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THE STANDARD'S
B E A T S H E E T
The Latest Digital Music News - and It's Free
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Tuesday, February 13, 2001
TOP STORY:
* Streaming Legalese: Fine Print in IP Legislation Touches Off a
Battle Between RIAA and Small Webcasters
NET NOISE:
* A Brief History of Banned Music (http://ericnuzum.com/banned/)
BEATS:
* Napster and More Napster: Some News Is Bad News
* IUMA Scales Back, Blames EMusic Partnership
DOT DOT DOT:
* Valentine's Day Special: Rosenbergs Team Up With Napster ... Bob
Dole Hooks Up With RIAA ... Qualcomm Gets Cozy With Launch
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TOP STORY
~~~~~~~~~
Streaming Legalese: Fine Print in IP Legislation Touches Off a Battle
Between RIAA and Small Webcasters
By Julene Snyder
Congress is likely to soon begin a debate about the Digital Millennium
Copyright Act and how it affects consumer uses of digital
entertainment, including Webcasts of streamed music. Many say the
system works fine under the DMCA. But a grassroots movement says it
will freeze out smaller Webcasters and has set off a blindingly
complicated back-and-forth dialogue on the legal, economic and
cultural implications of the DMCA's provisions.
The debate's essence comes down to licensing. If Webcasters meet certain
complicated criteria, they'll be able to buy a statutory license,
which would serve as a sort of blanket permission to Webcast all sound
recordings. For those who don't meet that criteria, a separate license
must be negotiated with the sound-recording copyright owners - which,
in the case of most signed artists, tends to be their record label.
Either way, Webcasters will need to pay. An amendment to the bill now
requires Webcasters to be financially responsible for statutory
licenses. This could create an untenable situation for some
Webcasters, as it might force cash-thin operations to pay for music
from which they might not be able to wring revenue.
Gloria Hylton, music director of mom-and-pop Webcaster Nwez.net, says
the legislation is unfair to Webcasters. She's circulating a petition
to independent Webcasters that asks the 107th Congress to "repeal or
revise amendments ... (that were) lobbied for by the RIAA and passed
in committee, without open discussion in either the House or the
Senate. They are anti-technology, anti-competitive, and anti-consumer.
Certain provisions within these amendments will cause irreparable
damage to the Internet economy when instituted in 2001."
One point that bothers Hylton has been the U.S. Copyright Office's
decision to grant the RIAA an antitrust exemption, so that the entity
could negotiate rights with Webcasters. While Hylton admits there
would be logistical difficulties in the scenario of every Webcaster
needing to negotiate separately with every record label, she sees the
involvement of the RIAA as ominous at best.
There are signs the movement might have a sympathetic ear in
Washington. Last month, Senator Orrin Hatch, R-Utah, made some
critical remarks at the Future of Music Policy Summit in Washington
that were aimed at the major labels and the RIAA. "I do not think it
is any benefit for artists or fans to have all the new, wide
distribution channels controlled by those who have controlled the old,
narrower ones," Hatch said. "We need to think as creatively about
licensing options, about technological and legal and legislative
solutions."
But the RIAA has a ready response to the charges of Hatch and Hylton.
Steven M. Marks, senior VP of business affairs for the RIAA, says the
administrative entity - dubbed SoundExchange - "represents more than
2,000 record labels that have designated it the agent for purposes of
negotiating statutory licenses."
Still, Hylton worries that the terms of the deal won't be favorable,
especially to small businesses like hers. Yet she worries that those
who don't cut deals may find themselves out of luck down the line.
"Webcasters without deals will go out of business," she says
emphatically. "Nobody's turning a profit as it is. We're all just
trying to find a way to be profitable in an industry that's still
finding its way."
Marks counters: "The fact that setting a statutory rate has been a
lengthy process should not be a reason for giving Webcasters a free
ride for their use of hundreds of thousands of recordings over the
course of several years. That's like saying someone who buys a
computer from a store that offers one-year-free financing should be
able to tell the store one year later that she doesn't have enough
money because she has used up all her cash."
Hylton says you can't attract funding if you have a big question mark
where a dollar-figure should be. "The only ones left standing will be
those who've made deals with this powerful lobbying organization. And
if I'm going to make a deal, what do I have to give up to make that
deal? If mom and pop want to be out of the mainstream, that's a threat
to their system. This is all about controlling the industry."
Marks urges Webcasters to at least negotiate with SoundExchange: "Even
if a deal is not concluded, they will have an idea of the range of
rates at issue and can make a business decision about what to set
aside." As far as Webcasters who choose a wait-and-see attitude go,
Marks says that those who don't want to cut a deal now certainly
aren't suffering unduly.
While administering royalties is a complicated and expensive
proposition, there are valid concerns as to whether having the RIAA in
charge of collecting monies is akin to putting the fox in charge of
the henhouse. Naturally, the RIAA wants to get the best possible deal
for SoundExchange members. And naturally, Webcasters want to pay as
little as possible while they struggle to come up with a profitable
business model.
Senator Hatch also stressed the need for give-and-take between warring
factions at the Future of Music Policy Summit. "I think both sides in
licensing disputes need to sit down and resolve their differences in
creative ways that will provide benefits for artists and music fans,
while allowing the intermediaries to add value along the way," he
said. "I expect to see the market provide fair, nondiscriminatory
licensing of music, not just cross-licensing among major labels. I
intend to do what I can to see that happen."
