Pandora Continues To Push Users To Vote For Shameful Radio Performance Tax

from the can't-compete? dept

Wed, Oct 14th 2009 8:18am — Mike Masnick

We mentioned back in July how Pandora was urging its users to support the Performance Rights Act, which is effectively a government bailout for the RIAA by taxing already struggling radio stations for the right to help promote the RIAA's music. It's a travesty. The only reason Pandora supports it is because Pandora was pressured into its own ridiculous webcasting rates and wants to help bring down radio too. While I like Pandora as a service, I think it's shameful that it's now using the political process to burden competitors with a government created tax, that goes straight to the RIAA.

Apparently, Pandora has once again ramped up this effort to have the government tax its competitors. A whole bunch of you have been forwarding these ridiculous emails from Pandora that urge people to contact their elected officials in support of the RIAA Bailout bill. Most of those submitting those emails to us have said that you'll be doing the exact opposite, and are offended that Pandora is pushing you to support such a thing.

Yes, Pandora, it sucks that you got stuck with ridiculous webcasting rates that will make it difficult to remain profitable, but that's no excuse for trying to get the government to dump an unfair tax on your competitors.

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Filed Under: bailout, performance rights act, radio, webcasters
Companies: pandora, riaa, soundexchange

78 Comments

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Anonymous Coward, 14 Oct 2009 @ 8:28am

It's not a tax. It's a fee.
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captn trips, 14 Oct 2009 @ 8:39am

Bailout??? ... really??
Stop calling it a bailout, you discredit yourself. First of all, your readers (I presume) are not mouth breathers, they don't need you to spin a story with the hyperbole of the day ("Bailout" is the new "Terrorism"). Second of all, it's not a bailout, the RIAA is in no danger of implosion.
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Shawn (profile), 14 Oct 2009 @ 8:40am

Is there really a practical difference form a 'tax' and a 'fee' when the government is imposing it? It is common practice in my state that when taxes are cut a few months later fees rise to cover the shortfall. Election season hits and the rats at the statehouse talk proudly of the tax cuts and ignore the fact that they raised fees to pull the same money out of your pocket.
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Anonymous Coward, 14 Oct 2009 @ 8:46am

Re:
There is a huge difference, on many levels. Taxes are no avoidable. Fees are avoidable. Taxes are not optional, fees are.

Example, your drivers license: Your renewal is a fee, not a tax. If you want to avoid the fee you can (stop driving). If it was a tax, everyone would pay it on their income taxes or property taxes every year, and your license would be "free".

Also, taxes are collected by the government for the government. The government is not collecting a tax for the RIAA (or anyone else) and then paying them tax free benefit. The government is only acting to uphold and maintain a fee structure system for those companies who choose to be in this business, assuring that there is not gouging or unfair application by either side.

Radio stations could avoid the fees by not broadcasting music (going all talk would work). If it was a tax, it wouldn't matter what the station did, it would pay a tax.

Thus, it isn't a tax - it's a fee. Pandora wants the fees that are paid by radio stations to be "fair" to the rates they are paying. They don't mention that they knew what the fees would be coming in, and were basing their business model on not paying fees or by paying signficantly lower fees. Their failed, now they want everyone else to suffer.

Fees. Not a tax.
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Anonymous Coward, 14 Oct 2009 @ 8:51am

I think its a great idea, If you put insane fees on everyone then people go out of business faster. At this point you realize it was a dumb idea or you end up with far fewer stations due to the high cost.

As long as the high fees are only on the net, net radio will be at a competitive disadvantage. When radio calls it quits due to costs then people might talk.
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Anonymous Coward, 14 Oct 2009 @ 9:03am

Re: Re:
What about fees that can't be avoided? From the radio point of view, is it not then a tax? I wouldn't be surprised if even all-talk radio stations are forced to pay royalty fees.

You're arguing semantics, tax, fee, stipend, it doesn't matter what's it's called the end result is the same. but if you'd like to argue semantics, then I believe that the government forcing one entity to pay another is called a tax, and by that definition it's apt here, even if the government is not the recipient. And no, claiming "pay it or choose not to" when the 'choose not to' option means closing up shop means it's NOT an option - it's forcing a decision on you.

But again, semantics...
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Shawn (profile), 14 Oct 2009 @ 9:03am

Re: Re:
Thank you. You are correct there is no practical difference between the fee and a tax. If the radio station wants to continue broadcasting music they will have to pay a new tax to do so.
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Ryan, 14 Oct 2009 @ 9:04am

Re: Re:
Nothing you said indicates any degree of comprehension in your tiny head. You attempt to show a distinction by changing the terms of the hypothetical tax vs. the hypothetical fee.

For instance, taxes are avoidable - just stop living or making money(income), purchasing good and services(sales),owning property(property), etc. A fee for drivers license renewals is a drivers license tax - if you want to avoid the tax, then stop driving, right?

Same thing for music. This effectively places a tax on playing music - if they want to avoid the tax, they can do other things than play music but this does absolutely nothing good for their long-term financial prospects.

