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Copyright Board Lawyer Responds On Pandora's End
Posted by
kdawson
on Tue Sep 16, 2008 04:38 PM
from the cutting-off-the-air-supply dept.
from the cutting-off-the-air-supply dept.
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.
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Internet Radio's "Last Stand" 316 comments
We've been discussing the plight of Internet radio for some time, as the Copyright Royalty Board imposed royalties that industry observers predicted would prove lethal to the nascent industry. We discussed Web radio's day of silence in protest, which won the industry a reprieve, and the futile efforts to find relief in Congress. Now it's looking as if the last act is indeed close. Death Metal Maniac sends along this Washington Post story with extensive quotes from Pandora CEO Tim Westergren, who said: "The moment we think this problem in Washington is not going to get solved, we have to pull the plug because all we're doing is wasting money... We're funded by venture capital. They're not going to chase a company whose business model has been broken." The article estimates that XM Satellite Radio will pay "about 1.6 cents per hour per listener when the new rates are fully adapted in 2010. By contrast, Web radio outlets will pay 2.91 cents per hour per listener." That's 70% of projected revenue for Pandora; smaller players estimate the hit at 100% to 300% of revenue.
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Well, hell (Score:3, Insightful)
Why doest Pandora just strike up with indie studios and go mono e mono with musicians for play rights?
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?
Re: (Score:2)
Screw that; why doesn't Pandora just pack up and move to the Bahamas or Grand Cayman? They'd get a nice, tropical island location (though they'd have to worry a little more about hurricanes), and they wouldn't have to worry about this RIAA silliness.
Re: (Score:3, Funny)
Unless you were referring to simulated stereo, you mean "mano a mano".
Re:Well, hell (Score:5, Funny)
Parent
Re:Well, hell (Score:5, Interesting)
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.
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.
Parent
Re:Well, hell (Score:4, Insightful)
If Pandora used their algorithms point you to indie music
that you are likely to want to buy, they could very well
completely sabotage the RIAA entirely.
An indie-centric version of Pandora would be quite cool actually...
Parent
Re:Well, hell (Score:5, Insightful)
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).
Parent
Because it wouldn't fix anything (Score:5, Informative)
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]
Parent
I don't think that's correct (Score:3, Informative)
From the initial story: [dailykos.com]
Even if you do own the copyright to your own recording of your own song, SoundExchange will collect Internet radio royalties for your song even if you don't want them to do so.
If you could please provide a citation where a contract overrides Soundexchange's legalized extortion? If it exists I'd like to see it.
Sound Exchange (Score:5, Informative)
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.
Parent
Pity (Score:5, Insightful)
Re:Pity (Score:4, Interesting)
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 ;-)
Parent
Re:Pity (Score:5, Insightful)
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.
Parent
Re:Pity (Score:4, Insightful)
Parent
Re: (Score:3, Insightful)
Most people's options suck. The majority of music I like is under an RIAA label, and that's true for almost everyone. Either I steal it (bad), pay for it and support the RIAA (definitely bad) even though I'm _slightly_ supporting the artist (definitely good), or I go without it entirely (bad).
Unfortunately, I'm not giving up the music. So I either have to steal it (and risk getting sued) or have to support the very organization that spends all of its time working against me and itself. Which would you s
Re: (Score:3, Informative)
You present the problem that many find themselves in, but thats merely because you're working off the assumption that there isn't much non-riaa controlled music out there (there's lots, its just not as easy to browse). Granted, it's not publicized as well but there are a lot of good suggestions in this older thread [slashdot.org].
People often forget the option of searching for independent groups for genres they enjoy and paying the group (good) without it going anywhere near the RIAA (also good). Remember if you find your
Re: (Score:3, Interesting)
Which would you suggest?
One possibility is buying "carbon offsets." For every $10 you give to an RIAA label, give another $10 to the EFF or a similar organization that stands up for consumer rights.
Re: (Score:2)
Hate to just pile on - but completely agree. For me, Pandora died a while ago (since I'm in Canada).
I haven't bought a ton of music lately, but what I have has been:
1. Stuff I found on Pandora. Their model was such that you were constantly bumping into new things that I actually liked (because of their excellent related music search). I've found 4 or 5 artists I really like, and have bought at least one album from each.