Given the tenor of the conversation thus far, that's a high-minded
goal indeed.
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NET NOISE
~~~~~~~~~
A Brief History of Banned Music
(http://ericnuzum.com/banned/)
Poor Eminem. So misunderstood. So picked upon. So he wrote a few
lyrics that are a bit on the raw side. Sure, the words to songs like
"Kim" ("Don't you get it bitch, no one can hear you? / Now shut the
fuck up and get what's comin to you / You were supposed to love me /
Now bleed! Bitch bleed!") might sound as if they're advocating murder,
but it's artistic license. While GLAAD is protesting his presence at
the Grammys and getting the word out, one has to wonder where the
women's organizations are when it's time to populate the picket line.
After all, while ol' Slim Shady may have a few choice words for
homosexuals, he saves his real vitriol for the ladies. But it's one
thing to protest, and quite another to censor. If you don't like what
Eminem has to say, grab a megaphone and yell some epithets back at
him. Make it a point not to buy his records. Or leave the room when
it's time for him and Elton to sing a duet. Yet that doesn't seem to
be the attitude of the cultural packagers and our public servants.
Browsing through the history of banned lyrics, one is struck by the
heavy hand of record labels (such as the recall of the original cover
of the Beatles' "Yesterday and Today"), TV producers (like the Ed
Sullivan Show's reluctance to let Jim Morrison sing "girl we couldn't
get much higher" on national television) and politicians (like Ohio
Governor James Rhodes' attempt to keep CSNY's "Ohio" from being played
in the state because he feared it would incite further violence). With
the Eminem controversy still burning, a little historical perspective
from a site like this is a good thing indeed.
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BEATS
~~~~~
Napster and More Napster: Some News Is Bad News
Napster aficionados will live to trade files another day, but perhaps
not much longer than that. As every news outlet and its corporate
sister reported, a federal appeals court ruled Monday that Napster is,
in fact, legally responsible for its users' copyright infringement,
but only to the extent that the company knew of those actions. So the
mad rush to download songs over the past weekend - Webnoize estimates
that 250 million songs were downloaded in 48 hours - can continue, at
least for a bit. Recording Industry Association of America head honcho
Hilary Rosen immediately issued a brief statement claiming victory:
"The court of appeals found that the injunction is not only warranted,
but required. And it ruled in our favor on every legal issue
presented." The three-judge panel from the 9th U.S. Circuit Court of
Appeals did cal a lower-court ruling "overbroad," and sent the
decision back for further deliberations. Napster - which acknowledged
the decision could eventually cause the company to shut down - plans
to get more facts into the record for the next round of judicial
review.
Read more at
http://www.thestandard.com/article/display/0,1151,22119,00.html?nl=bts
IUMA Scales Back, Blames EMusic Partnership
Sad news last week from the Internet Underground Music Archive, a
first-mover in online music. "We regret to inform you that we have
been forced to close the IUMA community to new artists," IUMA said in
a letter dated Feb. 7. "Severe cutbacks in funding from EMusic in
early January have made it impossible to maintain the quality and
consistency of many IUMA services. Since then, we have made exhaustive
attempts to find another partner, but the short timeframe has made
this extremely difficult, and we have been forced to scale operations
to the bare minimum." EMusic acquired IUMA in June 1999. While
IUMA.com is still in existence, "anything that (requires) human
interaction - CD sales, customer support, new artist submissions,
etc." is gone, quite possibly for good. That same day, EMusic released
financial results for the quarter ending Dec. 31, 2000. Tucked several
paragraphs down in the press release was word that the company's "net
loss for the December quarter was $191 million, or $4.65 per share,
compared with a net loss of $14.3 million, or $0.47 per share in the
same quarter last year." No word on how the IUMA baby-naming contest
affected the bottom line.
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DOT DOT DOT
~~~~~~~~~~~
Valentine's Day Special: Rosenbergs Team Up With Napster ... Bob Dole
Hooks Up With RIAA ... Qualcomm Gets Cozy With Launch
The bad-timing department brings news that the pop-rock band The
Rosenbergs - who gained notoriety by saying thanks-but-no-thanks to
Farmclub.com - have teamed up with Napster to promote the band's debut
album, "Mission: You." Bundled CDs will include a bonus copy to be
shared with a friend, and Napster will sponsor a month-long tour that
kicks off this week in Raleigh, N.C. ... Inside.com reported over the
weekend that the RIAA "has retained former GOP presidential candidate
Bob Dole as a strategic adviser with its legal/lobbying team in
anticipation that the Napster issue becomes an issue in Washington"
... News that Qualcomm is teaming up with Launch to "use new BREW
platform to make streaming music service Launchcast ready for wireless
delivery" sounds impressive ... I think. The press release hyping the
pairing explains that BREW is an acronym for "Binary Runtime
Environment for Wireless" and that the development "eliminates the
need to modify applications for each emerging cellular phone model."
Presumably, this is a good thing, but since just reading about "Code
Division Multiple Access" makes my head hurt, I'll have to take their
word for it.
STAFF
~~~~~
Written by Julene Snyder (julene@well.com).
Editor: Steven Zeitchik (szeitchik@thestandard.com).
Deputy Editor: Michele Keller (mkeller@thestandard.com).
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