And taxes collected by the government for the government - right, that's why we have these trillion dollar "stimulus" efforts to reward politicians' buddies with free money to "create" or "save" jobs. This would be enforced by the government - hence, a de facto tax.

Your post makes you sound like a 5 year-old bitching for the sake of bitching. The original was tongue-in-cheek, but your rebuttal took it twice around the dance floor with a bunch of nonsense.
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Mechwarrior, 14 Oct 2009 @ 9:07am

What Pandora is basically trying to do is to force Radio to fight these fees for them. This is a much better deal for Pandora than fighting the fees themselves. Imagine this, you have a service that provides the same things as another service, but in different media. You are forced to pay a fee, while the other service does not. By supporting a bill that would apply a similar fee on the other service there will be mainly two exclusive outcomes.

1) Your own fee is removed, allowing both services to continue without this monetary burden.

2) Both services now pay the same fee, forcing both to compete on the same level.

Pandora wins both ways.
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Abe Frohman, 14 Oct 2009 @ 9:07am

Re: Bailout??? ... really??
I agree with mike, actually. It's hard to see how this can't be categorized as a bailout of some sort. This is especially true anytime a service or product is unable to allow the free market to solve it's own problems. In my mind, indications of a non-free-market may include being propped up by taxation, fees on another, non-value-added product or service, or the market creates a virtual monopoly by way of over-enforcement of the market, which prevents competing products to market.

I do believe that the costs of enforcement from all parties, will continue to burden the industry, and yes, eventually, it will implode.
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Tony, 14 Oct 2009 @ 9:08am

Does anyone know a Pandora alternative that doesnt include limits on number of songs you can skip or REALLY F***** annoying ads. Not to mention loading pandora takes like 10 years and god forbid you have it running for 10 mins because then your computer will crash!
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Bradley, 14 Oct 2009 @ 9:10am

Is it possible that Pandora is doing this in part to try and get the Radio stations to fight back? If they win, there's a precedent and Pandora might have more leverage to get their own tax taken back off. I don't know that I fully think this is the truth, but it is a possibility I would think.
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Steve, 14 Oct 2009 @ 9:12am

Re: @Mechwarrior
Beat me to it. This is a genius play by Pandora. Try to bring focus to a ridiculous bill in hopes it gets squashed hence allowing both to proceed sans RIAA tax.
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Stuart, 14 Oct 2009 @ 9:14am

Re: Re:
Hmm. Wrong! By your logic taxes are not taxes either. Income tax: I choose to work therefore I pay = Choice. Property tax: I choose to rent therefore I do not pay = Choice. So by your ... Fucking idiotic "logic" there are only income and property "Fees"?
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Misanthropist (profile), 14 Oct 2009 @ 9:14am

Re: Bailout??? ... really??
uh, no, its definitely a bailout...
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Steve, 14 Oct 2009 @ 9:14am

Re: @Tony
Slacker, Last.fm... Youtube even. Run ad-block and you'll be able to ignore the sidebar ads, and turn off your speakers when the ads come on if they bother you that much. Do you complain about annoying TV ads when you have a mute button right there in your hand? A little effort on your part and you'd be happy. Quit complaining.
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Hephaestus (profile), 14 Oct 2009 @ 9:16am

Re: Re:
"Example, your drivers license: Your renewal is a fee, not a tax. If you want to avoid the fee you can (stop driving). If it was a tax, everyone would pay it on their income taxes or property taxes every year, and your license would be "free"."

hmmm .... how about sales tax??
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Yakko Warner, 14 Oct 2009 @ 9:18am

Re:
Last.fm?

I haven't used Pandora, so I don't know how its service compares, but I haven't had any issues skipping songs or been forced to listen to ads.
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Hephaestus (profile), 14 Oct 2009 @ 9:35am

Its a good thing.....
" If you put insane fees on everyone then people go out of business faster."

AC ... For the past couple years we have been watching the labels and the agencies representing them do a ton of self defeating things. I have been saying we should support everything they wish done, every new tax, every new fee, three strikes, charging for 30 second samples, charging public performances fees for ring tones, even making it a criminal offense with jail time to illegally download. The reason why is we need to reach the breaking point for this whole situation to change.
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Dustin, 14 Oct 2009 @ 9:37am

Actually...
Yes, Pandora, it sucks that you got stuck with ridiculous webcasting rates that will make it difficult to remain profitable, but that's no excuse for trying to get the government to dump an unfair tax on your competitors.

Actually, it is. This is not a perfect world. Pandora must act accordingly. A principled approach is probably desirable, but is not very effective at all, especially in the society we live in today. Pandora did not choose the rules of the game it has to abide by, but they did well to adapt to the new game. This proves it.
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Anonymous Coward, 14 Oct 2009 @ 9:41am

Re: Re: Re:
Sorry, the only way you can entirely avoid taxes it to leave the country.

You eat food - it is taxed (the land it was grown on, transport, the gas used to bring it to you, sales taxes, property taxes of the store, etc). There is no way to entirely, utterly, and without a doubt exclude yourself from all taxes.

Radio stations can stop playing music and avoid a fee. It's like driving a car, you can NOT get a drivers license or own a car and plate it, and avoid the fees.

