s illegal to make money off of it without consent of the copyright holder.

If someone were to create a site and have indie artists who are willing to have their music used for free played, this law wouldn’t or shouldn’t hold up in court. I say it’s unconstitutional, or whatever you call it cuz it’s overlapping with other laws. The RIAA is not the government, it’s an organization. The RIAA is NOT above the law. Someone should really try this in the U.S., it’d hold up in court.

Newob says:

So this is default unless you opt out?

Okay so if you can’t prove you own the copyright or that you have an agreement with the copyright holder to distribute their material, then this is the default law. So the RIAA doesn’t have to prove you broke the law now, because the burden of proof is on you to prove that you are following the law? Can we say U-N-C-O-N-S-T-I-T-U-T-I-O-N-A-L?

DancingSamurai (user link) says:

Hold your horses...

Well, IANAL but I think there’s a slight bit of confusion going on here. TFA makes a big deal about “compulsory licenses”, e.g.:

SoundExchange was established to administer the collection and distribution of royalties from such compulsory licenses taken by noninteractive streaming services

And interprets it to mean that the radio station must enter into SoundExchange’s license and pay them to play music, even public domain music, CC music, etc.

That interpretation is wrong (see http://en.wikipedia.org/wiki/Compulsory_license). Compulsory in this sense is actually a compulsion on the copyright holders, not the radio station. The copyright owner of the song must license his song to be performed by the radio station for the legally defined price. This is the same kind of license that has been in existence for years so that restaurants, over the air radio stations, etc. can play whatever music they want. Those who play music for which they already have (or don’t need) a license don’t owe SoundExchange a thing. This is a well established practice.

This whole article is a big to-do about nothing…

John Jordan says:

Sound Exchange

A friend with a station just cleared it up for me. You have to pay SoundExchange for anything, unless you get a waiver from the artist which is what Creative Commons also takes care of; so you do not have to pay for non-RIAA music with permission from the artists. The article should have stated that.

bd (user link) says:

re: damned if you do, damned if you don't

No matter which way the true talent of today turns we’re getting it up the wazzoo. At least in the 50s talented artists, for example those in the Drifters, would be at least conned into getting a Cadilac or a modest house for turning over their rights. But today we get nearly nothing–I’ve gotten more royalties for the few commercials I’ve done in my career than I’ve ever seen from any of my own recordings, or those others that I’ve been on. BMI has collected nothing for me, despite airplay in a number of states at a number of different stations–some logging us as in the top 10 for weeks at a time. Everybody wants the music for free or near to nothing, while poor schlubs like my compatriots and myself–who’ve logged countless hours in the woodshed to hone our talents and become reliable composers and performers; loosing sleep and making no money because of our love of the art–basically see nothing. In many cases it’s better to be a DJ and spin someone else’s music than it is to really go out and perform–fact is you make more money DJ’ing. Not all of my gigs are that way, but anything that is outside of the “norm” and particularly “creative” is! I know in the EU one gets paid not only for the gig they do, but royalties for the tunes they play–if one was to play all the cuts from one’s record at a gig, one would get paid for each cut as well as for the performance. You can thank corporate America for this. As long as corporations continue to run this country, put insane people in the white house and appoint dangerous persons to high, political offices you can count on RIAA and other such institutions to slave out musicians, and basically all the labor force of our nation.

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