RIAA Piracy Tax?
On this week’s edition of Copyright 2.0, I learned of a new idea that is gaining interest among the heads of some record companies: A “piracy” tax. As reported by Wired:
At the music industry trade show MIDEM last year, John Kennedy, the head of IFPI — the RIAA’s international affiliate organization — offered modest support for the kind of licensing fee Griffin and Jenner propose. “It’s a model worth looking at,” he said at a press conference. “If the ISPs want to come to us and look for a blanket license for an amount per month, let’s engage in that discussion.”
Jonathan Bailey, one of the hosts of Copyright 2.0, was open to the idea. Charging a flat rate to everybody (five dollars is the amount being discussed today) for the “right” to download your music sounds better than the losing battle the RIAA is facing today, right? There is some precedent for the idea of forced royalties and compulsory licenses, too. Bailey didn’t totally endorse the idea, but he said that it might be a good place to start until a better idea comes along. I enjoy hearing and reading Bailey’s opinion, but this time I have to respectfully disagree. I think this is a horrible idea that completely shreds the idea of copyright and intellectual property.
I think the problem becomes self-evident once one brings the definition of “copyright” into the issue. A copyright is the right to control the distribution and use of a piece of intellectual property. This right is initially secured by the creator of that property simply by the fact that he created it. Since he did the work to create it, he or she gets to decide what is done with it. Like any right over material property, it can be sold, exchanged, or given away. The owner owns it, so he gets to decide. That’s what copyright is about.
Now apply this concept to the idea of allowing everybody to use a compulsory license to download whatever music they want, in exchange for a $5 tax that is collected and distributed to copyright holders according to some process. Obviously, there are some conflicts. Copyright says that the owner of a creation gets to decide how to use that creation, but a compulsory license says that paying a tax allows anybody can download the copyright holder’s property — with or without permission of the copyright holder. Copyright says that a the owner of a creation can charge whatever he or she wishes for his music, but the compulsory license establishes a set rate for everybody — with or without permission of the copyright holder. All of the “benefits” that a compulsory license might bring about are at the expense of the artist’s rights.
When copyright is discussed today, I think too much focus is placed on the idea of making sure that artists receive some form of “fair” compensation for their work (I don’t mean to include Bailey in this group, now I’m just talking in general). When they’re not constrained by the rights of artists, people are free to imagine all sorts of “new models” that might bring more money to the artist than today’s system. And the funny thing is, some of these imaginary systems might, in fact, bring in more money for some artists if they were ever put in action. Some artists might even prefer it over today’s sytem, too. I doubt it, but I guess it’s possible, especially if one cherry-picks the right examples. However, any additional income will be at the cost of something that’s priceless. Control over one’s work is something that nobody should be forced to give up.
There are a number of other problems with a tax like this. How is the appropriate rate established? How would an artist receive compensation from a tax like this? How can one accurately measure downloads, anyway? These are questions that have no good answer. Like most “new models,” the system becomes pretty arbitrary when the details are established. It probably doesn’t matter, anyway: I doubt the RIAA would ever agree to a blanket, compulsory license in exchange for this tax, even if they were allowed to control the income. If the RIAA pushed a tax, it would be to make up for their losses from illegal file sharing. In other words, it would still be illegal to download music, but you’d pay the tax anyway. Even if you didn’t illegally distribute or download music.
The main source of the music industry’s trouble is the lack of understanding and/or respect for intellectual property, by both consumers and the recording industry. Gimmicks like this tax aren’t going to solve anything.
Tags: [copyright 2.0, isp, isp tax, piracy, plagarismtoday, riaa, tax]Comments
There is no right to copy music
Last December, a Washington Post editorial suggested that the RIAA was going after individuals for copying music from legally-purchased CDs to their computers. This story made big news, but it turned out to be completely false. The RIAA was going after individuals who were distributing music online, not people who were just making copies of their music. The Washington Post issued a correction to the editorial, but the story didn’t die there. Despite the facts proving the story wrong, there are some that still think the RIAA believes that they think every individual who rips his CD collection to his personal iPod is a thief and a potential target for a lawsuit.
