> From Karl Miller: ...would it be possible, within
> the guidelines of the
> law, for there to be a non-profit organization
> which would list all of the
> musicians/groups/labels that want to opt out of the
> payment scheme and could
> be aired over the net for free?..."
If such an organization existed - along with any other
organization that copyright holders might want to form
to charge something more than free but less than the
utterly absurd and above market rate that
RIAA/SoundExchange charges - then I would have no
problem with any statutory rates being set VERY high.
But such an organization does not exist and will not
likely exist for quite some time into the future.
Personally, I don't believe in statutory rates. I
think a copyright holder has the right to charge
WHATEVER he wants for his product. I also think a
copyright holder has a right to forbid those he does
not want to use his product from broadcasting it.
Radio stations, Internet and otherwise, do NOT, in my
opinion, have an inherent RIGHT to use other people's
The problem is, in today's context, no non-RIAA
controlled performance rights organization for sound
recordings exists. What we have is the SoundExchange
MONOPOLY which is not merely the performance rights
organization that deals with statutory licensing - it
is the ONLY performance rights organization that
exists PERIOD for sound recordings.
Broadcasting is simply NOT practical without stations
being able to acquire performance rights on a
wholesale basis. The time and hassle of contacting
hundreds of copyright holders individually is daunting
and very expensive. This is especially true given
that some musical acts might have broken up and some
artists might have died with their estates being
either uncertain or in dispute. Such problems are why
performance rights organizations exist in the first
place. Performance rights organizations are a CRUCIAL
necessity for both owners AND users of intellectual
It is simply not possible for Internet broadcasters
who are on the air TODAY to deal with performance
rights organization alternatives which MIGHT come into
existence in the FUTURE. At present, they have NO
VIABLE ALTERNATIVE but to either license through
SoundExchange at statutory rates OR go off the air.
And to license through SoundExchange means that one
has to pay the EXACT SAME PRICE for an obscure
recording by an artist or a niche genre as one would
pay for a major mass market hit. The way the
statutory rates are set up, at present, the ONLY
recordings that would be commercially viable to stream
are the mass market hits of the RIAA labels.
Anytime a legally enforceable MINIMUM price is set on
ANYTHING, the result is that those whose product is
not worth that minimum price will be force out of
business. Why would one pay .019 cents per-song
per-listener for a recording that nobody has ever
heard of when it is already very difficult to break
even playing hits to a mass audience at such a rate?
Imagine if the government were to fix a $50 minimum
price on chairs. Who would benefit and who would be
destroyed by such a scheme? Obviously those who make
their living selling chairs that only cost $25 would
be forced out of business because nobody in his right
mind would pay $50 for a $25 chair. And, obviously,
such a scheme would be a boon to those who sell chairs
that cost more than $50 because it would eliminate the
need to deal with lower priced competitors.
This is exactly what the RIAA is using SoundExchange
and the CRB rates for. They are trying to control and
marginalize the lower priced competition that
threatens their lock over the music industry.
A chair manufacturer ought to have a right to charge
as much for a chair as he wants to charge. He does
NOT have the right to demand that his competitors
charge the same high price. And neither does the RIAA
have the right to use the monopoly performance rights
organization it controls to do the same thing.
Telling small copyright holders and independent
artists that webcasters can license from them directly
means very little in practice. Since very few
stations are willing to go through such an enormous
effort, they will either go off the air or play RIAA
mass market hits at statutory rates and such artists
and copyright holders would end up being denied access
to ANY airplay - just as they were for DECADES when
the only radio that existed was AM/FM.
I have posted on how a free market alternative to
performance royalties might work on my blog at: