RIAA out of touch with reality

[dbdigital]

There's a wonderful article in MacWorld about a woman who successfully sued the RIAA for racketeering, invasion of privacy, and malicious abuse of the legal process after the agency sued her for illegally downloading music using Kazaa.

http://www.macworld.com/weblogs/editors/2007/07/riaa/index.php

The lengths to which the RIAA sunk to win their case are nothing short of despicable. But when the woman countersued they tried to negotiate a settlement realizing she might have a chance at winning. Shows that the RIAA is not all powerful and can be challenged.

But what the RIAA did here reminds me of what SoundExchange is doing with webcasters; trying to negotiate a settlement to avoid Congressional action. SoundEx knows that webcasters stand a very good chance of victory against them, the RIAA and the CRB.

db

 

[oaktree]

There's a wonderful article in MacWorld about a woman who successfully sued the RIAA for racketeering, invasion of privacy, and malicious abuse of the legal process after the agency sued her for illegally downloading music using Kazaa.

http://www.macworld.com/weblogs/editors/2007/07/riaa/index.php

But when the woman countersued they tried to negotiate a settlement realizing she might have a chance at winning. Shows that the RIAA is not all powerful and can be challenged.

Not true. The woman had to countersue, again, in an effort to get her attorney's fees (which, in this type of case are very expensive) back. RIAA settled with no one. They merely dropped the suit. The woman is out a lot of money in attorney's fees that the court said she was allowed to seek, but did not state had to be repaid.

No one has ever said they can't be "challenged." You can "challenge" anyone in court. It's the outcome that's the problem.

How man people do you think go to the lengths to countersue? It's not as easy as one thinks, especially when it comes down to no guarantee that those fees will be repaid, as in this case. Many "talk a big game" but don't when the chips are down. Dismissal doesn't mean "dismiss the costs."

But what the RIAA did here reminds me of what SoundExchange is doing with webcasters; trying to negotiate a settlement to avoid Congressional action.

Correct. And if you read the "settlement," you'll find that it is hogwash that is good only for 18 months and the whole thing must be renegotiated in 2009. Congress needs to act on this ... and time is quickly running out. Of course, Sound Exchange doesn't want Congress to get into it. But until it does, the asinine deal sticks until Sound Exchange is, in fact, sued, or Congress &/or the courts overturn the ruling.

SoundEx knows that webcasters stand a very good chance of victory against them, the RIAA and the CRB.


Or, at worst, are damned fearful of the outcome if it does lose.

 

[RadioMan203]

I think every webcaster, big and small, should stiff SoundExchange on the 15th if the IREA doesn't get passed by then. Think about it - it could be tied up for years in the courts and SX would be sucking wind if IREA gets passed in the meantime.

I love how the RIAA and SoundExchange are basically acting like mobsters - why isn't anybody going after them with the RICO laws? I want to know whose palms the RIAA and SoundExchange is greasing - to me it looks like government sanctioned mob activities to me.

 

[dbdigital]

There's a wonderful article in MacWorld about a woman who successfully sued the RIAA for racketeering, invasion of privacy, and malicious abuse of the legal process after the agency sued her for illegally downloading music using Kazaa.

http://www.macworld.com/weblogs/editors/2007/07/riaa/index.php

But when the woman countersued they tried to negotiate a settlement realizing she might have a chance at winning. Shows that the RIAA is not all powerful and can be challenged.

Not true. The woman had to countersue, again, in an effort to get her attorney's fees (which, in this type of case are very expensive) back. RIAA settled with no one. They merely dropped the suit. The woman is out a lot of money in attorney's fees that the court said she was allowed to seek, but did not state had to be repaid.

No one has ever said they can't be "challenged." You can "challenge" anyone in court. It's the outcome that's the problem.

Uh...OK. The point, is that the woman stood up to the RIAA and won, both by court and contrition (the RIAA dropped its suit). Far too many people would have been fooled and cowed into giving in to the RIAA or know where they stand legally. She wasn't going to take their nonsense.

