"Webcasters grumble over proposed fees"

Since many of y'all on this list are clearly musicians, you might like to
see what the Recording Industry Ass. of America is purportedly doing "for"
you:


[ http://news.com.com/2100-1023-841612.html ]

Webcasters grumble over proposed fees 

By John Borland 
Staff Writer, CNET News.com
February 20, 2002, 3:20 PM PT


Government regulators on Wednesday set long-awaited music licensing rates
for online radio stations, essentially splitting the difference between two
wildly divergent proposals from the recording industry and Internet advocates.

A closely watched arbitration panel appointed by the U.S. Copyright Office
recommended that online radio stations pay about a seventh of a cent for
every song they stream online. 

For America Online, which said it was streaming about 160 million songs a
month by late last year, the new rates would turn into a monthly bill of
about $224,000. 

In addition, the rate is retroactive, requiring companies to make back
payments that could run to millions of dollars. 

The recommendation isn't final yet, but it's already drawing criticism from
an Internet trade group, which declared itself to be "extremely
disappointed" in the results. 

"A lower rate would more accurately reflect the marketplace for music
performance rights and the uncertain business environment of the Webcast
industry," Digital Media Association (DiMA) Executive Director Jon Potter
said in a statement. 

"Artists and labels, who have supported these new businesses from the start
with their music, are one step closer to getting paid," Hilary Rosen,
president of the Recording Industry Association of America, said in a
statement. 

"We would have preferred a higher rate," she added. "But in setting a rate
that is about 10 times that proposed by the Webcasters, the panel clearly
concluded that the Webcasters' proposal was unreasonably low and not
credible. 

The royalty rates must still be approved by the U.S. Copyright Office. This
decision will come only after a 60-day public comment period, and DiMA will
use that opportunity to press again for lower rates, the group said. 

The proceeding, and the years of dispute preceding it, were kicked off by
the passage of a landmark copyright law dealing with digital media in 1998. 

In that law, dubbed the Digital Millennium Copyright Act, a new royalty
right for online use was created for the owners of copyrighted works. That
meant that if a song were to be played online, the record companies and
artists would get a small fee, unlike the case with traditional radio. 



Waiting on the final word

But Congress didn't say how much this royalty should be. Individual
companies have cut their own deals with record companies over the years,
but many Net companies have been waiting until an official rate was set by
the government. 

Under the terms of the original law, that means that they will have
back-payment bills due soon, paying whatever rate is set for the last
several years of operation. 

Radio broadcasters, which initially thought they would be able to put their
ordinary radio shows online without paying the new fee, get off a little
easier than Webcasters. The price for streaming an over-the-air broadcast
online is half that of a Webcast, or .07 cents per song. Companies that are
broadcasting only online will have to pay .14 cents per song streamed. 

Each type of company also will have to pay an extra charge totaling 9
percent of their total per-song bill, for a so-called ephemeral license fee. 

It's not yet clear whether these rates will cover a type of service that
Webcasters call "consumer influenced," in which a listener can skip songs,
or have some kind of say in what types of songs are played. Record
companies contend that because this gives the listener much more control
than is the case with ordinary radio, it's a different kind of service.
Webcasters say it should be covered under the ordinary royalty rates. 

Court cases in California and New York are under way on this issue. 

[end story]


--
Sean M. Burke    [email protected]    http://www.spinn.net/~sburke/