What is the basis for this belief? Well, one of the things behind it seem to be the fact that the RIAA hasn’t come out and said that an individual has a right to make copies of music – even for personal use. As stated on one of their sites:
Beyond that, there’s no legal “right” to copy the copyrighted music on a CD onto a CD-R. However, burning a copy of CD onto a CD-R, or transferring a copy onto your computer hard drive or your portable music player, won’t usually raise concerns so long as:
- The copy is made from an authorized original CD that you legitimately own
- The copy is just for your personal use. It’s not a personal use – in fact, it’s illegal – to give away the copy or lend it to others for copying.
A writer at Wired who has written many posts on this issue had the following evaluation of the quote above:
Taken apart, what does it mean? Ripping MP3s is unauthorized. Under copyright law, anything unauthorized is infringing, unless the Fair Use doctrine defends the action as “non-infringing.” But the RIAA doesn’t believe that Fair Use covers MP3 ripping. So when they say unauthorized, they mean “infringing.” But that infringement won’t “usually” bother them until you start distributing.
So, since the RIAA won’t say that ripping mp3s is a right, they are saying that it’s not a right. And that must mean that they think it should be illegal. Therefore, the RIAA is totally against mp3 ripping (and presumably, only doesn’t go after iPod users because of the negative press it would generate).
I think that this type of logic isn’t fair because it takes some things out of context, but it raises a good question. Is copying music for your own personal use a right? Or in other words, do you have a right to make copies of music you purchase, regardless of what the creator of that music thinks? I’ve thought about it for a while, and I’ve come up with my answer: No. There is no right to copy someone else’s music.
But why?
In Objectivism: The Philosophy of Ayn Rand, Leonard Peikoff wrote (page 356):
All such claims involve a contradiction: if my right to life entails a right to your labor or its product, you cannot have a right to liberty or property. If my unearned claim is not satisfied, my “right” is violated; if it is satisfied—as a matter of right, regardless of your choice—then your right to life is violated; you become a rightless creature, who functions by my or society’s permission. Free milk for part of the population, as one political theorist puts the point, means slave labor for the rest. The “right to enslave,” Ayn Rand observes, is a contradiction in terms; it means the right to infringe rights.
Even if you disagree with Ayn Rand’s view of rights, I don’t think there is any getting away from a fact in the quote above: Two people can’t have a right to the same thing. For example, if I have a right to the money I earn from my job AND my neighbor’s kid has a right to an education that is partially paid with my money, we can’t both be right. Either I get my money, or the neighbor’s kid does. To pick one option necessarily negates the other.
The rights of two individuals cannot conflict, otherwise they wouldn’t be rights.
When it comes to music, I believe that the music artist who creates the music has the right to that music. To have a right to your music means the ability to control its distribution and to guarantee that you are properly attributed. It is because of this that I think there cannot be a right to copy an artist’s music. To have a right to copy their music, independent of the terms in which you obtained their music, necessarily negates their right to control their property.
I like illustrations, so here’s a quick example (from my trusty GTD pad):
Here is an artist who wants to sell his music and a buyer. The artist is putting a condition on the sale, forbidding the buyer to make any copies. In this case, the buyer would have no right to copy that music, even to his iPod. He made an agreement with the artist not to do so. To say that the buyer has a right to make a copy of that music (regardless of the agreement he just made with the artist) is to say that the artist has no right to make that type of agreement when selling his own property.
Context is essential
To honestly answer the question “Do I have a right to copy my music?” a proper context has to be established. What music are you talking about? Were there any stipulations on the purchase? Is the copying for your or another person? If you’re just copying your own CD in a private folder on your own computer to listen for yourself, the answer is probably yes. If you’re copying your CD into a P2P folder in order to distribute the music to other P2P users (similar to the Jammie Thomas or the Thomas Howell case), then the answer is definitely no. It all depends on each particular situation.
But if the “Do I have a right to copy my music?” is meant to be asked without any context, as if the right existed regardless of the wishes of the artist, copyright law, or the conditions on the sale of the music, then the answer is absolutely no. There is no such right to copy music.
