Internet Radio vs. Copyright Royalty Board
I have been following the Internet Radio Royalties battle for a while now. The main reason is I like to see how corporations manipulate the government for their own benefit. This is why Rand supported separation between state and economics. By watching this issue you see that she was right.
If you read between the lines you will see that the big corporations lobbied the Copyright Royalty Board (Congress) to set royalty fees so high it would force smaller radio stations to shut down. That way the only choice you have left is theirs. If you think I am crazy for saying this, look at the internet stations that didn’t support the Internet Radio Day of Silence. The one at the top of that list is last.fm, which is owned by CBS. CBS would love to see the little guys get shut down. That would mean more money for them and less choices for you. This is a prime example of how the free-market is being destroyed by the government.
This Sunday was going to be that day when the new rates were going to take effect. So a lot of sites were ready to shut down. Then something amazing happened, SoundExchange, the people that collect royalties, told Congress that it would NOT collect. They felt that the fees were not fair and need to be reevaluated.
SoundExchange heard the cries from the radio stations and listeners. They looked at the rates that were set by the Copyright Royalty Board (Congress) and felt that something was not right about it. Now, SoundExchange and the Webmasters are negotiating their own pricing and are keeping Congress and the Copyright Royalty Board out of it. Looks like internet radio is safe for now because the free-market (you and the webmasters) is standing up to government.
July 19th, 2007 at 9:01 am
Hi Mosley. I’m also a big supporter of the fair market, but in this debate I fall on the other side. I’m probably the only person outside of SoundExchange that you’ll find that agrees with the CRB ruling. I know this isn’t a fun issue for most to discuss, but if it’s ok I’d like to explain why I believe the royalty rates should be raised.
First, I believe that music artists should have full ownership and control of everything they create. Like all intellectual property, this means that anybody who wants to take or use the music the artist created should have to obtain permission from the artist. Most artists will offer you that permission in a number of ways. If you want a recording of their music, you can usually buy a cd they made. If you want to listen to their music, you can go to one of their concerts. If you want to play their music for other people to hear, like on a online radio station, you can negotiate a rate with the artist. (Who knows, the artist might pay you to play their music on your station.) An artist might even make their music available for no cost by everyone. Basically, it is up to the artist to determine who or what is done with his own music.
Second, the proper function of the government is to protect individual rights, including the right to own property. In this case, the government should protect the music artist’s right to control who can use his property. If someone takes or uses that artist’s property without permission, the owner’s rights have been violated and the government should step in.
Unfortunately, the government is not doing its job for music artists. Rather than protect a music artists right to control his intellectual property, the government created a “Copyright Royalty Board” that allows webcasters to broadcast music without obtaining permission from the music artist. If a webcaster can’t or doesn’t want to go through the trouble of negotiating with music artists, he can just use the government license and play anything he wants. And if a music artist wants to charge more than the government royalty rate for his music, he’s out of luck.
It’s important to note here that webcasters are the beneficiaries of the CRB, not the victims. Most people that protest the CRB’s decision to increase their royalty rates do not have a problem with the government’s violation of the rights of music artists. Their complaint is that thegovernment’s individual-rights-busting license will cost too much. Currently, the rates established by the government are cheap enough to allow practically anybody to broadcast other people’s music, and that’s one of the reasons we’ve seen online radio flourish. The CRB’s rate increase will make it much harder for people to use the government’s license, but I believe that they never should have had that license in the first place.
The ultimate solution to this government intrusion is to abolish the CRB and get the government out of the royalty-rate-setting business, but that’s not an option today. The debate is whether the government rates should be very high or very low. I think the rate should be very high to make the government’s license as unappealing andinaccessible as possible, because nobody has the right to use that license anyway. If the government’s rates are out of reach of webcasters, their remaining option is the only option they should have had in the first place: To negotiate with the people who own the music they want to play.
Will enforcement of the CRB’s ruling cause some online radio stations to stop? Probably. I still think that’s a better option than allowing webcasters to use the government to step on the rights of the music artists. I really believe that internet radio is going to be fine, though. I believe that if there is a demand for something, like streaming radio, the market will try to fill that need. Webcasters are always quick to tell you all of the benefits music artists receive when they play their music. If a music artist wants to receive those benefits, it would make sense for him or her to give the webcaster permission to play his music. Music artists still have the ability to establish their own royalty rates, independent of the government’s rate, so they can still get their music played on online radio stations if they wish.
July 19th, 2007 at 9:19 am
You make good point but I don’t know if I 100% agree with you. If the artists are the ones getting screwed that why don’t we see them standing up for themselves? The only people that I see upset about this are the Webmasters and Listeners.
I agree that the artist should be the ones that have control of there music. That’s why I want the CRB to be gone! It’s just a waste of time. Also the artists do have a say SoundExchange collect and sets royalties for the artist. So if they want more money they just need to with them.
You should come on the show sometime!
July 19th, 2007 at 10:04 am
I don’t think I’d be good on the show, I don’t think I have much of a “radio voice.” I’m very content hiding behind my little keyboard.
