Home > Uncategorized > Dual quagmires: internet law and copyright law

Dual quagmires: internet law and copyright law

A few months ago, being an avid listener of Pandora Internet Radio, I shared their concern at a recent ruling handed down by the Copyright Royalty Board which would drastically increase royalty fees required from online radio stations. Essentially, as I understand it, the system currently works by having the internet radio broadcasters pay a reasonable percentage of their profits to SoundExchange, a non-profit that then distributes the “royalties” to the artists. Using provided data from the broadcasters, SoundExchange pays the artists their cut directly, and then gives the labels their cut as well.

Overall, not a bad system, in my opinion. However, this ruling I mentioned would change the system to charging rates based on collecting a fee per-listener per-play of each song. And because of the format, this would drastically increase the fees required across the board, essentially shoving many of the smaller stations out of business. It would also severely threaten the livelihood of even the largest broadcasters, like Pandora, because they have so many thousands of listeners.

In addition, Pandora would get a special kick in the pants because, unless I’ve read the whole thing wrong, the $500 minimum fee per-channel or -station would apply to each and every one of the personal stations that Pandora allows you to create and tune. I personally use two such channels daily, and there’s no way I generate $1000 of ad revenue to cover those two.

Now, back to my point. When I first read about this, I figured it was probably just some money-grubbers trying to grab more green for themselves. Of course, how could they not see that increasing the royalty rates so much would actually decrease their revenues to nothing by making the fees unpayable? It crossed my mind that the intention could be to push the webcasters out of business, but everyone loses by preventing the webcasters from making money. It just didn’t add up.

And then comes this little gem which is the end-product of all the formal complaints and protests, which states that the minimum fee would be capped at $50,000 (100 stations) for all webcasters who “work to stop users from engaging in ‘streamripping.'” For those unfamiliar with streamripping, most programs that play a digital music stream just play the audio and display the artist and track names (“metadata”) provided by the stream. However, streamrippers actually save this information to your hard drive, so that, after listening, what you get is a drive full of recorded audio complete with track and artist listings.

I’m not going into the legality of this, but the point is that any sort of such “work” to stop streamripping, as discussed in the most recent link, would involve some sort of Digital Rights Management, the music industry’s attempt to maintain a stranglehold on “their property” (the music that you bought and paid for).

Now, I’m a firm believer in the “never attribute to malice that which can be adequately explained by stupidity” philosophy, but I just can’t explain this one away. Except that this latest revelation shows an interesting and frightening possibility. Finally, someone has something to gain: the labels can get their dirty little DRM fingers into internet radio by using this proposed rate hike to extort the webcasters into adopting their standards … or else.

Now, I feel vaguely dirty typing out such an outlandish conspiracy theory, but so far, it’s the only explanation that makes sense, aside from greedy hubris on an epic scale.

At any rate, this is rather worrisome.

Categories: Uncategorized
  1. mike
    July 18, 2007 at 10:36 am

    As I understand it DRM would decrees the quality of the web stream. Also as it is only stations in the USA that would be compelled to use it ( at the moment) A unleveled playing field is created. with listeners going to stations with no DRM. I still see a conspiracy to kill internet radio

  2. Ruth
    July 24, 2007 at 10:42 am

    RenRadio, an online radio that is part of the Live365 network, plays mostly Renn Faire preformers, but is being effected by just this. In fact is has been announced that they will cease broadcasting at the end of the month.

  3. July 24, 2007 at 10:35 pm


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