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Congress Passes SWSA 183

signer writes "Congress has passed the Small Webcaster Settlement Act (House of Representatives link). Webcasters have until December 15th to negotiate Percentage-of-Revenue royalty payments, and they have the option of changing their status to non-profit and gaining a delay until June 30, 2003 to pay owed royalties from previous years. RAIN ( has details."
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Congress Passes SWSA

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  • by 1stflight ( 48795 ) on Friday November 15, 2002 @04:14PM (#4679592)
    IS this settlement good or bad for the webcasters? Personally I'm of the mind that radio by defination is free promotion, the webcasters should be charging for it.
    • IS this settlement good or bad for the webcasters?

      There is an annual minimum royalty of $500, which means that the smallest of small webcasters may not be able to afford it.

      • That may well be true, but it's a lot less expensive that what they would have been required to pay. Someone who wants to webcast should be able to afford that $500. That's only about $42 a month. I bet most of them spend that much on games.
      • by Liquor ( 189040 ) on Friday November 15, 2002 @04:45PM (#4679849) Homepage
        There is an annual minimum royalty of $500, which means that the smallest of small webcasters may not be able to afford it.
        Umm... I think it's even worse than that.

        I'm no expert at translating from legalese, but it sure seems that $500 is for past revenues, in 1998 - and there's a $2000 per year minimum after that, i.e. $6K for 1999, 2000, and 2001, and then another $2K minimum for 2002. And that's just to settle PAST broadcasts. So there's a minimum outlay of about $8500 for ANY webcaster that's been around for those years.

        Even if a webcaster is non-profit, with no income, they want 5% of expenses - still subject to the minimums.

        Oh, and you're a small webcaster until you make more than a $1.25 Million?
      • There is an annual minimum royalty of $500, which means that the smallest of small webcasters may not be able to afford it.

        Put up paypal, 50 bux a month and your covered. Of course better switch to peercast so your bandwidth doesnt run up your expenses (which they can charge 7% if expenses are larger)

        BTW, people over at Nectarine [] have been able to get enough donations to pay for bandwidth. They are even testing OGG streaming (less bandwidth than mp3s)
    • I'd have to agree with you here. How many of us mainly hear new music from somewhere other than the radio? I'd say, that I have purchased rough 70% of all the cd's I own after hearing the artist/song on the radio. I don't really see how internet radio works differently. If I were a music label I would want my music being put on the radio. Along the comment from the first poster about webcasters charging to music on the radio, that's not a bad idea. Not sure the music labels would go for it as they are making the big stink over internet radio. However, if interenet broadcasters charge companies for *gasp* commercials they may be able to afford the fees incurred by the new law.
    • by pla ( 258480 ) on Friday November 15, 2002 @04:26PM (#4679694) Journal
      No, not all that great.

      For one thing, the RIAA's slice of the pie still comes from *gross* revenue, meaning that stations operating with only a tiny profit margin will get very very screwed.

      Another poster already mentioned the $500 minimum, but that I see as less of a problem, only affecting the smallest of webcasters. The percentage of the gross take, on the other hand, doesn't go away regardless of scale.

      I have to admit I don't quite get the part about non-profit webcasting (the text of the bill HEAVILY references its predecessor, making it read almost exactly like a diff file). It sounds like they just have more time to decide to fold, but don't actually get significantly better terms. But don't quote me on that one.
      • Let me get this straight ... the RIAA *pays* royalties based on [their notion of] the net, but they *collect* royalties based on the gross? What's wrong with this picture??!

    • by mumblestheclown ( 569987 ) on Friday November 15, 2002 @04:35PM (#4679762)
      "free promotion."

      That's up for negotiations to decide, isn't it? One side POTENTIALLY benefits from "free promotion", the other from having some filler between advertisements (or some other benefit).

      Making things interesting is that in the marketplace of music, webcasters can always go to alternative music sources if they can't come to what they think is an equitable agreement with their first choice rightsholders--be that agreement the rightsholders get paid, pay, or whatever.

      in life, you get what you negotiate.

      • by FreeUser ( 11483 ) on Friday November 15, 2002 @05:40PM (#4680471)
        That's up for negotiations to decide, isn't it? One side POTENTIALLY benefits from "free promotion", the other from having some filler between advertisements (or some other benefit).

        Well, that is the theory. But that assumes both sides come to the table more or less as equals.

        In reality, the media cartels have a vertical monopoly on content from the artist's gitarre strings to the listener's earphone, whether that path passes through the radio or television spectrum as a traditional broadcast, or through the retail chain as a shiny 6" disc.

        The relationship is more complex than this (the cartels are currently crying foul over radio payola ... not because of the payola, which gives them almost complete control over what we hear on the radio, but because of the prices they are currently having to pay. They are asking the government to step in and slap the otherside down, so they can maintain their control, but at bargain basement prices instead), but overall they enjoy a vertical monopoly they are loathe to give up. represented a threat to this, before the cartels coopted them into the regime. Web broadcasters represent a threat to this, as do p2p filesharing networks. Their concern isn't that their content is being played (indeed, they pay for exactly that privelege on traditional radio), their concern is that their content isn't the only thing being played and, worse, they have no way to control that.

        Except, of course, to tell a webcaster to "play our play list or pay (exhorbitant) retail to broadcast our music", using their current market dominance to relegate those who say no to a tertiary status, and likely costing them the early listenership they need to stay in business.

        Its not that they don't want webcasting, or that they expect to make a lot of money licensing webcasters. Its that they only want THEIR webcasters online, and no one with such a cartel/monopoly mindset will ever negotiate with a party such as the webcasters in good faith.