2. Stuff I ran into on YouTube - most recently, episodes of Mitchell & Webb. Afte
Explore Creative Commons music instead (Score:4, Insightful)
Although Pandora is often seen as the little guy fighting the big bad music industry, Pandora just repackages the output of that industry, so it's feeding the monster and helping to ensure that the money-grabbing evil continues. If we want the monster to die, we need to stop feeding it. Pandora doesn't want the monster to die, it merely wants it to eat less.
So it's make-your-mind-up time, if you want to influence the evolution of music.
If you really want a sea change to occur, try listening to Creative Commons music instead of commercial output. The immense repositories at Jamendo (11,955 albums) [jamendo.com] and at Archive.org (53,088 concerts, 310,685 recordings) [archive.org] should be enough to keep you busy for the rest of your life, but there's lots more out there.
It's hard work, because there is nobody around to tell you what you must like, as the industry has been doing to us through radio and TV all these years. The diversity and sheer scale of Commons music is astounding, and exploring its uncharted vastness isn't quick nor easy, but ultimately your voyage will be very rewarding. Mine has been.
But you have to take that first step yourself, nobody can help you, short of handing you a few links.
The future really is in your hands. If everyone were to stop buying label output today, the Big 4 and the RIAA would disappear as soon as their coffers dry up, and the small labels would adapt perfectly happily because they're agile. You *can* drop your favourite chart bands if you try --- the discomfort doesn't last long, because there is no shortage of very high quality replacements. The Commons is vast, and the creativity amazing.
The future really is in your hands.
Parent
There's No Explanation For A Good Reason (Score:5, Interesting)
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... (Score:5, Interesting)
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.
Parent
The ISPs are hitting internet radio too (Score:5, Interesting)
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: (Score:2, Informative)
Re: (Score:2)
128 kbps = 128000 bits.
128000 bits / 8 bit per byte = 16000 bytes.
That's what I wrote above (128 kbps, 16000 bytes).
Re:The ISPs are hitting internet radio too (Score:5, Insightful)
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.
Parent
Re: (Score:2)
My mistake, you're right that listening to internet radio at work has nothing to do with your monthly bandwidth quota at home.
Also, I'm not talking about decent quotas like the 250GB you mention, I was more concerned about the kind of quotas we have over here in Canada (usually around 35GB per month, and that's a combined download+upload quota).
Even if we only count the weekends, that's still about 3.5GB, which is still 10% of the quotas around here.
And before you make the usual "find a better ISP" comment,
Re:The ISPs are hitting internet radio too (Score:4, Insightful)
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.
Parent
simple explanation (Score:5, Informative)
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 (Score:4, Insightful)
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.
Parent
Re: (Score:2)
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.
I've heard this argument made many times before (mostly on Slashdot), and while it's tempting to believe it out of a general hatred for the major music labels, somehow I just don't buy it. I just don't believe that internet radio is really that powerful, that it really a
Re: (Score:3, Insightful)
Well, first, I believe it's an effort to nip internet radio before it competes o a massive scale. The competition is there, and making inroads..
Re:simple explanation (Score:4, Interesting)
I believe it is trying to destroy all of internet Radio. As has been pointed out, as late as 2005, Sony BMG was fined millions for payola to radio stations, "encouraging" them to play what THEY wanted played. http://www.globalethics.org/newsline/2005/08/01/sony-bmg-fined-for-payola-to-the-tune-of-10-million/ [globalethics.org]
Pandora offers the individual listener the potential of having music served to them that their algorithm determines should be a good match. Pandora listeners have the option of tweaking that selection with an "I like" or an "I don't like" vote. However, a Pandora listener can just as easily populate their playlist with only specific songs that THEY want to listen to.
Traditional radio/satellite radio offers all listeners the same songs. The only choices are to change the station and hope for the best, or turn the radio off. You have to accept what you are handed. Radio stations create rotations... Pop, Heavy, Medium, Light...etc. Songs in the POPular rotation get played the most often, over and over, until they get relegated to the Heavy rotation. Songs in the heavy rotation get played more often than those in medium rotation, and those in medium... well you get the picture. What I think should be in Heavy rotation does not necessarily match what you think should be in heavy rotation. But here's a little insight for you, from my 4 years as an FM DJ. The songs in the different rotations, get their rotation designation from the music director of the station, based on what HE thinks the rotation should be. He bases his decision on things like Bilboard top 100, requests, and even his or her personal preference. Which brings us back to Traditional radio/Satellite radio is a controlled medium, where someone is deciding what is popular and what is not, and passing that info down to you.
