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Small Webcasters Sue RIAA

michael posted more than 10 years ago | from the even-writing-to-speakeasy's-ceo-gets-no-results dept.

Music 315

killthiskid writes "The Webcaster Alliance, a small group of 198 webcasters has sued the RIAA. CNET has the news, along with a growing number of other sites (google news). As many /.'ers know, in 2002 the Library of Congress decided on .07 cents per song (retroactive to '98). After that another bill was passed to protect smaller webcasters. Aparently, many webcasters are still not happy." Their complaint is online.

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315 comments

yup (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#6814778)

i like it

dupe, btw.

I sue you !! (-1, Offtopic)

SpanishInquisition (127269) | more than 10 years ago | (#6814784)

sucker!

Re:I sue you !! (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#6814801)

> I sue you!!

Let me be the first to welcome you to normal society!

RIAA: The 3vil ... (-1, Offtopic)

Chromodromic (668389) | more than 10 years ago | (#6814804)

... it's too much.

Oh shock and horror (-1, Troll)

tomstdenis (446163) | more than 10 years ago | (#6814805)

You have to pay people to use their licensed material. Nobody said a webcaster has to play RIAA music.

Is this just another "no shit?" story?

----
insert retort to troll here
----

And the PDF was slashdotted after one comment. so no I haven't RTFA.

Tom

Re:Oh shock and horror (2, Informative)

Student_Tech (66719) | more than 10 years ago | (#6814860)

Look at one of the articles off of Goolge News, it seems as if they don't like the $0.07/song/listener, and would like to have it set at 3-5% of the revenue that is generated.

Gabriel's organization would like to see the per performance royalties eliminated. Instead, a flat percentage of commercial Webcaster revenues, somewhere between 3 and 5 percent, would be a fair fee to pay, she said.

-Information Week Article [informationweek.com]

Re:Oh shock and horror (1)

Student_Tech (66719) | more than 10 years ago | (#6814914)

Ack, read that wrong, $0.0007/song/listener, dang people putting 0.07 cents and me misinterperting it.

Re:Oh shock and horror (0, Troll)

tomstdenis (446163) | more than 10 years ago | (#6814928)

Well too fucking bad. The RIAA owns the rights to the music. Stop playing RIAA music and you can then stop paying RIAA rates.

Oh my fucking god, I'm like a genius or something!

Tom

Re:Oh shock and horror (1)

yerricde (125198) | more than 10 years ago | (#6815049)

Stop playing RIAA music and you can then stop paying RIAA rates.

"Stop playing RIAA music"? What other music is out there? Many major record labels and music publishers are owned by the same companies. Even if an independent recording artist writes his own songs, how can a songwriter prove in court [slashdot.org] that the songs he writes are in fact original, that is, that they haven't already been written by somebody else [columbia.edu] ?

Re:Oh shock and horror (0)

Anonymous Coward | more than 10 years ago | (#6815112)

The RIAA owns the rights to the music.

Actually, they represent the owners of the rights to distribute the music. Lets not forget that they are merely the evil frontman for the greedy record labels...

Re:Oh shock and horror (4, Insightful)

Izago909 (637084) | more than 10 years ago | (#6815121)

Bullshit. Educate yourself before you start spouting nonsense. If that were true, why would stations like SomaFM.com that play independent and non-corporate music still be forced to pay the RIAA? They have permission from every artist that they play. Why should they have to pay the RIAA after they pay the artists? The RIAA doesn't even represent the music they play. They are just supposed to hand over the money and expect the RIAA to give ALL of it to the people that deserve it.
How about Bassdrive.com? They play noting but drum & bass. Not one single true electronic artist is signed to a major label that is represented by a major body, including the RIAA. Every one of their artists happy to get air time on a popular network, and those who get played and ask for money get it. Why should they have to pay the RIAA?

Everyone has to pay the RIAA because their lobbyists got a law passed that assumes ALL music is represented by the RIAA and that they have final say over who gets compensated, not the artist. What happens to the money when the RIAA can't find the rightful artist (most likely an independent)? Who gets it then?

Re:Oh shock and horror (2, Insightful)

tomstdenis (446163) | more than 10 years ago | (#6815177)

Well this is different. If you have to pay the RIAA regardless of what you play then even a percentage of profits is a stupid idea.

If this is truly the case then people should be [and probably are] contesting the validity of the law. Almost like levies on CD-Rs in canada. Personally I use CD-Rs for two purposes. Backups and pirating software. The levies go to music industry types though... what about software industries?

Tom

Re:Oh shock and horror (1)

focitrixilous P (690813) | more than 10 years ago | (#6815127)

Well considering most webcasts don't have ads, or anything to make money with besides cafepress tshirts, 3-5 percent is likely to be .07 cents a month. Even then they will complain, and no one will be happy.

Better world through litigation (5, Funny)

Angry White Guy (521337) | more than 10 years ago | (#6814815)

Keep the conglomerates and lawyers tied up forever. The rest of us can be free and happy.

No Chance (5, Insightful)

KrispyKringle (672903) | more than 10 years ago | (#6814827)

According to this article [atnewyork.com] , the group is actually closer to 400 members, but I'm inclined to trust CNet. Regardless, most are apparently one-man operations and the like; their chances of winning--let alone having the courts "block the major record labels from enforcing their otherwise legitimate intellectual property rights in sound recordings until the alleged violations are remedied" (according to the above atnewyork article)--are, I'd say, slim to none.

Re:No Chance (2, Funny)

jarrettwold2002 (601633) | more than 10 years ago | (#6815047)

You know with 400 people available do you think one of them might have run spellcheck?

"35. RIAA's members create or distribute 90% of all non-pirated sound recordings which are produced and sold in the United States. The Major Lables tend to focus on hits in broad-based genres such as Country or Pop ("Mainstream Content")."

Lables? If I were a judge I would be sooo impressed :)

trademark /. pessemism. (1)

Thinkit3 (671998) | more than 10 years ago | (#6815118)

Of course you want them to win, right? But you must offer the pessemistic prediction. You must alternate between cynicism and pessemism.

Excuse me for asking, but (5, Insightful)

Sphere1952 (231666) | more than 10 years ago | (#6814836)

how do you determine when you are listening to somone's intellectual property and when you are listening to someone's free speech?

Re:Excuse me for asking, but (4, Funny)

Lxy (80823) | more than 10 years ago | (#6814921)

Wait for the RIAA to mandate DRM for your brain. Then the confusion will be cleared up.

Re:Excuse me for asking, but (0)

Anonymous Coward | more than 10 years ago | (#6815088)

All your webcaster are belong to us?

Re:Excuse me for asking, but (5, Funny)

Frymaster (171343) | more than 10 years ago | (#6814944)

how do you determine when you are listening to somone's intellectual property and when you are listening to someone's free speech?

that free speech is free as in, uh, speech... not free as in beer. you can speak freely and charge for it. there is no mutual exclusivity. that'll be two dollars, please.

Re:Excuse me for asking, but (1)

CaptBubba (696284) | more than 10 years ago | (#6814949)

When they demand donations, it is free speech. When they demand payment, it is IP.

Re:Excuse me for asking, but (2, Funny)

gmag3 (121600) | more than 10 years ago | (#6815013)

It's the broadcaster's/webcaster's responsibility to determine this, not the listener's.

Re:Excuse me for asking, but (2, Insightful)

Sphere1952 (231666) | more than 10 years ago | (#6815199)

"...broadcaster's/webcaster's responsibility..."

Alright, but if I'm a small webcaster trying to promote free speech the entire burden is upon me and the people who want to be freely heard -- not upon those who want un-free speech. Since free speech generally doesn't have any money, Free speech is being priced out of the market in favor of people who can pay to do the copyright searches.