        So, until copyright is reformed to no longer grant government entitlement monopolies, there will be no free market in which such negotiations can take place, indeed, no free market whatsoever, so one cannot reasonably expect acceptable results to arise from applying free market assumptions to what is essentially a planned and very precissely regulated market.
    • SomaFM [] has a pretty good over view of what it means to them. The answer is we will see (since the negotiations haven't started yet). I really hope they make it back on the air. I want my SomaFM.
    • What does becoming a "non-profit" have anything to do with it? Will they still need to qualify as aa 501(c) according to the IRS?
    • Personally I'm of the mind that radio by defination is free promotion, the webcasters should be charging for it.

      That's a great idea! I'm going to take one of the new BMW 7-series cars without the dealers permission, drive it around town everyday promoting it and then send BMW a bill for the favor I'm doing them by promoting their cars.
      • >>Personally I'm of the mind that radio by defination is free promotion, the webcasters should be charging for it.

        >That's a great idea! I'm going to take one of the new BMW 7-series cars without the dealers permission, drive it around town everyday promoting it and then send BMW a bill for the favor I'm doing them by promoting their cars.

        Some unknown person driving one car around is completely different than broadcasting a song to hundreds, or thousands of people who likely have the means to buy the album. Also, you've taken and consumed physical capital (the wear and tear on the car) whereas the radio station do not expend any of the music company's physical capital.

        Go ahead, try to make a convincing argument of a recent musician who was mainstream super-successful WITHOUT the help of radio or internet broadcasts (besides Phish or Grateful Dead, who aren't mainstream anyway). Music companies know the power of promoting songs on the radio, and would gladly pay off DJ's to give their songs more airtime, but it's illegal to do so in such a direct manner. [] Top level 'you-scratch-my-back-I'll-scratch-yours' deals drive radio play these days.
  • Now there's actually someone with a valid claim that peer to peer is ruining their earnings.
  • by Anonymous Coward on Friday November 15, 2002 @04:15PM (#4679600)
    they'll all be non-profit.
  • Text (Score:3, Informative)

    by Anonymous Coward on Friday November 15, 2002 @04:17PM (#4679615)
    Here is the text in case RAIN can't shine:

    In a stunning victory for webcasting, both the Senate and the House of Representatives unanimously passed aImage: Bill text revised version of H.R. 5469 late last night that clears the way for copyright owners to offer webcasters a percentage-of-revenues royalty rate, essentially allowing the parties to mutually agree to override the CARP decision of last spring.

    The Senate passed the bill at 10:32PM ET and the House passed it at 2:44AM. It now goes to President Bush for his signature.

    The bill was actively supported by virtually all players on both sides of the debate this year, including the Photo: Sen. Jesse Helmsrecord industry, artist representatives, large webcasters, small webcasters, college radio representatives, and religious broadcasters.

    In what was viewed as a surprise by some observers, the legislative staff in the office of retiring Sen. Jesse Helms (R-NC) (pictured) apparently played an active and valuable role in crafting what the parties concluded was a much better piece of legislation than the one Helms blocked at the last moment late last month (here).

    Rates and terms removed from legislation
    The key difference between the bill that the House passed in October and the revised bill, renamed the "Small Webcaster Settlement Act of 2002," is that Congress did not establish any definition of "small webcaster" or set any royalty rates in the final version of the legislation.

    Rather, the bill grants both sides the right to enter into a voluntary agreement "without fear of liability for deviating from the fees andLink: SoundExchange terms of the July 8 order" (i.e., the Librarian of Congress's modified CARP decision).

    Specifically, the bill does so by permitting the receiving agent of royalty payments (i.e., SoundExchange) to negotiate on behalf of all copyright owners, whether they are members of SoundExchange or not, for the period beginning October 28, 1998 (i.e., the passage of the DMCA) and ending December 31, 2004.

    Under the new mechanism established by this act, the voluntary agreement envisioned would be submitted to the Copyright Office, published in the Federal Register, and subsequently made available to all qualifying webcasters.

    However, the bill grants the receiving agent that authority to make a settlement with the small commercial webcasters only until December 15th -- so the clock is ticking for both sides to "paper the deal." (CONTINUED)
    RAIN Vendor Guide Ver.3.0 Special issue coming soon: Most indicators seem to be pointing (finally!) toward a more-successful 2003 for both broadcasters and webcasters. To help you in your planning process for next year, RAIN's upcoming "Planning for 2003" issue will showcase products and services that will help you reduce your expenses and increase your revenues in 2003!
    Link: ABC Radio Networks
    Link to Backbone
    Link to: Bean Bag Entertainment Link to BRS Media Inc. Link: Link: DiMA
    Link to DotFM Link: Hiwire Link to IM Networks Link: Interep Link to Interep Interactive
    Link: International Webcasting Association Link to Measurecast Link to The Media Audit Link to Radio Web Stuff Link to Sabo Media
    Link: Stream Madness Link to Surfer Network
    For YOUR firm to be included, call RAIN at 1-312-527-3869 or e-mail

    Royalty payments from noncomms
    suspended until next June
    The version of the bill passed last night also suspends ALL royalty payments due from noncommercial webcasters until June 30, 2003, giving both sides time to work out a new voluntary royalty structure.

    Furthermore, the bill adds a new definition of "noncommercial" that permits webcasters who are currently for-profit entities to file for nonprofit status and take advantage of this option as long as they have a "commercially reasonable expectation that such exemption shall be granted."

