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U.S. Copyright Office Puts The Sting On Webcasters

By Frank Meyer, Contributing Editor
Wednesday, February 20, 2002 @ 10:54 AM


U.S. Copyright Office Cites Re

- advertisement -
The U.S. Copyright Office recently detailed the requirements for reports that webcasters must file with copyright holders in order legally use their music online. In doing so, many broadcasters are saying that the government formed their ruling based simply on the record industry's requests.

According to the ruling, webcasters will be required to report to the primary performance copyright holder (usually the record company) the following information for each and every song:

1. The name of the service
2. The channel of the program (AM/FM stations use station ID.
3. The type of program (archived/looped/live)
4. Date of transmission
5. Time of transmission
7. Numeric designation of the place of the sound recording within the program
8. Duration of transmission (to nearest second)
9. Sound recording title
10. The ISRC code of the recording
11. The release year of the album per copyright notice and in the case of compilation albums, the release year of the album and copyright date of the track
12. Featured recording artist
13. Retail album title
14. The recording label
15. The UPC code of the retail album
16. The catalog number
17. The copyright owner information
18. The musical genre of the channel or program (station format)

In addition, webcasters are to report information (a "listeners log" on the audience for their transmissions that contains this information:

1. The name of the service or entity
2. The channel or program
3. The date and time that the user logged in (the user's timezone)
4. The date and time that the user logged out (the user's timezone)
5. The time zone where the signal was received (user)
6. Unique user identifier
7. The country in which the user received the transmissions

The Copyright Office holds, based upon RIAA testimony, that these requirements are not at all unreasonable and that, in fact, many webcasters already follow these guidelines. Should these requirements survive legal appeal, it's not an overstatement to say that this may signal the death of webcasting (independent of the major labels, of course).

It is hard enough to survive in the webcasting industry what with bandwidth and technology costs, advertiser apathy in an already poor economy, listener acquisition costs, the AFTRA affair, and the uncertainty of music copyright royalty fees. Unfortunately, it now sppears that webcasters will have to make it mandatory for listeners to supply some information in order to listen and that the ability to "opt-out," or listen without providing any info will be eliminated.

It is very possible that requiring webcasters to report all this information for each song and each listener will prove to be so troublesome and costly that most webcasters will be left with no choice but to abandon the industry. And why does the RIAA need all this info on listeners anyways? They don’t ask for all of your personal info every time you buy a CD at the record store, do they? Hmmmm….

Meanwhile, CARP, the Copyright Arbitration Royalty Panel, which is the body appointed to recommend a copyright royalty rate for music streamed on the Internet, has finally released their conclusions. These rates, if adopted by the Copyright Office, will be what webcasters will have to pay (according to the Statutory License) to record labels to use their music.

The table below was taken from the U.S. Copyright Office site, and lists the basic fees.

It appears that commercial broadcasters, to stream their over-the-air signal on the Internet, will pay a royalty at about half the rate (0.07 cents) of an Internet "pure-play" webcaster (0.14 cents). In other words, Spinner.com will pay at double the rate of WLUP-FM/Chicago. But the table leads to some confusion here: To what does entry 1. (a) refer? We're unclear as well as to what "Business Establishment Service" is.

Note that "per performance" means "per song/per listener." In other words, every time one person hears one song, that's a performance. If twelve people listen to your webcast of twelve songs, that's 144 performances (we'll do some more math later). "Ephemeral" recordings are backup or "cached" copies of the same song (used to facilitate streaming, etc.). We're assuming this nine percent pays for the right to use them.

Note the minimum fee per license has been set at $500.

Type of DMCA - Compliant Service Performance Fee (per performance) Ephemeral License Fee
1. Webcaster:
(a) Simultaneous Internet retransmissions of over-the-air AM or FM radio broadcasts.
0.07 ˘ 9% of Performance Fees Due
(b) All other Internet transmissions. 0.14˘ 9% of Performance Fees Due

2. Commercial broadcaster:
(a) Simultaneous Internet retransmissions of over-the-air AM or FM radio broadcasts.
0.07 ˘ 9% of Performance Fees Due
(b) All other Internet transmissions. 0.14˘ 9% of Performance Fees Due

3. Non-CPB, Non-Commercial Broadcaster:
(a) Simultaneous Internet retransmissions of over-the-air AM or FM broadcasts. 0.02 ˘ 9% of Performance Fees Due
(b) Other Internet transmissions, including up to two side channels of programming consistent with the public broadcasting mission of the station. 0.05˘ 9% of Performance Fees Due
(c) Transmissions on any other side channels. 0.14˘

4. Business Establishment Service:
For digital broadcast transmissions of sound recordings pursuant to 17 U.S.C. 114(d)(1)(C)(iv) Statutorily Exempt 10% of Gross Proceeds

To learn more about this, check out www.kurthanson.com


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