Not hard, is it?
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MattP, 14 Oct 2009 @ 9:48am

Re: Re:
I'll throw in my hat for last.fm as well. An excellent service that has pointed me to artists I would have never heard of with the terrestrial options I'd otherwise be stuck with.
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Geekish, 14 Oct 2009 @ 9:50am

Re: Re: Re: Re:
"There is no way to entirely, utterly, and without a doubt exclude yourself from all taxes."

Well, not until you're dead anyway.
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CAS, 14 Oct 2009 @ 10:00am

Re: Actually...
I agree.. on top of that, I don't think it's even sneaky or underhanded. Currently broadcast radio has an unfair advantage over internet radio and it's impeding competition. My preferred solution is for there to be no fee, but then again, my preferred solution also would have no regulations at all.

IF broadcast radio cannot survive while paying fees then there is no reason why musicians would want to prevent their music from being played. If the value radio stations are able to survive while paying fees they why shouldn't musicians charge? Musicians like (whomever is popular these days) should be able to charge more than some unknown artist because of the amount of listeners that musician attracts.

In this case, I think government intervention was inappropriate in the first place, never mind this latest fee imposed on Pandora. There are plenty of anti-trust and other price fixing laws in place that could have taken care of any price gouging by the labels.

On top of that, the point is almost moot at this point. Music is so widely available it's only a matter of time before these fees are eliminated.

Pandora may not survive (although I hope it does) but eventually this will all work out. No one is crying for Napster but they've also been struggling for years. Eventually the RIAA will crush all their own distribution channels under their fees while music continues to spread beyond their control and musicians (as they are already doing) will realize that the RIAA is a dinosaur that isn't needed anymore.
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John Doe, 14 Oct 2009 @ 10:03am

Re: Bailout??? ... really??
How can it not be a bailout? Has the government ever passed a law to guarantee your income? They certainly haven't for me.
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Zach, 14 Oct 2009 @ 10:12am

What?
I think this article has completely missed the point, which is: If Pandora has to pay this tax, and they're not representing an established media form, why shouldn't an established format like AM/FM radio do the same thing?

I don't love the idea either. And there's an easy way to solve the issue - make sure everyone follows the same scheme. If you don't want traditional radio to pay this way, make sure Pandora and other sites don't too. If it's not fair, then it's not right.
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Dark Helmet (profile), 14 Oct 2009 @ 10:20am

Re: Re: Re: Re:
"Sorry, the only way you can entirely avoid taxes it to leave the country."

Arguable (homeless people can do it) but that isn't what you said. You drew a clear distinction: A tax doesn't involve choice, a fee does. And you were wrong. Really, REALLY wrong. Property taxes prove it wonderfully: if you rent, you don't pay the property tax, if you own you do. Choice.

"You eat food - it is taxed"

I can think of about ten reasons instantly upon reading this statement where that absolutely isn't true. Amongst them are dumpster diving, being given food by friends, soup kitchens, free samples at the grocery store, Hors d'ouevres (sp?) provided at an art exibit, etc. Again, while these may be rather extreme examples, your premise on choice fails. Half the things you listed aren't being paid by the consumer, but by someone else. If your point is that government gets it's hand in all pies, your probably right enough to just accept. But to state that you can't eat without paying taxes...mega-wrong.

"There is no way to entirely, utterly, and without a doubt exclude yourself from all taxes."

Yeah, you could. Your life would suck, but you can live completely off the grid, even in this country. Even in a major city you could do it.

"It's like driving a car, you can NOT get a drivers license or own a car and plate it, and avoid the fees."

And I can NOT buy a house or own a condo and avoid a property TAX. So again, choice isn't the qualifier.

"Not hard, is it?"

No, not hard, just not as easy as you're making it sound.

And FYI, Mike the whole bailout thing is being overplayed. I don't like the use of that word either, and I'm fairly supportive around here. I believe I covered hyperbole in one of my previous decrees....
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Mike Masnick (profile), 14 Oct 2009 @ 10:22am

Re:
What Pandora is basically trying to do is to force Radio to fight these fees for them.

No. That's not the case. First, Radio has already been fighting the fees, but did not help when the webcaster fees were put in place. The webcaster fees are already put in place and Radio has no interest in fighting them.
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jonathan segel, 14 Oct 2009 @ 10:28am

Re:
yes: taxes pay for the government to operate, these fees pay for the musicians to operate.
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ChurchHatesTucker (profile), 14 Oct 2009 @ 10:31am

Let's get back to the original solution
Payola, bitches. You want play? You gotta pay.

