Are New Streaming Royalty Rates A Way To Backdoor DRM Into Copyright Law?
from the dangerous dept
We recently wrote about how different parts of the music industry -- the RIAA, NMPA and DMA -- had come to an agreement on new royalty rates, as well as designating royalties for "new classifications" of services. While the groups celebrated this solution for being "flexible" for new providers, the details suggest a different story. We already expressed concerns about what are apparently licensing requirements for services that shouldn't need any license (i.e., personal music lockers). However, that was just based on the press release. When you look at the full details (pdf and embedded below), it gets even more troubling -- to the point that the whole agreement should probably be rejected.Here's the big concern. This is a settlement among a few parties, who certainly don't represent the entire industry. Yet, if the Copyright Royalty Board and their (typically out of touch) judges accept the settlement, the details of the settlement become law. And that's problematic, because this thing is pretty crazy with restrictions -- some of which are nearly impossible to understand. If you think the tax code is confusing, you haven't tried to figure out what you have to pay to license certain services. Let's just say you want to set up a locker service that allows users to buy music which automatically goes into the locker. Well, among a ton of other rules, try this sucker on for size:
In the case of a purchased content locker service, the percentage of subpart C service revenue applicable in step 1 of &sec;385.22(b)(l)(i) is 12%. For the avoidance of doubt, paragraph (l)(i) of the definition of subpart C service revenue shall not apply. The minimum for use in step 1 of &sec;385.22(b)(l)(ii) is the appropriate subminimum as described in paragraph (b) of this section for the accounting period, where the all-in percentage applicable to &sec;385.23(b)(l) is 18%), and the sound recording-only percentage applicable to &sec;385.23(b)(2) is 22%, except that for purposes of paragraph (b) of this section the applicable consideration expensed by the service for the relevant rights shall consist only of applicable consideration expensed by the service, if any, that is incremental to the applicable consideration expensed for the rights to make the relevant permanent digital downloads and ringtones.That's on page 40 of 44 pages. And is just one paragraph. Good luck figuring out the rest of the rules without a cadre of lawyers (oh wait... perhaps that's the idea).
But the bigger issue is that this agreement is a way to actually sneak DRM into copyright law. While existing copyright law has anti-circumvention rules, it makes no statement on how DRM actually impacts royalties or requirements (beyond anti-circumvention). Yet, this "agreement" has multiple sections that define types of DRM and with different rules for those specific cases. That is, the agreement defines the idea of a "limited download."
Limited download means a digital transmission of a sound recording of a musical work to an end user, other than a stream, that results in a specifically identifiable reproduction of that sound recording that is only accessible for listening for—Is this really what we want in the law? A specific legal definition of DRM that applies to others despite not being a part of the negotiations? The main issue is that this is a standard contract between private parties. That's fine if it only applied to those parties who were subject to the negotiation. But thanks to the CRB process, the end result may be to stuff this private contract between private parties directly into the law, and that will expand copyright in highly questionable ways.(1) An amount of time not to exceed 1 month from the time of the transmission (unless the service provider, in lieu of retransmitting the same sound recording as another limited download, separately and upon specific request of the end user made through a live network connection, reauthorizes use for another time period not to exceed 1 month), or in the case of a subscription transmission, a period of time following the end of the applicable subscription no longer than a subscription renewal period or 3 months, whichever is shorter; or
(2) A specified number of times not to exceed 12 (unless the service provider, in lieu of retransmitting the same sound recording as another limited download, separately and upon specific request of the end user made through a live network connection, reauthorizes use of another series of 12 or fewer plays), or in the case of a subscription transmission, 12 times after the end of the applicable subscription.
(3) A limited download is a general digital phonorecord delivery under 17 U.S.C. 115(c)(3)(C) and (D).
There are lots of other concerns about the document as well. It has lots of "this or that" calculations -- all of which default to the "greater of" option -- meaning that the rates are going to keep going up. Also, the agreement repeatedly defines "minimums" but we'll be waiting a looooooong time for you to come back with where the "maximums" are. The whole thing is crazy confusing, and while it may be perfectly fine if it were just a contract among a few players, the second it becomes part of copyright law, we should be concerned.
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Filed Under: copyright royalty board, drm, royalties, streaming
Companies: dma, nmpa, riaa
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*big smile*
Why do they bother? Don't they know we (the people) don't care about their laws/fees/rates and will just keep on sharing because it's natural and feels oh-so-right?
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Re: *big smile*
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Looks like a patent application. I think some lawyer is moonlighting
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Re: (stupid lawyering class)
If you've contracted for something which is illegal then the gov can/will step in and enforce its will upon your contract.
Well, more precisely, you can agree to anything in a contract but terms which are illegal cannot be enforced.
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Re: Re: (stupid lawyering class)
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Doesn't seem that much different than existing DRM. I'm not saying this is good, just that we may be overreacting.
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Which, of course, the US will want to export as part of ACTA (revised) and TPP as part of the American attempt to have everyone adopt the exact same "IP" rules as the US has. (See Sec. 1, Subsec 3b, Para, 18, Line 7a except on days where there is a full moon in which case Para 18m Line 32fm.)
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"A method of tracing purchased digital content in order to correctly assign royalty payments."