They were trying to pudsh them offline. (4, Insightful)

FesterDaFelcher (651853) | more than 10 years ago | (#6814837)

alleging that the trade association tried to push independent music stations offline. The way the law is currently, you have to pay if you are going to make music publically available. Now this law is insanely out of touch with the way people use media right now, and it needs to be changed, but unfortunately, the evil RIAA was just doing what it was supposed to do. It sucks, but its true.

Yah, that's gonna happen (0, Informative)

Sc00ter (99550) | more than 10 years ago | (#6814856)

Regardless of what you think about it the RIAA does own the rights to the songs and you're not legally entitled to play the songs to the general public without permission. If you don't like it find music from people that are not RIAA memebers and get the rights.

Re:Yah, that's gonna happen (5, Insightful)

Kazir (48851) | more than 10 years ago | (#6814885)

Correct me if I am wrong. But don't the music labels own the rights to the songs, not the RIAA? The RIAA just represents them.

Re:Yah, that's gonna happen (0)

Anonymous Coward | more than 10 years ago | (#6814972)

You are correct and your post should be modded HIGHER than the parent. The original poster is talking out of his ass.

Re:Yah, that's gonna happen (1, Insightful)

MrBlint (607257) | more than 10 years ago | (#6815150)

Actually the DMCA grants a compulsory license to broadcast. The issue is over how much it should cost.

Re:Yah, that's gonna happen (2, Informative)

Anonymous Coward | more than 10 years ago | (#6815043)

The grossly unfair aspect of the law is that radio stations don't pay a cent for playing songs over the air. The law is not about bringing in more revenue for RIAA members - it was obvious at the time that the result would be to eliminate small, hobby-type webcasting. I think the intention was much the same - to destroy an emerging competitor to commercial radio.

Re:Yah, that's gonna happen (4, Informative)

Dr. Zowie (109983) | more than 10 years ago | (#6815116)

Actualy, no, you are entitled to play the songs to the general public. The whole point of CARP is to mitigate the restrictions inherent in monopoly control. Remember, copyright is an artificial monopoly that is ostensibly intended to encourage creativity. The problem is that, perversely, copyright discourages dissemination of valuable ideas if the owner of those ideas loses interest in exploiting them, or perversely refuses to license them. The CARP is a kludge designed to fix that problem, by forcing content providers to license their content to anyone at a reasonable rate.

Correct Information (-1, Informative)

Jaguar777 (189036) | more than 10 years ago | (#6814866)

As many /.'ers know, in 2002 the Library of Congress decided on .07 cents per song (retroactive to '98).

According ot the legal document that was linked to.

In his July 2002 final rule, the Librarian of Congress found, among other things, that the fair market rate for licensing sound recordings was $0.0007 per performance.

So is it .07 or .0007?

Re:Correct Information (0)

Anonymous Coward | more than 10 years ago | (#6814916)

IIRC, 0.07 cents = $0.0007.

It's been a while since my last math class, however.

Re:Correct Information (0)

Anonymous Coward | more than 10 years ago | (#6814925)

So is it .07 or .0007?

They're both right, as they use different units. The .07 is in cents, whereas the .0007 is in dollars. They both come out the same.

Re:Correct Information (0)

Anonymous Coward | more than 10 years ago | (#6814931)

0.07 cents or 0.0007 dollars. There are 100 cents in a dollar, right ?

Re:Correct Information (1, Informative)

glgraca (105308) | more than 10 years ago | (#6814934)

Oops, 3 people who cant do maths with
moderation powers!

In my book .07 cents is 0.0007 dollars.

Ummm (0)

Anonymous Coward | more than 10 years ago | (#6814938)

.07 cents == $0.0007

Reading for comprehension is fun!

Re:Correct Information (0)

Anonymous Coward | more than 10 years ago | (#6814953)

He said .07 cents or 7 hundreths of a cent, or $0.0007 as the article said. They are one and the same.

+3 Informative? (1, Informative)

Surak (18578) | more than 10 years ago | (#6814954)

Informative? $0.0007 == 0.07 cents. D'oh!

Re:Correct Information (0, Redundant)

mal3 (59208) | more than 10 years ago | (#6814963)

I've always heard .07 *cents* per song, which would be the $.0007 number.

If that's the case I'm just not sure what they're bitching about. If you figure the average song is 3 minutes long, there are 1440 minutes in a day. So that equals around 480 soungs a day for a webcast. At $.0007 a song that's $.336 dollars a day. That doesn't seem unreasonable to me, a little low actualy.

Re:Correct Information (1)

J-B0nd (682712) | more than 10 years ago | (#6814987)

If I recall correctly, it was .07 cents per song, per listener, so you're at $0.336 per listener per day, which can add up very quickly with enough listeners.

Re:Correct Information (3, Informative)

cdrudge (68377) | more than 10 years ago | (#6815169)

Your right. $.336 per day per stream isn't that much, until you consider that they are streaming multiple streams. They could have several thousand streams going at once. Lets assume that are a very small shop and have 10 streams going. That is now $3.36 a day or $1226.40 a year. A larger shop doing 100 streams would pay $12,264 a year. 1000 streams would be $122,640 a year. Spinner.com does 22 million songs a week. That's $800,000 a year . Now they will have to pay those fees back to 1998, so you are going to have to multiply those figures by 5. Now do you see where the problem is?

Re:Correct Information (0)

Anonymous Coward | more than 10 years ago | (#6814966)

Both. 0.07 cents == $0.0007

Re:Correct Information (1)

Jaguar777 (189036) | more than 10 years ago | (#6814991)

Ok ok :)

I just read ".07 cents per song" as "seven cents per song" in my head.

At least give me some credit for reading the complaint before I posted :)

Moderators on crack... (0)

Anonymous Coward | more than 10 years ago | (#6815107)

This was modded from a high of +3 Informative dowun to -1 Redundant and another genius with mod points came by and rated it as Informative to raise it back to 0: Informative.

If you are going to use your mod points, take a quiet moment to READ THE FUCKING POST.

morons dispute saftIE in numbness theorIE (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#6814876)

lack of ability/positive intention is very dangerous to US.

soon, there'll be music on/in the air at all times. providing, of course, that unprecedented evile continues to be intervened upon.

fuddles.con is running linux now. no DOWt about that.

fauxking phonIE payper liesense stock markup FraUD execrable that they remain.

that's right, after the walking dead finish exterminating themselves, & sadly enough, some of us, it won't take long to clean up this cesspool of greed/fear execrable.

we're calling it the planet/population rescue program (formerly unknown as the oil for babies initiatve).

the Godless wons are helping by continuing to show where their hearts lie.

what's wrong with folks selling their kode? if it causes convenience, & interoperates with all the other kode on the planet, we say, no harm, no foul, so long as you fail to employ gangsterious/felonious practices to asphyxiate the 'competition'. sabotaging your free version of anything is a tad dastardly. if there's value added, without FUDging up the compatability, we'll pay. same with music. no more gouging dough though.

fortunately, mr stallman et AL, etcetera, is now offering comparable/superior software, to the payper liesense spy/bug wear feechurned models, in almost every circumstance. there'll be few, if any more softwar billyonerrors, as if there's a need for even won. tell 'em robbIE. you are won of the last wons whois soul DOWt, right? .asp for va lairIE's whoreabull pateNTdead PostBlock(tm) devise?, used against the truth/to protect robbIE's payper liesense stock markup bosses/corepirate nazi 'sponsors'. yuk.

back on task.

what might happen to US if unprecedented evile/the felonious georgewellian southern baptist freemason fuddite rain of error, fails to be intervened on?

you already know that too. stop pretending. it doesn't help/makes things worse.

they could burn up the the main processor. that would be the rapidly heating planet/population, in case you're still pretending not to notice.

of course, having to badtoll va lairIE's whoreabully infactdead, pateNTdead PostBlock(tm) devise, robbIE's ego, the walking dead, etc..., doesn't slow us down a bit.