Why aren’t others saying this?
Well, some have. Or at least, there have been a lot of people who have backed off of the RIAA on this issue when it was shown that the Washington Post’s story was wrong. Still, I’ve read a lot of the criticism expressed against the RIAA on other sites on this question, especially on Wired, p2pnet, and the Recording Industry vs The People, and I don’t think it is warranted. The RIAA is in a lose-lose situation when asked to answer the question without establishing some context. If the RIAA won’t say copying music is a right, critics will supply a situation in which copying music is ok (like copying a CD to your iPod) and say that the RIAA is against that. And if the RIAA says that copying music is a right, critics will supply a situation in which copying music is wrong (like P2P file “sharers”) and try to use the RIAA’s words against them.
In general, most of the criticism I’ve seen directed at the RIAA has been like this. It looks really bad, but once you look deeper you’ll find a fact or two missing. And if you consider concepts like individual rights and intellectual property, you might not think the RIAA was wrong at all. It’s a shame, too, because there are valid reasons to disagree with the RIAA. But not this time.
Update 1/31/2008: Corrected typo.
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Quick thought on the RIAA site hack
A hacker took down the RIAA’s site yesterday, removing all content from their site. I have one quick thought:
The fact that the RIAA’s site was open for attack does not excuse the hacker from exploiting the site’s weakness. I’ve seen the RIAA criticised for leaving themselves to be open to such an attack, which seems to have been completed using simple SQL injection. Most web developers have known about this technique and ways to prevent it for years, especially considering the fact that it could allow any site visitor to destroy your site’s database (like what just happened to the RIAA). This doesn’t change the fact that someone used that flaw to knowingly damage the RIAA’s property (their website and the data stored in their database), and that person should be held liable for that damage.
Here’s a quick analogy: Let’s say that as I leave for work in the morning, I accidentally leave the front door to my house wide-open. Does that mean that a robber who walks through that open door and walks off with all of my possessions should not be arrested for theft? Of course not!
No matter how bad the RIAA may be, their website is their property. As innocuous as it may seem, the attack to the RIAA’s site was a violation of their right to decide what they display on their own property. I doubt they will be able to catch the hacker(s) and I don’t know what the punishment should be, but it doesn’t change the fact that the attack was wrong.
Tags: [riaa]Comments
Jammie Thomas and the RIAA
About two weeks ago, Jammie Thomas was found guilty of copyright infringement for making 24 songs available on a peer-to-peer “file-sharing” network. The RIAA has been going after people who distribute music online for a couple years ago, but everybody before Thomas decided to settle the case for about $3,000. Thomas rejected the offer and took it to court, and for her trouble she was found guilty and hit with a judgement of $222,000. I bet she wishes she had just taken the first offer! Now Thomas is appealing that ruling on the grounds that the $222,000 constitutes an excessive and unconstitutional penalty. Since the 24 songs she was found guilty for distributing could have been purchased for $24, the actual damages to the property owners for her actions is a drop in the bucket compared to the money she’ll have to pay to satisfy the judgment leveled against her.
I disagree, and I think the logic she’s using in her appeal is a good example of the type of rationalization music pirates use when they choose to steal someone’s music. These people only consider a loss to be a sale that didn’t happen because an individual chose to download the music instead. Like in Thomas’ case, the 24 songs in the case can be purchased for $24, so the damages were $24. But in most cases of music piracy, the individual who steals the music has no intention of ever purchasing the music. Therefore, since the artist did not lose out on a sale, then piracy is ok and does not damage the artist. In fact, it’s good for the artist because it could lead to increased exposure to the artist!
What this argument ignores is the artist’s right to own and control his own creations. The real damage music piracy inflicts is the loss of the artist’s ability to set the conditions by which his property is traded. It’s that control that allows the selling of music at all. How can an artist sell his music when everybody can just take it? He can’t. He just has to accept whatever terms the music pirate dictates and live with it. This, in effect, makes the music worthless.
