Bill seeks music royalties for satellite downloads

By Reuters
Published: April 25, 2006, 10:35 PM PDT


The legislation, by U.S. Senators Dianne Feinstein, D-Calif., Lindsey Graham, R-S.C., and majority leader Bill Frist, R-Tenn., is aimed at compensating copyright holders as satellite radio services become distribution services.

(BULLSH*T, the "compensation" is intended for the labels, NOT the copyright holders.)

The "Perform Act," or the "Platform Equality and Remedies for Rights Holders in Music Act of 2006," would require satellite, cable and Internet broadcasters to pay fair market value for the performance of digital music. Additionally, the bill would require the use of readily available and cost-effective technological means to prevent music theft.

(Manditory DRM infection.)

"The birth of the digital music place has been a boon for businesses and consumers. However, these new technologies and business models have become so advanced that the clear lines between a listening service and a distribution service have been blurred," Feinstein said. "I believe that the Perform Act would help strike a balance between fostering the development of new technologies and ensuring that songwriters and performers continue to be fairly compensated for their works."

(Who's she running against next go-'round? Once again, I am ready to endorse her opponent (...and I'm a liberal!!!) Feinstein is a big disappointment.)

Record industry executives want so-called "parity" among the different download platforms. They argue that the new devices XM Radio is bringing to the market that allow customers to save songs on the receivers without paying for the download rip off the copyright holder.

"Digital sales are finally replacing physical losses," said Mitch Bainwol, chairman and CEO of the Recording Industry Association of America, which lobbies for the major labels. "If someone gets a distribution right without paying for it, that blows a hole in the digital marketplace."

Warner Music Group chairman and CEO Edgar Bronfman Jr. endorsed the legislation in testimony prepared for a hearing on the issue scheduled for Wednesday.

"When I see a device that permits consumers to identify the specific tracks they want from a satellite broadcast, record them and library them for future use, I call that device an iPod and I call the satellite service making that device available a download service," Bronfman said. "What is clear to everyone is that these services no longer resemble and will increasingly stray from our collective understanding of what constitutes a traditional radio service."

The bill protects copyright holders by ensuring that "the same rules apply to all of the satellite, cable and Internet services, which avail themselves of a compulsory license under" the nation's copyright laws, Bronfman said.

Sirius Satellite Radio has reached deals with the major record companies that compensate them for downloads on its S-50 receiver that allows customers to record content, but XM has not. A pair of devices, the Pioneer Inno and Samsung NeXus, allows customers to record programming.

XM executives contend that the devices are nothing more than a high-tech way to record radio programming, which is protected. In XM Chairman Gary Parsons' prepared testimony, he said that the Feinstein-Graham bill, tentatively known as the Perform Act, will "lead to a new tax being imposed on our subscribers."

(No sh*t Sherlock! And, it is "double-dipping" too.)

The company already pays millions in copyright royalties to the record companies, and said their push for a new royalty is a negotiating tactic designed to push those rates higher. The copyright office is currently reviewing those rates.

"The reason the recording industry is now insisting on a different standard has nothing to do with fairness," Parsons said. "XM and the record industry are in the middle of renegotiating their performance license. By changing the standard now, the recording industry hopes to stack the deck in its favor."

Bainwol denied the charge.

"Competition should be based on the offering. Their license is for a performance, not a distribution," he said. "I was struck by the power of their slogan: 'It's not a pod. It's a mother ship."'

"Digital sales are finally replacing physical losses," said Mitch Bainwol

Bainwol must have the best drugs in the country because he lives in a different reality. Over a three-year period, Apple has sold a billion 99-cent downloads, almost bringing singles back to the "value" they were attributed in 1997, when the "suggested" retail price was $3.80.

This doesn't even dent the $3 billion sales drop since 1999, much less replace it.

Settling lawsuits out-of-court can generate a lot of drug buying revenue. Bainwol strikes me as a mescaline type of guy. Hallucinogenics seem to be the RIAA drug class of choice.

Several so-called "traditional" radio services are considering or actively pursuing digital broadcasting. So what will stop people from recording such broadcasts?

I wouldn't be too surprised if in the near future the RIAA affilitates and their political allies start pushing a bill which would require radio DJs to "talk" all over the songs that they broadcast so that people wouldn't want to download them. Or, maybe require that in the middle of each broadcasted song a 5 second snippet of a speech by Mitch Bainwol be played. (Hello, everbody! NY KTU93 FM will give $1,000 to the first caller who can correctly string together an entire Bainwol speech from the next 20 songs we play!).

In the end, the Big Labels may end up killing their own golden egg laying geese with such bills.