that's right. those foulcurrs best get ready to see the light. the WANing daze of the phonIE greed/fear/ego based, thieving/murdering payper liesense hostage taking stock markup FraUD georgewellian fuddite execrable are #ed. talk about a wormIE cesspool of deception? eradicating yOUR domestic corepirate nazi terrorist/gangsters will be the new national pastime.

communications will improve, using whatever power sources are available.

you gnu/software folks are to be commended. we'd be nearly doomed by now (instead, we're opening yet another isp service) without y'all. the check's in the mail again.

meanwhile... for those yet to see the light.

don't come crying to us when there's only won channel/os left.

nothing has changed since the last phonIE ?pr? ?firm? generated 'news' brIEf. lots of good folks/innocents are being killed/mutilated daily by the walking dead. if anything the situations are continuing to deteriorate. you already know that.

the posterboys for grand larcenIE/deception would include any & all of the walking dead who peddle phonIE stock markup payper to millions of hardworking conservative folks, & then, after stealing/spending/disappearing the real dough, pretend that nothing ever happened. sound familiar robbIE? these fauxking corepirate nazi larcens, want us to pretend along with them, whilst they continue to squander yOUR "investmeNTs", on their soul DOWt craving for excess/ego gratification. yuk

no matter their ceaseless efforts to block the truth from you, the tasks (planet/population rescue) will be completed.

the lights are coming up now.

you can pretend all you want. our advise is to be as far away from the walking dead contingent as possible, when the big flash occurs. you wouldn't want to get any of that evile on you.

as to the free unlimited energy plan, as the lights come up, more&more folks will stop being misled into sucking up more&more of the infant killing barrolls of crudeness, & learn that it's more than ok to use newclear power generated by natural (hydro, solar, etc...) methods. of course more information about not wasting anything/behaving less frivolously is bound to show up, here&there.

cyphering how many babies it costs for a barroll of crudeness, we've decided to cut back, a lot, on wasteful things like giving monIE to felons, to help them destroy the planet/population.

no matter. the #1 task is planet/population rescue. the lights are coming up. we're in crisis mode. you can help.

the unlimited power (such as has never been seen before) is freely available to all, with the possible exception of the aforementioned walking dead.

consult with/trust in yOUR creator. more breathing. vote with yOUR wallet. seek others of non-aggressive intentions/behaviours. that's the spirit, moving you.

pay no heed/monIE to the greed/fear based walking dead.

each harmed innocent carries with it a bad toll. it will be repaid by you/us. the Godless felons will not be available to make reparations.

pay attention. that's definitely affordable, plus, collectively, you might develop skills which could prevent you from being misled any further by phonIE ?pr? ?firm? generated misinformation.

good work so far. there's still much to be done. see you there. tell 'em robbIE.

as has been noted before, lookout bullow.

Re:morons dispute saftIE in numbness theorIE (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#6814907)

You should register for an account at SomethingAwful [somethingawful.com] . Your debate skills would be highly regarded there.

Re:morons dispute saftIE in numbness theorIE (0)

Anonymous Coward | more than 10 years ago | (#6815108)

We don't want him.

Bill'em (1)

jabbadabbadoo (599681) | more than 10 years ago | (#6814884)

"The bill, which still must pass the Senate before Webcasters will see any tangible effect, marks a surprise political victory for a loose Internet community that had never previously launched any concerted political action. "

The bill should be passed TO the senate... pun intented.

Wow (5, Funny)

Mephie (582671) | more than 10 years ago | (#6814891)

Congress passed new copyright rules in 1998 that created a new royalty structure, unknown in traditional radio, under which Internet radio stations would pay record labels and artists a fee for playing their music online. Lawmakers didn't specify how much this fee would be, kicking off years of battles.

Now that's quality legislation.

For those that think PDF and adobe sucks.. (5, Informative)

Anonymous Coward | more than 10 years ago | (#6814895)


COMPLAINT

Perry J. Narancic, SBN 206820 LEXANALYTICA, P. C.
160 West Santa Clara Street Suite 1100
San Jose, CA 95113 Tel: 650-814-7688
Fax: 650-618-2700
Attorneys for Plaintiff WEBCASTER ALLIANCE, INC.

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA

Webcaster Alliance, Inc.
Plaintiff,
v.
Recording Industry Association of America, Inc., Universal Music Group, Inc., Warner Music Group,
Inc., Bertelsmann Music Group, Inc., Sony Music Entertainment, Inc., Capitol-EMI Music, Inc.

Defendants.

) )
) )
) )
) )
) )

Case No.:
COMPLAINT
(1) Unlawful restraint of trade in the market for domestically copyrighted
sound recordings (Sherman Act § 1)
(2) Illegal maintenance of monopoly in the market for domestically copyrighted
sound recordings (Sherman Act § 2)
Demand for Jury Trial

Plaintiff alleges as follows:
I. NATURE OF PROCEEDINGS
1. This is an action brought under the antitrust laws of the United States to restrain

anticompetitive conduct by the Defendants which threatens to injure Plaintiff and its members as
a result of Defendants' exclusionary conduct in the markets for domestically copyrighted sound
recordings and Internet distribution of such sound recordings.
2. Plaintiff is a trade association whose members are engaged in the business of
Internet radio, also known as webcasting. Webcasting is the Internet equivalent of terrestrial radio 1

2 COMPLAINT

whereby digital data is transmitted in real-time, without downloading any physical files. But
unlike the broadcasting of signals in traditional radio, Internet radio involves the transmission of
streams of data to an individual listener.
3. Internet radio is a vital form of media that allows ordinary individuals to transmit
ideas, music, opinions and other content to an international audience. Like traditional terrestrial
radio, Internet radio is an important medium that allows for the free expression of ideas, news and
opinion. However, the commercial success of Internet radio as a viable line of commerce is
dependent on securing access to suitable content, which is subject to the intellectual property
rights of its owners.
4. To allow for the growth of this medium, Congress enacted the Digital Millennium
Copyright Act of 1998 (" DMCA") to provide certain non-subscription Internet radio stations
with a compulsory license to perform copyrighted sound recordings. Under the DMCA, the
royalty rates for such compulsory licenses can be established by either a voluntary agreement, or
failing such voluntary agreement, the Copyright Office may initiate a Copyright Arbitration
Royalty Panel (" CARP") in order to establish such rates.
5. A CARP proceeding commenced in April 2001 to establish royalty rates for Internet
radio for the period October 28, 1998 - December 31, 2002 (the "CARP")
6. The Recording Industry Association of America, Inc (" RIAA"), a trade association
controlled by the five major labels who account for over 80% of all domestically copyrighted
content produced and distributed in the United States (the "Major Labels"), acted as a negotiating
agent on behalf of its members in the CARP proceedings.
7. The CARP submitted its report to the Librarian of Congress on February 20, 2002,
which report included certain recommendations as the appropriate webcasting royalty rates. (the
"CARP Rates").
8. However the Librarian of Congress rejected, in part, the CARP report, and the
Librarian of Congress set the rates in a final order that was announced on June 20, 2002, and
which was published on July 8, 2002 (the "LOC Rates") 2