If you think that $222,000 is a lot of money compared to the crime, look at some of the artists whose music was included in the 24 songs brought up in trial. Now compare the $222,000 to the amount of revenue the 24 songs have brought in to the music industry. Does the court’s ruling seem excessive now?
All this being said, I don’t like the fact that Thomas (a single mother of 2) has to bear such a huge financial hardship. But I also don’t like lots of cases I see of people making mistakes that are easily avoidable. Life has so much to offer, so why give that up for to be a martyr for a cause like fighting the RIAA in a file-sharing case? Even if you don’t agree with copyright, the law is clear and the penalties are harsh. We’ve all seen the FBI warning that pops up before movies. If you don’t want to be the target of a RIAA court case, all you have to do is not steal music. That’s not very hard.
Tags: [intellectual property, jammie thomas, riaa]Comments
Dismuke on “free markets”
A couple months ago, someone on the webcaster-side of the net radio royalty rate debate suggested that I read a post titled “An Unfree Market” written by Dismuke. I read it then, along with many other posts and articles on the issue, but I always remembered Dismuke’s response because of the way he tried to defend the idea of a “free market” while also trying to argue that the government should force low music royalty rates on music labels.
The two positions contradict one another, so in order to do so he twisted the idea of a “free market” into one that better suited his pro-government-regulation position. There are some arguments Dismuke made that I would like to address.
What is a free market?
A free market is a market where transactions occur only when the seller and buyer voluntarily agree to make the sale. The price for any product is ultimately up to the seller to set, and the amount that any buyer is willing to pay for that product is ultimately up to the buyer to set. The only way for a sale to occur is when the two sides can agree to terms. The only role the government plays in this type of market is to protect the freedom of all parties involved.
I’ve written this before, but that’s where the “free” in “free market” comes from. All parties are free to exercise their own judgment without being coerced into any deal.
This is where webcasters break with the ideas behind a free market. In a free market, the owner of a copyrighted song would be able to set his own publishing rate for any webcaster to play the song, and the webcaster would be free to accept the rate, walk away and never play the song, or negotiate a lower rate. Unfortunately, current U.S. law does not operate this way. Currently, if a webcaster does not like the rate the song-owner asks for, the webcaster can ask for “permission” from the government to play the song without the song-owner’s permission. The government has arbitrarily established a royalty rate that all webcasters can pay music labels, regardless of whether the music labels agree to the rate or not.
This special deal webcasters can make with the government violates the principles behind a free market. It takes away the freedom music owners have to set their own rates.
Webcasters love this arrangment, though, because the rates established by the goverment were much lower than major music labels wanted. That is, they were lower until the CRB’s recent decision to dramatically raise the royalty rates. So, when webcasters ask you to “save net radio” they’re not trying to bring back the free market. They’re really asking is that you pressure your government representatives to continue government intrusion into the free market.
So, how did Dismuke explain a free market? He doesn’t, except to throw out three facts about free markets:
1.) Free markets don’t allow prices to be set by judges on a government board,
2.) Free markets do not allow special privilege for certain industries to be set by the government, and
3.) In a free market, prices fluctuate according to supply and demand.
These are all true facts, but these facts by themselves do not define what a free market is. He never explains what he means by “free market,” leaving it to the reader to assume it is what he says it is. But if the the term “free market” is explained simply as a system where people are allowed to make their own agreements with one another without government influence, it’s easy to see how Dismuke’s call for government coercion in the music royalty rate business is in direct conflict with the free market.
Now, I can see how the first fact he gave could be considered an acknowledgement that the government should not be setting royalty rates. He wrote:
For the judges to attempt to cloak their rationalizations using free market verbiage is absurd and drops context in a massive sort of way because the entire process they are part of and the results of their decision is the exact opposite of a free market.
The results of the CRB decision are the exact opposite of a free market precisely because the process is the exact opposite of a free market. No matter what decision the CRB makes, it will be a result of a process that takes away the freedom of the owners to establish their own rates. Dismuke does not elaborate on this nor argue for the abolishment of the CRB and the special privilege they give webcasters.
Special privilege for certain industries?