    This provision seems to permit any "hobbyist" webcaster to make a choice of whether they would like to be a for-profit business or a nonprofit. The bill gives the parties involved until May 31, 2003 to negotiate their voluntary license.

    Stronger non-precedential language added
    The bill contains new and very strong language intended to prevent the deal negotiated in Sensenbrenner's office from being used as precedent in future CARPs.

    One example: "It is the intent of Congress that any royalty rates, rate structure, definitions, terms, conditions, or notice and recordkeeping requirements, included in such agreements shall be considered as a compromise motivated by the unique business, economic and political circumstances of small Photo: Capitol buildingwebcasters, copyright owners, and performers rather than as matters that would have been negotiated in the marketplace between a willing buyer and a willing seller."

    Another example: "Nothing in the Small Webcaster Settlement Act of 2002...shall be taken into account by the United States Court of Appeals for the District of Columbia Circuit in its review of the determination by the Librarian of Congress of July 18, 2002, of rates and terms for the digital performance of sound recordings and ephemeral recordings."

    Such language apparently satisfied the concerns of terrestrial broadcasters (e.g., the NAB and the National Religious Broadcasters) about the early version of the bill.

    RAIN Analysis

    An amazing combination of influences has come together to craft a solution that should Photo: Kurt Hansonallow webcasting to move forward to a healthier 2003 and beyond, with benefits for copyright holders, webcasters, and consumers alike.

    This is NOT a victory of webcasters over record labels (or, for that matter, vice versa). It is a victory for common sense, as all parties involved will benefit from a healthy webcasting space.

    The record industry has apparently come to realize that webcasting should not be lumped in with CD burning and file sharing as one of their enemies, but rather that the new medium has the potential to offer real benefits for them if everyone quits acting as if they're adversaries.

    And everyone else seemed to work together as well: Broadcasters did not flex their political might in Washington to try to quash this bill (and thus kill a potential new set of competitors), and Internet-only webcasters didn't use the negotiations to try to get themselves a leg up over broadcasters.

    And record labels and recording artists -- the two factions that share in royalty payments -- used the bill to clarify the functioning of SoundExchange in a manner that had benefits for both sides.

    Congress paid attention!
    Finally, it's amazing to me that such a bill was able to get the attention of Congress -- and unanimous passage! -- during a lame duck session designed to focus on critical "homeland security" issues.

    I'd like to think that last May's "Day of Silence" and the resulting press coverage (and support from listeners) played at least some small role in making this an issue that Senators and Congressmen were willing to pay attention to.

    Now we can move forward
    And now, let's see if copyright holders and webcasters can't execute those envisioned voluntary licenses and then start working together to, among other things, help break new artists, promote genres of music that have not gotten their fair share of terrestrial radio airplay in the past, and help sell records! - KH

    Look for more details on this bill and industry reaction later today in RAIN.
  • So, when do I have to start paying "Percentage-of-Revenue royalty payments" on the lemonade stand in my front yard.....?
    • by mumblestheclown ( 569987 ) on Friday November 15, 2002 @04:38PM (#4679790)
      Probably not percentage of revenue, but were you to use Led Zepplin's "The Lemon Song" playing on a jukebox as part of your stand's self-promotion, it would probably be wise to come to a flat-fee licencing agreement with the rightsholders in order to protect yourself. This is not meant to be funny. Don't mod it +1 Funny. Don't!
      • Your comment has caused an interesting thought...

        Where does personal use and promotional use differ, I mean, what if you really, really like "the Lemon Song" (god knows why, I like Led Zepplin, but....) so you have an endless tape of it playing at your lemonade stand for your own enjoyment...

        Now, somebody who has the ability to cause you problems drives by and hears said song playing, this person decides that you ARE using this song for promotional purposes...

        Who is right in a court of law? Unfortunately the person who is coming after you is going to have more money, and this would most likely result in you being found to be guilty.... In the words of Metallica, "Sad but true"... Uh, oh, was that "Fair use"???? Hope so... :)
  • ...they seem to be disappearing fast. :(
  • comments from somafm (Score:5, Informative)

    by pengwen2002 ( 469310 ) on Friday November 15, 2002 @04:21PM (#4679639)
    The folks at somafm [] have some interresting links and comments too.
  • by SexyKellyOsbourne ( 606860 ) on Friday November 15, 2002 @04:22PM (#4679652) Journal
    Honestly, how would you feel if something you put hours, days, and even weeks of effort, heart, and soul was being played FOR-PROFIT by a pay radio station by someone without your permission?

    Whether non-profit p2p and netradio is stealing or not can be debated -- but when someone takes an artist's hard work and plays it over the internet with the sole purpose of making money, it is blatant thievery of intellectual property and disrespect of copyright, which does have a right to exist to spur innovation in an economy that is, was, and shall be capitalist.
    • Because the simple fact of the matter is that most online music stations are NOT for-profit at all.

      Most of them, from what I've seen at least, are run by either (A) non-profit radio stations or (B) individual music lovers using Shoutcast or Ogg or what-eva.

      And if the RIAA promotes their common "it promotes piracy" party line in this case-- oh, really? How many people are going to pirate a cruddy 56/96/128Kbps stream?
    • How would i feel? Pretty darn good if i was the artist. Probably pretty good if i was the record label too. I mean, hey where else can you get free promotion? You think the artist will get a red cent of those webcast royalties?
    • I know, right? These artists put upwards of 24-48 hours into these songs making them the 1 hit wonders they are today!