3 COMPLAINT

9. The LOC Rates were primarily based on the royalty rates that were agreed to in a
licensing agreement between Yahoo, Inc., the second largest commercial webcaster in the world,
and RIAA (the "Yahoo Agreement"). In his July 2002 final rule, the Librarian of Congress
found, among other things, that the fair market rate for licensing sound recordings was $0.0007
per performance.
10. However, the LOC Rates generated a large outpouring of concern by Internet radio
stations in the United States, especially small commercial Internet radio stations that did not
participate in the CARP because of the prohibitively high cost of participating in the proceedings.
Plaintiff was formed in October 2002 for the reason of objecting to the LOC Rates, and
organizing the voice of those small Internet radio stations that were excluded from the CARP
proceedings.
11. Many webcasters condemned the LOC Rates as unreasonably high, and further
complained that they did not represent the fair market value for the license rights in question. In
particular, many small commercial Internet radio stations complained that the Yahoo rates (which
were the principal basis of the LOC Rates) were artificially high.
12. Based on the LOC Rates, small webcasters faced immediate extinction because the
back-royalties from the period commencing October 1998 were catastrophically high.
13. Congress enacted the Small Webcaster Settlement Act of 2002 (" SWSA") with the
purpose of providing relief to small webcasters from the LOC Rates. SWSA amended certain
provisions of the DMCA relating to the compulsory licenses for small webcasters. Among other
things, SWSA recognized SoundExchange, an unincorporated division of RIAA which is wholly
controlled by RIAA, to enter into agreements on behalf of all copyright owners and performers to
set rates, terms and conditions for small webcasters operating under DMCA statutory licenses.
14. Pursuant to SWSA, SoundExchange entered into a licensing agreement with a
private trade association called Voice of Webcasters (" VOW"), which agreement was published
in the Federal Register on December 24, 2002 (the "VOW Agreement").
15. Pursuant to section 4 of SWSA, the licensing option set forth in the VOW 3

4 COMPLAINT

Agreement was made available to any eligible small commercial webcaster. Thus, a private
negotiation between RIAA and VOW became, by virtue of SWSA, an industry-wide deal for all
small webcasters.
16. The rates and terms set forth in the VOW Agreement included, among other things,
a royalty rate based on a percentage of revenue, as well as onerous record-keeping requirements.
However, the rates in the VOW Agreement were not only unreasonably high, but actually put
many small webcasters in worse position than under the LOC Rates by among other things,
increasing by four-fold the minimum fee found to be reasonable by the CARP.
17. For the reasons set forth in this Complaint, Plaintiff alleges that VOW and the Major
Labels (through RIAA) entered into unlawful agreements (i. e. Yahoo Agreement and the VOW
Agreement) which had the intent and effect of restraining competition in the market for
domestically recorded sound recordings and in the market for Internet distribution for such sound
recordings
18. Faced with exclusionary licensing rates under both the LOC Rates and VOW
Agreement, Plaintiff's members are faced with certain and imminent extinction. None of
Plaintiff's members are in compliance with either licensing regime because the available rates
and terms are exclusionary. To its knowledge, all of Plaintiff's members do pay copyright
royalties in respect of musical works to BMI, ASCAP and SESAC, and wish to enter into fair and
reasonable licensing arrangements with the copyright owners.

II. JURISDICTION, VENUE AND COMMERCE
19. This Court has jurisdiction over this matter pursuant to Section 4 of the Sherman

Act, 15 U. S. C. § 4 and 28 U. S. C. §§ 1331, 1337.
20. Venue is proper in this District under Section 12 of the Clayton Act, 15 U. S. C. § 22,
and under 28 U. S. C. § 1391, because all the Defendants transact business and are found in this
District.
21. The Major Labels distribute sound recordings throughout the United States, and
across state and international borders. The activities of the Major Labels substantially affect 4

5 COMPLAINT

interstate and foreign commerce.
III. THE PARTIES
22. Plaintiff Webcaster Alliance, Inc. is a non-profit corporation organized under the

laws of the state of Nevada.
23. Defendant RIAA is a corporation organized under the laws of the state of New York.
24. Defendant Universal Music Group, Inc. is a corporation organized under the laws of
the state of California.
25. Defendant Warner Music Group, Inc. is a corporation organized under the laws of
the state of Delaware.
26. Defendant Bertelsmann Music Group, Inc. is a corporation organized under the laws
of the state of Delaware.
27. Defendant Sony Music Entertainment, Inc. is a corporation organized under the laws
of the state of Delaware.
28. Defendant Capitol-EMI Music, Inc. is a corporation organized under the laws of the
state of Delaware.

IV. THE RELEVANT MARKETS
29. There are two relevant product markets: the market for domestically copyrighted

sound recordings in the United States (the "Sound Recordings Market"), and the United States
market for commercial webcasting distribution of domestically copyrighted sound recordings (the
"Webcasting Market").

A. THE SOUND RECORDINGS MARKET
30. Music in the United States is created in an economic system that, for the most part,

bifurcates creativity, on the one hand, and commercialization of such creativity on the other. This
bifurcation is reflected in Section 102 of the Copyright Act, which includes "musical works" and
"sound recordings" as separate categories of eligible copyright protection. "Musical works"
refers to the notes and lyrics of a song, while "sound recordings" result from the fixation of 5

6 COMPLAINT

musical, spoken or other sounds in a tangible medium.
31. Musical artists typically own the copyright underlying the musical works they
create. These artists typically have contractual arrangements with one or more performing rights
organization (" PRO"), such as Broadcaster Music, Inc, (" BMI"), American Society of Composers
and Publishers (" ASCAP") and SESAC, Inc. These PROs, in turn, offer blanket licenses to users,
such as radio stations.
32. A given musical work can be the subject of numerous sound recordings by different
artists. The copyright in each sound recording is typically owned by a record label, which
typically produces, markets and distributes the recording. Under the Copyright Act, agents
designated to distribute royalties distribute the collected royalties to both sound recording and
musical work copyright owners.
33. Sound recordings which are either created or distributed in the United States
accounts for approximately $14 billion in annual revenues.
34. The Sound Recordings Market is comprised of a number of musical genres, such as
Country, Classical, Rock, Pop, Hip-Hop and Alternative. Record labels engage in the business of
producing, marketing and distributing these sound recordings.
35. RIAA's members create or distribute 90% of all non-pirated sound recordings which
are produced and sold in the United States. The Major Lables tend to focus on hits in broad-based
genres such as Country or Pop (" Mainstream Content").
36. In addition to Mainstream Content, independent artists create music that competes
with Mainstream Content. Independent artists are those who either (a) are not signed with a label
and self-produce and distribute their music, or (b) are signed with a small record label.
37. The content created by independent artists and independent labels (" Independent
Content") has a financial model which differs from that of Mainstream Content. Whereas
Mainstream Content typically involves large production, marketing and distribution investments,
return on investment can only be realized with large sales volumes. By contrast, Independent
Content typically involves a lower cost structure that enables a lower volume of sales. In other 6

7 COMPLAINT

words, the break-even point for Mainstream Content is typically much higher than for
Independent Content. As a result, the lower cost to produce and distribute Independent Content
allows artists not signed to an RIAA label to produce and distribute a more diverse variety of
content that increases consumer choice.
38. Although Independent Content has traditionally had lower cost structures, it
competes with Mainstream Content for listenership and consumer dollars. Today, approximately
10% of the Sound Recordings Market is comprised of Independent Content, and this figure is
growing at the expense of Mainstream Content.

B. THE WEBCASTING MARKET
39. Until the advent of the Internet, the Major Labels had a near-exclusive hold on

distribution and marketing channels to consumers, such as radio station play, shelf space in major
retail outlets, tour bookings, promotions and music videos.
40. The Internet allows the owners of Mainstream Content and Independent Content
alike to reach consumers directly in a highly targeted manner. However the relative advantage of
the Internet is greater for owners of Independent Content, because Independent Artists can now
disintermediate the Major Labels and circumvent the essential marketing and distribution
channels previously controlled by the Majors Labels. As a result, the Internet has made
Independent Content commercially viable on a large scale.
41. The Internet radio Market today is comprised of approximately 5,000 commercial
enterprises, most of which are small stations that include a mixed format of Mainstream and
Independent Material. These webcasting businesses are an essential distribution channel for
Independent Content.

