Confusion about SoundExchange’s role in web royalties…
Yesterday a post titled “RIAA Claims Ownership of All Artist Royalties For Internet Radio” made its way on the front page of Slashdot. In that post, the author links to a Daily Kos article that states that SoundExchange has the right to collect royalties for any music streamed over the internet, which is true. Where both articles go wrong, however, is when they jump from that fact to the false assumption that webcasters cannot play anybody’s music without paying royalties to SoundExchange. Here are the exact quotes:
With the furor over the impending rate hike for Internet radio stations, wouldn’t a good solution be for streaming internet stations to simply not play RIAA-affiliated labels’ music and focus on independent artists? Sounds good, except that the RIAA’s affiliate organization SoundExchange claims it has the right to collect royalties for any artist, no matter if they have signed with an RIAA label or not. […]
[…] One solution proposed by Webcasters is to just not play RIAA-member songs under the assumption that then they don’t have to pay the royalty to the RIAA’s collection body, SoundExchange; Webcasters would then just pay the independent artist the royalty.
This sounds fair and just because it is. However, the RIAA is not about being fair and just. […]
Sorry, but they have it wrong. I think I’ve written about this before, but I’ll explain the issue again as simply as I can.
People who create music have the rights to decide what they do with that music. That includes the right to negotiate with webcasters to stream their music over the internet. Our government still recognizes this right today.
The Digital Millennium Copyright Act (DMCA) gave webcasters another way to secure “permission” to play an artists music. Rather than negotiate with the owners of the music they wish to play, webcasters could pay SoundExchange, an organization associated with the RIAA, royalty rates that were established by the United States Copyright Board. SoundExchange’s job was to distribute the royalties to the artists. Essentially, the DMCA gave webcasters a way around securing permission from music artists to play their music. I think that’s horrible, but webcasters loved it. They could play practically anybody’s music for a low rate and not have to be sued for copyright infringement. Good for them, but bad for the owners of the music. What about what they want to do with their property?
This SoundExchange option for webcasters was just that: an option. Webcasters are free to ignore SoundExchange and make their own deals with any artist or music label they wish, and at any royalty rate. Or for free, for that matter. Artists are also still free to stream their own music without having to deal with SoundExchange. As far as distributing music over the internet, the DMCA only increased the number of options available to webcasters.
SoundExchange is not an option for artists, however. No matter who an artist wishes to grant publishing rights to his music to, anybody can play his music by going through SoundExchange. No matter what an artist wishes to charge for his music, anybody can play his music according to SoundExchange’s rates. All of the webcasters’ new “rights” to create their internet radio stations came at the expense of the artist. And accordingly, it also came at the expense of those who purchase the rights to artists music. Yes, it was the big labels, including those that are associated with the RIAA, that lost their rights. All because some people think it is their right to play other people’s music on their own radio stations.
That’s what SoundExchange means when they say that they can claim royalties from webcasters that use compulsory license to stream music. It’s compulsory for the artist to allow his music to be streamed over the internet by any webcaster that meets SoundExchange’s rates. That doesn’t mean that it is compulsory for the artist to only go through SoundExchange to stream his music, or to make other arrangements with other webcasters for higher or lower rates.
The authors of the Daily Kos and Slashdot post are mistaken when they suggest that SoundExchange has taken away the artists ability to play his own music without paying SoundExchange’s rates. And when the Daily Kos author states that “Artists can offer to download their music for free, but they cannot offer their songs to Internet radio for free,” he is incorrect. An artist can still offer his songs on internet radio for free. What he can’t do is stop SoundExchange from accepting royalty rates on his behalf by those webcasters that play his music and take the SoundExchange option.
So who is to blame for this? They believe that it’s the RIAA, but who gave the SoundExchange its power? If it wasn’t for the government’s intrusion into the music business, the artist would still have sole rights to his own music. I can accept that the RIAA has some blame for this mess, depending on how much “input” they gave the government when they established the SoundExchange option. However, the only solution for this problem is eliminate the law that gives SoundExchange any power at all. Setting music royalty rates is not a proper role for government.
Tags: [daily kos, digital millennium copyright act, internet radio, riaa, royalty rates, slashdot, soundexchange]Comments
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