Recording Industry Willfully Misreads The Law In Order To Sue Ford & GM For Having Built-in CD Rippers
from the keep-scroungingn-for-loose-change dept
It's no secret that the legacy recording industry players are constantly searching for new ways to make money. Of course, they don't seem all that keen on actually searching for new business models to make money, but rather they tend to default to new ways to squeeze money out of others through legal changes or lawsuits. That's what happens when you have an industry dominated by lawyers, rather than innovators. It's why so many new music services end up getting sued. It's why ASCAP tried to declare that ringtones were a public performance (ditto for the 30 second previews of songs at iTunes). Basically, these industries just go searching under the couch cushions for spare change to sue for because that's how they operate.The latest such example is the AARC -- the Alliance of Artists and Recording Companies -- deciding to file a lawsuit demanding $2,500 for every car in which Ford and GM have installed CD devices that will automatically rip CDs into MP3s to store on a local hard drive. The AARC is a smaller and little known collection society. It was created solely to collect fees from the Audio Home Recording Act (AHRA), one of the many (many) laws that the RIAA foisted upon the world in fear over the rise of digital music. It was designed as something of a "compromise" between the RIAA and the computing and consumer electronics industry. The focus was supposedly to better enable personal, non-commercial home copies of music, while putting royalties on devices used to make serial (repeated) copies.
The problem is that the AHRA is basically a deadletter act, with little real standing in the world today, partly because the act itself killed the market for such devices. The RIAA had tried to use it in the late 1990s to ban the mp3 player (or, well, to tax them to death). But, thankfully, a court in RIAA v. Diamond rejected that interpretation of the law, making mp3 players perfectly legal (without the corresponding royalty tax). That ruling, which destroyed the RIAA's (wrong) interpretation of the law, also opened up the wonderful digital music world we have today, where you can store thousands of songs in your pocket. Without the RIAA v. Diamond ruling, it's unlikely that we'd ever have the iPod.
There are still a very small number of things that are supposedly covered by the AHRA, but AARC collects a tiny, tiny amount of money. The Copyright Office's data shows a total of $748,277.72 in 2013. That's down from previous years, but at it's very highest AARC collected $5.3 million, and most years it was closer to $2 million. Oh, and in case you're wondering, almost none of that money actually gets paid out. The last year that the Copyright Office has published details concerning these fees, 2010, it notes that AARC collected $1.75 million... and paid out just $7,894.84. Yes, you read that right. AARC collected nearly $2 million, but gave less than $8,000 to copyright holders (likely the major labels, who probably didn't give any of that money to actual artists). The previous year, it paid out a whopping $16,564.63.
However, suddenly AARC seems to think that these CD-to-mp3 devices violate the law, and the auto companies and the electronics firms that make the devices, Denso and Clarion, must pay. The AARC is pulling out all the stops to explain why the lawsuit makes sense, focusing on claims by GM (in its marketing material) that "the hard drive will not accept photos or other sorts of data" but just music. This is in part because of the Diamond ruling noted (correctly) that a general purpose hard drive doesn't apply. But the AARC appears to be totally ignoring other key parts of the ruling.
For example, the court focused on the fact that the AHRA was targeted towards devices that are making more copies of works, and not on attempts to make recordings for private, non-commercial use. Here's what the court said about Diamond's Rio mp3 player (SCMS is the DRM the AHRA required device manufacturers install -- the Rio didn't have it, because they noted you can't copy works off the device, so it wasn't needed):
the Rio does not permit such further copies to be made because it simply cannot download or transmit the files that it stores to any other device. Thus, the Rio without SCMS inherently allows less copying than SCMS permits.In other words, the court recognized that devices that are just recording for home and personal use (and not allowing further copies) fit nicely into the purpose of the act and aren't subject to the royalty rates. It seems likely that the same argument applies to Ford and GM in this case. The AARC coyly claims that "other manufacturers, importers and distributors of comparable music recorders pay the required royalties without controversy," but it doesn't name who actually pays or for what.
In fact, the Rio's operation is entirely consistent with the Act's main purpose - the facilitation of personal use. As the Senate Report explains, "[t]he purpose of [the Act] is to ensure the right of consumers to make analog or digital audio recordings of copyrighted music for their private, noncommercial use."... The Act does so through its home taping exemption, ... which "protects all noncommercial copying by consumers of digital and analog musical recordings," ... The Rio merely makes copies in order to render portable, or "space-shift," those files that already reside on a user's hard drive. Cf. Sony Corp. of America v. Universal City Studios, 464 U.S. 417, 455 (1984) (holding that "time-shifting" of copyrighted television shows with VCR's constitutes fair use under the Copyright Act, and thus is not an infringement). Such copying is paradigmatic noncommercial personal use entirely consistent with the purposes of the Act.
Of course, these days, even CD ripping is well on its way to the technological graveyard. If the AARC magically succeeds with this lawsuit, I would imagine it would receive a one-time payout (how much do you think artists will see?), followed by Ford and GM ditching CD rippers from their vehicles, and moving straight to built-in streaming setups via things like Pandora and Spotify. But, you know, these days, the legacy record labels are searching under every damn legal cushion, never once thinking that maybe not trying to demand cash, but rather earning it from willing buyers might make more sense.
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Filed Under: ahra, audio home recording act, cars, cd rippers, mp3 players, recording industry, royalties
Companies: aarc, clarion, denso, diamond, ford, gm, riaa
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NO. WAY.
Here's a better idea: empower the music makers and remove the labels completely from the picture.