Dismuke, like many webcasters, believe that is is unfair that the CRB’s royalty rates are much higher for internet streaming than the rates established for AM/FM radio. They claim that this is an example of the government giving the over-air radio industry advantages over the online radio industry. Dismuke wrote:
On what twisted logic can one say that the value of a given recording being streamed is somehow different depending on whether the stream originates from an FM broadcaster or whether it originates from a station such as mine?
The value is different because the owners of the music being streams want a higher rate for internet transmissions.
If they were able to set the royalty rate for broadcasting their music (as they would be able to in a free market) they would set a higher rate. In setting the higher rate for internet broadcasting the government is not giving over-air radio a special privelege. It is refusing to grant internet radio a special privelege over the music owners: The ability to set their own royalty rate for somebody else’s music.
It can be argued that the music owners should want to lower royalty rates for music broadcast over the internet, but the final decision to allow the broadcast should be theirs to make.
Fluctuating Prices
Dismuke explains how prices fluctate in a free market, and correctly points out that it is not a guarantee that rates would increase every year (like the CRB ruling has declared) in a free market. He wrote:
For a person to know what the market price for a given good or service in the year 2010 ought to be would require nothing short of psychic powers or omniscience.
What’s missing here is the fact that the violation of the free market is not in the CRB’s rate increases, but the fact that the CRB exists at all. Would Dismuke maintain his objection to the CRB’s psychic powers if they set the 2010 royalty rate to what he wished instead of what the music owners wished?
If so - then the next question is this: which copyrighted sound recording?
Do the judges on the CRB actually mean to suggest that the market value of all copyright sound recordings is identical?
Again, what’s missing here is the fact that the violation of the free market is the CRB’s blanket royalty rate for all music, but the fact that the CRB exists at all. Yes, in a free market the rates for unpopular music would probably be lower than rates for popular music, but in such a market the government would be setting royalty rates at all. But he wants the CRB’s lower rates, not a free market.
Pricing smaller labels out of the market?
For the CRB to price such copyright holders out of the market for Internet radio airplay does them a profound injustice - especially since the purpose of the CRB is to look out for the property rights and best interests of all copyright holders, not just copyright holders who happen to be the major mass market labels which control the RIAA.
The government pricing someone out of the market sounds bad, and definitely anti-free-market. But there is one little fact that Dismuke is not telling you:
Copyright holders are still able to negotiate their own royalty rates with whomever they wish.
In other words, music owners are still free to negotiate their own deals with broadcasters. If a band wanted to play their music on Radio Dismuke for a rate that is much lower than the CRB’s rates, they are free to do so (assuming they haven’t already sold their music to another party). If a deal can’t be worked out, though, the webcaster can go around the music owner and broadcast under the government’s rate.
So, nobody has been “priced out of the market” by the CRB’s higher rates. Music labels can still charge lower rates if they wish.
Freeloaders?
Aside from the implication that small webcasters such as myself are a bunch of mooching freeloaders, on the surface, this almost sounds reasonable.
I think this is a case where the term “freeloader” deserves to be defined. The dictionary.com definition of freeloader is “someone who takes advantage of the generosity of others.” Freeloaders do not steal from people, they just take everything that is offered. When I think of a freeloader, I think of the irresponsible cousin or uncle on television whose asks to stay for a few days to “get back on his feet,” but stays for weeks because the family doesn’t know a polite way to ask him to leave.
I definitely agree that the term “freeloader” does not fit webcasters who are trying to “save net radio.” In fact, freeloader is too good of a term to describe them. These webcasters are not taking advantage of the music owner’s generosity, they are trying to steal the music out from under the music owner. The tool they are using for this heist is not a lockpick, a crowbar, or a club. Their tools are the government, which they want to use to invalidate the music owner’s right to control their intellectual property, and you, who they plan to use to pressure the government to do what they want.
Webcasters will be quick to point out that they pay royalty rates, and their payment is money the industry would not have received had they not started their internet broadcast. What they’re not telling you is that the record companies don’t want them to sell their music at them at the rate they’re paying, and the issue at hand is whether the record companies should have the right to tell them no.
