IP: more SMART IDEA FOR E-MUSIC SWAPPING

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: Simon Higgs <simon () higgs com>
Date: Wed, 08 May 2002 16:48:08 -0700
To: farber () cis upenn edu
Subject: Re: IP: more  SMART IDEA FOR E-MUSIC SWAPPING

At 03:05 PM 5/8/2002 -0400, you wrote:

For IP:

> I object to hsave to pay for somethinbg I don't want to ever listen to.

Then don't buy blank cassettes or MiniDisks or DAT tapes or other taxed
media. The Audio Home Recording Act already levies 2% of the manufacturers
sales price as a fee to you. 4% is set aside for non-featured artists, of
the remainder 40% for the featured artist and 60% for the labels[1]. Every
CD recorder has a $2.00 surcharge built into the price that goes directly
to the RIAA. The jury is still out on whether any artists have actually
received royalties from this tax. But, go back to hard media and look at
what type of tangible form the copyrights are actually protecting.

"Mechanical" royalties are collected by Harry Fox (a subsidiary of National
Music Publishers' Association) for content distributed on physical media
(records, tapes, CDs and computer chips).

"Public Performance" royalties are collected by ASCAP, BMI, SESAC (etc.)
for content distributed via radio airplay, broadcast and cable television,
live, and on the Internet (this is also known as "webcasting").

Now, of course, the Internet has created a territorial overlap. When you
download material that is still in a fixed tangible form (i.e. an audio
data file), copyright law indicates that it should still be protected by a
mechanical royalty as the consumer copies the audio file to a similar
tangible form (an audio CD or by copying an MP3 to an MP3 player). When you
download material that streamed in a similar manner to radio (i.e.
"webcasting"), copyright law indicates that this is the same as a "public
performance", and should be protected by a public performance royalty. But
on the Internet, Harry Fox collects "streaming" royalties, and
ASCAP/BMI/etc. collect "mechanical" royalties. Are you confused yet? A
little tip, the key word for webcasting is "non-interactive" services. If
your service is interactive, then you're supposedly back to a fixed-form
mechanical license. And you'd better comply with the DCMA or you're going
to jail.

We have another group of problems. The royalty tracking companies that have
emerged over the last five years only track streaming downloads. They don't
all track file downloads (those pesky tangible fixed-form audio files the
record industry manufactures on CDs by the truckload). These royalty audit
systems are not designed to track comprehensive downloads of an artists
catalog, only files served by streaming servers or "internet radio". I
asked one vendor why, and they apparently have been given no incentive to
do this by the performing rights organizations. After all, ASCAP and BMI
both benefit from being able to enter the Internet streaming revenue er..
stream.

The recording industry wants to use this technology to enforce royalties on
Internet Radio (because it can), without properly addressing file download
royalties. Lawsuits against MP3.com, Napster, Music City, et al, only try
to stop downloads from occurring, but do not properly address download
royalties. Their attempts are similar to using your pinky to plug a "leaky
crack running the length of the Hoover Dam".

Meanwhile, the artist is left exposed and unrepresented. One one hand, the
RIAA has sued anyone in their path, while the FTC has sued the RIAA
membership for collusion and price fixing[2]. On the other hand the RIAA
continue to amend distribution rules to exclude the artist. Companies such
as Napster and  MP3.Com can't join RIAA because of the lawsuits brought by
RIAA. That excludes the 91,000 artists distributed by MP3.com (74,000)[3]
and Napster (17,000)[4]. None of these artists are being served by the RIAA
membership whose rights the RIAA claims to protect.

According to Negativland, the RIAA have also taken upon the multiple roles
of police, judge, jury, and executioner by destroying, without due process,
original masters merely suspected of copyright infringement [5]. In this
case, it is when a manufacturing plant merely suspects that samples used on
an otherwise original recording have not been cleared. Efforts to suppress
the manufacture of works protected as fair use under copyright law is seen
by some to constitute prior restraint.[6]

Artist Courtney Love issued a letter to the music industry explaining that
until recently, Congress believed that the RIAA spoke for recording
artists, and not a trade group that is paid for by record companies to
represent their interests. Her letter calls for support over collective
bargaining in negotiations with record companies because singers are served
by the American Federation of Television and Radio Artists (AFTRA), and
musicians are served by the American Federation of Musicians (AFM), and
there is no single organization to negotiate health care and pension plans
[7]. In her speech to the Digital Hollywood Online Entertainment Conference
in 2000, she tells the story of a Congressional aide named Mitch Glazier,
who, with the support of the RIAA, added a "technical amendment" to a bill
that defined recorded music as "works for hire" under the 1978 Copyright
Act. Under the 1978 Copyright Act, artists could reclaim the copyrights on
their work after 35 years. This amendment would mean the copyright would
never revert back to the original owner. Ever. On the bright side, three
months after the "amendment", the RIAA hired Mr. Glazier to become its top
lobbyist.[8]

[1] http://www.riaa.com/Licensing-AARC-2.cfm
[2] http://www.ftc.gov/opa/2000/05/cdpres.htm
[3] Michael Robertson, Chairman and CEO, MP3.com, Inc., Testimony Before
the Senate Judiciary Committee
[4] Hank Barry, CEO, Napster, Inc., Testimony Before the Senate Judiciary
Committee
[5] http://www.negativland.com/riaa/dowesue.html
[6] Supreme Court Reaffirms Rejection Of Prior Restraints in CBS Inc. v.
Davis, U.S., 114 S. Ct. 912, 127 L. Ed. 2d 358, 22 Med. L. Rptr. 1285
[1994] Justice Blackmun. An article about this case is on Negativland's
website.
[7] http://www.mindspring.com/~gerryhem/piracy2.html
[8] http://www.mindspring.com/~gerryhem/piracy.html


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