A Reprieve For Net Radio?

Porsupah writes "The Register reports that "Rep. Jay Inslee (D-WA) and Rep. Don Manzullo (R-IL) have headed the 'Internet Radio Equality Act,' which aims to stop the controversial March 2 decision which puts royalty of a .08 cent per song per listener, retroactively from 2006 to 2010 on internet radio," as imposed by a recent decision from the Copyright Royalty Board. "If passed, today's bill would set new rates at 7.5 percent of the webcaster's revenue — the same rate paid by satellite radio.""

Good to Hear

[ror (1068652)]

Well that's a result! Hopefully these guys will make good progress. In the end though with net radio streams getting higher and higher quality how long will it be before people use net radio as a content distribution mechanism with an excuse to get around copyright?

The law requires DRM where possible

[tepples (727027)]

how long will it be before people use net radio as a content distribution mechanism with an excuse to get around copyright?

In the United States, the compulsory license for webcasting (17 USC 114) applies only if

(vi) the transmitting entity takes no affirmative steps to cause or induce the making of a phonorecord by the transmission recipient, and if the technology used by the transmitting entity enables the transmitting entity to limit the making by the transmission recipient of phonorecords of the transmission directly in a digital format, the transmitting entity sets such technology to limit such making of phonorecords to the extent permitted by such technology

Does it require _effective_ DRM?

[by Anonymous Coward]

How about someone who adopts a feeble DRM scheme, just as a ploy to satisfy the letter of the law? In the end, ALL DRM schemes are defeated eventually. Anyone who complains about the insufficiency of a particular webcaster's DRM could be confronted with a list of current workarounds for all of the supposedly current forms of DRM, thus illustrating the foolishness of the concept.

Re:Does it require _effective_ DRM?

[NormalVisual (565491)]

I understand there's a hackproof encryption scheme called "ROT13" that may be useful for DRM.

Re:

[Wolfger (96957)]

"to the extent permitted by such technology" is the key phrase in my opinion... but I am not a judge. Since no DRM scheme actually works (if I can play it and hear it, I can copy it), the "extent" is actually null. I somehow doubt the courts will agree with this assessment, though. And how will the courts define "where possible"? I want to open an internet radio station. I have legally purchased songs (about 500 CDs worth, plus some tracks from emusic and some CC stuff), and I'm running Linux. I know of no

Re:Good to Hear

[oDDmON oUT (231200)]

What, like people weren't using FM radio as "an excuse to get around copyright" in the 60s and 70s?

Feh!

This "fear" that the great unwashed masses would somehow use netradio as a means to obtain "free" content is the same shibboleth trotted out by the *AAs to enforce unreasonable copyright extension and maintain an outmoded business model whose only design is to continue fattenning the coffers of middlemen and executives, not "The Artists".

Kudos to the representatives for showing a semblance of sanity, brickbats to the Copyright Royalty Board for being the sellouts that they are.

Re:

[ror (1068652)]

FM isn't lossless; It's concievable people will be able to stream lossless audio streams on home connections in the near future. In fact, people could stream multi-track lossless streams. They could stream an entire Album in lossless format in the length for the longest song to play. Multi-track streaming is something that net radio can really offer over traditional radio, with little effort you can have alternate playlists, with the same inter-song content and advertising. However this could be easily set

Re:Good to Hear

[morgan_greywolf (835522)]

FM isn't lossless;

In the 60s and 70s, FM radio, unlike its predecesoor AM radio, was about as close to lossless as it got. That's why the RIAA tried to block the adoption of FM -- people could record music off the air! People would stop buying records!

And net radio, MP3, AAC, etc. aren't lossless either. Sure, there's things like FLAC, but lossless encoding eats up a lot of space and bandwidth very quickly.

Blank Tapes...

[encoderer (1060616)]

But they also fought for (and won) a royalty on blank cassettes, resulting in fair compensation for the millions upon millions of mixtapes and such that WERE recorded off the radio. I'm not positive if there's a similar royalty on blank CD media (I seem to remember hearing that there is...) but nowadays, to be analogous (pun?) to the advent of FM and royalties on cassettes, the content companies should get (small) royalty fees for each GB of hard-disk sold. After all, that is the predominant storage mechani

Re:

[morgan_greywolf (835522)]

There is a 2% levy on digital recording devices and media.