      Long live Menudo!
    • I think you're missing the point. CARP suggested charging WAY MORE for web streaming than what radio stations are charged for royalties. Anyway, most of the royalty money never reaches the artists' pockets; rather, it gets lost in the record companies' "accounting costs."

      Most people playing this music aren't looking at profit but are playing music for the sake of music. Those that use "non-profit" status to try and slip by this are going to run head-long into the IRS rules on NPOs -- and they're NOT forgiving of organizations that try to use NPO status as a "cover."

    • by pla ( 258480 ) on Friday November 15, 2002 @04:31PM (#4679735) Journal
      Umm... Have you looked at the business model of a conventional broadcast radio station, lately?

      They do *exactly* what you say seems so "wrong" for webcasters.

      And, to add insult to injury, the RIAA actually *PAYS* "normal" radio stations to play that copyrighted music.
      • Too bad The Onion [] took down this article, I think it explains the hypocrisy pretty well. At least Google still has the cache: RIAA Sues Radio Stations For Giving Away Free Music []
      • The difference here is power. The RIAA has absolutely no obligation to maintain the same pricing scheme for different customers. Do you think it's wrong that Nike gives Tiger Woods free golf clubs, but charges me? BASTARDS!!!

        This is simply how the world works. The RIAA makes more money when 90% of their sales is accounted for by like 30 albums a year. They maintain this by getting radio stations to play a list containing like 50 songs, and they pay for the privelege.

        Webcasters, on the other hand, want freedom, and the RIAA is within their rights not to pay them for the privelege! If any webcaster shows an ability to shape the music scene in terms of what people buy, to a significant degree, then the RIAA will likely pay them (or co-opt them). Until then, don't expect it.

        This is not to say I like the RIAA. I think they're a bunch of jackasses. But that's not relevant to the discussion at hand, which is to say they can certainly screw anyone who depends on their copyrights for a living, and are well within their rights to do so.
      • No, radio stations DO pay royalties for the music they play on the air. They can negotiate for reduced rates, as can the webcasters under this legislation.
    • Broadcast stations play copyrighted music all of the time and pay no royalties. It is well understood that radio stations provide a service to the music industry that would otherwise have to advertise music. You have seen music advertisements on TV I assure you, and know what? They suck. Radio is the lifeblood of the music industry. That is why record companies pay of radio bigwigs to get their pet projects played. The only reason the RIAA is targetting webcasters is because it internet related and that scares them.
    • What are you talking about? "Hours, days, and even weeks of effort, heart, and soul..??"

      You just covered a *Madonna* song, for Pete's sake.

    • by Anonymous Coward
      Even if we agree that the FOR-PROFIT argument holds water, what about the NON-PROFIT organizations? The bill doesn't say they're exempt. On the contrary, it says that in six months they have to pay for everything, retroactively. If you were an artist, would you appreciate your record company squashing the lifeblood out of your non-profit, loving, internet fans, who only want to share the love? As an artist, you aren't going to see a single cent of royalties paid under this bill anyway, so if you do have an objection, it would have to be out of small-minded rabid capitalism, and not out of concern over matters of effort, heart, and soul.
    • Considering I am an artist [] that allows my music to be broadcasted for free, I don't have any problem with it. Its not stealing, its promotion. Part of getting your name out there. Of course, I am part of the 99% of musicians who 99% of the world hasn't heard of. I imagine for musicians who are established and don't necessarily need the promotion might sing another tune, but I don't know as I'm not one.
    • they are always trolls, but what disapoint me is the insightful moderation of the parent.
      I suppose all good slashdotters are currently exchanging jokes two stories before.
  • by DaveOf9thKey ( 599178 ) on Friday November 15, 2002 @04:23PM (#4679664) Homepage Journal
    I've lived in North Carolina for more than 20 years, and this may be not only the first time Jesse Helms and I agreed on something, but the first time I wanted to stand up and applaud him for following through on it.

    Clearly, the apocalypse is coming. Someone tell the FBI...
  • like college radio and the NPR music stations (e.g. WXPN).

    Problem, though, is that it could hurt the small, independent, for-profit stations. I can see Sh*tchannel using the royalty issue as a way to round up the last of the independents into their corporate droneness.

    Guess this means I can start looking into streaming my music on the Web again. Now, if they could only relax the FCC rules on what you can play and when. (Not talking about obscenity but about the stifling rules on playing an artist more than once in a time period. I mean, if payola is legal now [with Sh*tchannel demanding $$$ from the record companies], then maybe we should toss out the rest of those 50s-era radio rules too.)
  • by Crusty Oldman ( 249835 ) on Friday November 15, 2002 @04:24PM (#4679669)
    Non profit status = special license = jurisdiction = control
  • by hazzzard ( 530181 ) on Friday November 15, 2002 @04:26PM (#4679686)

    Well, I don't really care where the music comes from.
    Even if you don't understand the foreign languages,
    there are tons of webradios elsewhere
    that will not suffer from these problems
    (i.e. don't have to do massive advertisements to afford casting good music). Does anybody have some links to good webradios in Italy, spain, mexico etc.?? Please post!
  • well? (Score:4, Funny)

    by Anonymous Coward on Friday November 15, 2002 @04:27PM (#4679701)
    Like most slashdotters, I have a busy, active lifestyle. And when I read about these new political events, I need to know up front: should I be please that the little guy is finally getting a break, or should I be pissed off that the MegaCorps(tm) are gorging themselves with another piece of the public pie?

    Frankly, I can't tell by reading this summary. I'm forced to read the article and background information to form an opinion of my own, rather than sharing in the poster's rage (or satisfaction) at this travesty of justice (or victory for freedom)..whatever it is.

