New Licensing Scheme for Webcasts

The U.S. Copyright Royalty Board announced Friday new royalty rates for webcasts of copyrighted material [Wired].

Compulsory licenses are already in place for audio recordings and cable TV, but interestingly not for radio or VCRs. (See Lessig’s Free Culture for more background.) Congress uses these fixed-rate licenses strike a balance between copyright holders and media re-users of copyrighted material. The copyright holders want to get paid for every use of their material. The media re-users want access to that material. At one extreme, if copyright holders (in this case record labels owned by global media corporations, represented by the RIAA) are allowed to set their own prices for licensing, they can in effect price new media out of the business. This new scheme sets a fixed price so that webcasters, if they can afford it, can continue in business. It will now cost $0.0011 per song per listener.

The free market has actually hit on such a solution in the past: voluntary collective licensing. As EFF describes:

Songwriters originally viewed radio exactly the way the music industry today views KaZaA users [and webcasters–Ed.]—as pirates. After trying to sue radio out of existence, the songwriters ultimately got together to form ASCAP (and later BMI and SESAC). Radio stations interested in broadcasting music stepped up, paid a fee, and in return got to play whatever music they liked, using whatever equipment worked best. Today, the performing-rights societies ASCAP and BMI collect money and pay out millions annually to their artists. Even though these collecting societies get a fair bit of criticism, there’s no question that the system that has evolved for radio is preferable to one based on trying to sue radio out of existence one broadcaster at a time.

So one interesting question is why the CRB is interfering where the free market might be expected to work the situation out for itself. I’ll give you a hint: as Wired says, when setting its rates, the CRB “apparently simply endorsed the proposal of the RIAA-associated SoundExchange royalty organization.”

Of course, another interesting question is whether in fact webcasting ought to be construed as infringing copyright in the first place. Just because copyright has been vastly expanded over the last 100 years does not mean that there is any constitutional basis in applying it to digital, therefore non-destructive, reuse. Further, since many webcasts are non-commercial in nature, copyright protection at all and compulsory licensing in particular seem unfairly applied.

This will likely increase commercialization of webcasting, and due to the fairly high prices, reduce the number of media outlets. Our own web-only WSLC may be priced out. I wonder whether my favorite non-profit radio stations will be able to continue streaming for free. Which is exactly the kind of competition squashing the RIAA and the rest of the old guard media are trying to accomplish.

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