What is the connection to the music Industry trying to destroy all of internet radio? Are you familiar with the popular media player called VLC? http://www.videolan.org/ [videolan.org] and give it a try. Did you know that it keeps a list of internet radio stations that you can pick and choose from? If you downloaded it (or already have it), start it up. From the top menu, hit view, and open the playlist. From the Playlist, hit Manage, and look at Services Directory. We are only interested in Shoutcast Radio Listings. There are currently 397 internet radio stations in that list. The number will vary as some are very amateur, and some are essential commercial. All are considered internet radio. The Music industry cannot exert a controlling influence over all of them to make them play what they would wish. When all you need is add a plugin to your Winamp player to turn your music collection into a Shoutcast Radio station, how can the music industry exert control over you? What they can do, is track you down by your IP address (just like a movie thief), contact you through your ISP, and have you fined for not paying for the music you play... until you make the choice THEY want, which is you see that it costs you more than you get out of having your own radio station.
The music industry not only wants their dollar. They want the old days back where they decided what was hot and what was not, and they want to get back to those days of serving up their choices in music to the public.
Parent
Re: (Score:2)
Another industry gets offshored (Score:4, Insightful)
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: (Score:2)
Why the government (Score:2)
Maybe it's because that same government is who declares that compulsory licensing must happen in the first place?
It wouldn't make sense to have compulsory licensing if the price could then be negotiated. The copyright holder could just say, "Ok, $1 million per play if you want access to my song," and then no one would be able to license it.
Either get rid of compulsory licensing, or deal with the fact that the associated rates are l
What? (Score:2)
Weren't working out for who, exactly? More than likely it was pressure from radio stations, bars, et cetera for regulation on an increasingly out of control royalty scheme put forth by the cartel of the Big Four. So what did this government do? Regulated it for the labels, not for the people who are getting gouged to hell and back on what, in my opinion, is backward and stupid anyway. Royalties simply for playing a song? Hell, why doesn't Penguin start char
Seems obvious to me. (Score:2)
"No one seems to be trying to defend or explain why Internet radio is being hit so much harder than satellite or broadcast."
Why do either, when all that would serve to do is draw attention to the disparity, and invite enough consideration that the real aim become apparent? Which is to strangle a nascent medium in order to have control over it.
Consider FIOS. Massive pipes to the doorstep, geeks rejoice. If anyone had said at that time that Verizon would be getting into the television business most would h
Radio... meh (Score:2, Interesting)
Seriously, the only thing I've chosen to listen to on the radio was the Mark and Lard show on Radio 1 when I was about 14.
Picture this proposal:
"How about you flip on your radio and we'll play you music that you may or may not like, followed by advertisements, bullshit interviews, more advertisements, and more music that you may or may not like. How's that?"
Compared to:
"Fire up your MP3 player/ocremix.org/shoutcast
Re:Why internet radio is hit harder (Score:5, Insightful)
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.
Parent
Re: (Score:3)
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?
Re:Why internet radio is hit harder (Score:5, Insightful)
Except the cost of such material, and the authorization to use some part of the radio spectrum? Hum, nothing.
Parent
Re:Why internet radio is hit harder (Score:5, Informative)
1. An FCC license.
2. Commercial broadcast hardware.
Have you priced either? Very effective at excluding undesirables...
Parent
Re:Why internet radio is hit harder (Score:5, Insightful)
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."
Parent
Re:Why internet radio is hit harder (Score:5, Insightful)
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.
Parent
Re:Why internet radio is hit harder (Score:5, Interesting)
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.
Parent
Re:Why internet radio is hit harder (Score:4, Insightful)
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.
Parent
Re:Why internet radio is hit harder (Score:5, Interesting)
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.
Parent
Re: (Score:2)
Sometimes it's not bias (Score:3, Insightful)
Sometimes something truly sucks, and there is no way to put it in a positive light.
The recording industry grinding independent internet radio stations to paste being one good example.