CRB coverage 2007:
CRB decision
SaveTheStreams
Legal options
Markey
Petitions
Copyright law
Canada?
Fred Wilhelms [2] [3]
JPMorgan analyst
SaveNetRadio
Rehearing denied
SNR.org website
B'casters interests
Day of Silence?
What is "fair"?
House IREA
SX Point/Counter
July 15th D-Day
Hill walk recap
Senate IREA
Hanson/Simson
Offer to SCW
Berman/Coble
100th co-sponsor
File for stay
Noncomm offer
$1 bil admin cost

CRB coverage 2002:
CARP decision
Industry reacts
Industry stunned
Huge RIAA win
SJO editorial
Day of Silence?
Congress support
Day of Silence on!
Press coverage
Day of Silence
Librarian decision
Cuban speaks up
Labels: Die Now!
Forbes coverage
SWSA
SCW license

"The Future of
   Radio" series
1 | 2 | 3 | 4 | 5

"Net radio frontier:
Ad sales" series
1 | 2 | 3 | 4 | 5

UPDATED:
Internet radio
royalty basics

Copyright Law
DMCA
CRB 2007
 Webcast decision

and RAC board member Jay Rosenthal regarding numerous issues underscored by the CRB ruling, including the purpose and need for copyright, fair compensation to artists, and royalty structures that would allow the booming webcast industry to continue growing apace.

What follows are excerpts from both authors' articles. The articles are being featured in this week's "Dust Up" feature in the Opinion section of the paper. Excerpts from additional articles will follow later this week.

From the L.A. Times: "Today, Hanson and Rosenthal debate how and whether webcasting should be open to hobbyists, or only to those who can generate revenue for performers and labels...

BY KURT HANSON
"Jay,

"For the past 70 years, broadcast radio has been the primary means by which American consumers have discovered new music. For example, in my case, radio airplay is how I first discovered the Royal Guardsmen, Blood Sweat & Tears, the Fifth Dimension,... — artists I've subsequently purchased hundreds of dollars' worth of releases from.(Full disclosure: I actually only spent about $1.90 on the Royal Guardsmen; they lost me at "Snoopy's Christmas.") You could probably tell  the same story about how you discovered music, too.

"Even today, it's radio airplay that's the primary driver behind hit artists like Britney Spears, Maroon 5, and Akon. Radio airplay is the lifeblood of the U.S. record business—and the primary driver behind its most profitable releases.

"But one limitation of broadcast radio has always been its 'bandwidth.' There's only enough spectrum allocated to the FM band to squeeze in about 20 radio stations in a typical U.S. city, which means that there's only enough room for about the 20 most popular music formats...

"In the special case of Internet radio, however, it's a whole new world, because 'bandwidth' is essentially unlimited...

"So, Jay, the question posed for today's Dust-Up is this: If you're a commercial operation streaming an all-oboe Classical channel, there's no question that it's appropriate under current copyright law to pay certain rights fees to copyright owners... But if you're a hobbyist who wants to stream, say, a barbershop quartet radio station, with no desire to turn it into an income-generating business, is it necessary and appropriate to pay such fees?

"On a philosophical level, I believe I would argue: Yes, it is; you should... It's copyrighted material. And, rightly or wrongly, the Digital Millennium Copyright Act says that a royalty should be paid on top of whatever promotional value the label and musician get when you expose that CD to new listeners...

"On a practical level, though, I think it might be appropriate to have some sort of de minimis cutoff. Many of the stations you'll find on Live365, for example, rack up less than 700 hours of listening per month, meaning that they have, at the average moment, only one listener (or less). Is such a hobbyist—who is expressing his love of a certain genre of music—harming the label, or the musician, or other webcasters, or the principles of copyright law by his efforts? I can't imagine so. Is it really necessary to make him hire a lawyer to review legal documents and send filings and reports to SoundExchange, while also taking $500 from him? I would think not...

"But my key point, Jay, is that a fan of barbershop quartets—i.e., the individual who wants to introduce others to his love of the genre through a hobbyist webcast—is a friend of the copyright owners, not the enemy, and should be treated as such. (Doing otherwise would be just another example of the record industry cutting off its nose to spite its face.)"

Discover the music, then pay for it
BY JAY ROSENTHAL
"Kurt,

"While I agree with your philosophical conclusion that 'all' webcasters should pay royalties, even 'hobbyists,' I totally disagree with your conclusion that as a 'practical' matter, 'hobbyists' should be granted a legislative waiver or discount. The only real practical solution is an agreement reached via a private market-based negotiation between the webcasters and SoundExchange — perhaps incorporating some provisions of the Small Webcaster law, or direct licensing.

"Reaching a legislative solution is very problematic. Consider these hurdles: How would the law define a 'hobbyist?' What happens when a hobbyist's webcasting station turns into a commercial enterprise? What if the hobbyist starts streaming major label releases?... It is a moving target, almost impossible to define with enough precision to have any real meaning.

"But putting aside the definitional problem, there is an even bigger philosophical question — why does a hobbyist 'deserve' a break in the first place? The most common argument is that big media do not play indie music, and indie artists and labels would receive free promotion they otherwise would not receive. While I wish this were true, I am just not as convinced as others that this type of promotional webcasting greatly benefits artists or labels.

"There may be some anecdotal evidence that some listeners 'find' new artists and then 'buy' the music... I am more inclined to believe — based on the experience of my artist and indie label clients — that some listeners 'find' new music and then, more often than not, illegally download the music.

"This is very similar to the fallacious argument made by those supporting free peer-to-peer (P2P) file sharing services. They don't see the activity as substituting for a sale; they see it as 'turning on' new fans who eventually buy the music... If [that] were true, we would be in a golden age of music sales. Instead, we are faced with possibly the worst depression this industry has ever faced — not because the music is bad, but because P2P has devalued music...

"There is nothing wrong with the suggestion that a hobbyist should find a new hobby if he or she cannot afford the rates set by the Copyright Royalty Board. That doesn't appreciably hurt artists, indie or established, but puts everything into perspective and promotes a very simple idea — webcasters must build business models incorporating the rates set by the Copyright Royalty Board."

Read the entire article at the L.A. Times.

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