    Please slashdot...let me know what I should think.. maybe an icon next to the story?
  • by Anonymous Coward on Friday November 15, 2002 @04:29PM (#4679714)
    I've googled myself to death in recent weeks looking for non legal-speak about how non-profit, free-format college radio will be effected by all this stuff. Now that the revised legislation is passed, what gives?

    A lot of alumni from my alma mater were upset when our radio station stopped webcasting. That was a MAJOR connection for us. Where will students/administration go to get answers? Will it be affordable (less than 4 digits)?

    • Stop living in the past. College is over, get over it. Move on with your life. Who cares about what your alma mater is doing. All they want you for is to give them more money, as if tuition wasn't enough.
    • It looks like (don't quote me on this) that if your college radio station is non-commerical/non-profit (which pretty much all of them are), then all royalty payments are suspended until June 30, 2003. This addition time gained for these types of broadcasters gives "both sides time to work out a new voluntary royalty structure."

      So in a nut shell, if you are non-commerical/non-profit, you don't have to pay till June 30th, 2003. After that, my guess is there will be a very low yearly fee or royalty plan that you may or may not have to pay.

      Again, don't quote me on this. But if it is what it sounds like, I am one very happy e-board member for my university's radio station!
      • So what the hell is this putting off till 2003 for? If you have no money because you're a Non-Profit, then you should make them pay $0. peroid. Hell, the least they could have done is forced the RIAA to PAY Non-Profits for the free advertising to pay for newer and better equipment for all the free advertising.
    • WEhat would be interesting is trying to get a list of songs - sponsored by artists ofr example - that are designated "non-profit playable", which would allow those songs to be played by radio - webcasters - or traditional - without any royalty red tape.

      Maybe artists could designate a song off their previously released album or something...

      then all college radios could promote/play these songs with the hopes of getting the college populous to go out and buy the artists other CDs.

      the other thing that should be tried - is that non profit radio stations should make compilation CDs of music that they play and sell them to their listeners - then take a percentage of those proceeds to support the station, while the rest goes to the artists or labels in leiu (sp) of royalties.
    • I put up a reply to someone else's question on the board. You need to find out some numbers before you can answer how it effects the radio.
      • What is their GROSS REVENUE from the webcasts?
      • What is their EXPENSE of the webcast, beyond their regular Internet connectivity?
      • What is the size of their outfit? listners? employees?
      For a college, they would probably have to work within the formula. That is, pay revenues of the larger of:
      • 0.08 * gross revenue from webcast
      • 0.05 * (expenses of webcasts - certain exemptions, such as existing net connections)
      So if the radio does no advertising, it makes no revenue from the webcast. It probably only has minimal webcast expenses, since it probably is already doing a radio broadcast. So the overall cost for a college to broadcast will be quite small.
  • I've always wondered (Score:4, Interesting)

    by m0rph3us0 ( 549631 ) on Friday November 15, 2002 @04:31PM (#4679733)
    I fully understand having to pay royalties for playing music that is copyrighted, but I am wondering if I play music that the owner of the music licenses me to play do I still have to pay RIAA? Maybe one of the legal eagles out there can answer this for me.

    • Of course, IANAL, but it would depend on the contract between the artist and the label. Unfortunatly, most artists just sign the dotted line and don't realize that they are henceforth, and until termination of said contract, slaves to the record company. This also means that what they make is not their own as long as they are making it under the label's distrobution channels. :S

      So, long story short... yes, you have to pay.

    • That's simple, that situation will never exist.

      When artists sign an RIAA contract, their label owns every recording they make until X number of albums are released. Which means, if the label drags its feet and refuses to release the last album of the contract, that artist's career is over. They can't take their work elsewhere unless they're a multi-millionaire who can afford enough lawyers to find a way out.

      Therefore, an artist under an RIAA contract cannot directly give you rights. They can't even record a handful of songs on their own and keep the rights for themselves, the RIAA owns everything.

      It's time the music artists unionized...
    • You will have to pay royalties to the copyright holder of the recording.
      • If RIAA is the copyright holder, then you have to pay fixed royalties or work out other arrangements. That's where this law comes in.
      • If the grunge band next door is the copyright holder, the law still applies. You have to pay or work out other arrangements. Most small bands would probably arrange to pay you if you help them sell CDs.

      hope that helps.

  • by rhwalker22 ( 581141 ) on Friday November 15, 2002 @04:32PM (#4679747) Homepage's story [] quotes several small webcasters praising the compromise bill. According to the article, the bill "does not establish specific royalty rates for webcasters. Instead, it authorizes the music industry's principal royalty collector, SoundExchange, to negotiate binding royalty contracts with small webcasters on behalf of all artists and record labels." Strange footnote: Sen. Jesse Helms had a big stake in the bill as he successfully protected small religious webcasters from the royalty axe.
  • Way the hell too many 'subparagraph B(iii) except after 'Section C'. Apparently to make sense out of it you need to be all coked up like our President.

    You'd thing after paying taxes to support a Congress to make 'laws' like this, they could spend a little to make it readable by the general public, which will have to hire laywers and subsequently be priced out of webcasting right there.

    If this benefits the little guy, I'm all for it. Unfortunately, I can't tell. 'Course it's Friday and I haven't had my Dr. Pepper yet either.

    • Actually, it is a LOT easer to read than most other bills. Political party doesn't matter, its the legal, technical precision that makes it difficult.

      If you are a programmer, imagine that you are in the 107'th development team of a two-century old legacy program. If you want keep side effects down, you have to be very precise, and your changes will be a little hard to read.

