Copyright board avoids digital music royalty rate hike

[AppleInsider]

Averting a potentially drawn out conflict over music royalties at iTunes and other online stores, the Copyright Royalty Board on Thursday said it would preserve the same royalty rate as today for CDs and downloadable songs.

A three-person panel of judges determining the changes for the Board said labels would still have to pay the same 9.1 cents per song as they do today, rejecting calls by the National Music Publishers Association and connected artists to pay as much as 15 cents per song.

The decision brings a quick end to an argument between store operators and musicians where both camps had said their opponent's requests would be unsustainable. While artists have long called for better income for content sold, Apple in a statement warned it might need to close iTunes if the royalty increase took effect and labels were unwilling to soak up some of the costs.

Apple currently operates iTunes on minimal profit and claims it would take losses on each sale if it didn't raise prices, a move which it also believes would be untenable in the current market.

In a surprise move, however, the Copyright Royalty Board has also set a royalty rate per ringtone of 24 cents, effectively setting a government-determined rate for the first time. Ringtone fees in the US have until now been set through individual negotiations, which often leads to significantly varying prices and a limited selection as certain artists or labels may refuse ringtones due to fundamental disagreements over prices.

None of the involved parties have commented on the ruling as of press time.

[ View this article at AppleInsider.com ]

[bigmc6000]

Good deal! Way to use the muscle in a positive way Apple!

[coffeetime]

The government setting the price for ringtones. A tax break provision for the makers of toy wooden arrows inserted into the latest version of the "Financial Armageddon Avoidance" bill.

We recently watched the excellent HBO miniseries "John Adams." I'd say that he along with the other founding fathers of our country are spinning in their graves about now. Every two years, one entire house of Congress (House of Representatives) is sent packing, and despite the fact that the public's approval rate of Congress is probably LESS THAN HALF that of Bush, we proceed to rehire almost all of them back again (and again, and again, and yet again). Isn't that Einstein's definition of the word "insanity"? (Doing the same thing over and over again and expecting different results.)

[SpamSandwich]

Only suckers pay for ringtones.

[ByronVanArsdale]

Originally Posted by SpamSandwich

Only suckers pay for ringtones.

Agreed. I just the "old telephone" ring on my iPhone!!

[whatisgoingon]

Originally Posted by AppleInsider

In a surprise move, however, the Copyright Royalty Board has also set a royalty rate per ringtone of 24 cents, effectively setting a government-determined rate for the first time. Ringtone fees in the US have until now been set through individual negotiations, which often leads to significantly varying prices and a limited selection as certain artists or labels may refuse ringtones due to fundamental disagreements over prices.

Why is a ringtone, which by definition is a small fraction of a complete song, and generally is missing the vocal's for the song, worth almost 3 times the value of the complete song including vocals? Sure, the carriers have been gouging for ringtones, just because they can, by using their walled-gardens to artificially limit supply. Is this just the gov't way to forcing them to spread the wealth (as in, since you are gouging your customers, you should be paying artists more for what your are selling)?

[manfrommars]

Originally Posted by bigmc6000

Good deal! Way to use the muscle in a positive way Apple!

Well put. Apple goes to pains to 'appear' to make the tools that artists and creatives live by. Yet here was an ideal opportunity to support those very artists.

The September 30th posts about this issue were so well written I won't retread, but it seems clear that no one is fooled by Apple's crying poor on this, nor is anyone fooled into thinking musicians are greedy for asking for more that 9-ish percent returns on songs they write.

Bogus decision, IMO.

[Ireland]

The poor musicians. I think it's a sin what the record companies make in this racket.

[Ireland]

Speaking of ringtones, here's the one you hear on Apple's iPhone ads. I use it as an alarm myself. You're welcome!

[sflocal]

It just goes to show the greed the record labels have on this. I side with Apple completely. I can understand the 9.1 cents for CD distribution but the record labels should out of their own pocket pay the 15 cents for electronic distribution since there is actually less overhead involved than with the physical CD itself. No packaging, shipping to stores, inventory, etc.

I believe record labels make more money from online sales per-song since they don't have to do any work whatsoever to sell the music. Apple does that for them.

Greedy bastards. The artist should start a revolt against the labels.

Remember, remember the fifth of November...

[Dorotea]

Don't think this is about musicians at all. This is a royalty paid to song writers/publishers.

[YTV]

Who the hell pays for ringtones. Honestly I don't know a single person who has ever paid for a ringtone, ever.

[JeffDM]

Originally Posted by YTV

Who the hell pays for ringtones. Honestly I don't know a single person who has ever paid for a ringtone, ever.

For the most part, I think of paid ringtones as an a-hole tax. I'm surprised people pay it, but ring tones are a billion plus dollar indusrty.