It's only illegal because it's worth something.
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Pitabred (profile), 14 Oct 2009 @ 10:32am

Re: Re:
Maybe Pandora is hoping that adopting a "scorched earth" policy will make the bottom fall out, and force Congress to reevaluate all of these stupid "performance" fees?
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jes (profile), 14 Oct 2009 @ 10:40am

performance royalties.
do you know that the countries currently not paying these performance royalties for terrestrial radio play are the United States, China, North Korea and the Congo? Almost all other countries pay both performance rights holders (like BMI/ASCAP etc) and Performance royalties (which pay the performers of the tune) That's what these fees are going to do, have broadcast radio also pay performance royalties. Internet radio already does.
it's like $500 a year. They pay more than that for NBA "fees".
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Dark Helmet (profile), 14 Oct 2009 @ 10:52am

Re: performance royalties.
Facts! I love facts! Where did you come by the fact that us, China, N. Korea, and the Congo are the ONLY ones NOT paying performance royalties on terrestrial radio?
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kryptonianjorel (profile), 14 Oct 2009 @ 10:54am

Re: Re:
Radio won't be fighting webcasting fees directly, but by having Pandora push to have Radio fees upped, it is bringing a much more powerful ally to the table. Pandora doesn't have the resources to fight for itself, so if it can help get this fee instituted, there will be an outrage from the radio industry. I think Pandora (along with other webcasters) could then ride along and say "We deserve the same as them, we're radio too"

I think this is a decent plan, and seeing the ways Pandora has bent over backwards to stay alive, I'd like to think this is a strategical move and not a spiteful one.
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Mike Masnick (profile), 14 Oct 2009 @ 10:58am

Re: What?
I think this article has completely missed the point, which is: If Pandora has to pay this tax, and they're not representing an established media form, why shouldn't an established format like AM/FM radio do the same thing?

So two wrongs make a right? How does that make sense.

Yes, the webcaster fees are ridiculous and unnecessary, but that doesn't mean they should be added elsewhere as well.
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kryptonianjorel (profile), 14 Oct 2009 @ 10:59am

Re: Re: Actually...
Remember, Musicians don't make a dime off of radio play. For musicians, it is free publicity, so they don't get paid. The songwriters are the ones who get paid, since nobody would otherwise know they wrote the song, so radio play not a promotion of the songwriter.

At least, I think thats how it works. I may have made that up...
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Anonymous Coward, 14 Oct 2009 @ 11:04am

Re: Re: Re: Re: Re:
if you rent, you don't pay the property tax

Sometimes taxes are hidden, or at least not given directly. You rent an apartment - the owner is paying taxes, and passing those taxes on to you in the rent. Thus, you are paying taxes.

You can THINK you are avoiding tax, but you are not.

It's not hard, is it?
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ChrisB (profile), 14 Oct 2009 @ 11:15am

Re: Re: Re:
You tend to get something for a fee (drivers license, admission to a state park) and the money raised tends to go back to support the service.

You tend to get nothing for taxes (property tax, sales tax) and the money goes into general revenue.
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Kevin Seal, 14 Oct 2009 @ 11:33am

Re: Re: performance royalties.
Dianne Feinstein said that recently, and it's referenced here:
http://news.ecoustics.com/bbs/messages/10381/549087.html

"The Performance Rights Act brings the United States in line with almost every other nation in the world. Only a few countries do not provide a fair performance right on radio, including Iran, North Korea and China. And because the U.S. doesn't have a performance right, foreign stations do not have to pay American artists when their music is played on stations around the globe -- an inequity that costs American artists tens of millions of dollars each year."

Also quoted on the AFTRA site:
http://www.aftra.org/press/pr_2009_02_25performancerights.html

AFTRA = American Federation of Television and Radio Artists

"Today, AFTRA members, including will.i.am, Sheryl Crow, Herbie Hancock, Emmylou Harris, Patti LaBelle, Dionne Warwick, Crystal Waters, and Jon Carroll joined with local AFTRA artists, other musicians, and members of Congress to kick off the effort to pass the Performance Rights Act."
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nasch (profile), 14 Oct 2009 @ 11:53am

Re: Re: Re: Re: Re: Re:
It's not hard, is it?

That's true, if you redefine terms as you go, it's pretty easy to make any point you want to.
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Dark Helmet (profile), 14 Oct 2009 @ 11:56am

Re: Re: Re: performance royalties.
"Dianne Feinstein said that recently, and it's referenced here:"

Well, putting aside for a moment that Feinstein is one of the most pro-content industry, anti-fair use politicians in the country, I said I like FACTS. Facts and statements by politicians rarely have much to do with one another.

"Also quoted on the AFTRA site:"

The quote you pointed out is interesting, but not terribly useful with regards to my quest for facts, as it has none regarding the statement I was addressing.

However, the link you provided WAS more helpful to the discussion, it just doesn't say what jes said it did. Jes said:

"the countries currently not paying these performance royalties for terrestrial radio play are the United States, China, North Korea and the Congo"

and the link you sent me to said:

"Only a few countries do not provide a FAIR performance right on radio, including Iran, North Korea, China and the U.S." [Caps added for emphasis]

Now, putting aside the fact that countries mentioned don't match up, those two statements aren't even CLOSE to being congruent. It turns out that terrestrial radio stations DO pay performance royalties for songwriters in America. The article did mention, however, that there is no performance royalty paid for foreign artists.

Now we get to have a debate about the word "fair". To have that debate, we would need the rates of all the relevant countries (or at least a good sampling) and compare them. Do you have a link for that as well?