Which doesn't apply for all devices and media... it depends on how the media is marketed. For instance, the 2% levy doesn't apply for all CD-Rs -- only those marketed as 'music CD-Rs'. In fact, the only difference between regular CD-Rs and 'music CD-Rs' is the 2% levy.

Re:

[jhfry (829244)]

Actually... no digital media is lossless... its sampled from an analog source, so by definition it cannot be lossless.

The only way you will ever hear your favorite artist, in truely lossless format, is to be in the same room with them and hear them.

Don't trust amplification systems either... many of these use circuits that will clip or otherwise distort the analog signal, reducing it's fidelity.

In truth, unless you have the rare opportunity to hear your favorite artist perform acoustically in a non amplifie

Re:

[Rob the Bold (788862)]

This "fear" that the great unwashed masses would somehow use netradio as a means to obtain "free" content is the same shibboleth trotted out by the *AAs to enforce unreasonable copyright extension

You don't get to work "shibboleth" into conversation very often.

But on the subject, I'm sure they'll find a way of hating "Hi-Definition" radio, too.

Re:

[oDDmON oUT (231200)]

You don't get to work "shibboleth" into conversation very often.

Nor do the opportunities to do so alliteratively present themselves often. '^)

Re:

[Achromatic1978 (916097)]

It's pretty cool because they can even broadcast IDE tags so you can look at your Radio if you have a display and see what's playing.

Ever heard of RDS [wikipedia.org]? I get artist and track information on my non-HD radio already.

Re:Hear this - Snaptune One

[greyfeld (521548)]

Apparently you've never heard of Snaptune One [snaptune.com]. It will record the streaming audio for you, go out and identify songs and then you can import them into iTunes or use something like SoundForge to convert them to the format of your choice. The song identification needs some work and takes time, but you can always identify them yourself. Take a look. I think you will like it. Oh yeah and it's free!

You can also combine it with an usb FM tuner to record local programs. I used to record our local college ho

Re:Good to Hear

[B'Trey (111263)]

Why download hundreds of mp3s when I can listen to the same music streaming from the internet?

You can listen to the same music whenever you like? I'd like to hear Lucinda William's "Righteously." The version from "Live at the Filmore", not the studio release. Right now. Where do I tune in to hear that?

Re:Good to Hear

[dantheman82 (765429)]

There's Rhapsody for that...I've been able to use the 25 free songs streaming per month through them. Listen to pretty much the whole album if you wish...

Here's your link:
http://www.rhapsody.com/lucindawilliams/liveatthef illmore [rhapsody.com]

Re:

[B'Trey (111263)]

Lucinda isn't country, regardless of where some record store decides to stick her cds. She's a lot closer to, say, Eric Clapton than she is to Kenny Chesney.

Re:Got it.

[mrbooze (49713)]

Lucinda Williams *is* country, she's just not the crappy country anyone is allowed to hear on the radio.

She records on Lost Highway records, a country-music label. Headquartered in Nashville, TN.

She's what is often labeled as "alt.country", "americana" and about 100 other labels. Basically it means "country artist who doesn't play the heavily-produced pop country that everyone seem to think is country music these days".

Eric Clapton, being one of the premiere bluesmen alive, is a lot closer to real country music than Kenny Chesney too.

Re:

[Lumpy (12016)]

because the streams from the net are horrid. I would rather have a portable sirius reciever than use internet streams over a cellphone.

sorry, but none of it compares to a good mp3 player with gobs of music on it, they just cant stream you 384vbr music over a cellphone without problems.

I like to not get a headache from my music, so I carry a mp3 player with high bitrate songs on it.

Re:Good to Hear

[thing12 (45050)]

Because iPods don't have wifi yet.

It's bigger than an iPod, but a Treo w/PocketTunes can do streaming audio. With Sprint's Unlimited PowerVision plan you get all you can drink music anywhere they have coverage. Carrying only one device is a nice plus too.