    • That's because the law is a public monopoly, and all the law is open source. They can't make money off the law, so they have to make money providing "service and support". So, they have a vested interest in writing laws that are hard to understand.

      On the other hand, if we could choose from a multitude of proprietary legal vendors, the laws would almost certainly be simpler. Of course, you couldn't have a purely unregulated legal market because someone might go into "business", declare his home a sovereign state, and make wife beating legal. However, a regulated legal market with broad mandates such as upholding the Constitution and collecting revenue could be interesting. If people got disgusted with "pro-NRA flat tax 2.0", they could register their gun and switch to "progressive tax abortion rights unlimited 3.04".

      The only trouble is, what happens when holders of "unlimited land use rights 4.5" move in next door to someone who just purchased "English common law 253.4 with rigid Home Owner Association bylaws service pack 2"?

  • I'm Done (Score:3, Interesting)

    by m1a1 ( 622864 ) on Friday November 15, 2002 @04:35PM (#4679759)
    I don't don't know about the rest of you, but personally, I am done buying CD's. Honestly. I have put off making this decision for a long time, but honestly, it's long overdue. For me, this is the straw that broke the camel's back. I can only hope a lot of other people feel the same way.

    The sad thing for the RIAA is, that I really used to buy quite a lot of cds. By the time graduated high school I had nearly 100, and this mostly bought out of my own cash. Even as a poor colloege student I always buy my favorite bands cd's, but not anymore. Sad really, looks like I'll never own that new Pearl Jam. Oh well, I'll support the band by continuing to go see concerts and buying t-shirts and posters. The RIAA will never see another dime of my hard earned money.
    • I'm afraid the RIAA usually gets a cut of concerts, t-shirts, and posters. It's all to recoup the 'loss' of recording the band in the first place. What the RIAA doesn't get, Ticketmaster will, and they'll rape you and me at the same time.

      You could go give the band a fiver, they could probably hang on to that.

      • "You could go give the band a fiver, they could probably hang on to that."

        Hmm, I guess maybe that's what I'll have to do.
    • The RIAA will never see another dime of my hard earned money.

      Sorry to break it to you, but if the bands you like are controlled by the one of the RIAA companies, RIAA makes money from concert tickets, t-shirts and posters too.
    • --I established my criteria on forwarding cash to "entertainments" a long time ago and have stuck to it. Once the media copy cost more than I made in one hour, I ceased purchasing new. This happened for me around the transition time from 8 tracks to cassettes. Once a "live" event cost more than two hours labor to me, I stopped attending. This is music, movies, sporting events as well. Saved me thousands now over the years. And by a long time I mean back when live concerts and sporting events where like 3$ to attend some places. IMO, there isn't a single one of them people worth more than that. entertainers and sports gods and their management packaging teams just aren't worth what they think they are worth. they make the money by people paying them, but to me they aren't worth it. this is just my personal opinion, anyone's mileage may vary, but really, some of those people being multi zillionaires? for that stuff, "entertainment'? It's just not that important. Entertainments are "amusing" they aren't necessities or all that valuable.

      Now this is just my formula, won't work for anyone else, but I just got tired of seeing the waste and greed when I worked live music and a little film/television industry work.

      "Artists" and "executives" and etc. I saw where huge amounts of the money was going, screw them greedy people.

      As to the broadcasting-the netcasting-simple solution, it's called stop supporting them, if it was me with a station, I wouldn't play any stuff that required royalty payments to them. It would have to be free for use by order of the creator/copyright holder, or a different contract that was much more reasonable, but none of the full price riaa stuff.
    • No, it's really not that sad that you won't be purchasing the next Perl Jam album.

      However, for anyone experiencing such anti-RIAA sentiment, I would point out that some of the finest and most groundbreaking music today is released by labels who are not part of the RIAA. (99.9% of artists ARE involved with ASCAP and BMI, but as I understand it, these organizations are separate from and not quite as evil as the RIAA.)

      For example, some of my favorite sources of music are Darla Records [], Drag City Records [], Teen Beat Records [], Matador Records [], Merge Records [], Misra Records [], etc., etc. Many of these record labels are actually NICE to their artists and fair to the consumer (the average cd price is maybe $11-14). Also, online stores like Other Music [] and Insound [] do a fairly good job of filtering new non-big-five-media-company music. This is, of course, a small slice of the available pie, focused around my particular listening habits. I know that it is daunting at first to try and find music outside the mainstream that suits you, but you really only need to find a few artists or labels to truly open the flood gates.

      My point being, there IS music being made for you that does not diectly suport "the man." Find a record label you like and begin to branch out!

  • by JessLeah ( 625838 ) on Friday November 15, 2002 @04:35PM (#4679760)
    1) Web radio dies, or goes "underground" and just becomes a lot less popular, and a lot more scary to be involved in. (due to the new-found illegality thanks to this bill)

    2) Web radio stations start playing works by independent (non-RIAA-affiliated) artists en masse-- thereby avoiding having to pay the RIAA a red cent.

    Actually, there's a third that is somewhere in between: 3) Web radio stations start playing only "mixed" versions of RIAA tunes, claiming that by producing a "modified, derivative work" it is legal. Then this gets hashed out in court, or worse in Congress...

    As I see it, though, (1) is by far the most likely. Lots of the SlashDot types might be interested in indie music... but remember, lots of the listeners of these online stations are/were regular Joe-Blows. They want to hear Queen and Sting and Madonna and Eminem and Snoop Dawg, not (insert obscure indie band name here).