Again, not saying that either of you is wrong here, but I like FACTS, not ambiguous statements regarding what's fair or not...
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Comboman (profile), 14 Oct 2009 @ 12:02pm

Re: Re: What?
So two wrongs make a right? How does that make sense.
It's far from an ideal solution but it at least levels the playing field. Webcasters already tried (and failed) to stop these fees; what other choice do they have but to force their competitors to pay the same fees?
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ervserver (profile), 14 Oct 2009 @ 12:25pm

Pandora
I'm slowly getting turned off Pandora, was so cool for awhile....not so much anymore
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Anonymous Coward, 14 Oct 2009 @ 12:30pm

Re:
I would like a service like pandora with more than 10 records in its database
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Geekish, 14 Oct 2009 @ 12:31pm

Re: Re: Re: Actually...
Hmm. I think the musicians and songwriters are really in the same boat here. It's free publicity. And actually, I think the songwriters are getting less publicity, at least from the general public. I often hear the performing band's/musician's name announced (or see it, in the case of streaming audio on the net), but rarely hear who exactly wrote the song's music or lyrics.
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Anonymous Coward, 14 Oct 2009 @ 12:32pm

Two wrongs do make a right. It's not fair to hold pandora to a higher standard than commercial radio. Pandora doesn't like the fact that it's being taxed out the wazoo, but the sheer fact that it's the only thing being taxed in such a way when other services with more lobbying and government influence get off scott-free.

Pandora is merely asking the government to keep it fair; because, right now the FCC is FORCING an unfair competition to occur. Capitalism doesn't work [when there's not a level playing field].

Mike, you complain about bloggers being held to lower standards than journalists/"well-established review site"/newspapers/the media/etc.

How is this different from pandora's point of view?
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Geekish, 14 Oct 2009 @ 12:42pm

Re: Re: Re: Re: Re: Re: Re:
Yeah, if we take this route, where would one draw the line for 'indirect tax-paying'?

Gee. I bought this shirt from a rummage sale, and the previous owner bought it from a store in MN (where there is no tax on clothing), but the store itself bought it from a distributor who pays taxes and took that into consideration when pricing it, so therefore I paid taxes on it?
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Dave, 14 Oct 2009 @ 1:05pm

Re:
It's not a tax, because the money doesn't go to the government. It's a government regulation of a transaction between two parties.
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Killer_Tofu (profile), 14 Oct 2009 @ 1:18pm

Re: Re:
"these fees pay for the musicians to operate."

No. They don't.
This has been stated by the musicians / artists many times over. Only the very few at the very top see anything from these royalty / fee / tax collection agencies. The only thing they are there for is to siphon money from the system into a few fat cat pockets.
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Mike Masnick (profile), 14 Oct 2009 @ 1:31pm

Re:
Two wrongs do make a right.

Wow. You cannot be reasoned with I see. You are a fool.

It's not fair to hold pandora to a higher standard than commercial radio.

So because lobbyists got a ridiculous deal against Pandora everyone else must suffer? Are you really sure you want to go down that road?

Pandora doesn't like the fact that it's being taxed out the wazoo, but the sheer fact that it's the only thing being taxed in such a way when other services with more lobbying and government influence get off scott-free.

You got it backwards. The others aren't getting off scott-free. It's the lobbying power of the RIAA that put Pandora on the hook.

Pandora is merely asking the government to keep it fair; because, right now the FCC is FORCING an unfair competition to occur. Capitalism doesn't work [when there's not a level playing field].

Um, there was a level playing field until the RIAA got these new performance taxes added to webcasters. What sort of fool thinks that when one bad tax is added through regulatory capture the only "fair" thing is to add it to others?

What does the FCC have to do with any of this?!? Answer: absolutely nothing.

You clearly don't know squat about what you are talking about. Come back once you've been educated.

Mike, you complain about bloggers being held to lower standards than journalists/"well-established review site"/newspapers/the media/etc.

How is this different from pandora's point of view?

Really? You can't tell the difference between these situations? Ok. Enough talking to you.
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Lonzo5, 14 Oct 2009 @ 1:54pm

One thing I'm looking forward to is reading about all the lawsuits the RIAA will file against stations that choose not to play songs by the artists they represent. I'm not claiming to know the facts here, but they (the RIAA) will actually be getting paid to broadcast/advertise their songs on the radio (makes zero sense and should actually be the opposite-- it costs exponentially more to broadcast an FM signal than it does to burn a CD or encode an mp3, and in most cases, record the song itself). I see there being a big shift toward local, indie and underground artists for all but the largest radio stations. Mainstream music will be mostly streamed over the net, probably swarming with great big tacky paywalls and heart-wrenching propaganda glorifying the starving RIAA. It's really disturbing that an organization like this has such a great deal of clout in our society. This is a tax, as far as I'm concerned. A tax, by my definition, is an artificial debt for a service (or disservice)that has not necessarily been requested, and can only be obtained through force or the threat thereof. If it were a fee, the RIAA would be offering something in exchange for the radio stations' money. As it stands, though, the record companies get their songs played for free while collecting a sum of money in exchange for not using the government's power to get their way.
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Zombie_Doc (profile), 14 Oct 2009 @ 1:56pm

Re: Re:
Not really, in Virgina you are taxed to death. Some taxes are avoidable if you try hard enough. Like the 'personal property tax' basically because I own a car I have to pay a tax based on what the local government thinks my car is worth. I 2002 Accent with 130K miles on it is worth on the market about 10.00. But they think it is worth a lot more. Anyway if I didn't own a car I could avoid this tax. Frankly I feel it is just a shakedown, when I bought the car I paid a sales tax plus crazy 'fees' to the dmv to register said car. But Va has its hand in my pocket looking for every spare penny it can gouge out of me.