Re:Good to Hear

[Constantine XVI (880691)]

And assuming you'd rather not pay for Sprint/ATT/Verizon/etc.'s high rates for Internet service and just want to use Wifi, there's an app for the DS called DSOrganize that does internet radio as well. Of course, it requires a cart to run it on (I reccomend the R4 or EZFlashV), and they take uSD cards. I bet the PSP can do something like this as well

Skepticism

[Dr. Eggman (932300)]

"If passed, today's bill would set new rates at 7.5 percent of the webcaster's revenue -- the same rate paid by satellite radio."

My first question would be "what were the rates/pay scheme before this whole mess with CRB's decision was imposed?" Are we really seeing a good decision, or are we seeing an attempt to dupe people into seeing a good decision while still getting some of the increase those who convinced the CRB, wanted to see?

Re:Skepticism

[ps236 (965675)]

It sounds pretty much like what the webcasters wanted. They wanted a reasonable percentage of their revenue as the smaller webcasters have had previously. I can't remember exactly what it was previously but it was around the 6-10% mark IIRC.

The problem with the CRBs desire was that they wanted around 110% of the webcasters' revenue.... I looked at the figures, and although the royalty per 'performance' looked teeny, once you added it up it was pretty obvious there was no way that amount could be earned by advertising, the webcasters would have to either have a second method of income (as Yahoo, AOL etc do), or charge a quite large subscription ($20-ish per month)

Personally I don't have a problem with a royalty per performance, but it had to be at least an order of magnitude lower than the proposed royalty scheme. The problem (from RIAAs POV) with 'percentage of revenue' is that a webcaster who has a very low revenue (eg a hobbyist webcaster) essentially pays no royalties at all.

If this "percentage of revenue" proposal does go through, then I hope the RIAA learn (but doubt they will) and the next time this comes up they come up with something more reasonable and less greedy and manipulative. If they'd proposed a royalty per performance scheme of 1/10th their actual proposal, then the chances are most webcasters would have accepted it without much more than a grumble, and the RIAA would get more than they would with a 7.5% of revenue scheme..

Re:

[cayenne8 (626475)]

"If this "percentage of revenue" proposal does go through..."

So...if this goes through, and you are an webcaster, that does NOT generate any revenue, you can broad cast songs and all for free?

Let's run a litle calculation.

[LullySing (164221)]

--- a snip from savenetradio.org----
On March 2, 2007 the Copyright Royalty Board (CRB), which oversees sound recording royalties paid by Internet radio services, increased Internet radio's royalty burden between 300 and 1200 percent and thereby jeopardized the industry's future.

At the request of the Recording Industry Association of America, the CRB ignored the fact that Internet radio royalties were already double what satellite radio pays, and multiplied the royalties even further. The 2005 royalty rate was 7/100 of a penny per song streamed; the 2010 rate will be 19/100 of a penny per song streamed. And for small webcasters that were able to calculate royalties as a percentage of revenue in 2005 - that option was quashed by the CRB, so small webcasters' royalties will grow exponentially!

Before this ruling was handed down, the vast majority of webcasters were barely making ends meet as Internet radio advertising revenue is just beginning to develop. Without a doubt most Internet radio services will go bankrupt and cease webcasting if this royalty rate is not reversed by the Congress,
----- end snip-----

well, lemme give you an idea, ok ?

Say that you got a small internet radio channel that handles on average 150-200 users per hours ( approx user count for all 24 hours... peaks at 500ish, 10-15 users in the wee hours... so say, for all practical purposes you ot a constant 175 users, k?) . Because you're barely making any money off this thing ( say you're "making" $100-200ish a month after paying for equipment, band, coffee, ramen, etc etc) you had the exemption that made it you paid a fraction of your revenues to the RIAA. But hey, you're still making peanuts here, so it's all good.

Suddenly the rules change. Let's run a quick and dirty calculation on what you suddenly owe the RIAA here...
175 users * 8 songs and hour * 0.0018 $ ( that's per song streamed) = 2.52$ So that's 2 bucks fifty an hour.
multiply by 24 hours, times the number of days in a month ( say 30) and you get.... 1814,40$ that you owe to the RIAA... PER MONTH.

Can you say ouch ? for a guy that was barely making ends meet, and making just enough to take out his girlfriend to a fancy dinner once in a while ( if nothing breaks) you went down to actually owning money for running a small net radio station.