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Sounds like a fair deal. If it leads to AARC death I'm all for it.
Also, let's hope the MAFIAA doesn't kill the streaming services before Ford and GM go for it. Or Comcast/Verizon don't throttle their connections to the point a 33600 modem is faster making streaming impossible. Actually, nevermind, let's go back to painting cave walls.
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The only way out of this is to starve the beast. Now it's true (as was pointed out yesterday) that it's a difficult task, but it's the only method that has the slightest chance of working. We might as well give it our best shot.
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Which is exactly why I don't use streaming services. It's too hard to maintain my boycott of RIAA-member music with them.
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I just load a USB flash drive with several hundred or more MP3's, most at 320 bps, and plug it into my car stereo. Even an 8 GB drive is enough for a coast-to-coast road trip. Simple.
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It doesn't mean what you think it does.
That just means that there are some annoying hipsters out there that go out of their way to make sure that their children can't relate to normal people.
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I occasionally buy them from independents like CDBABY. I call them backups.
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I really like my digital vinyl player, removes the little shhh background but thats the only manipulation it does, maybe it doesn't play them like back then but the covers make for great posters. on your walls.
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Even better
Or, even better, the inclusion of an SD card slot so that people can rip their own CDs onto a card (or copy selections from their digital-only collection onto it.) Personally, I'd much rather that than a CD reader or streaming service anyway.
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Re: Even better
That's what I have in my VW. It was a piece of cake.
1) Drag iTunes folder to SD card.
2) Insert SD card.
3) Listen to music. (With a fairly decent UI too.)
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Re: Even better
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Re: Even better
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Listening vs. paying
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Re: Listening vs. paying
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They made a lot of money for decades by reselling people the same content over and over. They sold an 8 track to those who owned a vinyl, then they sold a CD to those people, then a remastered CD, then possibly a Minidisc or DAT. But, as soon as people could rip a CD legally, that revenue stream dried up. If you rip an MP3 through a CD you already own or - god forbid - stream the track through Spotify, that's a lost sale to them. Even an iTunes sale isn't enough because you might dare omit a few tracks you don't actually like instead of buying the whole album again.
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Interestingly, I'd bet I still spend more on entertainment than most, because I go to movies in the theatre, go to concerts, and buy video games on PC and PS3.
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Way too much effort to find someone with a CD so you can copy it, as opposed to clicking like 2 links and just downloading it.
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Could I have a tiny, tiny amount of money please?
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Compare to the ACA
Maybe the AARC (and others) should be required to pay out 80% of their licensing fees to actual artists. Maybe the artists would actually get paid instead of the vast majority going to these 'licensing groups'. Let's see how they fight that when they constantly beat on the "think about the artists" drum.
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IOS 8 will apparently already include the ability to stream Spotify via CarPlay in the manufacturers that include it. No reason why those manufacturers can't add their own support or adopt Apple's solution.
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The solution here for citizens would seem to be
For digital audio recording devices, manufacturers and importers pay a 2% royalty on the device's transfer price, with a minimum royalty of $1 and a maximum of $8 ($12 for dual recorders) per device.
Thus declare yourself a maker of such devices, pay $8 and now you can put as much audio as you want on the 4 TB hard drive. When busted declare you'd paid the fee that covered the licensing.
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I think they're correct on this one
The gist of the AHRA, even in RIAA v Diamond, was that portable music players were exempt from the various requirements of the AHRA basically because they only copied music via ordinary, standalone computers.
From the opinion (and remember that many of these terms have special definitions in the law that are not the same as the ordinary definition, but which control):
If the device in the car is itself copying straight from a CD (unlike the Rio), and is not a general purpose device (like the computers that ripped music for the Rio), AHRA probably applies to it.
This is why, even though it would be quite easy, you don't really see basically single-purpose music players with recording functions
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Re: I think they're correct on this one
Any clearer yet?
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Re: Re: I think they're correct on this one
The statute doesn't actually care. 17 USC 1002:
I don't see anything in there about a device that merely doesn't allow copying to be made from it. If it's not SCMS, and not certified, it has to have the status information accurately sent, received, and acted upon, etc. Regardless of whether the device is otherwise more restrictive.
And if it's a qualifying device, the royalty has to be paid. 17 USC 1003:
Any other suggestions?
What you really need to do is to show that it isn't a digital audio recording device; that's what happened in the Diamond Rio case. But I don't think it'll work here.
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Re: Re: Re: I think they're correct on this one
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No, I know; but what that particular passage relates to was the argument that if computers and their hard drives are exempt from AHRA, that it defeats AHRA's purpose. The appellate judges found that in the case of the Rio, while AHRA did not apply, its purpose was not frustrated. That is, it was not an absurd result to find the Rio was legal.
The problem is that if AHRA does apply, compliance with part of the general idea (and not with the royalties provision, which is also at issue in this case) does not excuse non-compliance with the actual requirements of the statute.
As for the Wikipedia entry, surely you should know better than to cite that when you could cite the actual law. The blanket protection is at 17 USC 1008, but it only applies to copies made with AHRA-compliant devices, media, etc. This is why there had to be a fair use determination in the Rio decision, finding that space shifting could be non-infringing, because the protection in AHRA wasn't applicable. Here if you're saying the section 1008 protection applies, you're also having to concede that the plaintiffs are correct and that their action for violating sections 1002, and 1003 should succeed.
Here's the relevant language:
Note, btw, that it only protects against infringement actions, not actions to enforce the AHRA itself.
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