Music Industry Creates New Royalty Rates... But Did They Do So For Systems That Don't Require Royalties?

from the seems-like-it dept

There's been some buzz in music circles about the news that the RIAA, the NMPA (music publishers) and the DMA (digital music companies) have reached an "historic" agreement on mechanical royalty rates, potentially avoiding what often is a contentious rate setting process at the Copyright Royalty Board (CRB). The CRB still needs to approve the deal, but the fact that an agreement was reached outside of having to go through such a contentious process, where the results often seem arbitrary and disconnected from reality, is mostly a good thing.

That said, I do have some concerns. Because beyond setting the rates for existing mechanical licenses, the groups also sought to create new rates for new types of service. THR has the details:
  • Mixed service bundles (for example, a locker service, limited interactive service, downloads or ringtones combined with a nonmusic product such as a mobile phone, consumer electronics device or Internet service)
  • Paid locker services (subscription-based locker providing on-demand streaming and downloads)
  • Purchased content lockers (a free locker functionally provided to a purchaser of a permanent digital download, ringtone or CD where the music provider and locker have an agreement)
  • “Limited offerings” (subscription-based service offering limited genres of music or specialized playlists)
  • Music bundles (bundling music products such as CDs, ringtones and permanent digital downloads)
Now, to some extent it's nice to see them coming to agreements with the idea of allowing certain new types of sites to easily make it clear that they are licensed under a clear rate, and move forward with that. But some of this is concerning in that it partly seems like a way to overclaim rights that copyright doesn't, in fact, cover: for example, the license rates for locker services. As has been discussed, it's not clear that locker services need to pay any copyright under existing law. If it's just about enabling users to store and listen to their own music, what copyright issue is there? Yet it appears that at least some such services may be expected to pay these mechanical rates.

Filed Under: copyright royalty board, dma, nmpa, riaa, royalties

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  1. icon
    Cerberus (profile), 13 Apr 2012 @ 3:08pm

    Re: Physical storage units

    Oh, don't worry, they are very reasonable. First there is a nominal fee for using the CD at a different location from your own house. Then you need to pay as a fee the price of the CD times the number of people whom you've ever lent your storage key to or whom you wilfully left in the same room as your key while you went to the bathroom. Multiply that by their number of friends on Facebook, because those people might copy the CD. Then multiply that number by the number of friends the average Facebook user has, because the copies could be recopied. Do that seven times, since it is well known that you know every person on earth in seven steps. Let's say the average user has 500 friends (a very modest assumption), so 500^7: now we have about 7.8 million trillion lost sales. Oh, and if you dare show the cover in public when you're on the train, that's twenty years in prison.

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