“Music publishers, the record labels and digital music distribution outlets began a three-way legal wrestling match Monday over just how much songwriters and the publishing houses should get paid for digitally delivered music.”
At stake in this debate is mechanical royalties for internet streams. Major labels, Apple, and Yahoo want the royalty rate for artists to be lowered. The big publishing houses are currently promised nine cents a song, a figure that often gets negotiated lower, and the consortium against them wants that rate moved to 8%. Apparently, publishing revenues are up, while major label revenues are down. The Digital Media Association is upping the ante, pushing for the royalty rate to be dropped to 4%.
The driving concern here is the financial ‘burden’ that paying these royalties puts on the large companies that offer music. The claim is that streaming media should be treated like terrestrial radio.
Bottom Line: Without content, there is nothing to stream.
The RIAA’s head, Cary Sherman, wants to put encryption on our computer that will force us to decrypt music before listening to it. In other words, the filter will scan all your incoming data and then either allow or deny your ability to listen to it. since this idea likely won’t be popular (who’s going to willingly put a filter on their computer that blocks the files they are downloading?), the next suggestion is to put the filters in our modems.
Despite the predictable public backlash against these tactics (in an environment where the RIAA already has public approval that rivals the US Congress), some ISPs are moving ahead with these filters. The technical specifics are a bit thick, suffice it to say that various file encryptions can bypass these filters unless entire protocols are blocked.
Here’s a video of Mr. Sherman lauding the glories of filtering:
Bottom Line: Being out of touch with your consumers’ needs does not improve your financial picture, or your credibility.
The RIAA wants to expand copyright law, with the apparent intention of having more technicalities to prosecute. The new law on the table is for album compilations. Specifically, having each track count as separate count of infringement.
Goggle’s top copyright lawyer was quoted saying the parties pushing this bill have an “unslakable lust for more and more rights, longer terms of protection, draconian criminal provisions, and civil damages that bear no resemblance to the damages suffered”.
Bottom Line: Fining someone upward of $9,000 for a track with a value of a dollar may not be fair, but lawmakers still seem to align themselves with this kind of enforcement.
Although still unconfirmed, rumor has it that EMI is seriously considering pulling their funding from the RIAA. According to a recent Variety article, EMI has taken early steps to exit from the IFPI, the international version of the RIAA. Part of the move is a demand by EMI that the RIAA and IFPA produce a proposal on restructuring by March 31.
Citing the massive cost of participation in these trade organizations, it seems EMI is very unhappy with the results being produced by the RIAA and IFPI. The public relations nightmares these organizations have created has been a major contributor the devaluation of music. If file sharing wasn’t labelled an almost terrorist act, it could have a huge impact on the perceived value of music.
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