Karl 's Techdirt Comments

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  • On the post: When Entertainment Industry Numbers Are More Suited To Comedy Than Analysis

    Karl ( profile ), 16 Mar, 2012 @ 03:14pm

    Re: Re: Re: Re: Re:

    The guy above you is saying internet piracy had nothing to do with it.

    If you're referring to me, I never said piracy had nothing to do with it.

    Just that recording industries' incompetence had much more to do with it than piracy.

    Also, people may have been able to do home recording since the 1970's, but it was still far too expensive to be done by the majority. Home recording really didn't become mainstream until the late 1990's.

    And they certainly could not have copied, distributed, and sold (or given away) their recordings as easily as they can now. Compare how easy it was to get a CD into record stores, vs. using BandCamp, Soundcloud, CD Baby, TuneCore, etc.

    But, go ahead and ignore all of this, and keep focusing on piracy alone. It just means you'll go bankrupt sooner.

  • On the post: When Entertainment Industry Numbers Are More Suited To Comedy Than Analysis

    Karl ( profile ), 15 Mar, 2012 @ 11:17pm

    Re: Re: Re: Re: Re: Re: Re:

    By the way, if you want to read a well-thought-out position on all of this, I recommend:

    Time for the Recording Industry to Face the Music (PDF), by Mark Cooper.

    The section entitled "Technologies of Distribution" is especially apropos.

    Cooper is Director of Research for the Consumer Federation of America, a coalition of non-profit groups whose mission is to advocate for consumer rights, and has been around for over forty years.

    Or, as you put it, one of "you bozos."

  • On the post: When Entertainment Industry Numbers Are More Suited To Comedy Than Analysis

    Karl ( profile ), 15 Mar, 2012 @ 10:26pm

    Re: Re: Re: Re: Re: Re: Re:

    I love when you bozos try to argue that piracy wasn't the main instigator of revenue decline.

    I love it when rational arguments and facts are met with nothing but "but... but... piracy!" sprinkled with idiotic ad hominem attacks.

    All the effort to expose people like you as zealots is done by you.

    Seriously, if you want to know who's responsible for turning The Pirate Bay into folk heroes, just find a mirror.

  • On the post: When Entertainment Industry Numbers Are More Suited To Comedy Than Analysis

    Karl ( profile ), 15 Mar, 2012 @ 08:40pm

    Re: Re: Re: Re: Re:

    At a time when music has never been so popular, so widely consumed, and so widely used...

    ...and the record labels are getting royalties on almost all of it.

    You're also acting like people have stopped spending money on music. They haven't. The amount of music purchases has increased in the past 10 years. The amount of money that has been spent on music has been consistently increasing. It's just that music purchases are now single MP3 tracks, and that the increased spending has occurred in parts of the industry (e.g. live shows) that make the artists money, rather than the labels.

    you know, the ones making that very product

    The labels are not, and never were, the ones making music. That would be the artists. Artists are making music at higher rates than ever before in history. And more of the money being spent is going directly to them.

    Also, there are simply more artists. The largest growth of music has been with independent artists and non-RIAA labels. There are more people than ever "making that very product." Many are not part of what you refer to as "the music industry," but in fact, the artists using YouTube, Soundcloud, iTunes, or TuneCore - and even those that use "pirate sites" like The Pirate Bay or Megaupload - are the new music industry.

    lost almost 60% of the business in the 10 years since Napster.

    Income from CD sales had plateaued before Napster came along. They didn't begin dropping until after Napster was shut down.

    It's not "the 10 years since Napster." It's the 10 years since digital distribution. That's what the market wants, and that's exactly the market that the labels refused to enter (and tried to keep others from entering).

    The idea that they're failing simply because of piracy is a flat-out lie.

    One you're only happy to repeat. I notice that you did not address even one of the many other things I brought up. Quite obviously, you keep repeating "piracy" to detract from the fact that labels brought this on themselves through their own sheer incompetence.

  • On the post: When Entertainment Industry Numbers Are More Suited To Comedy Than Analysis

    Karl ( profile ), 15 Mar, 2012 @ 05:05pm

    Re: Re: Re:

    Still pretending record industry revenue being halved in a decade wasn't because of piracy?

    It's not "pretending," it's true.

    The record profits that labels had in the late 1990's was due entirely to CD sales. Prior to the introduction of the CD, the major labels weren't making any more money than they are now.