    Le sigh... But if outcome #2 was the case... that would be very nice.. and might even spark a nationwide change in buying habits (i.e. people would start buying more indie music, leaving the RIAA bit by little bit... of course, this would only affect the mostly young and relatively Internet-literate (not necessarily computer-literate, but they're familiar with the Net and much of its underlying tech) folks who use Web streaming...)
  • I'm almost ready to go with a free Internet station that I'd do strictly out of love of music, and wanting to offer something different. I wouldn't make a penny off the stream, except the occasional voluntary PayPal donation.

    So what does this mean for me? If my revenues are zero, do I owe zero? A lot of the stuff I'd be playing would be from obscure artists who would likely not get a PENNY from RIAA extor^H^H^H^H^Hroyalties anyway.

    Or is there a mandatory minimum, as I remember reading of in previous proposals?
    • And earlier post mentioned a $500 minimum. Yeah. Sucks to be you.

      But maybe there'll be something you can rig so as to register as non-profit, and then pay little or none...

      But I don't think the RIAA will go for that. So shhhhhhh....
  • Can someone explain why there is a deadline for negotiating the percentage-of-revenue royalties?

    I read the article, but does this date only apply to the copyright holders of the content webcasters were streaming in the past? Ie, does the date only apply to negoating the roytalties with the copyright holders of content you streamed in the past, and does this prevent you from negoating custom roytalities with copyright holders in the future? (I can't imagine it would.)
  • by JessLeah ( 625838 ) on Friday November 15, 2002 @04:39PM (#4679802)
    What happens to classical stations now?

    The music companies might put out an argument "Well, since we sell Beethoven and Bach CDs, you owe us", but realistically, what do you guys think will happen to those who only play music too old to be copyrighted (at least, until Congress ups the copyright time limits retroactively again ;) )? Like Beethoven, Bach, Brahms and other artists whose name doesn't begin with B?
    • Here's the bigger question. Would the classical music copyright cover the artists which performed?

    • by Frobnicator ( 565869 ) on Friday November 15, 2002 @05:34PM (#4680305) Journal
      what happens to classical stations now?
      I assume you are talking about the time, and not the style? Nothing changes for those people.

      The music itself is in the public domain.

      The PERFORMANCES are owned by someone. If you have 1845 recording from the London Symphony Orchestra, that's in the public domain. If you have a 2001 perfomance of the same work by the same Orchestra, then you need to work out the rights.


    • The *compositions* written by classical composers is free of copyright. You are welcome to take their works (the melodies, harmonies, every musical expression they made) and do with them what you like.

      However, every *recording* made within the current timeframe of copyright today (death + 70 years) cannot be reused without consent of the holder of that work's copyright. You want an "unemcumbered" Beethoven's 9th Symphony that wasn't recorded in the '20s? Hire the conductor, orchestra, and choir, record it all, and its yours! Same goes for sheet music: if you can't find an old print copy, you can interpret the music yourself and write down every note on staff paper, and you won't owe anyone a thing.

      Of course, that might be asking a bit much to avoid a few cents/dollars on licencing/royalty fees. But that's the deal, as it stands now.
  • Sade (Score:5, Insightful)

    by dolo666 ( 195584 ) on Friday November 15, 2002 @04:40PM (#4679814) Journal
    I'm not normally a Sade fan, and I remember holding some disdain for her music in years past (80's). But after hearing some of her recent stuff (downloaded via Gnucleus), I bought her album and went to her concert with my wife.

    Exposure sells and it's the RIAA who are scared because maybe we don't want to buy the crap they are carpet bagging... maybe we will hold out for something better. They don't trust themselves.

    One hit wonders shouldn't sell any records because the rest of their albums suck. While good musicians and artists who sweat blood to make amazing albums are still left behind. If the internet could do anything, I think it would even things out so real musicians would make the money they deserve and fluff bands get downloaded for the song that's good and passed over for concerts and cds.

    Good music will always sell.
    • ...if it sells. If Britanny Spears suddenly wants more money and etc. They can let her go and push the next hot piece of ass. By selling sex rather than music, the RIAA can use an artist like a mass produced commodity instead of a rare talent like the good ones are.

      They don't really even want good music because the people that write it could increase their demands. There are more pretty faces than talented musicians...

      Fortuantely there are enough people that aren't attracted to sex_idol-pop to allow other artists to flourish.

      MTV has a lot of fault in this. No one can tell what you look like on the radio...

      • No one can tell what you look like on the radio...

        They can, though, if they see you on the cover of a magazine, or on the label of your CD, or on Jay Leno late at night, or in your new movie...

        Much as we all love to hate MTV (and I do!), I think there's a larger culture-of-celebrity thing going on here. Being, as Zoolander would say, "unbelievably good looking," is just part of the celebrity package these days - playing a role in journalism [], fiction [] and nonfiction [] writing, and politics [].

        And once you demand good looks, it's hard to get a really large helping of that "talent" thing in the same package... and so much easier to go to an external songwriting team. So that's what they do.

        Not that I disagree with your point about the interchangeable sex-widgets. It's just that that's sort of an added benefit.