And Jerry Del Colliano in his current blog makes the very same point regarding webcasters, SoundExchange (and by extension the RIAA) and the CRB. As Jerry points out: "Now, it's time to take off the gloves and hit SoundExchange where it hurts them the most — in Congress." This issue needs to be settled definitively not some lame compromise proposed by SoundEx that's good only till 2009.

http://insidemusicmedia.blogspot.com/2007/07/declare-war-on-soundexchange.html

What Jerry has written is really a call to arms.

db

 

[BDBopper]

Couldn't all Webcasters large and small, bands, and music fans all get together as one large group and sue SoundExchange, and the RIAA to the Stone Age?

 

[vsa]

Couldn't all Webcasters large and small, bands, and music fans all get together as one large group and sue SoundExchange, and the RIAA to the Stone Age?

Sue them for what? The law must be changed. It is broken.

 

[BDBopper]

Is it the law that allows for Sound Exchange to charge a stream 500 dollars minimum, even if they play nothing under their domain? Or not even play music at all? It is my understanding that if you played air raid sirens for 24 hours just for the hell of it you'd still have to pay up. Am I correct?

 

[JohnParker]

If the "air sirens" were recorded then it's a performance and someone's getting paid. If not, you have a good point but I believe that you'd still be forced to pay although I'm not 100% on it.

jp

 

[vsa]

Is it the law that allows for Sound Exchange to charge a stream 500 dollars minimum, even if they play nothing under their domain? Or not even play music at all? It is my understanding that if you played air raid sirens for 24 hours just for the hell of it you'd still have to pay up. Am I correct?

The SoundExchange performance royalties apply to a blanket license that lets a radio station play copyrighted musical works without having to obtain permission from each and every copyright owner. If you want to play a recording of a siren that has been copyrighted, or a recording by anybody, if you obtain individual permission directly, you are free to play the material - subject of course to any agreement you may have to make in order to compensate the owners.

 

[BRUSSTAR]

We are an all-talk station, originating our shows in-house.

SoundExchange has ZERO jurisdiction over us. But I'm sure if we asked, they'd find a way to attempt extortion.

If I'm wrong here, someone let me know, and I'll sue them myself.

 

[BDBopper]

Based on my understanding, even terrestrial streams of all talk radio are going to have to pay, so why not you?

If it was all black and white we wouldn't be asking these questions. There's a huge grey area on purpose, and that is so they can extort money from people. I am pretty sure that over half of all sound recordings ever made and that could be and are played over the Internet have a quality that is the following:

1. Recording on a obscure record label that is defunct
2. Owner of the label is dead
3. Most musicians on recording are deceased

I could go on and on and on. Where does the money required to be paid to Sound Exchange go for playing something like that? They have no idea who to pay, except themselves. They are sure as heck not going to refund the money. Not that they care what is being played. Nowhere In what I have read is SoundExchnage wanting playlists. It is as if you are playing 'Hit Me Baby One More Time" by Brittany Spears all day long (or any popular contemporary hit song). All they want is our money.

I've done Internet Radio as a hobby for seven years. For a time I was at a station that was required to submit playlists to BMI. I played songs by people I know in the music business on purpose and made sure to have them listed in the playlists I submitted. I made sure I called my friends every month to see if they got paid at all. Guess what. They got nothing. Zip, zilch, nada.

It's a crying shame! I wish there was a way to stop this extortion but we've reached the 11th hour.

 

[profradio]

The royalties paid to SoundExchange reflect a statutory digital performance license for sound recordings. The advantage of the statutory license is that a service does not have to individually obtain rights from the copyright owner of each and every sound recording.

The statutory license is not mandatory. If a service directly licenses each sound recording used, then that service is under no obligation to pay the statutory royalty.

If a service performs no sound recordings, such as some all-talk stations, that service has no need to directly license material or to pay the statutory royalty. However, some "all-talk" stations make "incidental" performances of sound recordings. Incidental uses include music used for transitions, beds, and themes. The statutory rates adopted by the Copyright Royalty Judges include special, lower rates for stations making only incidental performances.

If a station performs sound recordings but neither directly licenses those works nor pays the statutory royalties to SoundExchange, that station would be subject to an infringement lawsuit by the copyright owners of any of the works performed.

 

[BDBopper]

okay. That's understandable. However, what if the copyright holder cannot (deceased) or will not (ignorant to the situation cause I am sure there are many estates that don't realize their deceased kin made Copyrwritten works) come forward. Isn't SoundExchange going to sue on their behalf but without telling the copyright holders?