    In the late 90's and early 2000's, the SRP of retail CD's was $17-$19. These prices were artificially inflated (and subject to a lawsuit by the FTC). Labels were pushing "hit-song-friendly" artists, and you had to pay for the full album to get that hit song; the labels were deliberately eliminating CD singles, for exactly that reason.

    But even if piracy was eliminated tomorrow, people still wouldn't buy full-length CD's. They'd buy MP3's off of Amazon, iTunes, etc. Most would buy single songs.

    In fact, people already are doing this - in record numbers. Music purchases have done nothing but increase in the past ten years. The fact that those purchases make less money for the labels is the primary reason why they are failing.

    When the labels did try to enter the realm of digital sales, their "efforts" (Pressplay and MusicNet) were spectacular and colossal failures. Outrageously expensive ($3-$4 per track), and hobbled with outrageous DRM (some songs would "expire" after a month), consumers avoided them like the plague. It's also worth noting that those services are the subject of yet another class-action lawsuit for price fixing (Starr v. Sony et. al.).

    There are other reasons, of course. DVD's didn't exist in the 1990's, and the decline in CD sales just happens to coincide with the rapid rise in DVD sales. Video games also came into their own since then, so they have even more competition for consumer dollars from them.

    Plus, the actions labels took to "stop piracy" didn't actually stop piracy, but did eliminate any claims of higher moral standing they might have had. From suing grandmothers and teenagers for hundreds of thousands of dollars, to drafting SOPA and PIPA, the labels have done nothing but make themselves the most hated industry on the face of the planet. (This, on top of their widely-known tendency to fuck over artists whatever chance they got.) There's no question that most people will take any chance they can get to make sure RIAA clients never get a dime from them.

    Piracy probably did have some impact. But it isn't the primary reason the labels are failing - not even close. They're failing because they're incompetent businessmen.

    Eliminating piracy will do nothing to fix that.

  • On the post: When Entertainment Industry Numbers Are More Suited To Comedy Than Analysis

    Karl ( profile ), 15 Mar, 2012 @ 03:31pm

    Re:

    Their numbers are no more unrealistic than those offered by the theives who pirate content.

    So far as I know, none of the "theives who pirate content" have ever offered any numbers.

    People critical of the MPAA/RIAA certainly have, but they are not (and don't represent) "theives who pirate content."

    So, what numbers are you talking about?

  • On the post: Guess What? Copying Still Isn't Stealing

    Karl ( profile ), 14 Mar, 2012 @ 11:52pm

    Re: Re: It can be.

    To wit, if an action meets any part of the requirements of 'stealing', then (via one of two well-known principles of deductive reasoning: the "Synechdocheus" syllogistic form, or the rule of inference from first-order logic "Modus Synecdoche") we can deduce that the action is equivalent to stealing.

    I'm assuming this is satire, right?

    Synecdoche is on Wikipedia. It is clearly a literary construct, not a logical construct.

    I studied logic in college, and no logic professor in his/her right mind would consider Synecdoche logically sound. If some object is in a subset, it does not logically follow that it is in a set that includes that subset.

    The classic example is defining a human as a "featherless biped." It didn't work in ancient Greece, it doesn't work now.

  • On the post: Guess What? Copying Still Isn't Stealing

    Karl ( profile ), 14 Mar, 2012 @ 11:39pm

    Re: Re: Re: Re: Re: Re: Re: Re: It can be.

    Your classroom assignment for the day is to read 17 USC 106

    For the record, "bratwurzt" does not appear to be from the United States. Thus, 17 USC 106 has no bearing whatsoever on whether what he's doing is legal.

    For the record, I don't know of anywhere in the Western world where distributing copies is legal. (In plenty of jurisdictions, however, merely downloading is legal... just like buying a bootleg DVD is legal in the U.S.)

    Well, unless he lives in England, in which case he'll be extradited, even if what he's doing is perfectly legal in England.

  • On the post: Guess What? Copying Still Isn't Stealing

    Karl ( profile ), 14 Mar, 2012 @ 11:31pm

    Re: infringement

    ASCAP and BMI rape the artists. Only pennies on the dollar actually go towards royalties. They pocket the rest for their operating costs.

    This is not really true.

    What you're describing is the way record labels work, not PRO's like ASCAP or BMI. The latter are totally different from labels, and have actually fought labels in the (distant) past.