I could also avoid paying income taxes as well by not working, and all forms of property tax by being homeless. So taxes are avoidable you just have to be willing to be homeless and own nothing of value.

Or you could just go to jail.
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Anonymous Coward, 14 Oct 2009 @ 2:07pm

Re: Re: Re:
...and if you are willing to do that, then you are effectively taxing yourself.

death and taxes. It's all there.
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SteveD (profile), 14 Oct 2009 @ 2:10pm

Re: Re: I see. You are a fool.
Whoa, lets all take a step back here. I don't always agree with your positions Mike, but I've always had a lot of respect for how calmly and rationally you've argued it. I've never seen you call people names before.

Pandora's position is they want a level playing field, which is not an unreasonable position for any business to take. You might not agree with their acceptance of the rates imposed upon them, but they clearly feel this is the only option left to them.

As for the argument over artist compensation for FM radio play, as I understand your position it is that radio play is promotional, and historically this has always been compensation enough.

But what I don't see why you are trying to make an historical argument in today's climate; so much is changing it hardly seems relevant. It made sense when so much of the industries revenue came from selling units; anything which encouraged unit sales was complimentary. These days album sales are not what they were, and radio is shrinking in importance as a promotional platform next to new technologies.

If a big chunk of artist income in the future is going to come from licensing content to businesses to leverage for profit to the public, it makes sense to bring FM Radio into line.
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Dark Helmet (profile), 14 Oct 2009 @ 2:15pm

Re: Re: Re: I see. You are a fool.
I think there is a very good chance that Mike knows something about the "anonymous" coward that we do not.

Like who he is, or who he's employed by (possibly identifiable via IP address?)
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wallow-T, 14 Oct 2009 @ 2:38pm

( Mostly saying the same as Steven D above.)

Considering the totality of the political situation regarding royalties for the transmission of music, Pandora's position makes perfect sense. It wasn't just the RIAA who screwed Pandora and other online webcasters with ruinous royalty rates; the over-the-air broadcasters were cheering from the sidelines at the prospect that their competition would be hobbled if not put out of business entirely.

At this point, the only hope for survivable rates for webcasters appears to get the over-the-air broadcasters, who still have political clout, tossed into the same royalty-paying pot, and then start talking about lowering the rates across ALL transmission media. Platform neutrality, yay!!

As somebody wrote somewhere else about this scrap: The National Association of Broadcasters might be the only trade group which could make the RIAA look good. :-)
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Dark Helmet (profile), 14 Oct 2009 @ 2:56pm

Re: Re: Re: Re: I see. You are a fool.
On the other hand, going through the past two days' stories, I HAVE noticed far more anger and name-calling going on than usual, Mike using words like "dickish", "moronic", and "fool".

Now I for one, being a hateful sumbitch, have no problem with this stuff, but I do wonder about the impetus for such change in tone and language...
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Anonymous Coward, 14 Oct 2009 @ 3:33pm

Re: Re:
A sales tax can be avoided, by not buying stuff. Is it a fee instead? Has everyone been wrong all this time?
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Josh (profile), 14 Oct 2009 @ 4:29pm

Think about it
I note that, on the whole, Techdirt has more and brutaler flame wars than 4chan.
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Glenn, 14 Oct 2009 @ 4:54pm

Po-tay-toe...
Po-tah-toe... Pandora has just as much right to want all "radio stations" to be treated the same as anyone who wants the opposite (aka "you"). Personally, I don't listen to them anymore, but the RIAA deserves to die... now... forever.
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Anonymous Coward, 14 Oct 2009 @ 5:01pm

Re: Re: Re: Re:
So, a tax is something that you can't get out of every single one of the same (so anything is a tax, because you can't get rid of ALL taxes, regardless if you got rid of ONE tax). Easy: call any random fee a TAX, and since you can't get rid of it AND every other TAX, it qualifies as a tax.

Great logic. Kudos!

The music fee is a tax then, because even if you can rid of it, you will still pay SOME kind of tax on something.
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Anonymous Coward, 14 Oct 2009 @ 5:41pm

Re: performance royalties.
So move to a country that has radio performance fees.
Let us keep enjoying life in America without them!
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Hola, 14 Oct 2009 @ 7:19pm

Re: Re: Re: Re: Re:
"There is no way to entirely, utterly, and without a doubt exclude yourself from all taxes."

Well, not until you're dead anyway.