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I notice a couple of big flaws there that would leave customers cut off through no fault of their own...
"Doesn't seem that much different than existing DRM."
Perhaps, but the current DRM isn't codified into law. That's the difference.
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For example, this exact kind of option is already there in the law for streaming audio recordings; webcasters meeting certain, feasible but not entirely reasonable criteria, can elect to just report to and pay standard fees to SoundExchange, and they get an automatic, blanket license which keeps them from having to negotiate with each label separately for a license to use each recording. It's compulsory for the copyright owners, meaning they can't opt-out. If the webcasters choose not to use this system for whatever reason, there's no penalty, they just have to get their own licenses, which was the default situation anyway.
Likewise, right now, you can run a music store that offers any kind of music downloads (DRMed or not), as long as you have license agreements worked out with each and every copyright owner (publishers and labels both), for every song and for every territory you sell to. That's option A and it's always there. What would change, if the CRB adopts the aforementioned agreement as the standard, would be you'd have an Option B: If you so desire, and provided all the well-defined criteria are met, you could offer DRM-laden downloads of any copyrighted music (no matter who the copyright owners are)...you'd only just have to pay the standard "limited download" rates. But if you don't like those rates or can't meet the criteria, e.g. because you're not stupid and you know nobody wants DRM, you still have option A.
So again I have to wonder what the freak-out is about. If there is to be a compulsory option that applies to all copyright owners, it seems to me (again, IANAL) that it must be in the law, and it must have very well-defined terms and rates.
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I think you might be a little overly conspiratorialist regarding whether the NMPA is operating in the best interest of publishers collectively and especially with respect to the definitions of the various types of services, but I haven't had time to finalize my own analysis of the deal, so I will keep an open mind.
Wish I had more time to comment on your other points, but I have to get back to auditing royalties!
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This is a pretty good explanation of the different types of licenses. Limited downloads are already a thing that exists, apparently. I also skimmed the agreement above; it contains text relating to permanent downloads as well.
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Building Walls
The end result is that the illegal ones will flourish, we all get it for free, and they get no money what so ever.
You have to hand it to the lawyer who drafted this. What a way to keep themselves in litigation work for life. The only party who stands to profit from this.
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Entertainmentspeak
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A better idea...
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Re: A better idea...
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If you can't make a good movie, get a room
Actually, I spoke with an attorney, by phone, about a proposed patent office in Denver recently, and well, he's at a very esteemed law firm. He said "Go to West Hollywood to see what's going on". And I did, but only for a little bit-- I went to West Hollywood and frankly, it's a very homosexual neighborhood where anything goes.
It seems that if that's where all the entertainment legislation is being written, all the nation's attorneys of this type, convene to play a game of "hide the legislation"
I'm not making this up. Someone needs to go there and get a second opinion because I am pretty sure to live in that part of town, you have to want to have sexual relations with anything that moves. Just do a quick search on Craigslist in the personals section for the area called "WeHo".
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Re: If you can't make a good movie, get a room
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Re: Re: If you can't make a good movie, get a room
Seriously don't use that....
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If you can't make a good movie, get a room in WeHo
Actually, I spoke with an attorney, by phone, about a proposed patent office in Denver recently, and well, he's at a very esteemed law firm. He said "Go to West Hollywood to see what's going on". And I did, but only for a little bit-- I went to West Hollywood and frankly, it's a very homosexual neighborhood where anything goes.
It seems that if that's where all the entertainment legislation is being written, all the nation's attorneys of this type, convene to play a game of "hide the legislation"
I'm not making this up. Someone needs to go there and get a second opinion because I am pretty sure to live in that part of town, you have to want to have sexual relations with anything that moves. Just do a quick search on Craigslist in the personals section for the area called "WeHo".
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If you can't make a good movie, get a room in WeHo
Actually, I spoke with an attorney, by phone, about a proposed patent office in Denver recently, and well, he's at a very esteemed law firm. He said "Go to West Hollywood to see what's going on". And I did, but only for a little bit-- I went to West Hollywood and frankly, it's a very homosexual neighborhood where anything goes.
It seems that if that's where all the entertainment legislation is being written, all the nation's attorneys of this type, convene to play a game of "hide the legislation"
I'm not making this up. Someone needs to go there and get a second opinion because I am pretty sure to live in that part of town, you have to want to have sexual relations with anything that moves. Just do a quick search on Craigslist in the personals section for the area called "WeHo". It's very revealing to the type of people and culture in the area of the folks who write this type of legislation.
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It doesn't really matter
fact: the content industry will always push for more
fact: the distribution channel for media has merged with the communications platform
fact: homo sapiens have an intense NEED to share and communicate.
The content industry wants more money and that's just fine, but trying to have governments legislate things that run contrary to human nature tends to be a losing battle. Alcohol is legal because humans like to consume alcohol, and regardless of the health and safety issues, it is viewed as something that should be legal. Sharing is an even more powerful need that we have hardwired into us. We all saw what happened on 1/18 and we will probably see more activity like that as the content industry seeks to restrain our ability to use the technology available to us.
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Artists?
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Re: Artists?
If you want to find those who are ripping of artists through download sales, start with the major labels. God knows plenty of their artists have complained about their shady practices.
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Re: Re: Artists?
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