    Likewise, their operating costs are not unreasonable; usually 10% (or less) from songwriters' revenue. Considering that publishers take 50%, that labels take 85% (of performing artists' revenue), and that labels demand that you only get 75% of the statutory royalties if you're both a singer and a songwriter... and the PRO's look absolutely heavenly by comparison.

    This is not to say that the PRO's actually benefit artists in general. It's not that they operating costs are high, it's that they unfairly distribute revenues. For example, they take money (by law) from venues as performance royalties. Yet they don't distribute that money according to whose songs are played in venues. They distribute it according to radio airplay. In other words, if you're a BMI artist whose songs get played in bars all the time, yet your song is not in rotation on terrestrial radio, then you get nothing.

    It's not that PRO's don't pay artists. It's that they only pay artists who are radio darlings. This usually means major label artists, since major labels traditionally are the only ones who can afford the payola.

  • On the post: UK Decides Hollywood, US Gov't's Interests More Important Than Own Citizens; Extradites Student For Linking

    Karl ( profile ), 13 Mar, 2012 @ 11:08pm

    Re: Re: Re: Re: Re: If you are easily disturbed do not read this comment.

    Not everything is MAFIAA, and there's not a lot of point in a shotgun-style boycott.

    There used to be a site called RIAA Radar, but unfortunately it's been down for a while. I haven't found a replacement.

    Personally, I mostly buy records from artists who I meet face-to-face. That way, I know exactly who I'm supporting. Probably not the best option for most people, though, especially if you don't live on one of the American coasts.

  • On the post: Guess What? Copying Still Isn't Stealing

    Karl ( profile ), 13 Mar, 2012 @ 09:20pm

    Re: Re: Re: Re: It can be.

    Er, I just realized you were talking about a single copy of a single painting, that was never made available to the public at all.

    Making an unauthorized copy of it still isn't akin to "theft." It's more like trespassing, or invasion of privacy.

  • On the post: Guess What? Copying Still Isn't Stealing

    Karl ( profile ), 13 Mar, 2012 @ 09:07pm

    Re: Re: Re: It can be.

    Apparently, you aren't an artist.

    I am, though.

    Who are you to say that all of humanity is "entitled" to it? Psha.

    Copyright is granted to artists by the public, and exists primarily to benefit the public. That's why the Constitution granted copyright powers to Congress, not to authors and inventors directly.

    This is explicit in the Constitution, was expounded by Thomas Jefferson, explicitly stated by Congress, and reiterated repeatedly by the Supreme Court.

    So, a better question is: who are you to say humanity is not "entitled" to it? Your voice has no more import than his, mine, or anyone else's. If we outvote you, then our votes carry.

    You pay the artist for his painting and oh-my-god, you own it. What you decide to do with it is your business.

    Really?

    So, I could paint my own copies of that painting, and sell them? I could print out T-shirts, handbags, and baseball caps with that painting's image, and sell them on the streets of New York? I could make posters and give them away to whoever I want?

    No. I couldn't. That's what copyright is: the right to restrict others from using what they own.

  • On the post: Guess What? Copying Still Isn't Stealing

    Karl ( profile ), 13 Mar, 2012 @ 08:54pm

    Re: Re: Re: Re: Re: It can be.

    How about this... It doesn't really matter if you like someone's business model or not. If you download a copy of something without paying for it, it is unethical and illegal.

    Unlawful? Yes. (I prefer "unlawful" to "illegal," because the latter implies a criminal act, and copyright infringement is usually a civil offense.)

    Unethical? Probably not.

    Is copying and sharing unethical? Generally speaking, it is not. The cornerstone of many ethical philosophies is that sharing is one of the most moral things you can possibly do. If you're sharing a copy of something, that's certainly not any less ethical. It might be more ethical, since you are creating abundance where once there was scarcity.

    The Biblical parable of the loaves and fishes is a prime example of this. Five loaves and two fish feeding 5,000 men. It's hard to imagine a more accurate metaphor for file sharing.

    Now, if you're a fisherman or a baker, then Jesus's miracle certainly would be a threat to your livelihood.

    If they behaved according to your morals, they'd complain that every miracle was "theft" of bread and fish. They'd give your own sermon on the mount, where they'd try to "educate" everyone in Galilee about how much "stealing" food is "destroying the value" of fishing and baking. Without bakers or fishermen, they'd say, there won't be any more bread or fish, and you'd have nothing left to "steal." They'd also tell everyone to just ignore that Peter guy, because he's not a "professional" fisherman.

