Music Industry Creates New Royalty Rates... But Did They Do So For Systems That Don't Require Royalties?

from the seems-like-it dept

Fri, Apr 13th 2012 2:15pm — Mike Masnick

There's been some buzz in music circles about the news that the RIAA, the NMPA (music publishers) and the DMA (digital music companies) have reached an "historic" agreement on mechanical royalty rates, potentially avoiding what often is a contentious rate setting process at the Copyright Royalty Board (CRB). The CRB still needs to approve the deal, but the fact that an agreement was reached outside of having to go through such a contentious process, where the results often seem arbitrary and disconnected from reality, is mostly a good thing.

That said, I do have some concerns. Because beyond setting the rates for existing mechanical licenses, the groups also sought to create new rates for new types of service. THR has the details:

Mixed service bundles (for example, a locker service, limited interactive service, downloads or ringtones combined with a nonmusic product such as a mobile phone, consumer electronics device or Internet service)

Paid locker services (subscription-based locker providing on-demand streaming and downloads)

Purchased content lockers (a free locker functionally provided to a purchaser of a permanent digital download, ringtone or CD where the music provider and locker have an agreement)

“Limited offerings” (subscription-based service offering limited genres of music or specialized playlists)

Music bundles (bundling music products such as CDs, ringtones and permanent digital downloads)

Now, to some extent it's nice to see them coming to agreements with the idea of allowing certain new types of sites to easily make it clear that they are licensed under a clear rate, and move forward with that. But some of this is concerning in that it partly seems like a way to overclaim rights that copyright doesn't, in fact, cover: for example, the license rates for locker services. As has been discussed, it's not clear that locker services need to pay any copyright under existing law. If it's just about enabling users to store and listen to their own music, what copyright issue is there? Yet it appears that at least some such services may be expected to pay these mechanical rates.

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Filed Under: copyright royalty board, dma, nmpa, riaa, royalties

16 Comments

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Anonymous Coward, 13 Apr 2012 @ 2:35pm

if they are prepared to pay, whether they need to or not, it's down to them. the problem will come if customers are then expected to pay for a service when it doesn't need paying for. but, in true entertainment industries fashion, 'if someone can be conned, let's con them!' who's going to be asked to supply the 'locker' space, Mega or Hotfile?
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crade (profile), 13 Apr 2012 @ 2:41pm

They obviously have the ability to shut down those services so they have the ability to extract payment from them, thats how it works.
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PRMan, 13 Apr 2012 @ 2:56pm

Physical storage units
What are the rates for putting my physical CD in my storage unit?
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Cerberus (profile), 13 Apr 2012 @ 3:08pm

Re: Physical storage units
Oh, don't worry, they are very reasonable. First there is a nominal fee for using the CD at a different location from your own house. Then you need to pay as a fee the price of the CD times the number of people whom you've ever lent your storage key to or whom you wilfully left in the same room as your key while you went to the bathroom. Multiply that by their number of friends on Facebook, because those people might copy the CD. Then multiply that number by the number of friends the average Facebook user has, because the copies could be recopied. Do that seven times, since it is well known that you know every person on earth in seven steps. Let's say the average user has 500 friends (a very modest assumption), so 500^7: now we have about 7.8 million trillion lost sales. Oh, and if you dare show the cover in public when you're on the train, that's twenty years in prison.
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Anonymous Coward, 13 Apr 2012 @ 4:44pm

Next thing you know, you will have to pay...
Next thing you know, you will have to pay your car manufacturer any time you park your car in a garage.
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Anonymous Coward, 13 Apr 2012 @ 4:56pm

This is exactly why I will never pay for music again ever.
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Anonymous Coward, 13 Apr 2012 @ 6:10pm

They are assuming lockers will be abused, with people sharing the passwords. IP address based single-computer restrictions are too cumbersome. iTunes restricts your purchased mp3s to five computers, so that's better but still not ideal.

What if when you purchased a song you got the right to play it anywhere within some reasonable distance from your phone? Not stored on your phone or played through your phone's speaker, but on stereo equipment near you, either streaming through your phone or direct from the cloud? Would that be enough for the consumers and for the rightsholders? Could that be a compromise point? Your phone as your digital music wallet. That would be enough freedom for me to make it worth buying.
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Digitari, 13 Apr 2012 @ 7:50pm

Re:
Right, cause ya know that http://www.kickstarter.com/ is just a paton
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Digitari, 13 Apr 2012 @ 7:51pm

RE wrong tab
Dammit
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Anonymous Coward, 13 Apr 2012 @ 11:04pm

Copyright Scope Creep
This is how copyright scope creep happens. First there are "voluntary agreements". (Maybe not so voluntary, really.) Then those agreements become "industry standard". Then the law gets changed to "recognise existing practices". The the lawsuits start to force into line everybody else, including those who thought that the scope creep was outrageous.

"Man is born free, and everywhere he is in chains." -- Rousseau. This is how the chains are made.
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Anonymous Coward, 13 Apr 2012 @ 11:06pm

Re: Copyright Scope Creep
"Then the lawsuits start ..." Oops, sorry.
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Simon, 14 Apr 2012 @ 10:54am

Grammar
Historic does not start with a vowel, eg 'an' is not needed.

[quote]reached a "historic" agreement on mechanical royalty rates[/quote]
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Anonymous Coward, 14 Apr 2012 @ 4:44pm

I sometimes start singing or humming without realizing. I could do so on any day, at any time, and in any place. Should I be required to pay for a license? Doesn't seem like much of a stretch, given the file locker ruling.
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Niall (profile), 16 Apr 2012 @ 4:46am

Re: Grammar
Unfortunately, a lot of Americans use some weird style guide that says otherwise.
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Anonymous Coward, 16 Apr 2012 @ 8:16am

I thought we didn't have "royalty" in this country.
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jupiterkansas (profile), 16 Apr 2012 @ 12:19pm

This is a way to control which online companies they do business with - those that are willing to pay and can afford it. The rest will get seized by the government.

Companies DiMA represents:

Amazon.com
Apple
BestBuy/Napster
Live365
Microsoft
MTV Networks
Myspace Music
Nokia
RealNetworks/Rhapsody
RightsFlow
Slacker
YouTube

http://www.digmedia.org/about-dima/members

Aside from Youtube, I've never used any of these companies for file storage.
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