Save Internet Radio - new fee structure will kill best personalized radio options

Tim from Pandora wrote a great letter calling for mobilization against the new royalty fees for online radio stations. The problem is that the ad revenues for these stations are not sufficient to cover the fees, and the fees were set based on erroneous *estimates* of ad revenue that were far too high.

I'm reprinting it here, hope you will help us reach Congress on this one.
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Hi, it's Tim from Pandora,

I'm writing today to ask for your help. The survival of Pandora and all of Internet radio is in jeopardy because of a recent decision by the Copyright Royalty Board in Washington, DC to almost triple the licensing fees for Internet radio sites like Pandora. The new royalty rates are irrationally high, more than four times what satellite radio pays, and broadcast radio doesn't pay these at all. Left unchanged, these new royalties will kill every Internet radio site, including Pandora.

In response to these new and unfair fees, we have formed the SaveNetRadio Coalition, a group that includes listeners, artists, labels and webcasters. I hope that you will consider joining us.

Please sign our petition urging your Congressional representative to act to save Internet radio: http://capwiz.com/saveinternetradio/issues/alert/?alertid=9631541

Please feel free to forward this link/email to your friends - the more petitioners we can get, the better.

Understand that we are fully supportive of paying royalties to the artists whose music we play, and have done so since our inception. As a former touring musician myself, I'm no stranger to the challenges facing working musicians. The issue we have with the recent ruling is that it puts the cost of streaming far out of the range of ANY webcaster's business potential.

I hope you'll take just a few minutes to sign our petition - it WILL make a difference. As a young industry, we do not have the lobbying power of the RIAA. You, our listeners, are by far our biggest and most influential allies.

As always, and now more than ever, thank you for your support.

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Fashion industry thrives in spite of no copyright protection

An upcoming paper in the Virginia Law review explains how the fashion industry thrives in spite of a lack of copyright protection. The paper has been widely covered in legal and new media blogs, and calls into question the common assumption that copyright induces creation through financial effects.

UK sound recording copyrights staying at 50 years?

The UK likely won't extend copyright for sound recordings beyond the current 50 year term, a surprise to most of the entertainment industry. Although this isn't a done deal, it means the earliest Beatles recordings will be in the public domain in the UK by 2013!

Will this have an impact on the US market? The Supreme Court held in Quality King (98 F.3d 1109) that imported copies are subject to the first sale doctrine. So what happens when a work no longer covered in the UK is manufactured there and resold here? The importer should be able to undercut prices in the market here.

Ringtones get compulsory licenses - publishers mad, labels happy

The Register of Copyrights has determined that ringtones fall under Section 115 of the copyright Act, and therefore are subject to compulory licenses. The publishers had argued that ringtones, and we mean the realtones which are actually audio rather than midi, are derivative works, and therefore not covered under Section 115. Harry Fox had already licensed a large number of works under this theory at rates higher than the compulsory license, so this ruling means that publishers will probably lose money, although it is still up to the Copyright Royalty Board to determine the exact rate.

Streamcast (Morpheus) case follows Grokster

Streamcast, maker of popular P2P application Morpheus, lost in court against the RIAA. The judge followed the precedent from the MGM v Grokster decision last spring - a company that induces infringement may be liable even if they have no central server. The majority of Streamcast's brethren have either settled with the RIAA and folded up, or else are converting to legit services. Limewire is the exception - they are counter-suing the RIAA for antitrust violations because they claim they tried to go legit but could not get the same deal as iMesh.

Recording broadcasts

The road from performance to copy has blurred. Taping radio onto a cassette, or a TV show onto a VHS tape, was considered fair use in the 80s. But now that satellite radio companies want to make hardware allowing perfect digital copies of satellite broadcasts, the copyright holders want more money, beyond the performance royalties they already receive.

Is it fair? On one end of the spectrum, we have TiVo - they don't have to pay those fees for in-home reproductions, even though I can tune into a music channel from cable and record the audio in perfect quality. In fact, our intellectual property system has awarded TiVo this past spring in a suit against DVR competitor EchoStar, to the tune of $73 million. (Although EchoStar has a stay on the injunction and is filing a countersuit)

On the other end, we have the Internet subscription services (Yahoo, Rhapsody, etc...) - they were forced, by the record labels, to build in digital rights management preventing easy interface with the streaming server for recording purposes, the circumvention of which may violate sections 1201 or 1202 of the DMCA. Software does exist for recording live off of the sound card (see Replay Radio and Total Recorder), and the legality of such an act done for more than noncommercial purposes is unclear.

So why is cable content not encrypted? Or conversely, why can't Internet streams be recorded directly from the streaming software application? Why the distinction in rights related to access and time-shifting depending on whether the content is delivered via cable, satellite or Internet? It's all digital content.

The law (statutes and caselaw) draws distinctions based on distribution technologies that ought not to be drawn. The core bundle of rights, such as reproduction, distribution and performance, evolved at a time when each right would be exercised through a distinct technology typically involving striking physical differences. Today, they all blur together thanks to digital networks.

The bundle of rights in the Copyright Act should be completely rewritten from the ground up to be neutral and uniform with respect to transmission technology. Such a change would save time and money for law firms, technology companies and content providers.

21st century music law

Copyright is dead. Long live copyright!