    Eventually, they'd go to the Romans, and demand that they do something about "that rogue pirate Jesus," who is costing them seven pieces of silver per day.

    Do you think this behavior is actually moral?

  • On the post: Guess What? Copying Still Isn't Stealing

    Karl ( profile ), 13 Mar, 2012 @ 07:35pm

    Re: Re: Re: It can be, but it's not

    Great! Copy your money and send it to me.

    Can do!

    Now, where should I email you this money?

  • On the post: Guess What? Copying Still Isn't Stealing

    Karl ( profile ), 13 Mar, 2012 @ 07:30pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: It can be.

    Also:

    Your actions are still subject to property theft law

    Someone needs to re-read Dowling v. United States, in which the Supreme Court explicitly stated that infringing copies are not stolen goods.

    Property theft law does not apply to copyright infringement, in any way, shape, or form. Only copyright law applies to copyright infringement.

  • On the post: Guess What? Copying Still Isn't Stealing

    Karl ( profile ), 13 Mar, 2012 @ 07:11pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: It can be.

    Correct me if I am wrong here, but isn't copyright infringment as it is defined in the laws restricted to distribution and not consumption?

    Not really. Read 17 USC 106. (1) covers reproduction, (2) covers distribution.

    Technically, merely "consuming" the work is not infringement, but if you make a copy of it in order to consume it - as you do when you download a file - then you're infringing. On the other hand, you are not infringing when you purchase a counterfeit CD or DVD, since you didn't make the copy.

    No, it doesn't make much sense, but that's copyright law for ya.

  • On the post: Guess What? Copying Still Isn't Stealing

    Karl ( profile ), 13 Mar, 2012 @ 02:31pm

    Re: It can be.

    But there are people -- not all of them on the side of RIAA/MPAA/et cetera -- who disagree with that, who think copying *is* stealing.

    None of those people sit on the Supreme Court:

    Since the statutorily defined property rights of a copyright holder have a character distinct from the possessory interest of the owner of simple "goods, wares, [or] merchandise," interference with copyright does not easily equate with theft, conversion, or fraud. The infringer of a copyright does not assume physical control over the copyright nor wholly deprive its owner of its use. Infringement implicates a more complex set of property interests than does run-of-the-mill theft, conversion, or fraud.
    - Dowling v. United States


    It may be stealing in the sense that you can "steal" a joke, "steal" a glance, or "steal" someone's heart.

    It is not "stealing" according to the law. That is a fact.

  • On the post: Brazilian Performance Rights Group Claims Collecting From Bloggers Was Simply An 'Operational Error' After Google Pushes Back

    Karl ( profile ), 13 Mar, 2012 @ 08:18am

    Who pays the fees?

    Two years ago, Ecad and Google signed a letter of intent that guides the relationship between both organizations. The document details that Ecad can collect copyright fees for music coming from embedded videos, as long as it gives advance notice to Google/YouTube.

    Even if this is the case, it seems to me that Ecad could only collect those fees from Google. The bloggers wouldn't have to pay those fees in any case.

    This is because it was Google - and not the bloggers - that signed that agreement. You can't be legally responsible for a contract you never even saw.

    So, Ecad had no business contacting the bloggers no matter what is in the agreement.

    Well, unless Brazil has some bizarro-world contract laws.

  • On the post: How Big Music Companies Are Stealing Hundreds Of Millions In Royalties From Artists

    Karl ( profile ), 12 Mar, 2012 @ 08:19pm

    Re: Re: Re: Re: Re: Re: Let me take it, frame by frame it:

    How did Kim.com make his mega-millions?, Limewire, Grokster, Pirate Bay?

    The Pirate Bay does not make "mega-millions." Counting server costs, they barely broke even. The rest were actively trying to ink deals with artists when they were shut down.

    In any case, whatever money they made, it wasn't remotely close to what the labels still make, and it wasn't remotely close to what the labels lost.

    It also ignores why anyone used them at all. If the labels had actually offered consumers what they wanted, they wouldn't have been profitable at all.

    Witness iTunes. Despite the fact that everything on there can be acquired through piracy, the amount of money artists and labels make through iTunes dwarfs the total amount made by all pirates put together, by several orders of magnitude. Similar observations can be made about Netflix for movies, or Steam for gaming.