Now you understand why the "percentage of revenues" is something small webcasters want.

Re:

[Flaming Foobar (597181)]

Fine calculations, but... If you have an average of 175 of users listening all the time, wouldn't it mean you have probably thousands of listeners altogether? 2k doesn't sound that much if there are, say, 3000+ regular subscribers. Get a sponsor and you've pretty much made the money.

Re:

[milkman_matt (593465)]

Even in that case, you'd think any reasonable business focused on long term profits would rather have a small piece of 1000 stations than a large piece of the 100 that are left after the smaller ones are forced out of business by jacking up the rates to an unreasonable number. Another thing is if they make it reasonable to make a station, by charging stations based on a % of profits, then that encourages MORE stations to come up because they see that they can afford it. More stations = More small profits,

Is there still time?

[jddj (1085169)]

The new rates go into effect May 15 and are expected to instantly bankrupt most small web broadcasters (because they're retroactive to January, 2006).

In the mean time, this bill has to get out of committee, be voted on and passed by the house, get to the president's desk either on its own or tacked on to another bill, and then get signed.

That's a lot to get right fast. And the bill will no doubt face fierce lobbying opposition from the music industry suits trying to get internet radio shut down.

Props to these congressmen for setting up a bill on this, but...we're not there yet.

Re:

[TheRaven64 (641858)]

I heard about this yesterday on Radio Paradise [radioparadise.com] (and submitted it). They are hoping that the bill will pass in the House before the deadline. If this happens, then they hope to get a reprieve until it's been heard in the Senate before they have to pay the royalties. I hope it passes, since I listen to Radio Paradise and WCPE [theclassicalstation.org] quite often, but since I'm not in the USA I can't do much directly since it's nothing to do with my elected representatives.

Ah! Another case of "daddy I want a pony"

[tkrotchko (124118)]

When little Nancy wanted a dog, she went to her father and said "daddy, I want a pony". Her father looked at Nancy and smiled and said "Nancy, horses cost a lot of money". But Nancy persisted "DADDY,I WANT A PONY". Her father frowned a bit "Nancy, besides costing so much, we'd need a stable and the horse would have to be trained and cared for".

So Nancy threw herself on the ground started crying, screaming and kicking "DADDY, I WANT A PONY. WAAAH".

In desperation, the father said "Nancy, how about a nice dog instead?".

And with that, Nancy smiled and went back to her room. She got the dog she wanted in the first place.

Re:

[smellsofbikes (890263)]

Communications and rhetoric courses talk about this -- and they have a specific name for the tactic, but I can't remember it right now. Anyway, they invariably discuss the most famous case of this: Watergate, where the initial proposal by Liddy and Haldeman sounded, to them, likely to be shot down, so instead they came up with an elaborate proposal that involved ferrying people around in helicopters and speedboats, and when they presented it, Nixon argued that it was stupid, and they ended up compromising

Re:

[Enry (630)]

Having worked for a federal department in the past, the GP is absolutely correct.

Every budget is padded by 15-20% with the expectation that it would be slashed by 15-20%, leaving them with close to what they wanted in the first place. I'd guess that higher-profile departments (DHS, Defense), get what they want by just asking.

Re:

[Overzeetop (214511)]

Actually, I read the entire ruling. The _only_ thing the content owners asked for and didn't get was a 25% premium for any content streamed to a mobile device.

Using your analogy:

The content owners asked for a pony. With a new barn, and tack, and a nice new trailer. Because, you see, they said that's really what they deserve. The webcasters said they could do a dog, as that's about what every other little girl on the block had, and they just didn't make enough money to buy a pony and everything that went wit

Great news for non-profits

[traindirector (1001483)]

This would be a wonderful change for public, non-profit, and college radio stations who broadcast on the airwaves as well as maintain a web stream. While the current web rate per song is pretty bad, it is the requirement that all songs need to be logged that is really making it difficult for these stations to keep their web streams up, since they don't often have the all-digital systems / small libraries of commercial ventures. It is almost as if the current legislation was drafted to prevent these types of stations from (legally) offering their content online.

This would blow away the reporting requirement and most of the fees for these stations. Fees could be easily calculated based on the small amount of revenue the stations generate. My only worry is that this amount might be higher than the per-song rate for commercial stations, and government loves business...

