And, Of Course, Labels Sue Pandora Over Pre-1972 Recordings

from the after-losing-on-trying-to-shake-them-down dept

Just a few days ago, we wrote about how the record labels were trying to have it both ways. That is, on the one hand, they are arguing in a variety of cases that the DMCA shouldn’t apply to pre-1972 sound recordings, while also arguing against any attempt to treat pre-1972 sound recordings the same as if they were under federal copyright law. At the same time, they are claiming that it’s somehow unfair that Sirius XM and Pandora aren’t paying statutory licensing fees on those very same pre-1972 recordings.

Having already sued Sirius XM over the issue last fall, the RIAA’s record labels have now targeted a similar lawsuit at Pandora. The lawsuit itself is highly misleading, taking statements from Pandora totally out of context (the labels have a habit of doing this). The most obnoxious of these misrepresentations is the RIAA’s claim that Pandora recently stated in SEC filings that there’s a risk factor if the company is “required to obtain licenses from individual sound recording copyright owners for the reproduction and public performance of pre-1972 sound recordings.”

The RIAA presents this as if it’s Pandora trying to get out of paying. But that’s not what Pandora is saying at all. It’s noting that because pre-1972 works are not covered by the various rates that it pays which are set by the Copyright Royalty Board, in order to secure the rates, it would need to negotiate individually with every copyright holder for the right to stream those works in every single state. But it’s noting that as a risk factor — because, as Sirius has pointed out in its own response to the similar lawsuit, decades have gone by and the labels have never been asking for licenses for performances of pre-1972 works. And those works have been used for years, license free, by TV and radio broadcasters, bars, restaurants and a variety of other places. The real risk is that Pandora, which has relied on the fact that it can take compulsory rates, would then suddenly have to negotiate with everyone, which would be a massive headache. And this is the mess caused by the weird way in which pre-1972 sound recordings are treated.

Again, those works are not covered by federal copyright laws, which include specific rights over performances of works, which was something of a new concept when it was added to federal copyright law. The various state laws that these works are covered by are generally common law concepts around misappropriation and unfair competition. So the big question is whether or not “performing” a work falls under such common law concepts. Historically, these claims were mostly focused on making unauthorized copies. Performing the work has generally been considered a separate issue. This makes it a bit questionable that the RIAA is now suddenly seeking to reinterpret a big swath of history around how those works were legally used — which also raises a concern about “laches” or how timely these lawsuits are. The RIAA has had decades to complain about these practices, and is just doing so now…

And, of course, remember that this is all happening just a month or so after the publishing arms of the very same labels were found to have been colluding unfairly to jack up Pandora’s rates. Basically, the legacy recording industry players are now looking for just about any way possible to make Pandora pay even more. This isn’t a surprise. It’s how the industry has always worked. When they’re struggling to figure out ways to make money, they look at anyone successful and assume it’s their fault that the legacy players are making less money. So, rather than innovating, they try to find legal ways to force more money out of the innovators and into their own hands. This is just the latest example in a very long line of such cases.

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Companies: pandora, riaa

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Comments on “And, Of Course, Labels Sue Pandora Over Pre-1972 Recordings”

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42 Comments
Anonymous Coward says:

…they look at anyone successful and assume it’s their fault that the legacy players are making less money. So, rather than innovating, they try to find legal ways to force more money out of the innovators and into their own hands.

This is exactly why I have for years now refused to purchase any music supported by the RIAA and conglomerate. I don’t want any part of my money going to such actions. I disapproved of their methods and none of the music I hear recently on the radio inspires me at all. The RIAA can go suck it up along with the labels and any artists that signed with them. Rats on a sinking ship deserve to go down with it.

Anonymous Coward says:

Well it seems as if none of my posts for the last two days are showing up. Instead they are all labelled awaiting moderation…only moderation isn’t coming around to actually moderate them.

I’ve posted no links, have no where I want anyone to be, and have nothing I want to sell. Guess I’ll find a new home page for a while.

Anonymous Coward says:

Re: Re:

Are you using TOR? I do and I find that about half of the time, my comments are held for moderation. I think it might be because certain exit nodes have been misused by other users in the past. In fact, when I tried to post a comment about this recently, it got stuck in moderation for at least a day and I’m not sure if it ever left moderation (haven’t checked).

trollificus (profile) says:

Re: Re:

Did you contact them?

I had a post suddenly show up as “awaiting moderation” and it was after I’d posted criticizing what I’d thought was a bit of ‘groupthink’ and I worried it was in some way punitive.

But I got a very quick response indicating a word or combination of words might have set off the spam filters. And since it had been a typically wordy post, I had to concede that possibility. It was soon posted and haven’t had a problem since.

Try that, they were very nice about it.

Anonymous Coward says:

Pandora

According to Sound Exchange, Pandora is paying absolutely nothing to them for songs recorded prior to 1972. If this is true then Pandora has created a mess for themselves. While DMCA may not apply to songs prior to 1972, it is unclear whether other laws do.

Most digital music services do pay for pre-1972 recordings. Pandora has apparently stepped out on a limb.

Mason Wheeler (profile) says:

Re: Pandora

From the article:

But it’s noting that as a risk factor — because, as Sirius has pointed out in its own response to the similar lawsuit, decades have gone by and the labels have never been asking for licenses for performances of pre-1972 works. And those works have been used for years, license free, by TV and radio broadcasters, bars, restaurants and a variety of other places.

Pandora is paying nothing for playing these songs… and neither is anyone else, because that’s how the law works in this specific case.

Anonymous Coward says:

Re: Pandora

Well, honestly, the vast majority of pre-1972 protected songs should be in the public domain. Pandora has been repeatedly screwed over by the RIAA and its member labels over the royalties they were expected to pay.