V. ANTICOMPETITIVE CONDUCT
A. THE DEFENDANTS' CONSPIRED TO ESTABLISH AN EXCLUSIONARY ROYALTY RATE IN THE YAHOO AGREEMENT.

42. The CARP primarily based its recommendations for webcasting rates and terms on 7

8 COMPLAINT

those set forth in the Yahoo Agreement. However, it made a finding of fact that RIAA had
artificially inflated many of rates in the Internet radio license agreements it entered into before the
April 2001, including the Yahoo Agreement, in order to establish a "benchmark" for an eventual
CARP proceeding. In so finding, the Panel found that RIAA only entered into negotiations with
those entities that were willing to pay high rates (even with unstable companies) and that in so
doing "RIAA created a virtually uniform precedent with rates above those that most buyers would
be willing to pay".
43. For the reasons set forth in the foregoing paragraph, the CARP did not consider the
rates in all but one of the early agreements as establishing a fair market rate. Instead, the CARP
relied on the Yahoo Agreement as the basis for setting royalty rates, based on the rationale that
Yahoo was a business with "resources, sophistication and market power comparable to that of the
RIAA" and that the resulting agreement reflected a "truly-arms-length bargaining process on a
level playing field between two major players of comparable skill, size and economic power".
44. However, following release of the CARP report in February 2002, a high-ranking
official of Yahoo testified before the United States Congress that rates in the Yahoo Agreement
were "excessive":

The fees ultimately set by the CARP in its recent report were considerably higher than any fair market outcome or any reasonable construction of the economics of the
Yahoo-RIAA Agreement. The Panel did not appropriately address the unique facts and circumstances surrounding the Yahoo/ RIAA Agreement, yet the Panel explicitly
used certain terms of that Agreement as a benchmark for industry rate-setting. The result is that a single specific agreement based upon the unique situation of an
individual company whose business model was atypical of Internet Internet radio stations in general, has been misapplied to set excessive rates for an entire industry.
http:// www. house. gov/ judiciary/ mandelbrot061302. htm

45. RIAA and the Major Labels either knew or should have known that the Yahoo
Agreement would establish a "benchmark" for the CARP.
46. It was not only the magnitude of the rates, but also the royalty formula in the Yahoo
Agreement that served to exclude small internet radio stations. The Yahoo Agreement was based
on a per performance fee, which is a formula that operates to the distinct disadvantage of small 8

9 COMPLAINT

internet radio stations.
47. Despite the excessive benchmark, RIAA vigorously advocated for the adoption of
the rates of the Yahoo Agreement before the CARP Rate and LOC Rate proceedings.
48. Yahoo declined to participate in the CARP, and Plaintiff does not know if Yahoo
made its own view of the "excessive" rates known to any interested party during the CARP
proceeding.

B. THE DEFENDANTS CONSPIRED TO ESTABLISH AN EXCLUSIONARY ROYALTY RATE UNDER THE VOW AGREEMENT.
49. Following the publication of the LOC Rates in July 2002, many small webcasters
raised objections to the confiscatory rates set forth therein. Beginning in July 2002, one group of
small webcasters who belonged to a trade association known as Voice of Webcasters attempted to
negotiate a separate, private license agreement with RIAA.
50. VOW asked the law firm of Shaw Pittman LLP to represent the group as legal
counsel. Despite potential conflicts between the individual members of VOW, Shaw Pitman
agreed to undertake the representation and sought a $1000 retainer from each member of VOW.
51. VOW representatives attended a meeting with the RIAA at RIAA offices in
Washington, D. C. in July 2002. At that meeting, the VOW representatives were authorized by
the VOW members to commence negotiations at 3% of webcasting revenues, and to settle on a
rate up to 5-6% of webcasting revenues. These figures were based on the total royalty rates
payable to the three PROs in respect of licenses for musical works.
52. VOW's July 2002 meeting with RIAA ended with RIAA holding firm on a royalty
rate of 10%-12%. Throughout the summer of 2002, RIAA repeatedly added additional onerous
terms that were not part of the initial July 2002 negotiations. Finally, in view of what appeared to
be bad-faith negotiation by the RIAA, certain VOW members decided to leave the negotiation
process, and did so.
53. But one group of VOW members persisted in negotiating a licensing deal, that
ultimately was more favorable to RIAA than RIAA's original proposal in July 2002. This group 9

10 COMPLAINT

consisted of Radioio, Digitally Imported, 3Wk, Classical Music Detroit and Ultimate 80's (the
"VOW Supporters").
54. Four our of the 5 VOW Supporters entered into an agreement with RIAA and the
Major Labels, which ultimately became SWSA and the VOW Agreement. The VOW Supporters
were motivated to enter into this agreement by a desire to reduce back royalty liabilities for the
period 1998-2002 that would otherwise be due under the CARP Rates, which were due in full on
October 20, 2002.
55. In the case of Radioio, its back royalties under CARP rates were approximately
$100,000 for each year of webcasting, which were reduced to approximately $13,000 per year.
56. RIAA and the Labels were acutely aware that certain VOW members faced
significant back royalties under the LOC Rates and that these members would be effectively out
of business if such royalties became due on October 20, 2002. Using such negotiating leverage to
its maximum effect, RIAA and the Labels coerced certain VOW members to support a small
webcasting agreement that would be applied to all small webcasters under SWSA.
57. Although the savings in back royalties under VOW Agreement were substantial for
the VOW Supporters, these savings achieved by mortgaging the future for all small webcasters.
Since the publication of the VOW Agreement, RIAA has refused to negotiate with Plaintiff or
any of its members.
58. In so becoming parties to the VOW Agreement, the VOW Supporters became
willing co-conspirators with RIAA and the Labels in establishing an anticompetitive agreement
whose purpose and effect was to unlawfully exclude competition in the Webcasting Market.
59. One consequences of the VOW Agreement has been to erect a significant barrier to
entry in the Webcasting Market, that are not based on legitimate justifications. One such
barrier, m for instance, is the four-fold increase in minimum fees in the VOW Agreement, over the
minimum fees set forth in the CARP and LOC Rates. 10

11 COMPLAINT

VI. CLAIMS FOR RELIEF
FIRST CLAIM FOR RELIEF

Conspiracy to Restrain Trade in the Market for Sound Recordings In Violation of Section 1 of the Sherman Act

60. Plaintiff incorporates the allegations of paragraphs 1 through 59 above.
61. The Defendants' conduct in securing webcasting license rates (in the CARP
Proceedings and the SWSA negotiations) based on artificially inflated rates in the Yahoo
Agreement had the purpose and effect of eliminating small webcasters , which in turn, eliminates
the principal distribution channel for Independent Content.
62. As a result of the decline in the total number of webcasters, and royalty rate
arrangements which are designed to keep small webcasters insubstantially small, the Defendants
have caused injury to Plaintiff's members which is integral to the antitrust injury in the Sound
Recordings Market.
63. As a result of Defendant's unlawful conduct, Plaintiff's members are in a position of
threatened loss or damages because they are not in compliance with any webcasting licensing
regime, and are exposed to legal action by RIAA and the Major Labels for copyright
infringement.

THIRD CLAIM FOR RELIEF
Illegal Maintenance of Monopoly in the Market for Sound Recordings in Violation of Section 2 of the Sherman Act

64. Plaintiff incorporates the allegations of paragraphs 1 - 63 above.
65. As a result of the Defendant's conduct in choking off the only viable distribution
channel of Independent Music, Defendants have unlawfully maintained a shared monopoly in the
Sound Recordings Market.