---

Not so true. My dad passed away in July and as executor I have to file his tax return/s for '08 and '09.
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Mike Masnick (profile), 14 Oct 2009 @ 10:06pm

Re: Re: Re: I see. You are a fool.
Whoa, lets all take a step back here. I don't always agree with your positions Mike, but I've always had a lot of respect for how calmly and rationally you've argued it. I've never seen you call people names before.

Fair enough. But I'm not afraid to share my opinions, and my opinion is that anyone who claims two wrongs makes a right is a fool. And deserves to be called one.

I understand Pandora's position, but that's not what this particular person was arguing. He was arguing that two wrongs make a right.

These days album sales are not what they were, and radio is shrinking in importance as a promotional platform next to new technologies.

Indeed, but as we've shown -- repeatedly -- other aspects of the music business are increasing, and all of those are promoted by radio play as well.

The fact that payola is still rampant should make that clear.
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Mike Masnick (profile), 14 Oct 2009 @ 10:07pm

Re: Re: Re: Re: I see. You are a fool.
I think there is a very good chance that Mike knows something about the "anonymous" coward that we do not.

Like who he is, or who he's employed by (possibly identifiable via IP address?)

Indeed. But I won't reveal it. The one time I hinted at it, this particular individual went ballistic and threatened to sue me. Funny.
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Mike Masnick (profile), 14 Oct 2009 @ 10:12pm

Re: Re: Re: Re: Re: I see. You are a fool.
Now I for one, being a hateful sumbitch, have no problem with this stuff, but I do wonder about the impetus for such change in tone and language...

I don't think the tone has really changed that much. But there's a point at which it sense to stop conversing with idiots and point out that they are, without any doubt, idiots. :) It's not hateful. It's just making the point clear.

I'm certainly not doing it to anyone. Just those who are here every day, posting things that are clearly idiotic, for which we've had long discussions on these subjects, and who still post ridiculous things. You begin to realize that they're asking to be called an idiot, so why not just do it?
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Silas, 15 Oct 2009 @ 1:14am

Pay the fee like everyone else
Why all the fuss about not paying performance rights? Everywhere else in the world does so why not in the US? It's grouped with China, North Korea and Iran, oppressive regimes that don't recognise rights. I can't believe there's so much fuss. You use my content to build a business and you don't want to pay me for it? Incredible
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rumblefish (profile), 15 Oct 2009 @ 5:48am

Re: Re:
So . . . that little party in Boston Harbor in 1773 was about a "fee" on tea, not a "tax" on tea since, afterall, nobody was required to buy or drink tea?
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Anonymous Coward, 15 Oct 2009 @ 6:27am

Well Pandora just got uninstalled from my Sprint Hero. Hadn't gotten around to testing all the various Internet radio apps, but now I have one less. No biggie, there's a ton of em.
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Dark Helmet (profile), 15 Oct 2009 @ 6:43am

Re: Pay the fee like everyone else
Uh, Silas, according to an article I responded to earlier, we DO pay performance royalties, just not "Fair" performance royalties as defined by the industry.
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Mark Campbell, 15 Oct 2009 @ 7:10am

Here's to the RIAA!
I kind of hope that the radio stations have to pay those rates. Hopefully, the radio stations decide that they don't like paying to promote other people's music and decide not to use RIAA music at all.
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Mesh, 15 Oct 2009 @ 1:49pm

If the performers actually received the money from the royalty it would be one thing. The royalty is paid to the owner of the "master recording" ie the record label. It is then up them to decide if the performer/artist gets it. If record labels already make it difficult for artist to get paid by album sales, who says they won't make it difficult for artists to receive their share of the "performers royalty."
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K, 17 Oct 2009 @ 8:29pm

Re: Re: Re: Re: Re:
@Geekish then there's the Paris Hilton tax. :P
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Mojo Bone, 18 Oct 2009 @ 3:58pm

"And because the U.S. doesn't have a performance right, foreign stations do not have to pay American artists when their music is played on stations around the globe -- an inequity that costs American artists tens of millions of dollars each year."-quote extracted from Kevin Seal's post

Leaving aside the use of the term "performance right"-what we're discussing is a performance royalty-a musician has a "right" to perform on the street, but only if we pay a fee for a license; otherwise, we can be arrested for panhandling and/or vagrancy, If we play in a bar or cafe, the venue must purchase a license, or they're liable to pay a fine, (ASCAP/BMI, not RIAA) but I digress; my point is that this situation has had some unintended consequences-a sort of American musical hegemony on the airwaves in many foreign countries. It's cheaper for them to broadcast American artists than their own, which tends to increase the popularity and sales of American artists in those countries.Hard to put a figure to it, but the Madonnas and Garth Brookses of the world have certainly benefitted, to the tune of some number of "millions of dollars each year". Many countries resent what they see as a cultural invasion, and have instituted statutory retaliation for their artists not receiving performance royalties in the US, but it amounts to a pittance compared to the American market, because until recently, an American artist (or more correctly, their record company) could more than make up in overseas record sales what they were denied in broadcast royalties.