Here’s a quick example: Imagine two guys, Dan and Mike. Mike buys a brand new car for $20,000. Dan steals the car one day, sells it for $500, walks home, and gives the money to Mike while saying “I helped you out, this is money you didn’t have before I sold it.” The problem between Dan and Mike would not be the amount of money Dan sold the car for, but the fact that Dan sold Mike’s car without permission.
I don’t know enough about how the creation of the compulsory license for internet broadcasting has affected that industry to know if it is wrong for webcasters to take advantage of the license to play music without first getting permission from the owner. So long as the webcaster pays the royalty rates dutifully, I’m inclined to believe that they’re just mixed up in this mess of a system our government has created. However, if a webcaster - or anybody else - takes another step forward and becomes an advocate for this system that steals the private property from music owners, he has become part of the problem.
“Beyond Disgusting”
Dismuke wrote (emphasis mine):
The task of the Library of Congress and the Copyright Royalty Board is to protect the property rights and interests of all copyright holders. The fact that the judges on the CRB chose to use their authority to create an arbitrary rate scheme which will price a great many copyright holders out of the market for valuable Internet radio airplay so that some copyright holders with political pull can be protected from emerging forms of competition - well, that is disgraceful. And the fact that they attempt to use the honorable term “free market” as a rationalization for their decrees is beyond disgusting.
If it is “beyond disgusting” that someone would misuse the term “free market” when issuing their ruling, then how should one describe the way that webcasters argue for a completely anti-free-market system? The paragraph above is just like his entire post. His first sentence states that the task of the Library of Congress and the CRB should be to protect the property rights of all copyright owners (which should mean that property owners should be able to set their own rate for their own property), and then in the next sentence he complains that the arbitrary rate the judges picked is not low enough for webcasters (nevermind what the property owners want). He complains about the political pull of some record companies, all the while trying to build up political pull of his own. And all of this is surrounding a statement that is completely false (the idea that anybody will be priced out of internet radio).
If Dismuke was really concerned about the property rights of music owners and if he really believed that the free market was “honorable,” he would advocate for the elimination of the CRB and the compulsory license for internet broadcasts.
Why I Wrote This
I know I’ve written a lot about the internet radio, even before writing this huge post. One of the things that motivates me to keep doing it is the frustration I feel in when essential points in issues like these are ignored in favor of emotion-based arguments or outright lies. Instead of arguing whether intellectual property owners should have the right to control their own property, we get “Save Net Radio!” What is “net radio?” Who are we saving it from? How will it be saved with this government action? The questions raised by a context-dropping call like “Save Net Radio” lines up the issue perfectly for those who want to fill in their own answers without really addressing the issue at all.
Edit 6/21/2007: Very stupid spelling errors fixed.
Edit 6/22/2007: I should have probably made this clear above, but the link to Gus Van Horn’s site is not meant to imply that I’m replying to something he wrote. I’m linking to a comment someone else wrote.
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SoundExchange concession
Recently, SoundExchange made an offer to allow small webcasters to broadcast music an alternative to the massive rate increased that are supposed to go into effect in July. SaveNetRadio quickly rejected the offer as not enough, because they feel that larger webcasters should have the same breaks.
And I thought this campaign against SoundExchange being all about the little guy?
Of course, it’s not. The campaign to “save net radio” is not about actually protecting people’s ability to play music online, it’s about using government power to force content providers to sell their music for less than what they feel they are entitled to. I think it is a shame that SoundExchange feels that it even has to make these types of concessions, if it is doing to to try to deflect more government attention. The only issue the RIAA (or anybody working in any industry) should have to concern themselves with when setting the prices for their product is the demand for that product. It’s sad that today’s political climate allows people to use the government to shake down others for their property.
What this concession does do, however, is eliminate all of the sob-stories about amateur webcasters who were going to go into personal bankruptcy over the royalty rate increases. All of you small webcasters, now you won’t have to shut down your internet radio stations. You’ll be able to continue on, content in the fact that government intervention allows you to play somebody else’s music without their permission. Your pressure has saved “net radio” from the people that created the music.