VII. PRAYER FOR RELIEF
WHEREFORE, PLAINTIFF PARYS FOR RELIEF AS FOLLOWS:
1. That the Court adjudge and decree as follows: 11

12 COMPLAINT

a. That Defendant's conduct in negotiating the Yahoo Agreement violated
Sections 1 and 2 of the Sherman Act, 15 U. S. C. §§ 1 and 2;
b. That the Defendant's conduct during the CARP proceedings relating to the
setting of royalty rates, and their representations about the Yahoo Agreement in particular,
violated Sections 1 and 2 of the Sherman Act, 15 U. S. C. §§ 1 and 2;
c. That the Defendant's conduct in negotiating the VOW Agreement violated
Sections 1 and 2 of the Sherman Act, 15 U. S. C. §§ 1 and 2.
2. That the Major Labels, and all persons acting on their behalf or under their direction
or control, and all successors thereto, be preliminarily and permanently enjoined from enforcing
their otherwise legitimate intellectual property rights in sound recordings against any small
webcaster until the violations alleged in this Complaint are remedied.
3. That the Court enter such other preliminary and permanent relief as is necessary and
appropriate to restore competitive conditions in the markets affected by Defendants' unlawful
conduct.
4. That the Court enter such additional relief as it may find just and proper.
5. That the Plaintiff recover its costs of this suit, including its attorney's fees, as
provided by law. 12

13 COMPLAINT

JURY DEMAND
Plaintiff demands trial by jury pursuant to Rule 38( b) of the Federal Rules of Civil
Procedure.

DATED: August 27, 2003 For the Plaintiff WEBCASTER ALLIANCE, INC.

Perry J. Narancic LEXANALYTICA, P. C.
160 W. Santa Clara Street Suite 1100
San Jose, CA 95113 Tel: (408) 286-2506
Fax: (650) 618-2700

Wait, wait, wait... (2, Insightful)

ArmenTanzarian (210418) | more than 10 years ago | (#6814899)

Internet radio stations make money!?! Seriously though, if you make money off other people's stuff, you should pay them money. A percentage of these tiny station's meagre profits have to be a pittance, to be paid in twenty installments of one-twentyith of a pittance.

Re:Wait, wait, wait... (4, Insightful)

arth1 (260657) | more than 10 years ago | (#6815235)

The problem is that unlike normal broadcast radio, where the radio station pays per performance, with internet radio, RIAA sees that there's one stream to each user, and wants payment per performance PER USER.
With 50,000 people listening to the same MusicMatch radio song, that's suddenly a LOT of money.

To make it even worse, what happens when a user doesn't like a song and switches channels? Pay twice! A radio station doesn't have to pay extra if a user skips to a different channel. But for internet radio, there's a payment for the song you listened to before, and the one you're listening to now.

What's apparent here is GREED -- RIAA isn't content with getting a similar amount as they do from broadcast radio stations, but want additional levy "because they can". The justice system in this country, headed by the Senate and Congress, is more corrupt than any banana republic official, and will gladly give big business whatever they want, as long as they get their support in return.
Don't expect any fairness here. The only concern is how much can small businesses be bled without dying.

Regards,
--
*Art

maybe i'm missing something about the rate (3, Insightful)

Anonymous Coward | more than 10 years ago | (#6814903)

but .07 cents doesn't seem that high. thats not 7 cents, its $.0007.

one month is 720 hours, times 60 minutes, divided by 4 minutes/song, is about 10,000 songs a month. multiply this through, and thats about $7 a month to operate an internet radio station.

surely without multicast, the bandwith alone costs much more than this?

Re:maybe i'm missing something about the rate (5, Insightful)

Sc00ter (99550) | more than 10 years ago | (#6814947)

Except that it's per connection.. so if you have 100 people listening you're up to $700/month. Or so I understand.

Re:maybe i'm missing something about the rate (0)

Anonymous Coward | more than 10 years ago | (#6815020)

Yes, it's much, much higher than what traditional broadcasters pay. It's unfair, illegal, immoral, unethical, fattening, and just plain wrong. But you'd expect that since the big broadcasters (ClearChannel) and the RIAA are asshole brothers.

Re:maybe i'm missing something about the rate (1)

kfg (145172) | more than 10 years ago | (#6814951)

Yes, what you are missing is that that is to be charged per listener, as in a live performance, rather than per play, as in radio.

KFG

Re:maybe i'm missing something about the rate (1)

henele (574362) | more than 10 years ago | (#6815058)

surely without multicast, the bandwith alone costs much more than this?

FYI. using a reliable [streamguys.com] streaming/bandwidth company, 128kbps per user per month comes in at $4...

Quick note for those who don't read the articles.. (5, Insightful)

Rahga (13479) | more than 10 years ago | (#6814905)

I didn't read the articles either, but this had to be cleared up for those who don't know the situation....

The RIAA, as an organization, managed to move themselves into a position where they are the sole entity authorized to collect and distribute the performance fees for music streaming. I am not aware of any group or comitee that oversees the RIAA in this activity, and being well aware of the unethical-when-they-can-get-away-with-it actions of their members, I think that it would not surprise anyone if the RIAA decided that smaller non-member music companies and performers were completely ignored when it comes time to pay out the fees RIAA colected on their behalf.

Good for them (5, Insightful)

JayBlalock (635935) | more than 10 years ago | (#6814927)

The way I see it, this issue is simple. There is no reason at all that webcasters should be forced to pay more to play songs than broadcast radio. We all know how much radio pays the RIAA. (hint: less than nothing) But that's because the industry can control the radio biz through payola. Webcasters are distributed and beyond control, and THAT'S why the RIAA's trying to force them to pay massive fines which radio doesn't. The only reason this is even an issue is the insistance of our government that anything Online has to be treated like it's a completely different entity than its offline counterpart. There's otherwise no excuse to make the webcasters pay, while simultaneously paying OUT to radio stations. It IS monopolistic behavior, and very possibly illegal - as hopefully the courts will decide.

Re:Good for them (3, Informative)

Rahga (13479) | more than 10 years ago | (#6815012)

Ever hear of ASCAP and BMI, or SESAC? You are right, radio doesn't have to pay the RIAA... instead they get to pay those other performance rights organizations, and trust me, they do get paid. The songwriters for everything from "Louie Louie" to "Baby Got Back" are going to continue to get royalties paid to them for quite some time....

The only difference in web streaming is that the RIAA moved themselves into a positions where webcasters must answer to the RIAA... ASCAP and others do have online licesnsing and so on, but that's not the same thing that RIAA got in on.

Re:Good for them (3, Informative)

thumbtack (445103) | more than 10 years ago | (#6815242)

Webcasters pay for performance royalties, terrestial radio doesn't.

Webcasters have to pay the performance royalty based on the number of listeners, Terrestial radio doesn't pay performance royalites, period.

Both have to have ASCAP, BMI, SESAC licensing.

As an example when you hear Britneys Pears on the radio while driving, the songwriter gets paid (about 8.5 cents as I recall) no matter how many listeners are tuned in. When Britneys Pears is played on a webcaster, the song writer still gets theirs, but in addition Britney and her label get a royalty based on the number of listeners..Hence if you can afford the equipment, its cheaper to broadcast rather than webcast. (at least licensing wise)

Re:Good for them (1)

JayBlalock (635935) | more than 10 years ago | (#6815268)

Ok, but there is the theoretical way the system works, and the REALITY of how the system works. And while broadcast stations may technically be paying fees, in reality they aren't - they're more than made up for by what's being paid to them. Which is part of the reason that this is an anti-trust issue - the various recording groups have tilted the scales so far in favor of broadcast radio that, should the webcasting fees ever become cemented, it will destroy the industry completely.

Great.... (-1, Troll)

Anonymous Coward | more than 10 years ago | (#6814940)

now take a copy of this story and fax it to Slashdot's main page last night, when it was news.

Terrestrial Radio (1)

ekephart (256467) | more than 10 years ago | (#6814955)

Terrestrial Radio broadcasters would probably be pretty upset if they had to pay 0.07 cents for every listener listening to each given song through out the day.