This is nothing but an extortionary tactic by the RIAA and the labels, and it should be treated as such, with full criminal sanctions for racketeering etc.

Anonymous Coward says:

Re: Re:

Option #1:
Federal law does apply to pre-1972 recordings, this includes paying sound exchange for pre-1972 recordings and DMCA applying to pre-1972 recordings.

Option #2:
Federal law does not apply to pre-1972 recordings, this means sound exchange does not need paid for pre-1972 recordings and the DMCA does not apply.

Chronno S. Trigger (profile) says:

Re: Re: Re: Re:

“I’m pretty sure that’s the position that most labels have always taken.”

You would be wrong. Radio stations paying to play music is a relatively new thing. The labels didn’t start pushing for that until years after Internet radio and satellite radio started to get big.

There was a scandal between the record labels and radio stations a while ago. The record labels got into trouble for paying radio stations to play their music. So the exact opposite of what you were pretty sure of.

The labels took the position of “Get the music out there any way possible”. I don’t know why that changed.

Anonymous Coward says:

Re: Re: Re:2 Re:

The labels took the position of “Get the music out there any way possible”. I don’t know why that changed.

Pandora and the like could end up replacing the labels as the means of publishing recordings. This would remove the Labels Income as the sales and Licensing of the recording that they own wind down; therefore the labels have to take over or destroy such companies.

Anonymous Coward says:

Re: Re: Re:2 Re:

Are you talking about terrestrial radio? Because that’s a different ballgame.

Also, payola is neither “the exact opposite” or at all inconsistent with the claim that pre-1972 sound recordings are covered by state law.

Regardless, it is (a) not a new position that pre-1972 sound recordings are covered by state laws, and (b) not inconsistent to argue that pre-1972 sound recordings are not covered by federal copyright law.

Anonymous Coward says:

Re: Re: Re:3 Re:

FYI, here is what the Copyright Office says:

“Although sound recordings were first given federal copyright protection in 1972, sound recordings made before February 15, 1972 remained protected under state law rather than under the federal copyright statute. As a result, there are a variety of legal regimes governing protection of pre-1972 sound recordings in the various states, and the scope of protection and of exceptions and limitations to that protection is unclear. Current law provides that pre-1972 sound recordings may remain protected under state law until February 15, 2067. After that date they will enter the public domain.”

http://www.copyright.gov/docs/sound

So, again, I’m not sure what is inconsistent about saying pre-1972 sound recordings are not covered by federal copyright law, but they are covered by state law.

Anonymous Coward says:

Re: Re: Re:4 Re:

I think the inconsistency is in the last sentence in the first paragraph

“At the same time, they are claiming that it’s somehow unfair that Sirius XM and Pandora aren’t paying statutory licensing fees on those very same pre-1972 recordings. “

If they are saying that XM and Pandora should pay federal statutory licensing fees then that would be an inconsistency.

Karl (profile) says:

Re: Re:

I don’t understand how this is “trying to have it both ways.”

They are trying to get Pandora to pay the statutory rates that are settled under FEDERAL copyright laws.

This is because the various state “copyright” laws are not exactly copyright laws, but things like “unfair competition” (which usually has a “passing-off” component, like trademarks) and “unauthorized distribution” (which only covers distribution of copies).

None (that I know of) establish any sort of royalty requirements for public performances, or even cover public performances at all.

So, they are essentially saying that public performances of pre-1972 sound recordings should be treated as if they were covered under Federal copyright law, but that DMCA immunity regarding pre-1972 sound recordings should not be treated as if they were covered under Federal copyright law.

That is “trying to have it both ways.”

Karl (profile) says:

Re: Re: Re:

Oh, yeah, there’s one thing to keep in mind:

pre-1972 sound recordings

A “sound recording” is distinct from the underlying composition. The underlying composition has been covered by Federal copyright law, for about a century. Pandora (like terrestrial radio) is, and always has, paid royalties on the underlying composition for pre-1972 recordings.

What they have not been paying are the royalties for sound recordings. Those are the royalties which go to SoundExchange (as opposed to the composition royalties, which go to ASCAP, BMI, or SESAC).

Terrestrial radio does not, and has never, paid any royalties on the sound recordings, pre-1972 or not.

Karl (profile) says:

Re: Re: Re:

Spotify like most companies, pays for pre-1972 recordings and are not getting sued.

I know I’m late with this, but…

Spotify isn’t eligible for the type of royalties under consideration; those royalty rates are only available to non-interactive services (like Pandora and SiriusXM).

So, they already must do direct deals with the rights holders. They’re not paying “royalties” at all; they’re entering into direct contract negotiation with the rights holders, and those rights holders pay whatever royalties are owed to artists.

Anonymous Coward says:

Re: Re:

Short answer: no. Pre-1972 sound recordings are (or may be) covered by a hodgepodge of state laws. While it may not be entirely clear whether and to what extent your service would be prevented by those laws if you don’t get permission, you will at the very least have to worry lawsuits from record labels if you have any type of success (even if you were to eventually win such suits).

Karl (profile) says:

Re: Re:

Q) May I start a streaming service that plays only pre-1972 music and not have to worry about any royalties?

No matter what the status on state laws, you would still have to pay composition royalties to ASCAP/BMI/SESAC. These royalties have been an established part of federal law since the invention of the player piano.

Until the Internet came around, you would not have to pay sound recording royalties for performances. The only entities in the United States that have to pay these royalties are Internet and cable streaming radio stations.

Terrestrial radio stations, bars, restaurants, live venues, etc. do not have to pay sound recording royalties, and never have. Not under federal law, and not under any state law.

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