    The music biz is down 50% in ten years- that's a fact

    No, the recording industry is down 50% in ten years. The music industry is growing. More people are spending more money on music than ever before, on live performances, merch, etc; and musicians are making more money than ever from things like synch deals.

    Likewise, the number of purchases of recorded music has steadily increased over the past ten years - it's just that those purchases have been digital tracks, which make less money for the labels.

    This goes to show one thing: piracy is not the problem, and people don't pirate because they only want stuff for free, or because they don't want to support artists. In fact, every independent study has shown that pirates spend more on music than non-pirates.

    The problem is that the major labels are, and always have been, terrible businessmen. This should not surprise you. Gatekeepers and monopolists do not generally have good business sense. Being the only source of a product, they don't need to actually respond to the market. Their business smarts have atrophied from misuse.

    The labels still depend on CD sales for their profits. They were only madking a profit on them because they fixed prices (and were sued by the FTC because of it). They had such bloated overhead that the only way they could make a profit on those CD sales (according to the RIAA) was if those albums went platinum. They steadfastly refused to enter the digital market in any meaningful way, and refused to deal with (and aggressively sued) anyone else who tried. When they did enter the digital market, their "products" (MusicNet and Pressplay) were horrible, anti-consumer, catastrophic failures - and the subject of another class action price-fixing lawsuit.

    When the world wanted digital tracks, the labels deliberately killed CD singles. They deliberately stopped dealing with local record stores, and instead courted chain stores like Best Buy and Wal-Mart.

    And every single anti-piracy attempt has hurt them tremendously. Whatever moral superiority they had over the pirates was lost in the public's eye when they started suing grandmothers and teenagers for hundreds of thousands of dollars. Sony/BMG's anti-piracy DRM was a "rootkit" that was characterized (correctly) as spyware - and was the subject of yet more legal sanctions by the government. They not only supported, but helped draft, SOPA and PROTECT IP - bills that resulted in one of the largest grassroots protests in recent political history.

    All the while, they have themselves pirated off of artists; not only is this article an example, but there are plenty of others. Such as the now-VP of the RIAA sneaking a phrase into a bill that would rob artists of their copyrights, or the fact that the major labels were found guilty of literally stealing $45 million of Canadian royalty money from artists. The labels' contractual exploitation of recording artists has been widely known for decades.

    Because of all this, the public's opinion of record labels is now somewhere between the tobacco industry, and Osama Bin Laden. The recording industry has done nothing but attack their customers for the past 30 years (at least). Yet piracy is the reason they're failing?

    Yeah, pull the other one.

    The label execs have been playing the piracy card for decades now. They're doing this deliberately. It's an orchestrated misinformation campaign designed to deflect the blame from their own failures.

    and in my little corner of it, the # of songwriters is down by at least 2/3.

    It is true that "songwriter for hire" is probably a dying occupation. The major growth in music now is from either a) independent artists, or b) performances, neither of which favor songwriters who are not performers.

    Of course I'm a marginal, a washout.

    You are not marginal, and I would be a complete hypocrite if I called you a washout.

    What you are is someone who is losing their income because their bosses screwed up. I know how much that sucks, believe me. You have my sympathy.

    You'd probably have more of it if you didn't just come on here and start shouting at everyone.

  • On the post: How Big Music Companies Are Stealing Hundreds Of Millions In Royalties From Artists

    Karl ( profile ), 12 Mar, 2012 @ 11:17am

    Re: Synch & masters, artistic & mechanicals, and digital income

    Hey, Jesse. Thanks, once again, for stopping by.

    I think I can answer some of those quibbles, though I'm less of an expert than you are, to be sure.

    it's unclear how much of this affects artists who have a label working their music, whether independent or major.

    The article deals exclusively with songwriter royalties - that is, the copyright on the underlying composition, not the sound recording. So, it doesn't matter so much whether the artist is on a label; it depends upon whether the artist is a member of a PRO.

    Outside of the United States, songwriters get two types of royalties from digital sales: "performance" royalties (handled by a PRO in the U.S.) and "reproduction" royalties (handled by the Harry Fox Agency in the U.S.).

    Most artists on a label (even an indie label) are members of a PRO. In this case, both the performance royalties and the reproduction royalties go to the local PRO (like JASRAC). The local PRO then pays the performance royalties to the U.S. PRO (ASCAP, BMI, SESAC). That money eventually gets to (certain) songwriters, in the wholly-unfair-and-complicated way that it always has with U.S. PRO's, but that's another kettle of fish.