7.5% * $0 = $0

[traindirector (1001483)]

No income = $0
Royalty rate = 7.5% income
7.5% * $0 = $0

It's nearly unthinkable that an agreement will be reached with these terms and no other provisions, but these are the terms the article provides. I'm sure there will be a separate provision for non-profits. But if passed in this form, it would be a GREAT thing for non-profit / no income webcasters.

I run a net radio station

[fury88 (905473)]

I run one of the more popular net electronic stations out there and I am of course glad to see this. I am also an artist and I have no problems with equality on the internet. It's clearly the way to go and I think people will becoming more creative with out to make money out of net radio. Right now I am not profitable at all. I split the cost with 3 guys and I carry most of the load of maintenance.

retroactively??

[nurb432 (527695)]

The whole idea of changing the rules then penalizing you from actions in the past should be banned.

How the hell are you supposed to predict when congress will get a burr up its butt add that to your future business plan so you don't get put out of business ( or goto jail )?

Re:retroactively??

[ameoba (173803)]

Wouldn't it be nice if there was a law on the books against this [usconstitution.net] already?

Re:

[nurb432 (527695)]

Since when has the US Constitution meant much to the government? For as long as i have been alive they just 'interpret' it away when its inconvenient to them.

Re:

[poot_rootbeer (188613)]

The whole idea of changing the rules then penalizing you from actions in the past should be banned.

It already is. Article I of the Constitution forbids the federal and state governments from passing any ex post facto law.

The court system generally doesn't mind the practice, though, if there is no penalty attached; if citizens benefit from retroactive application of a new law, it's often allowed. So if internet broadcasters were compelled to pay higher royalty rates under existing law, and this new law red

Uhh, wait....what?

[tacokill (531275)]

I think it is banned, at least in the context of criminal law. I can't remember the legal term but there is a legal concept in the US that "new" laws can not punish you for past behavior that WAS legal.

It's where the term "grandfathered in" came from back in the slave days. Once slavery was abolished, slave owners could not be prosecuted for violations in the past (that were legal when they were committed).

Can someone help fill in the rest?

Re:

[Angst Badger (8636)]

The whole idea of changing the rules then penalizing you from actions in the past should be banned.

It was banned. The Constitution explicitly prohibits ex post facto laws.

Of course, the Constitution explicitly prohibits a lot of stuff that the government does with impunity these days.

What constitues a "broadcast"

[VE3OGG (1034632)]

You know, this got me thinking... from what I understand, you must pay a portion of your revenue (7.5%) to the RIAA. So, what pray tell would happen if you streamed something for free... ie sans revenue? And what constitutes braodcasting? Does a torrent of my songs? What about files to individually download? Most would say that no, that isn't it, because the content must be streamed (i.e. in real time with buffering) but we all know that streamed content still has to be stored locally somewhere. So, what ex

Re:

[adwarf (1002867)]

You have to put in some protections, like you can't let someone choose their song 'on demand.' Which means you must limit the amount of songs a person can skip, you can't let them rewind or replay something that streamed. You also have to make a reasonable effort to prevent copying. I'm sure there are more rules those are just the ones I know off the top of my head.

This provides a simple solution:

[Ant P. (974313)]

7.5% of 0.

Re:What about Radio

[ps236 (965675)]

They pay NO performance royalties at all - that's the problem.

Satellite pay 7.5% of revenue as performance royalties
The CRB wanted webcasters to pay around 100-125% of revenue as performance royalties
Radio stations pay 0% as performance royalties.

Re:

[ArhcAngel (247594)]

Actually, I hear [wikipedia.org] they pay less than nothing.

Re:

[thrillseeker (518224)]

Maybe they could just require the station to broadcast at a really low quality. That would discourage most from recording and burning it on a CD or transferring it to their mp3 players.

... or listening.

Re:

[smchris (464899)]

I guess "really low" is relative but that's effectively what DI.FM is doing with 96k stream and 320k paid downloads and the subscription premium service.

I know we all love the Register and all, but my first thought was that we have to link to a UK site to get news of an anti-megacorporate bill here in the U.S.? I know, I know. Typical now.