"Hmm. I think the musicians and songwriters are really in the same boat here. It's free publicity. And actually, I think the songwriters are getting less publicity, at least from the general public. I often hear the performing band's/musician's name announced (or see it, in the case of streaming audio on the net), but rarely hear who exactly wrote the song's music or lyrics."-Geekish

I think you've argued yourself out of your point-hardly anyone bothers with listing proper credits anymore; digital and sattelite radio do stream artist info along with the music, but if you want to know who wrote the song, you get that info from the CD or the Harry Fox Agency, or Billboard, Cashbox, et al, but you will likely pay for the info, one way or another. Quick; how many artists can you name? Now, how many songwriters?

"One thing I'm looking forward to is reading about all the lawsuits the RIAA will file against stations that choose not to play songs by the artists they represent. I'm not claiming to know the facts here, but they (the RIAA) will actually be getting paid to broadcast/advertise their songs on the radio (makes zero sense and should actually be the opposite-- it costs exponentially more to broadcast an FM signal than it does to burn a CD or encode an mp3, and in most cases, record the song itself). I see there being a big shift toward local, indie and underground artists for all but the largest radio stations. Mainstream music will be mostly streamed over the net, probably swarming with great big tacky paywalls and heart-wrenching propaganda glorifying the starving RIAA. It's really disturbing that an organization like this has such a great deal of clout in our society"-.Lonzo 5

It does cost exponentially more to broadcast FM radio at 50,000 watts or so, but those costs are likely to plummet in the near future due to new digital broadcast technologies and regulations in the pipeline, though no one expects they'll drop to anywhere near webcasting levels. I don't see a groundswell of demand for non-RIAA represented music at this moment, nor in the near future.

"Considering the totality of the political situation regarding royalties for the transmission of music, Pandora's position makes perfect sense. It wasn't just the RIAA who screwed Pandora and other online webcasters with ruinous royalty rates; the over-the-air broadcasters were cheering from the sidelines at the prospect that their competition would be hobbled if not put out of business entirely.
At this point, the only hope for survivable rates for webcasters appears to get the over-the-air broadcasters, who still have political clout, tossed into the same royalty-paying pot, and then start talking about lowering the rates across ALL transmission media. Platform neutrality, yay!!" -wallow-T

AGREED. Except, speaking as both an arist and a songwriter, I don't mind at all when someone wants to share my music with others for the sheer love of it, but as soon as (s)he gets paid to do so, I want my cut. I believe royalty rates are too high across the board. I want them reduced to sane and sustainable levels for both broadcasters and webcasters, but I also want an end to statistical sampling of a very few playlists, so that everybody that gets played gets paid.

If the performers actually received the money from the royalty it would be one thing. The royalty is paid to the owner of the "master recording" ie the record label. It is then up them to decide if the performer/artist gets it. If record labels already make it difficult for artist to get paid by album sales, who says they won't make it difficult for artists to receive their share of the "performers royalty."-Mesh

Yes, and this is the point in history when we have an opportunity to do away with the 'plantation mentality' that the RIAA and major labels have encouraged; still it's only fair that the entity which pays for the production owns the master recording.There is also another major inequity that should be dealt with: the US is also the only country in which composers and performers are not paid royalties for performances of theatrical films. (hope that's not too off-topic, and as an aside, I think this thread could do with some pruning of the posters that want to argue about the difference between a tax and a fee)
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Decadre, 19 Oct 2009 @ 7:03am

NAB forced these fees down other services' throats
Simply said, the NAB was the driving force behind sites such as Pandora and satellite radio to pay these fees. Go ahead and google NAB & Pandora and you'll see what I am saying.

What's the matter NAB, can't take the taste of your own medicine?
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Decadre, 19 Oct 2009 @ 7:11am

Re:
The NAB lobbied for internet radio apps/services such as Pandora to pay these fees.

When congress tried to pass some legislation to give these apps/services time to negotiate a deal with the RIAA directly (instead of the forced rates passed via the lobbied legislation), the NAB lobbied against that too.

That story was reported on right here on Techdirt btw.

So, in my opinion I think you think you are incorrectly labeling which side is the "real" bully here.
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ike, 26 Oct 2009 @ 8:32am

a government bailout for the RIAA by taxing already struggling radio stations

I don't recall seeing a post on this. Why are radios struggling? Is it a biz model problem?
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threepenpals, 18 Dec 2009 @ 6:12am

Re: Re:
Aren't income and property taxes avoidable in a way that's similar to "fees" for driving or airing fees for songs?

Property taxes depend on (a) having a home when you could rent, and (b) the expense of your home. By your 'opt-in' criterion, then, it seems that property taxes are equivalent to fees. Similarly, one could do a variety of things to change their income-tax bracket; so, it starts to look like a fee by your criterion as well.

On the other end of things, many people may well consider their owning of a home (which you seem to consider as something beyond choice) as largely dependent on their owning a car. Maybe they have no access to public trans. and need to drive to or for work. In that case, no registration fee (for the car) -> no driving -> no house. Therefore, if owning a house isn't a choice, then, for some people, neither is driving a car.

I don't see how your distinction holds without some platonic breakdown of what people need that includes units like "owning a house". In other words, I don't think it works out at all.
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