[solipsism]

Originally Posted by JeffDM

For the most part, I think of paid ringtones as an a-hole tax. I'm surprised people pay it, but ring tones are a billion plus dollar indusrty.

If that is an a-hole tax what are ringback tones, "biggest douche in the world" tax?

[AeronPrometheus]

Jobs held his hand over the big red button and they blinked.

[AeronPrometheus]

Originally Posted by solipsism

If that is an a-hole tax what are ringback tones, "biggest douche in the world" tax?

It's a lazy tax for the billions that want the latest Akon song on their phone and don't know how. Ringback tones are the quickest way to alienate longtime friends and family.

[v2m9]

thanks for tips

[ncee]

As long as someone is willing to pay for something / anything, there will be companies that charge for said goods and services.

I'm not against anyone making a buck, and if you can find a way to do so, good for you, but on the other hand … a flucking ringtone??

Man what in hell has the world come to.

I want each and every one of you to sit down, get out a pen and paper, and write down where you think we will be in 1, 2 5, 10 years.

What are we having to pay for …
What are we using our phones for …
What are we using our computers for …
Are we happy with the laptops (now that they are just so flucking small, fast and cool to have and use … what can they possibly add, change to the current models …
How are we communicating …

There was a time I thought make many, that Zager and Evans were daydreaming when they wrote the hit song, "In the year 2525"
- http://www.youtube.com/watch?v=WhNM2K8cmU8

[lfmorrison]

Originally Posted by whatisgoingon

Why is a ringtone, which by definition is a small fraction of a complete song, and generally is missing the vocal's for the song, worth almost 3 times the value of the complete song including vocals?

It's because a ringtone license constitutes a perpetual license to make public performances of the song - every time your phone rings in a public place, you're effectively making a public performance of a portion of the song for everyone around you to listen to.

Other forms of public performances (such as broadcast radio) involve either pay-for-play royalty payments, or else a system of ongoing blanket royalty payments which are then distributed through a complicated formula to the consortium which represents the various copyright holders.

Instead of requiring you to pay a royalty for each public performance of your ringtune (ie every time your phone rings), you pay a larger one-time royalty when you acquire the ringtune.

Public performances of a song are not included in the fair use rights conveyed to the owner of a CD or like media, so the royalty paid for CDs and like media are not as high.

Or so the argument goes...

[elroth]

Originally Posted by coffeetime

...founding fathers of our country are spinning in their graves about now.

I'd say thie price of ringtones would concern them a lot less than Bush's warrantless wiretapping and his holding people in jail without trial or access to the evidence against them, or Cheney saying he's part of the legislative branch, not the executive branch (so his papers and e-mails can be kept secret).

[DavidW]

Originally Posted by lfmorrison

It's because a ringtone license constitutes a perpetual license to make public performances of the song - every time your phone rings in a public place, you're effectively making a public performance of a portion of the song for everyone around you to listen to.

In nearly every industry, except the music industry, this would be regarded as....free advertising.

Other forms of public performances (such as broadcast radio) involve either pay-for-play royalty payments, or else a system of ongoing blanket royalty payments which are then distributed through a complicated formula to the consortium which represents the various copyright holders.

Instead of requiring you to pay a royalty for each public performance of your ringtune (ie every time your phone rings), you pay a larger one-time royalty when you acquire the ringtune.

Public performances of a song are not included in the fair use rights conveyed to the owner of a CD or like media, so the royalty paid for CDs and like media are not as high.

Or so the argument goes...

So I can actually get the RIAA after all those annoying drivers that blast their car stereos for everyone to hear?

I kind of don't think that the fair use law meant to ban all playing of music in public. Or that all music played in public constitutes a "performance". So long as the music being played, that is within earshot of everyone nearby, is for your own listening pleasure. Sitting on a park bench while eating your lunch and listening to music on a CD player with speakers is not a "public performance". Even though the people sitting next to you can hear the music.

You standing on a street corner protesting the war while playing anti war protest songs in the background is a "public performance". You entertaining the crowd at the park by dancing on roller skates while playing music is a "public performance". Or you setting up a DJ booth in the middle of a park and start taking request from the public. Even if you don't charge anythng for playing the request.

As long as you're listening to your music for your own personal pleasure, it is not a "public performance" of that music. Because you are ultimately playing your music for youself. Not for the public.

A ringtune should not be regarded a a "public performance" because the tune is to entertain the owner of the phone. Not the people around that can hear it. (It's sure as hell not entertaining me when I hear one of those annoy ringtunes. ) Now if the owner of the phone gets up and start tap dancing or singing to entertain the people around, every time his/her cell phone rings. That's using a ringtune in a "public performance".

Now the RIAA would like you to think otherwise and wants you to feel guilty for "ripping" off the artist".