Copyright Board Lawyer Responds On Pandora's End

mattnyc99 writes "A month ago we talked about the impending death of streaming music site Pandora thanks to a very backwards fight over royalties. PopMech follows up with an article that, besides noting how insane it is that Pandora has to pay record labels for the bad songs that users skip, also gets the (three-member) Copyright Royalty Board to try and defend itself about why the government is determining royalty rates for the music industry. Quoting: 'It was uninvited,' says Richard Strasser, senior attorney for the Copyright Royalty Board. 'I don't think anybody was jumping up and down with joy in the government that they have this responsibility, but the former systems just weren't working out.'" No one seems to be trying to defend or explain why Internet radio is being hit so much harder than satellite or broadcast.

Pity

I have been listening to Pandora, discovering new artists, and had begun to buy music again (most of my music collection is CDs bought in the Eighties). Guess I'll just go back to listening to my 'oldies' - I can't be bothered to keep fighting the music industry to accept my money.

Re:Pity

You wouldn't be alone. I stopped buying CDs in the early 90s; just had no source of inspiration for finding new music anymore. Someone recently showed my Pandora, and that was actually my first thought: find new music and start collecting again. Oh well, I'm older now, and wine is actually quite enjoyable to collect (& eventually consume) even though it's more expensive ;-)

Re:Pity

I have been listening to Pandora, discovering new artists, and had begun to buy music again

Please consider checking RIAA Radar [riaaradar.com] when buying music that you find through Pandora. When you pay for content published on RIAA labels, you are literally paying people to fight against your interests as a music fan.

If people would simply stop rewarding stupidity, the RIAA would melt like the penny-dreadful movie villains they are.

Re:Pity

That is assuming that you are buying new music. if you buy used CDs you aren't supporting the RIAA at all, while still being "legal".

There's No Explanation For A Good Reason

They are just waiting for the net radio enthusiasts to postulate. Then, they label net radio advocates as "extreme and uncooperative" as the excuse for not saying or doing anything.

It's important to remember the RIAA members control distribution. Letting net radio operate at a discount or even the same rates as broadcast is a non-starter. RIAA says, "net radio is cheaper, so give me more money. Well, actually, just give me more money..." And broadcasters are quite happy with that too.

Best stance is to let the lack of an explanation rest as is and use the FOIA, if possible, to get at communications about the issue.

Remember this, too...

It's important to remember the RIAA members control distribution. Letting net radio operate at a discount or even the same rates as broadcast is a non-starter.

It's also important to remember that the RIAA members also own most of the radio stations. The internet is their competition for earlobes, which they could otherwise sell to advertisers.

The ISPs are hitting internet radio too

The ISPs are hitting internet radio too with their monthly bandwidth quotas. Once you start to pile up usage, every bit counts:

31 days * 24 hours * 60 minutes * 60 seconds * 128 kbps (16000 bytes) = 42854400000 bytes per month. That's nearly 40 GiB of data, only for radio.

Even if you get real and cut it back to working hours and assume 8 hours of radio per day on weekends, that's still a whopping 13.3 GiB of data only for radio.

Re:The ISPs are hitting internet radio too

who the hell listens to internet radio for 8 hours every single day in a month?If you're considering listening while at the office, that's not bandwidth you should be concerned about so that's gone. The only people we have left using that kind of bandwidth are radio junkies who need some kind of noise playing all the time and who work from home/are unemployed. That's not a very big market, and to a person who needs to listen to that much radio, 30 GB out of 250GB per month (taking the recent Comcast announcement) isn't that much.

Re:The ISPs are hitting internet radio too

who the hell listens to internet radio for 8 hours every single day in a month?If you're considering listening while at the office, that's not bandwidth you should be concerned about so that's gone.

YOU may not care, but the people paying for uploading those bits to you (the net radio providers) certainly care if you're consuming bits that much.

simple explanation

No one seems to be trying to defend or explain why Internet radio is being hit so much harder than satellite or broadcast.

The explanation is pretty simple. If you follow the history of the battle over internet radio royalties, you'll quickly see that it is all about stream ripping. The music industry is convinced that millions of people are "stealing" music by recording streaming radio with free tools like streamripper.

They initially attempted to get congress to pass legislation to force all internet broadcasters to use DRM in their streams. When this went nowhere, that's when they began the royalty assault. The plan is to simply force internet radio broadcasters out of business with exhorbitant royalties. Looks like it's working, too, with the demise of Pandora.

Re:simple explanation

The explanation is pretty simple. If you follow the history of the battle over internet radio royalties, you'll quickly see that it is all about stream ripping. The music industry is convinced that millions of people are "stealing" music by recording streaming radio with free tools like streamripper.

It's not just about stream-ripping. It's also about controlling the market. Internet radio destroys the ability of the major labels to determine what music gets played, which means that they lose the marketing oligopoly they currently hold.

Another industry gets offshored

Won't this just mean that there won't be any U.S. Internet radio stations? They'll either fold up or move off-shore. They won't be able to conduct any "business" in the U.S., but short of the Great Firewall of Comrizon/Vericast, the MAFIAA won't be able to stop U.S. users from streaming.

Re:Why internet radio is hit harder

The reason is regular people can be broadcasters on the internet. This is not very appealing to large commercial cartels. They want to make royalties not just on the content but also the the broadcasting hardware. It ain't cheap or easy to start an XM radio or regular O-T-A radio station. The commercial interests want their cut â" so they seek to drive any one out of business who is doing internet radio.

Re:Why internet radio is hit harder

Except the cost of such material, and the authorization to use some part of the radio spectrum? Hum, nothing.