I'll go ahead and explain myself further. The station I was on specializes in obscure DooWop music (I started there at 18 but when my musical tastes expanded past the British Invasion time period I got the message that I should move on in no uncertain terms). Recordings that sometimes were being played from the records themselves because most of the genre hasn't been released legally (yes bootlegs are definitely out there) on CD.

 

[profradio]

If it was all black and white we wouldn't be asking these questions. There's a huge grey area on purpose, and that is so they can extort money from people. I am pretty sure that over half of all sound recordings ever made and that could be and are played over the Internet have a quality that is the following:

1. Recording on a obscure record label that is defunct
2. Owner of the label is dead
3. Most musicians on recording are deceased

U.S. copyright protection was first extended to sound recordings in by the Sound Recording Act of 1971, effective in early 1972. Works recorded before that time do not have copyright protection and therefore are not subject to the sound recording performance royalty. Note that this does not apply to recordings re-issued after that date.

For deceased copyright owners, the copyright passes to heirs, subject to the expiration lengths specified in the statute (as extended by the Sonny Bono Copyright Term Extension Act of 1998).

I could go on and on and on. Where does the money required to be paid to Sound Exchange go for playing something like that? They have no idea who to pay, except themselves. They are sure as heck not going to refund the money.

Federal regulations require SoundExchange to keep unclaimed royalties in a trust account for three years from the date of distribution. Unclaimed funds are allowed to be used to offset SoundExchange's costs (other regulations allow SoundExchange to deduct its costs prior to any distributions). See http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=db9c249743bea8f50d542d3f78738865&rgn=div8&view=text&node=37:1.0.3.12.10.0.179.8&idno=37 [37 CFR § 380.8].

It certainly is fair to question how motivated SoundExchange is to locate copyright owners and musicians (remember that statutory royalties are split 50/50 between copyright owners and artists).

SoundExchange argues that the composition of its board, made up of representatives of both copyright owners and artists, is what keeps it honest. Yeah, right. They also point to their outreach efforts to get copyright owners and artists to register with SoundExchange. SoundExchange has listed on their Web site listings of unlocated copyright owners and featured owners. Because the site is undergoing a face lift today, I cannot access reliable current figures. There is a significant number of unlocated names.

Further fuel for conspiracy theorists: Isn't it ironic that SoundExchange elected to take down its Web site, making payment forms unavailable, just days before the payment deadline?

Not that they care what is being played. Nowhere In what I have read is SoundExchnage wanting playlists. It is as if you are playing 'Hit Me Baby One More Time" by Brittany Spears all day long (or any popular contemporary hit song). All they want is our money.

Wow. How did you miss this? "Reports of Use" has been a very contentious issue; for many smaller Webcasters this is as great a concern as the fees, if not greater.

The Copyright Office of the Library of Congress first issued a notice of proposed rulemaking, "Notice and Recordkeeping for Use of Sound Recordings Under Statutory License," on February 7, 2002. The proceeding continued for several years. The "Interim Final Rule" was finally issued on October 6, 2006 (http://www.loc.gov/crb/fedreg/2006/71fr59010-9.html).

I personally appeared at two separate hearings on the recordkeeping issue and contributed to thousands of pages of filings in opposition to SoundExchange's proposed recordkeeping proposals. SoundExchange's initial proposal was much more than the rules as adopted (which are, in an of themselves, ridiculous). If you'd like to see for yourself, the original proposal is at http://www.copyright.gov/fedreg/2002/67fr5761.html, scroll down to "Sec. 201.36".

I've done Internet Radio as a hobby for seven years. For a time I was at a station that was required to submit playlists to BMI. I played songs by people I know in the music business on purpose and made sure to have them listed in the playlists I submitted. I made sure I called my friends every month to see if they got paid at all. Guess what. They got nothing. Zip, zilch, nada.

Be careful here. This is exactly the line of reasoning SoundExchange has used with the Copyright Office, Copyright Royalty Judges, and Congress to require reporting requirements much more burdensome than for BMI.

 

[profradio]

okay. That's understandable. However, what if the copyright holder cannot (deceased) or will not (ignorant to the situation cause I am sure there are many estates that don't realize their deceased kin made Copyrwritten works) come forward. Isn't SoundExchange going to sue on their behalf but without telling the copyright holders?

