|
Ultimate 80s, et
al., proposed letter of petition to the U.S. Copyright Office
Please note: As reported in RAIN on Friday
March 1 (scroll down to "sidebar" below story here),
a coalition of webcasting industry leaders, including Ultimate-80s.com
founder David Landis, have composed a letter of petition to
the Copyright Office in protest of the CARP recommendation.
This is the SECOND draft of this proposed letter. We're
interested in hearing what you think of it.
Please don't yet take any action with this letter. We're still
finalizing it, and are making it available on the site simply
to solicit input. When the letter is finished, we'll be happy
to let you know how you can participate and get your voice heard.
Please e-mail any suggested additions or changes to paul@kurthanson.com. |
March 4, 2002
Office of the General Counsel
U.S. Copyright Office
James Madison Bldg.-Room LM-403
First and Independence Ave., SE
Washington DC
Dear Sirs and Madams:
We, the undersigned, are putting aside our competitive interests
to join together to collectively and strenuously object to the recent
proposed rates set for digital performance rights in sound recordings
and ephemeral recordings. The rates for public performances under
the statutory license, as proposed by the Copyright Arbitration
Royalty Panel ("CARP") in their decision made public last week [Docket
No. 2000-9 CARP DTRA1&2], would significantly impair the ability
of the nascent webcasting industry to develop into a viable business.
By so doing, the rates will impair the full development of this
new medium of expression by placing a financial barrier to new entrants
to the industry. This in turn will stifle innovation and creativity
that would be provided by new companies, and limit the dissemination
of the very music that the statutory royalty was meant to promote.
While the undersigned companies were not participants in the CARP,
we feel strongly that the decision will have a profound impact on
the development of this new industry, in which we are all participants.
Thus, we are compelled to file these comments on the decision. In
making your decision on any requests that may be filed seeking modification
or review of the CARP decision, we ask that you carefully consider
the impact that the decision will have on all of the companies involved
in this industry. Particularly important is your consideration of
the impact of this decision on the small webcasters who were financially
unable to participate in the CARP process.
The CARP decision to impose a pay-for-play model, where a webcaster
pays a fee for each song played regardless of whether that webcaster
is making any revenue off of the website, is particularly injurious
to the small, start-up webcaster not affiliated with some large
company that can bankroll start up costs. The pay-for-play scheme
is different than that used for years for the licensing of compositions
by ASCAP, BMI and SESAC, and places a financial roadblock in the
path of new start up companies. Many of these companies are instrumental
in globally introducing audiences to new and innovative music, including
music that is currently not played on many terrestrial broadcast
stations. By preventing the entry of these innovators, the proposed
royalty payments will stifle creativity on the Internet, and limit
the dissemination of many new artists' work.
Each of us believes that artists should be fairly compensated for
their work. However, we believe that the proposed rates are not
only unfair to Internet webcasters, but also to consumers and the
artists themselves. It is an unfortunate reality that to date, streaming
music over the Internet is, for the great majority of companies
involved, a profitless endeavor. While all of us are encouraged
by the significant streaming audience growth rate during the past
year, the industry has thus far been unable to translate that growth
into revenue from advertisers. Thus, the payment of the royalties
proposed by the CARP will substantially impact the viability of
many companies currently streaming music on the Internet.
A far more equitable solution would be to base royalty payments
on webcasters' revenue as derived from the delivery of digital music,
so that the artists and broadcasters both can be fairly compensated
as the industry grows. Instead, the CARP recommendation will simply
serve to drive thousands of streaming broadcasters off the Internet
and deprive millions of listeners exposure to recording artists'
music, and, as a result, deprive the musicians of any potential
income from these new sources. Since its inception, the Internet
has been viewed as a medium that will allow everyone to communicate
and share their creative and artistic expression with the world
at large. The expression may be for commercial purposes, or it may
be entirely without such motivation. We fear that the CARP decision
will radically restrict the availability of the Internet as a medium
for this expression, which we believe is contrary to the intent
of Congress in adopting the statutory license.
We respectfully urge you to carefully review and reconsider the
CARP recommendations for the fee structure, so that it truly promotes
the wide dissemination of music by diverse sources, as envisioned
by the statutory license. We ask that you give all of us in the
Internet streaming industry a chance to survive.
Sincerely,
|