Michael (-1, Offtopic)

LittleLebowskiUrbanA (619114) | more than 10 years ago | (#6814956)

OK, what's your problem with Speakeasy since you're making the front page of Slashdot your personal complaint forum.

Re:Michael (1, Funny)

Anonymous Coward | more than 10 years ago | (#6815109)

Guess where the Offtopic mods are coming from. Hint, the name starts with M and ends with ichael.

Re:Michael (0)

Anonymous Coward | more than 10 years ago | (#6815158)

Michael: what a pathetic little turd. I wouldn't expect any more from slashdot.

Re:Michael (2, Insightful)

Dot.Com.CEO (624226) | more than 10 years ago | (#6815135)

How the fuck is this offtopic then? If Mikey is content to force upon everyone his trivial problems of installing an ADSL line on every post posted on the front page in the past hour, why the hell not comment it?

Be professional (4, Insightful)

LittleLebowskiUrbanA (619114) | more than 10 years ago | (#6815233)

What gets me is that subscribers are PAYING for his little comments about Speakeasy. Christ, take it up w/ Speakeasy, Michael. Try acting professional for once. Leave Slashdot out of it.

Re:Be professional (1)

Dot.Com.CEO (624226) | more than 10 years ago | (#6815256)

Well, he DID try to contact the CEO.

What a pathetic little turd.

MOD PARENT UP (0)

Anonymous Coward | more than 10 years ago | (#6815269)

I just watched this post get hijacked.

It was at +2, Offtopic. Meaning tons of positive Karma.

Then Michael came in and "ajusted it."

MOD PARENT UP (Score:?)
by Anonymous Coward on Wednesday August 27, @08:00PM

This is at 12:37 EST (-5:00ZLU)

I have NEVER EVER seen a score ? before.

Poor Michael's feelings must of gotten hurt. Just shut up, Michael. You're like the plague, only not as cool, because nobody really fears you. You just make them sick.

I am happy that people are standing up against the rediculous crap that gets posted here, ESPECIALLY since some people pay for it.

Too much money.. (5, Interesting)

BrookHarty (9119) | more than 10 years ago | (#6814957)

While 7% of revenue or 10% of expenses (whichever is greater) for the last 4 years on a shoestring budget would put alot of small mom/pop/kid radio stations out of business.

Funny how Record industries will pay to get thier music played on FM Radio, but on the net, they will just start their own partially owned net Radio stations and crunch the little guys.

So, wheres the good free (non-riaa) Indie radio stations? With all the talk of "F*CK" the RIAA, wheres the alternative Garage/Indie/etc radio? I listen to Techno, and the best streams are UK Based. Wheres the alternatives?

Techno sucks (-1, Flamebait)

Anonymous Coward | more than 10 years ago | (#6814981)

And deserves to overdose on ecstacy and glowsticks.

Re:Techno sucks (1)

recursiv (324497) | more than 10 years ago | (#6815249)

where'd you get that? eminem?

you know, there are styles of electronic music other than rave.

*sigh* not that you care.

Re:Too much money.. (0)

Anonymous Coward | more than 10 years ago | (#6815042)

if they are UK based who cares ? the RIAA's laws dont extend there, the PRS on the other hand do

Re:Too much money.. (1)

nege (263655) | more than 10 years ago | (#6815217)

I agree, where are they...I dont know. Many of my favorites went down when the fees started...I hate the RIAA. I will continue to pirate my music because we are at a complete impass. I refuse to work with them, and they refuse to work with me.

Maybe I'm not seeing something here but.. (5, Insightful)

Channard (693317) | more than 10 years ago | (#6814971)

I mean, sorry to be un-idealistic here, but web-broadcasters thinking they could play commercial music without paying for it was naive at best. Let's face it, we're living in a capitalist society here and the free and easy image of the internet was never going to last .

If said web broadcasters really do object, the best way to hurt the RIAA is by not using their music.-There are plenty of bands out their on the web whose music could likely be picked up relatively cheaply, and denying the RIAA future profits.

What you are not seeing... (2, Informative)

Hell O'World (88678) | more than 10 years ago | (#6815056)

... is that web broadcasting functions like traditional broadcasting. Playing a song owned by the RIAA is advertising the RIAA's product. Although I agree with you, that ideally bypassing the RIAA would be the solution. A nice free market solution. Now if we were only monopoly free...

There IS no "RIAA-safe" model! (5, Informative)

Adolatra (557735) | more than 10 years ago | (#6815206)

bypassing the RIAA would be the solution.

Actually, it wouldn't.

The RIAA's subsidiary, SoundExchange [soundexchange.com] , is currently the sole designated agent for collection distribution royalties, as per the U.S. Copyright Office.

What this means is that SoundExchange, a.k.a. the RIAA, is authorized to collect on behalf of all copyright holders. Even those who aren't members of the RIAA proper.

To put it another way, even if I were to start a band, and a Shoutcast station devoted solely to my band, or to local unsigned bands throughout my city, the RIAA (as SoundExchange) could knock on my door and demand royalties! And since none of us are members of the RIAA, we wouldn't see a red cent!

This is just a taste of the asinine legislation currently binding webcasters thanks to the RIAA's powerful lobbying power.

Music plagiarism? (1)

yerricde (125198) | more than 10 years ago | (#6815084)

There are plenty of bands out their on the web whose music could likely be picked up relatively cheaply

How can a webcaster know for sure if an independent band's self-written songs are in fact original [slashdot.org] ?

Grow up! (0, Flamebait)

Keith Russell (4440) | more than 10 years ago | (#6814983)

from the speakeasy-dsl-sucks dept.
from the speakeasy-has-spent-two-weeks-without-placing-my-o rder dept.
from the i-thought-premium-price-meant-premium-service dept.
from the even-writing-to-speakeasy's-ceo-gets-no-results dept.

Write an entry in your bloody journal. This is just childish.

Re:Grow up! (0)

Anonymous Coward | more than 10 years ago | (#6815083)

Looks like Michael has an overinflated sense of his own importance.

$200 a year? (3, Informative)

Jonny Royale (62364) | more than 10 years ago | (#6814998)

If I'm reading this right..the webcasters have to PAY ~200 US a year (3 min song avg.) to the recording industry to play their music?

So why aren't radio stations paying this? They use RIAA "protected" material all the time. Is there a diference between broadcasting on the 'net & broadcasting over the radio (from a legal standpoint, that is)? I can get input from a radio station wired into my PC & record it...does that mean I'm pirating music? Or the fact that I bypassed all the storage media to get that music the real issue here?

*begin sarcasm* Or is that "lisence fee" covered in the payola they get from the music industry to push the latest "pop-phenom"..??*end sarcasm* sarcasm

Rights???? (4, Interesting)

joelwest (38708) | more than 10 years ago | (#6815004)

I would like to propose that the idea of having the 'RIGHT' to own something or to do something is also mitigated by the responsibility one is willing to take, not only to protect that right, but also in general. I do know that the idea of the U.S. Constitution is based on the idea that human beings have inalienable rights and that these rights need protection.

Let's continue: The right to own a creative work is then mitigated by the ability by the right of someone else to enjoy that creativity; if I am creative in isolation it is called masturbation. So if I want an audience I need to allow them to enjoy my work. What are the responsibilities of the audience versus the composer versus the pimp errrrr agent...

Thats the question. Not rights...responsibilities.

Sniff... (0, Flamebait)

JoeLinux (20366) | more than 10 years ago | (#6815006)

It does me proud to see a group of people try to stick it to the RIAA.

May they bitch-slap the RIAA like the ho-bags they are.

And don't forget to wear a Jimmy-hat when you have them bent over. We don't know where they've been.