    But the reproduction royalties - which are legally supposed to go to the songwriter, not the label, outside the U.S. - are given to the record labels. Which record labels? Not the independents - it's given exclusively to the RIAA clients. This is done by the local PRO (e.g. JASRAC).

    In other words: All the money that, in the U.S., is handled by the Harry Fox Agency, is lining the major labels' pockets. Not a cent of it goes to songwriters.

    At least, that's how I understood the article. It's difficult to suss out, because foreign copyright law is totally different from U.S. copyright law in many ways.

    For licensing games, movies, commercials, whatever, you *should* get both a synch right & a master right. I believe this is analogous to both artistic royalties & mechanical royalties.

    As I (hopefully) explained above, the royalties the article is talking about are neither synch rights nor master rights, both of which are copyrights on the sound recording, not the underlying composition.

    You, as a label executive, don't have the legal right to negotiate the rights to the underlying composition, unless the songwriter expressly assigned it to you (which many do). This might be the source of confusion.

    So digital retailers inside the US aren't involved at all in this story. Frankly, that's where the majority of income for US-based independent artists comes from, no matter who you are.

    Correct. However, retailers in Japan certainly are involved in this story (they were the example!), and Japan is the #2 market for music in the world. It may also involve retailers in the U.K., Germany, and France, which are the #3, #4, and #5 markets respectively.

    It's demanding that all non-US digital stores (as opposed to physical stores) get explicit permission from each rights-holder to sell a product that they, if they were in the US, would automatically be able to sell by being associated with the artist's distributor.

    These royalties aren't going to the artist's distributor, either (not that they should). They are going directly to the RIAA's clients.

    Instead, they could just ink deals with the HFA. Or, hell, even give it all to the PRO's (as a last resort). At the moment, songwriters are getting none of these royalties, and they're going to the major labels instead... even royalties to artists on indie labels.

    Yes, that means songwriters on Alternative Tentacles are unwillingly supporting the major labels. Sucks, don't it?

    As is industry standard, digital sales are treated differently than physical sales. They're treated as licenses (hence the bits about compulsory licenses above) and therefore the standard is 50% label, 50% artist.

    Actually, this was not an industry standard. Among all the RIAA clients, digital downloads are considered sales, not licenses. Among RIAA artists, and most non-RIAA labels, they're considered licenses. That's what Eminem's lawsuit was all about.

    Basically, you're mistaken because you're running a label that is actually honest. It's a good mistake to make.

    In any case, the article is talking about downloads in other countries, not the U.S.

    If we have to split the digital into mechanical & artistic, we have no real guide. As noted, there's no hard and fast % split.

    Indeed, that's very true. The article does mention that, though:

    The problem is that the old school music industry was built for the world of analog TV, AM/FM radio and 12? pieces of vinyl or 5? circular pieces of plastic. It was not built for the world of digital. The old songwriter collection and administration industry is not motivated to change the system, as the existing system allows them to take/earn hundreds of millions of dollars from other people?s royalties.

    In regards to the new emerging digital music services, they have no simple solution to get licenses from and make payments to copyright holders; it?s a pain, it?s complicated and, for the moment, it?s cheaper to take on the potential legal liability than invest resources and time to comply with the law and pay the right people.

    The complexity of copyright law, the total lack of transparency, and the inability to audit anything, creates a perfect storm for global copyright infringement. The end result: hundreds of millions of dollars of other peoples? money getting siphoned off and/or not paid to the millions of rightful copyright holders.

    I'd also like to add something to Jeff's statement.

    The emerging digital music services have no stake in ripping artists off in this fashion. If the system was changed, they wouldn't have to pay additional royalties. Instead, the royalties they already pay (to e.g. JASRAC) would simply be distributed in a fair manner.

    But they simply don't have the resources to change things. As Jeff mentioned, there's simply no system to handle these royalties, and putting one in place would require tremendous time, effort, and resources.

    On the other hand, the major labels have a huge stake in keeping the system the way it is. If it changed, the major labels would lose a significant portion of their income. If anyone tried, they would fight it tooth and nail.

    We all know how litigious the RIAA is. They have no qualms about throwing money at lawsuits, even if they're destined to fail. This means that anyone who attempts to change the system is up against not only the additional costs of implementation, but decades of lawsuits from the RIAA.

    From the standpoint of any digital music service, it's better to rip off artists than it is to take on the RIAA.

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