FC: RIAA responds to "hidden" privacy issue in Internet radio fees

[Declan McCullagh <declan () well com>]

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http://www.politechbot.com/p-03335.html

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From: SMarks () riaa com
Subject: FC: The "hidden" privacy issue in Internet radio fees
To: declan () well com, scobb () cobb com
Date: Wed, 3 Apr 2002 09:54:51 -0500

Declan and Stephen,

     I thought I'd take a minute to try to clarify a couple of things.  The
arbitrators set rates on a per performance basis, which requires webcasters
to report the total number of performances they make of sound recordings.
In discussions with webcasters with whom we did individual license
agreements, we found that it was easier for the webcaster to provide us a
playlist with a separate listener log that we could then combine to
determine the number of performances made.  The listener log has no
identifiable information -- it's merely "listener a" or whatever the
webcaster wants to call it.  Again, the idea was to make reporting easier
for webcasters.  As it turns out there may be other ways to do so and these
will be explored and discussed in the upcoming recordkeeping proceeding in
the Copyright Office.

     We were surprised to see the $500,000 figure in the P.S. to the
message below.  What webcaster are you referring to?  That would mean more
than 330 million performances -- is it possible that someone got the
calculation wrong?

Steve

P.S.  Please feel free to post this to the politech listserv.

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Date: Wed, 03 Apr 2002 13:59:15 -0500
To: SMarks () riaa com
From: Stephen Cobb <scobb () cobb com>
Subject: Re: Internet radio fees (not for publication)
Cc: declan () well com

At 4/3/2002 09:54 AM -0500, you wrote:
> Declan and Stephen,
>
>      I thought I'd take a minute to try to clarify a couple of things.  The
> arbitrators set rates on a per performance basis, which requires webcasters
> to report the total number of performances they make of sound recordings.

I think this means: ""songs played times number of people logged in when a 
song is played."  Am I right?

As to the calculations -- your remarks are puzzling me: "We were surprised 
to see the $500,000 figure...would mean more than 330 million performances."

Before I say anything in print about this, let me see if I have it right:

365 days x 24 hours x 60 minutes = 525,600 minutes of play time per year
4 mins avg length of performance = 525,600/4 or 131,400 performances a year
131,400 x $0.0014 per performance = $183.96

That's the annual fee for a station that broadcasts 7x24, has one listener, 
and plays 15 songs per hour. If the station averages 1,000 listeners over 
the year, around the clock, that makes the annual fee is $183,960.

PLEASE let me know if I have this wrong. Because I do want to get it right. 
By my calculation that station would owe $735,840 based on the fees going 
into effect October 2002, retroactive to the date of the DCMA, October, 1998.

Another way of looking at this is your figure of 330 million performances. 
I was talking about 4 year's worth of back fees, so that's 82.5m per year. 
We have established, I think, that a 7x24 radio station can broadcast 
131,400 performances per year. So put that into 82.5m and you get 627.85, 
which is, by my calculation, the average audience of a station that would, 
over 4 years of sustained operations, put out 330 million performances, and 
thus owe around $500,000.

Again, please let me know if this is wrong.

Respectfully...Stephen

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From: SMarks () riaa com
Subject: Re: Internet radio fees (not for publication)
To: Stephen Cobb <scobb () cobb com>
Cc: declan () well com
Date: Wed, 3 Apr 2002 14:28:06 -0500


     Yes, those numbers look correct.  That is a very large webcaster --
who is it?

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