BY PAUL MALONEY
Quite a few of the organizers and panel speakers at last week's Radio Ink Internet Conference were stunned at how little our industry understands the Digital Millennium Copyright Act, or DMCA. Many webcasters (including at least one company's CEO) aren't even aware of the most basic tenets of the legislation, much less realize that "the meter has been running" since October of 1998 -- and once the compulsory license fee has been set through the U.S. Copyright Office and arbitration, the RIAA will come knocking!

What was just as stunning was the inability and/or unwillingness of those same panelists to even attempt to explain the law. Just as quickly as the question came flying out of the audience again and again, it was sidestepped by those on stage with the aplomb of a noncommittal moderate politician.

Granted, like most law, it would probably be less confusing for most Americans if it were written in Chinese. The DMCA's roots are actually in international law designed to handle the myriad realities of worldwide copyright protection in the digital age. The law encompasses much more than Internet radio.

Moreover, the DMCA has yet to be enforced or conclusively interpreted in the court system. Even the professionals whose job involves the enforcement of and defense against the legislation couldn't agree on what the law means. RIAA President and CEO Hilary Rosen herself, (pictured in an interview with RAIN publisher Kurt Hanson here), seemed at times to differ from her organizations earlier interpretations.

This is not a very comforting thought to webcasters looking to arm themselves with the requisite knowledge of operating an Internet radio business. How can streamers follow a law that can't even be explained?

With that thought, we look to the two main antagonists in the great DMCA tilt: the Recording Industry Association of America (RIAA), representing the record industry; and the Digital Media Association (DiMA), a webcasting industry organization.

Naturally, both of these organizations have a very vested interest in how this law is interpreted. Here's the part that's hard to swallow: until the law successfully withstands (or doesn't) the test of the courts, there really is no right answer to the question: "what does the law mean?".

But perhaps by examining points from both sides of the issue, webcasters might feel a little more confident in their operations. There are a dozen or so generally accepted points to which streamed programming must adhere. These points include the "sound recording performance complement," and other rules regarding minimum "rest" times for songs, the maximum amount of times a particular artist can be played in a given time, and so forth. We suggest you review this information, available from both organizations' websites (the links are below). (CONTINUED BELOW)

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This publication most definitely isn't in the position to hand out legal advice -- your best bet is always to consult a trusted legal expert. But there are a few points of the ongoing discussion that we find interesting.

First, and this is very important. If you are streaming music over the Internet, you will have to pay for it (can you hear me in the back?). As in "retroactively." As in as far back as October 28th of 1998. This is a point that many don't seem to realize. Unless you have some miracle deal with the copyright holders of every piece of music you've ever streamed (or you yourself own the copyrights), you will owe money.

How much you'll have to pay is the question. Broadcast.com founder Mark Cuban (above) has suggested that the RIAA might expect as much as one-half cent per song per stream listener, which comes out to an unbearably high $90 CPM per hour (see RAIN stories here and here). DiMA Executive Director Jonathan Potter (pictured below at Radio Ink) warned webcasters to "be ready to part with as much as 15% percent of (their) gross revenue." Others, like Hiwire attorney Steve Chen (responding to Cuban in RAIN here), are guessing closer to 5% (still significantly more than broadcasters pay ASCAP and BMI for songwriting copyrights).

Another major point of contention is how the law applies to broadcasters simply streaming their signal on the 'Net, as opposed to Internet-only webcasters. Historically broadcasters, unlike movie or commercial producers for instance, haven't had to pay copyright holders of the sound recordings they use (broadcasters pay copyright holders of compositions, through ASCAP, BMI, etc. -- not owners of the actual recordings). Broadcasters and the DiMA see this as setting precedent: webcasting a broadcast signal is not a major change in the model, so just like for their over-the-air signal, broadcasters putting their stream online feel they shouldn't be liable for extra charges. Internet-only webcasters have to pay rights fees to copyright holders of both compositions and sound recordings.

The RIAA sees broadcasters' exemption, in the words of RIAA counsel Steve Marks (right, at Radio Ink), as "a political anomaly." He argues that "the interactive possibilities of the digital world make webcasting different" in the eyes of the law, and that his organization is only trying to establish the same rules in the U.S. as exist elsewhere in the world.

Now if that "math" isn't "fuzzy" enough, consider the issue of "ephemeral" and "temporary RAM" copies of the music you webcast (see RAIN Associate Editor Ralph Sledge's piece about this here). Most Internet radio stations don't stream directly from a compact disc; rather, songs are "ripped" and "encoded" into files that are stored on a computer for streaming purposes. These are "ephemeral" copies, and there are specific points of the law concerning this that you need to understand (e.g. according to the RIAA, ephemeral copies of protected songs "must be destroyed within six months, unless preserved exclusively for archival purposes." Is simply having it in your library or playlist "archival," or does this mean a specifically "archived" program?).

Likewise, the DiMA reminds webcasters that "some copyright owners claim that temporary copies made in the user's computer memory (RAM) during the performance of streaming media content somehow are infringing." The Copyright Office and Department of Commerce are currently studying this possible interpretation of the DMCA.

It's clear that the time is now to get as solid an understanding as you can about these issues, to protect yourself and your business. We'll do our best to present what we learn along the way.

See the specifics of the RIAA's interpretation of the DMCA here. Get the DiMA's version here.

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From the website: "On Friday, December 8, from 10AM to 6PM (PST), LuxuriaMusic is thrilled to announce that we will be Day Tripping with a solid eight hour block of music composed by Lennon and McCartney... AND George Harrison...

"But LuxuriaMusic isn't content just playing the same old thing, over and over. No!! We are tapping into our own private stash of vinyl albums and we have cherry picked only the finest Beatles "covers" from such, non-mop top, artists as Tom Jones, Tony Bennett, the English Muffins, Hugo Montenegro, (the great and under appreciated) Troy Cory, the Mystic Moods Orchestra, Leonard Nimoy, William Shatner, and any other Star Trek Alumni that we can find..."

Read the details here.

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Reprinted from yesterday's edition...

This feedback is in response to the RAIN story on the Arbitron/Edison study on radio station website content, here.

"Traffic is up, every quarter..."

Missing from this research (and other studies like it) is real-world evidence that an increase in "stickiness", or an increase in online listening (either in time spent listening or numbers of listeners) directly increases station profitability in a measurable and meaningful way.

The ramp up in online costs associated with "driving" listeners online appears not to be factored in. It would be a poor business indeed if a radio station were to undertake an affirmative effort to drive on air listeners to listen online, perhaps to the ultimate point of abandonment of their radios.

Finally, if it is true that radio websites do not give listeners what they want, why then, would total traffic on the RDG network continue to increase (it has)? RDG is the industry's largest hosting platform, and we have mostly major to medium market stations of all formats. Traffic is up, every quarter.

Michael C. Rau, CEO RDG, Inc.

Dec. 12-14, 2000	Streaming Media West 2000, San Jose, CA
February 1-4, 2001	RAB 2001, Dallas, TX