The artists do have a say in establishing the SoundExchange royalties, which is one of the reasons why we saw the big jump in rates. But the webcasters and online radio listeners think they should have a say, too, and they want you to pressure Congress to give them that. I think that the artists should be the *only* people who have a say in what they charge for their own property.
That’s one of the neat things about individual rights. You can have millions and millions of people who disagree with what you do, but they are powerless to stop you. If record companies want to charge high rates, they should be able to do so regardless of the wishes of webcasters and listeners.
Here’s another way to look at it. Let’s pretend that instead of establishing high royalty rates, the government abolished the CRB and told webcasters and artists to work it out on their own. That would be great, right? Well, I think that if this were to happen we’d see the same type of SaveNetRadio movement we see now. We would still hear all of the horror stories about all internet radio being shut down. We would still see the calls for people to call their government representatives to pressure them to “save internet radio now!” The SaveNetRadio’ers are not fighting for a free market or for anybody’s individual rights. They want the artists’ music, and they want it cheap.
You are right that there are practically no music artists or record companies that are standing up for their individual rights. Unfortunately, we live at a time where most people have never grasped the concept of a “right,” and I think that’s why debates like this happen all the time. Some people say high rates, some people say low rates, but nobody asks the question “What role should the government play in our lives?” But the fact that you’ll probably never see an artist stand up and explicitly state his right to control his own intellectual property doesn’t mean that the artist doesn’t have that right.
July 19th, 2007 at 10:28 am
“But the fact that you’ll probably never see an artist stand up and explicitly state his right to control his own intellectual property doesn’t mean that the artist doesn’t have that right.”
Sure it does! If the artist is not going to protect his right to his music then he doesn’t have it. Just like if people let a dictator run there country then they give up their rights. The only way for them to get them back is to stand up for your right to live free, but if you’re not going to do that then you don’t have any rights.
I remember Rand saying something about this but for the life of me I can remember was. So I will have to look in to this before I make anymore statements.
But what I do know is the protection of your right is your individual reasonability. The government’s only job is to protect you from force. Example, if you brake in to my house and steal my TV, but I do or say nothing about it, then the government can not protect my right to that property. If my neighbor saw is stolen and told me about it and I still do nothing, again I the government can not protect my right because I don’t acknowledge I have one. If the neighbor calls the police and they come knocking on my door, again if I say or do nothing they are powerless to do anything. You can’t protect a right that someone doesn’t accept they have.
July 20th, 2007 at 1:02 am
I think there are some differences between the cases you gave and situation we’re talking about. I don’t want to split the conversation off into different directions, so I’m just going to talk about one difference I see. The royalty rate debate is not about one party whose has been robbed but refuses to press charges against the thief. It’s about whether that robbery should be allowed as government policy. If the Internet Radio Equity Act is passed by Congress, the government will become the tool that webcasters use to take the property of musicians. I don’t think that is a proper function of any government, no matter how well victims are able to explain how their rights have been violated.
But so far as it matters, rights-holders have spoken out in favor of the increase, in the form of record labels that represent the musicians. They don’t state that they should get to charge whatever they want for their property, but they did push the CRB to raise the rates in the first place.
You said:
“The government’s only job is to protect you from force.”
You’ve also stated that the government should lower royalty rates for music played over the internet. I have a question for you: How does lowering the royalty rate the CRB offers to webcasters going to protect anybody from force?
July 20th, 2007 at 9:15 am
When did I say this?
“You’ve also stated that the government should lower royalty rates for music played over the internet.”
I do not support the CRB so I can not answer your question. My point is that I do NOT want the government evolved. This was something that the artist and/or the labels have to deal with themselves. Also if you look at the case you can see that CBS and other big media were going to use the CRB to force smaller competition out of the market.
This is why we need separation between government and state, so problems and debates like this can’t happen.
July 20th, 2007 at 9:44 am
In a previous post on your blog, you gave support for SaveNetRadio.com (whose primary goal is to use the government to lower royalty rates) and you asked for readers to contact their congressmen to “let them know you’re not happy.”
How can the CRB’s royalty rates force smaller competition out of the market? Any artist or music label that thinks the CRB rate is too high is free to offer their music for lower rates. Any webcaster that doesn’t want to pay the CRB rate is free to walk away or to ask for lower rates from artists.
The only people who are being *forced* in this situation are the music artists and other owners of music.
July 20th, 2007 at 10:09 am
“How can the CRB’s royalty rates force smaller competition out of the market?”
They were hoping that people would not stand up and they would just do what the CRB says. And that was what was going to happen. SoundExchange was really to start charging the new rates. But then they changed there minds because they saw that the new rates were unfair.
We now that you can get different rates from the artist, but there are a lot of people out there that think that if the government says you have to do something you have to do it. But you and I are Smarter then that. So yes they were trying to control the market but finality key players that we involved understood the power of contracts out side the government.
Alot of people just fallow the Government like sheep!