Over the years I have spent many hours, in person and via conference calls, negotiating with the RIAA and/or SoundExchange. I have jointly appeared on conference panels with the SoundExchange executive director and (now former) general counsel. The only definitive answer I can provide to this question is that it is uncertain that SoundExchange would file suit on behalf of any copyright owner. They would more likely inform a copyright owner when an infringement is discovered and then let the copyright owner file suit. I am fairly comfortable in speculating, even if SoundExchange itself were to file suit, that SoundExchange would file suit only on behalf of one of its members (not all copyright owners and artists are SoundExchange members, though SoundExchange has been assigned the responsibility for collecting royalties on behalf of all). I also believe it to be unlikely that SoundExchange would file suit on belalf of a deceased non-member.

I'll go ahead and explain myself further. The station I was on specializesin obscure DooWop music (I started there at 18 but when my musical tastes expanded past the British Invasion time period I got the message that I should move on in no uncertain terms). Recordings that sometimes were being played from the records themselves...

I'm assuming you mean here that the performances are made from native media (vinyl or CD), rather than from a computer file. In any of these cases, it is that original recording that is subject to the royalties. The computer file would constitute an "ephemeral copy" made from the original recording (and which is an entirely different copyright discussion). It is the copyright owner of the source recording that SoundExchange would pay.

Unlike most Web-only services, many broadcast stations that simulcast on the Internet make a majority of their performances from native media. This is why the reports of use have been so problematic. For a station performing from native media, such reports are very difficult. SoundExchange (Barrie Kessler) regularly testifies that reports of use are "a press of a button." For a service making performances from native media, that couldn't be further from the truth. Even for some services making performances from computer files reports are difficult.

...because most of the genre hasn't been released legally (yes bootlegs are definitely out there) on CD.

Hmmmm. Would a copyright owner of an illegal recording seek statutory performance royalties? If so, would these royalties be sufficient to pay the legal judgement for his illegal activity?

For the separate issue of the one-off (but legal) recording, how many times is that recording going to be played? Multiply that number of performances by the number of listeners to each spin and the royalty (for 2007, $0.0011 per performance on a Web-only service). Split the total 50% for the copyright owner, 45% for the featured artist, 2.5% for AFTRA, and 2.5% for AFofM. Keep in mind that SoundExchange won't write a check until the total exceeds ten bucks. How many spins/listeners will it take before SoundExchange cuts a check?

If my math is correct, it would take 20,202 spins/listeners before a featured artist would see a check.

This is one of the weaknesses of SoundExchange's PR. They have every artist convinced they will see massive amounts of new money from these royalties. Ask that "young" artist seeking to be established which they would prefer: a $10 check or having their song heard 20,202 times by potential buyers/concert goers? My bet is on the latter.

 

[BDBopper]

so let me see if I have this correct. If a station played music from pre-1972 vinyl only they are fine and don't have to do anything? I'm sorry...some of my raw emotion is getting in the way of comprehension.

 

[profradio]

so let me see if I have this correct. If a station played music from pre-1972 vinyl only they are fine and don't have to do anything? I'm sorry...some of my raw emotion is getting in the way of comprehension.

The Sound Recording Act of 1971, Pub. L. No. 92-140, 85 Stat. 391 (1971), went into effect February 15, 1972. Sound recordings made prior to that 1972 date are not subject to U.S. copyright law; therefore, digital performances of those recordings are not subject to U.S. copyright -- there is no copyright owner!

However, a re-release of an older recording could be subject to the digital performance royalty. If a recording label this year releases a "digitally remastered" CD of a recording originally released on vinyl in 1968, a performance from the CD is subject to the digital performance royalty but a performance from the orginal vinyl is not. Same goes for a "best of" CD released after 1972 -- it is subject to the sound recording digital performance royalty.

Now, there is a copyright in the underlying musical work (musical notes and lyrics) depicted on the sound recording. Preformances of pre-1972 recordings would still be subject to the musical works performance royalty (ASCAP, BMI, and SESAC). But, the sound recording performance royalty (SoundExchange) woud be out of the picture.

 

[BDBopper]

Thank you!