  • they have the option of changing their status to non-profit and gaining a delay
    The presumably also have the option of going out of business and paying nothing, which is exactly what the RIAA wants to happen. That's the only possible explanation for the exorbitant rates being demanded. I've said it before, I'll say it again: fuck 'em, and fuck 'em again; then keep on fuckin' 'em. Boycott big-money music!
  • This bill says that the copyright holders (record companies) can waive or negotiate new royalties if they want to. This isn't exactly the stunning defeat of RIAA that we were hoping for.
  • by Anonymous Coward
    Record companies used to PAY you to play
    their stuff, now they want to be paid.
    Fickle bunch, eh?
    • I never understood why Payola was bad to begin with. It's just a different business model. There's plenty of room for Payola stations and ad-based stations and combinations thereof. I suppose misrepresenting the fact that you got Payola is immoral, but Payola in and of itself doesn't strike me as bad... unless it is accompanied by "take the money or take a bullet" which I understand it was in some cases.

  • What the hell? (Score:4, Interesting)

    by JanusFury ( 452699 ) <kevin,gadd&gmail,com> on Friday November 15, 2002 @04:52PM (#4679895) Homepage Journal
    Why on earth do non-profit stations have to pay royalties? What the hell's up with that? I mean, come on. Isn't the idea of being non-profit that you won't have to pay excessive fees because you're not making any money? How do they expect non-profit webcasts to pay excessive fees just to broadcast songs to all twenty of their listeners? It's not like there's big money in webcasting...
    • If you only have 20 listerners, you don't have revenue.

      The law clearly states:

      the royalty rate shall be 8 percent of the webcaster's gross revenues during such period, or 5 percent of the webcaster's expenses during such period, whichever is greater, except that an eligible small webcaster that is a natural person shall exclude from expenses those expenses not incurred in connection with the operation of a service that makes eligible nonsubscription transmissions, and an eligible small webcaster that is a natural person shall exclude from gross revenues his or her income during such period

      It says GROSS REVENUES, not anything about broadcasts or listeners.

      This means that if you only have 20 listeners, you probably aren't making any revenue. If you are a small-time band broadcasting for yourself, you can make it so you make no revenue on the broadcasts. (make revenue on sales of the songs, not the broadcastings).

      The second part says if you don't spend any money other than your regular web hookups (like your DSL, cable, T1, etc.) then you don't have to pay based on expenses.

      The final part is just a protection that personal income isn't part of the broadcasting.

      That's why (almost) everyone likes it. RIAA doesn't mind because they can get you for copyright if you broadcast their songs. Small webcasters don't mind IF they make no revenue. The only people who need to worry are:

      1. The people who make revenue from ads. So the obvious solution there is: NO MORE ADS, (use a donation drive or something) meaning no more revenue, meaning no more fees.
      2. The people who have large expenses for broadcasts, like college and university radio. But they probably aren't paying much for equipment, so 5 percent isn't really too big of a charge.

      Some people's children...

    • They don't. They expect to put the non-profit webcasters off the air because they can't pay. Then, the only webcasts will be for-profit, run by people or companies that can afford the payments (which, most likely will result in a situation very similar to that of over-the-air radio, except instead of being paid, webcasters will be paying)
  • unhappy (Score:3, Insightful)

    by nege ( 263655 ) on Friday November 15, 2002 @05:03PM (#4679995) Journal
    That silence you just heard was the sound of 20,000 smalltime webcasters going offline.
  • Clear-channel (Score:5, Informative)

    by Triv ( 181010 ) on Friday November 15, 2002 @05:09PM (#4680036) Journal
    This is slightly OT, but I realised something disturbing a few hours ago and it does relate to the radio/webcasting debate in a roundabout way.

    I've got a friend coming into New York tonight, so I figured I'd check out a few local venues to see who's playing, what's going on and all that. One of my favorite music venues is Irving Plaza []. (flash site) I like going to random shows, I like supporting local music and I like circumventing the RIAA as much as is possible.

    Chck out the link above - see what's in the lower left-hand corner of the homepage under the Irving Plaza logo? "Clear Channel Entertainment []."


    I. Can't. Get. Away. :(

  • congress - bah! (Score:3, Interesting)

    by _ph1ux_ ( 216706 ) on Friday November 15, 2002 @05:28PM (#4680181)
    so forgive me for being naive about this but it would seem to me that congress should not be able to mandate the prices for a service. I dont understand how congress can actually set the amounts that should be paid by webcasters.

    Take insurance for example - they can make it a law that you must actually carry insurance - but they cant make a law telling me how much i have to pay for it (although they should regulate the prices due to the fact that we are forced to carry a product sold by a private company)

    Just because they *can* pass crap like this doesn *not* make it right.

    This country is so ass-backwards these days I am amazed at the things that congress get away with without any repremands.
  • And I'll tell you why. The solution that they originally proposed involved charging the webcasters based on the number of listeners. Even though most of them were not making money, they would still be forced to pay royalties.

    The new legislation will charge them a percentage of the money they make! So if you're a small webcaster who is NOT profiting from the streams, you wouldn't have to pay.
  • The agreement on the surface seems reasonable and fair: 8% of gross income or 5% of non-bandwidth-related expenses, whichever is greater.

    However, the retroactive minimum fees are killer!

    It will cost a minimum of $8,500.00 for a long-lived webcasting station to legally get back on the air. A fee of $2,000.00/year for years 1999-2002, plus a prorated fee of $500.00 for 1998 (the DMCA did not take effect until October 1998). Many small time radio stations and hobbyist stations cannot afford this!

    I'm glad the law gives college radio stations and other nonprofits extra time to work this out.

    If stations five years ago had known about the killer retroactive fees that would be coming due now, very few of them would have continued webcasting after that fateful day in October 1998!

    To me, the solution is to forgive the retroactive fees, in exchange for agreeing to pay the new fees for years 2003 and beyond.

The IQ of the group is the lowest IQ of a member of the group divided by the number of people in the group.