I hate the RIAA as well, but.... (1)

TheLinuxSRC (683475) | more than 10 years ago | (#6815016)

as long as they own the rights to this stuff, they will be able to do what they want. This is not really news. A solution would be to not buy/use anything from the RIAA. If no one is buying their stuff, they will have to lower prices or risk going out of business. Nothing to see here, move along.... -Officer Barbrady

how do i go about becoming a webcaster? (0)

Anonymous Coward | more than 10 years ago | (#6815027)

how do i go about becoming a webcaster?

i would love to set up a site where anybody could download any cd (.wav quality) from me for $ .0007 * #tracks + myprofit. sure, i'll "stream" it at the bitrate, meaning that it will take them an hour to download "listen" to the cd. but after that, it is legal to timeshift things broadcast off the radio, no?

Remember Anti-Trust (5, Insightful)

Anonymous Coward | more than 10 years ago | (#6815053)

I am not a lawyer...
That being said, the complaint as written is based on the Sherman anti-trust act, and in my opinion holds some water. The RIAA does control the vast majority of sound recordings in the US. They are acting in a manner to eliminate competition and maintain that monopoly. They are not doing this by producing a better product, or offering it at a cheaper price, but by clubbing smaller entities with "intellictual property" laws and forcing common aggreements on everyone.

In sum:
1. The RIAA is looks a monopoly.
2. The RIAA acts like a monopoly.
3. The RIAA acts against smaller firms to maintain the monopoly. (Prevent compeititors from entering the market.)

That sounds to me like enough of an argument for Sherman Anti-Trust to be applied.
If you RTA you'll see that the webcasters don't want to get the music for free, but just for a price they can afford... Which is a good argument when RIAA acutally pays radio to do exactly what the webcasters do.

Boohoo, Michael gets snubbed by Speakeasy (0)

Anonymous Coward | more than 10 years ago | (#6815057)

Why don't you get off your high horse and stop sobbing about it through snide subtitles.

Brought to you by the Department of We Don't Give a Fuck.

A quick summary for those who don't want to click (5, Informative)

Teknogeek (542311) | more than 10 years ago | (#6815077)

The complaint goes like this:

Prior to when the current webcaster royalty rates were determined, the RIAA met with Yahoo! to work out rates seperate from those put forth by the Librarian of Congress, or LOC. The LOC, in turn, used the Yahoo! rates as the baseline for a "fair market" royalty value.

A similar case occured between SoundExchange (a wholly owned subsidiary of the RIAA) and the Voice of Webcasters (VOW) organization, except that the rate was now four times what the Copyright Arbitration Royalty Panel (what the LOC based the final decision on) had deemed okay.

The lawsuit alleges that the RIAA unfairly inflated the Yahoo! royalties to the point where they would not legitmately be a 'fair market value'...it was price-fixing, with Yahoo! as (possibly) an unsuspecting ally.

But what about Voice of Webcasters? Good question. The suit also claims that the RIAA/VOW negotiations were in bad faith on the part of the RIAA, and that the RIAA forced those VOW members who remained for the entire negotiation to enter into an agreement, later encoded into law as the Small Webcaster Settlement Act of 2002, that would make it even harder for webcasters to survive.

Basically, the Webcaster Alliance wants the RIAA to be barred from enforcing their copyrights against webcasters until a legitimate, non-abusive rate can be found, and that the RIAA pay for their legal fees.

They're also asking for a jury trial. IANAL (duh), so I don't know if that's a good or bad idea.

Whether they succeed or not... (3, Insightful)

kingLatency (624983) | more than 10 years ago | (#6815079)

Whether this group succeeds or not, it's good to see them standing up and fighting. The general populus might take more notice and the government certainly will. This is a step in the right direction.

With people this stupid about (0)

Anonymous Coward | more than 10 years ago | (#6815094)


it almost wants me to become a lawyer so i can take their money and laugh at their chances

tip: in the real world why do you think radio stations are licensed and play adverts ? what do you think that advertising revenue pays for ?
(unless the record company negotiate different terms aka payola)

A quote designed to be embedded in every RIAA art (0)

Anonymous Coward | more than 10 years ago | (#6815104)

RTFA ---
"This lawsuit is a publicity stunt that has no merit," an RIAA representative said.

This is a quote that fully belongs somewhere in EVERY story about the RIAA. For example it really fits the recent RIAA sues music swappers stories.

Oh, No! $0.0007 per song! (1)

nxs212 (303580) | more than 10 years ago | (#6815113)

Doesn't anyone proofread legal documents anymore? Or is that "prohibitively" too expensive as well? I am referring to line 4 on page 3 of the complaint PDF file.
I would GLADLY pay 7/10000 dollars for the right to broadcast a song. That's 0.07 cents per song!
Obviosly they made a mistake.

Multiply that (3, Informative)

yerricde (125198) | more than 10 years ago | (#6815146)

I would GLADLY pay 7/10000 dollars for the right to broadcast a song. That's 0.07 cents per song!

Multiply that by the number of listeners. Multiply that by the number of songs you play in a month.

Re:Oh, No! $0.0007 per song! (0)

Anonymous Coward | more than 10 years ago | (#6815168)

That is $.0007 per listener, which can add up really fast. See other posts.

Re:Oh, No! $0.0007 per song! (1)

SoTuA (683507) | more than 10 years ago | (#6815205)

Perfect. Now, suppose an average song is 3 minutes long. Let's say that's 480 songs a day. Still not much, huh? Well, the catch is, it is (or seems to be) a price BY CONNECTION. As in, 10 people tune in my webcast, that's 0.7 cents. Do this on a daily basis, and you can easily get to a thousand dollars a month, wich mom-n-pop webcasters can't afford.

The only winners (1, Informative)

EvilNutSack (700432) | more than 10 years ago | (#6815194)

... in this whole mess will be the lawyers, not the consumers. Hang on, I wonder if the RIAA can get nailed under the Patriot Act for being a terrorist organisation; law suits instead of bombs?

Intellectual property vs The Big Web Grab (5, Insightful)

poopie (35416) | more than 10 years ago | (#6815221)

It seems that the current generation raised on Internet don't realize that for hundreds of years there have been laws esatablished to protect people's rights and just because law on the internet has been difficult to enforce doesn't mean that people's rights stopped being important.

There is an alarming trend for the opensource community to appear to outsiders as very cavalier with issues dealing with protecting rights for others to derive profit from their works. Perhaps the mindset is "I gave all my code away for free, why should I care if you make money from your game/music/movie/software/patent/intellectual property/licensed image/registered trademark ?".

Do "opensourcers" belive that if something is not covered by a GPL-like license that it's okay to ignore that license, just because they're not afraid of being caught?

I'm all for patent reform and whatnot, but... until laws are changed, those laws still exist. Do I think that the RIAA and MPAA are locked in a downward spiral and that they're getting ready to pull a 'SCO'? Sure I do. With a world full of indedpendent artists and movie makers and the internet as a distribution method, It's completely conceivable that we could have "GPL" bands and movie studios releasing GOOD STUFF onto P2P network. Hey opensource/free software community: In a band? Have a video camera?

Ever wonder why department stores play MUZAK? It's because they PAY a company for the rights to play that MUZAK in their store, and MUZAK is cheaper than real music. If we really care so much, isn't it our responsibility to provide an alternative?

If you own a bar and play a radio with hip-hop tunes on it, do you know that you should be paying royalties to the artists? Do you know that if you run a restaurant and you show a movie in your restaurant that you are supposed to pay royalties?

Do you know that you're not allowed to have a picture of Bart Simpson on your website? Do you know that your favorite movie sound clips may not be 'fair use'?

Just because the internet has made it easy to share content, doesn't mean it's right or legal. Try to picture it from the viewpoint of Linux vs. Commerical OSes - if you don't want to support MPAA and RIAA, then *WE* need to provide an alternative, otherwise we need to play by their rules or petition to have the rules changed.
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