Re:Why internet radio is hit harder

1. An FCC license.
2. Commercial broadcast hardware.

Have you priced either? Very effective at excluding undesirables...

Re:Why internet radio is hit harder

They want to make royalties not just on the content but also the the broadcasting hardware

What's to stop me from using my choice of broadcasting hardware if I was in the terrestrial radio business?

In the USA, that would be the FCC [wikipedia.org], which operates its Office of Engineering and Technology (OET) "tasked with overseeing equipment authorization for all devices using the electromagnetic energy from 9 kHz to 300 GHz. OET maintains an electronic database of all Certified equipment which can be easily accessed by the public."

Re:Why internet radio is hit harder

No one seems to be trying to defend or explain why Internet radio is being hit so much harder than satellite or broadcast.

That's an easy one. Cause people use the internet to steal copyrighted material.

People can't "steal copyrighted material" from satellite and broadcast?

I think I've got a better explanation. Broadcast and satellite are channels that require very high initial investment, thus locking out small competitors. Internet radio can be set up by anyone, and thus is harder for an industry cartel to control.

Re:Why internet radio is hit harder

It was sarcasm.

It's just as possible. For some reason, though, the internet is the one that scares content providers. Maybe it's the democratic nature of the web, as you point out, but I suspect a lot of it's just illogical fear.

Re:Why internet radio is hit harder

Oh, I think the fear is very logical, for the reasons that have been pointed out. Gotta maintain that barrier-to-entry to keep the markets under firm control. Otherwise, you know, we might have a free market, and the only people who want that are the very ones being excluded.

Re:Why internet radio is hit harder

It was sarcasm.

It's just as possible. For some reason, though, the internet is the one that scares content providers. Maybe it's the democratic nature of the web, as you point out, but I suspect a lot of it's just illogical fear.

Maybe, but one argument against mere "illogical fear" can be seen if you read Lawrence Lessig's Free Culture [free-culture.cc], where he describes his experience in trying to pass the Public Domain Enhancement Act [wikipedia.org].

The act proposed one small change to current copyright law: that after 50 years, a copyright holder would have to pay $1.00 for each ten years of it's existing copyright protection to maintain copyright protection, otherwise the work goes into the public domain. This would allow old commercially nonviable works to go into public domain after a reasonable period, yet imposes only the most trivial burden on maintaining protect for the tiny minority of works that are still commercially valuable after that period. However, the industry fought the bill tooth-and-nail and defeated it, for stated reasons you can see at the Wikipedia link which sound pretty disingenuous to me.

I tend to favor Lessig's argument, as summarized by WP:

"Proponents, however, have suggested that the real threat this poses to copyright holders is that a huge wave of previously unseen, unused, and forgotten works would spill into the public domain, free for anyone to tamper with. The PDEA would not compromise currently used copyrighted works like Mickey Mouse. Content that is being used, or even content whose owner is aware they 'own' it can be protected for a minimal fee. They suggest there is no reason to oppose it other than the fear of competition from the influx of new content."

And *that* is what I think they really fear about internet radio, not that people will steal their content, but rather *compete* with it.

Re:Well, hell

Why doest Pandora just strike up with indie studios and go mono e mono with musicians for play rights?

Because the demand for indie music is dwarfed by the demand for big-label music. I know I'd stop listening to Pandora most of the time if they stopped offering music from the 70s and 80s that I listen to the most.

And if Congress is forcing internet radio companies to pay to some RIAA-hole, countersue them under RICO. After all, they're pooling their money. And isnt payola illegal?

Please explain exactly how the RIAA could be prosecuted under RICO. I don't mean to pick on you, but I often see remarks that the RIAA should be prosecuted under RICO, and I have yet to see a clear analysis of how exactly they violate RICO laws. And as for payola, this is the opposite of payola. The big labels are not paying for airtime.

What I'd like to see is an anti-trust suit against SoundExchange. We won't see one, of course, because it'd be political suicide to take on the RIAA when they own the political system.

What I'd really like to see is a retreat from fascism (call it corporatism if you like), but that sure as hell isn't happening any time soon.

Re:Well, hell

Yes, payola is illegal. It's also standard operating procedure, and nobody gives a damn that it happens (or nobody in a position to do anything, at least).

And let's face it - Pandora wouldn't be nearly as successful as it has been if it could only play indie music. Say what you want about quality, but there's a tremendously larger audience for mainstream music, pretty much by definition (now technically mainstream and indie aren't mutually exclusive, but it tends to work out that way more often than not).

Because it wouldn't fix anything

Thanks to Soundexchange. [wikipedia.org]

You have to pay royalties to the RIAA for any music you broadcast. Even if the artists you are playing are not RIAA members. They can, however, become RIAA members and get their precollected royalties, of course.

And no, I'm not bullshitting you. It's actually law. Here's the original Slashdot thread about it. [slashdot.org]

Re:Well, hell

Or it could mean 2.71828183 channel surround sound.

Sound Exchange

If you go to the SoundExchange website, they have a list of thousands of musicians for whom they collected revenue but have not contacted them for payment. Their right to those funds expires after a certain period of time, and SoundExchange would keep 50% in any case.
In most case musicians would prefer to have their music broadcast as widely as possible. It is possible to opt out of representation by SoundExchange, but then the guidelines are written so that they have to waive ALL rights to revenue from that track. They can also make exceptions for particular webcast sites, which is made quite difficult and challenged aggressively.
One exception is polka music, a group representing American polka music negotiated a broad agreement with SoundExchange that polka stations don't have to pay any revenues.