Webcasting and Copyright. (Copyright Corner)

By Gasaway, Laura | Information Outlook, February 2003 | Go to article overview

Webcasting and Copyright. (Copyright Corner)


Gasaway, Laura, Information Outlook


Recent news reports about the dispute between record companies and radio stations concerning copyright royalties for streaming copyrighted music have highlighted concerns that small radio stations would be unable to continue webcasting; indeed, a number of small Internet webcasters have ceased operations due to the high royalty rates. "Webcasting" is defined as the ability to use the Web to deliver live or delayed versions of sound or video broadcasts. Sometimes the same technology is referred to as "streaming." For a webcast, like a broadcast, it is the transmitting organization as opposed to the listener that determines the content of the program or the playlist. Although video can also be streamed, the controversy has revolved around so-called "Internet radio" and copyrighted sound recordings.

With the advent of the Internet, some radio broadcasters began to simultaneously webcast their radio broadcasts over the Internet. Others offered original direct Internet broadcasts. Radio stations that provided simultaneous webcasting paid royalties to copyright holders for the performance of their copyrighted music. However, the royalties they pay to ASCAP (the American Society of Composers, Authors and Publishers), BMI (Broadcast Music, Inc.),and SEASAC (the Society of European Stage Authors and Composers) compensate the composers or holders in the musical composition and not the owners of the copyright in the sound recording (i.e., the record). Most radio and television broadcasters pay royalties through an annual blanket royalty fee.

The reason that recording companies were not compensated for playing their records over the air is that, historically, there were no performance rights for sound recordings. The Copyright Act was amended in 1995 with the Digital Performance Right in Sound Recordings Act and again in 1998 with the Digital Millennium Copyright Act to provide performance rights for sound recordings performed by digital means. The second amendment covered webcasting. Radio broadcasters opposed the 1998 amendment, but Congress supported the recording industry by enacting this compulsory license provision. If a radio station webcasting over the Internet does not qualify for the compulsory license, then the only option it has is to negotiate individually with each record company whose recordings are being streamed.

There are several detailed requirements that a webcaster must meet in order to qualify for the compulsory license. (1) The webcast may not be a subscription service; in other words, users must not be able to select and play songs on demand. (2) Within a three-hour period, the webcaster cannot play more than three tracks from an album, and no more than two consecutively, nor more than four tracks by a given artist, and no more than three consecutively. (3) If the webcast is archived, the archive must be at least five hours long, and it may not be made available for more than two weeks. (4) If the webcast repeats itself (plays in a loop), then the loop must be at least three hours long. (5) Prior playlists of songs may not be published. (6) The webcaster must identify the song title, album title, and the featured artist during the performance of the song. (7) Finally, the webcaster must not encourage users to copy or record the music being played and must disable copying by users in possession of technology cap able of copying the recording.

From 1999 forward, the debate has been over the royalty rates that webcasters must now pay to recording companies in addition to the royalties to composers. In February 2002, the U.S. Copyright Office (Copyright Arbitration Royalty Panel, or CARP) released its proposal for how webcasters should be charged by the music industry. Neither side liked the proposal. The proposal was rejected by the Copyright Office in May 2002, and in June 2002, the Librarian of Congress issued a compromise ruling, which mandated that webcasters must pay 1/14th of a cent ($0. …

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