Tags: [government intervention, internet radio, net radio, riaa, soundexchange]Comments
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
Net Radio discussion at S&R
This past weekend, I did more writing in response to a post about the recent internet radio ruling at a site called Scholars and Rogues. I don’t know the site that well, I just happened to come across it while I was checking out blog posts on the subject of internet radio at Technorati. I don’t think enough is being said for the “other side” of the internet radio royalty ruling, and I mean those that don’t believe that internet broadcasters should be able to use the government to set royalty rates on music. Below you can read are the comments I wrote that best explain my position on this issue.
5. Darren - April 21, 2007
I don’t see how this ruling will stop internet radio.
What’s at question is who gets to play whose music and under what terms. Normally, a webcaster would have to obtain permission from the owners of any music they play. Whether you agree with it or not, this board is a way for webcasters to get around seeking permission and to play the music for a rate that the board sets. Even though the board may have changed their rates to a level that most webcasters can’t afford, webcasters still have the option of playing music if they obtain permission.
It may seem that is is unfair that the rates were hiked so high, but shouldn’t the people who own the music decide what the fair price is? It’s no different than if, for example, you set up a garage sale and tried to sell your computer for $1,000,000. People may laugh at you and nobody will buy the chair, but it’s *your* chair and you get to decide what it is worth *to you.* The same applies to the RIAA and all music they own. Whether one likes it or not, when a musician signs a contract with a big label to sell the rights to their music, the big label owns the music. And the big label gets to decide what they will charge for it.
No matter what the RIAA does, people are still free not to buy their music, musicians are free to give away their music instead of sell it to the RIAA, and webcasters are still free to play music of those that have given them permission.
8. Darren - April 21, 2007
Webcasters may believe the royalty rate was fair, but the owners of the music the webcasters were streaming did not. I believe that only those who own the content should get to decide the royalty rates that are charged for that content.
I don’t see a major difference between webcasters who think they should be able to publish music for free and those who are willing to pay last year’s royalty rates. One will pay the artist *something,* but both accept the premise that they should get to stream music without obtaining permission of the artist. If one really wants to stand for the rights of artists (or for all individuals, for that matter), they should reject that premise.
I think that the RIAA has made it pretty clear that they think webcasters should have to pay more to play the RIAA’s music. Therefore, they are raising their rates. Webcasters can take it or leave it.
11. Darren - April 21, 2007
The RIAA owns the rights to all music it purchases from the artist. Once the artist signs a contract that transfers the ownership rights from the artist to one of the music labels, the RIAA has the same rights to that music as if they created it themselves.
This actually is an extension of the artist’s right to own whatever he or she creates. Artists have the right to trade their product to anybody they want for any amount of money. If the government’s copyright board were to step in and take away the RIAA’s right to sell their product, it would be the same as if they took those same rights from the artists. The government would be telling the artist (or RIAA, or whomever else owns the music), “You may not sell your music for that rate, it’s too high. Internet broadcasters only want to give you 0.0001 cents per play, and what they want is more important than what you own.” Who really loses in this deal?
The RIAA is always made to be the bad guy, but the RIAA has one thing over webcasters that are pushing this “Save Internet Radio” campaign: The RIAA won’t take an artist’s property if he or she don’t want to sell it to the RIAA. The RIAA respects the rights of the artist, because it’s those same rights that allow the RIAA to function as a business at all. Webcasters, on the other hand, will try to compel the government to *force* content owners to sell their products at a lower rate. Webcasters are right in one respect: Only one side in this debate is really looking out for the rights of the artist.
20. Darren - April 22, 2007
[…]
That’s what the free market is really all about. It’s more than people buying and selling things for money; it’s also about respecting individuals and their rights to their lives and their property. We might not like or agree with what people do with their stuff, but we have to respect their rights. That’s the principle I’m talking about. If you think that streaming music over the internet is important enough to violate those rights, then we don’t agree in principle at all.
[…]
Tags: [intellectual property, internet radio, riaa, royalty rates]