December 1, 2008

Podcasting, music and the law

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Bad news for podcasters who want to abide by the law — it’ll cost you

Guest post by Matt May

ASCAP has updated its Internet licensing to reference podcasts — oh, excuse me, pod-casts. The move may have been intended to answer some questions as to the legality of using music in podcasts, but, as with the webcasting era, it left a lot of people scratching their heads. Is this all we need, just a $288 license to this agency, to be covered through the end of the year?

Well, there’s some bad news. The truth is that, no, that’s not everything. In fact, the landscape for music licensing is even more confusing than most people would imagine, and it at times consists of entities who may not even want to sell you a license. Here, I try to break them down. Know that I am not a lawyer, and as such am not going to know much more detail than is absolutely necessary.

Songwriters

ASCAP is essentially a middleman for songwriters’ royalties. Authors join ASCAP knowing they have agreements with others for capturing and redistributing royalties as they accrue from various sources (radio, TV, commercials, etc.).

But ASCAP is only one of these middlemen. BMI and SESAC are also in the same business, and they have their own licensing policies. In order to check compliance, you’ll need to verify that all of the music you’re playing is by artists that are ASCAP members — or, like radio stations do, license all of them. For the calendar year 2005, BMI wants $283 for what appears to be the same license as ASCAP’s, and SESAC wants $168.

So that $300 bill has turned into a $750 bill to license your music. The bad news for the non-profit podcaster is that you’re not done. Not by a long shot.

Content owners

You’ve paid the songwriters, which gives you the rights to the music being performed.

But that doesn’t give you the right to the performance of the music — that is, the stuff represented in bits or grooves or magnetic forces. Nor does it give you the right to make copies of it, but more on that later. Let’s talk to the people who own the recordings. Which is…

the record label, of course! You wouldn’t think that the artist would own their own recordings, would you? That would be silly. Record labels exist to extract the most revenue possible from the recordings they have made, and to that end, they don’t seem to publish their licensing terms, or be interested in offering blanket coverage for sound recordings.

I had originally thought this step is subsumed by the mechanical rights I mention below, but in the comments on my blog, Craig Patchett points to a SoundExchange licensing primer (now removed) that lists a “master use license” which you will need to negotiate with the content owner. That’s something you’ll have to seek out from each record label, and not only can they charge you whatever they can get, they may also see fit to refuse to license the track you’re seeking.

There is a statutory license that went into effect in 2002 for the purposes of webcasting. For .07¢ — that’s seven hundredths of a penny — per stream per performance, you can play what you like. (FYI: the minimum fee for 2005 is $500.) But podcasting isn’t webcasting: it’s a download, not a stream-based system. And since a download is copying an original, you need to pay the labels for the master use license, skip this step, and go straight to mechanical rights.

Mechanical rights

These rights, so named because of a history dating back to player piano scrolls, entitle you to make copies of music recordings. The Harry Fox Agency administers these licenses. Through the end of 2005, mechanical rights cost 8.5¢ for each track up to 5 minutes, or 1.65¢ for each track over 5 minutes in length. SongFile.com lets you buy as few as 500 of these at a time (that’s $42.50, to save you time on the calculator). Mind you, you’ll have to license each track separately, so if you’re making a music-oriented show, that’s $42.50 times every song you’re playing, minimum, per show.

What to do

And that’s most of it. Once you have paid the $750 minimum to the performing rights organizations, $42.50 per track to Harry Fox, and whatever is behind Door Number 3 to the labels, you’re covered, at least until more than 500 people download any given song. I am purposefully avoiding the discussion of other countries’ royalty systems, because I don’t know anything about any of them, and what I’ve written is probably already enough to make a few heads explode.

It is important to know this stuff now, to avoid a meltdown later. Should you decide not to go the licensing route, and your show becomes popular, you may be in for a rude awakening down the road. Remember the filesharing lawsuits? Of course you do. That’s just a publicity stunt compared to what people could be facing if they ignore these rights wholesale. All of these agencies sue infringers like it’s their job. Because it is. And the law is on their side.

I can hear it already: “But I’m a non-profit! I’m not making any money on this at all!” Yes, we know. But there’s no provision for that in the law. You’re broadcasting, as far as they and the law are concerned, and that means keep records, report playlists, and pay up.

What can you do about this? In the future, if podcasting catches on broadly, it’s going to be best to ask all of the owners of all of these rights to offer a license that reflects the reality of the situation: lots of people are making shows, and lots more are listening. Therefore, give us a licensing regime that doesn’t require a lawyer, an accountant, and a traffic department just to make a 21st-century mixtape.

The alternative to this is to separate yourself from the entire system. Creative Commons-licensed music explicitly waives the author’s right to the royalties I’ve mentioned here. A large number of artists are using Creative Commons licenses, either out of pure altruism, or cognizant of the fact that offering a defined set of rights to users means there are no questions for people like podcasters. In other words, Staccato is in the clear. And I’m keeping good track of the licenses I find, just to avoid a nasty surprise down the road. I’m not looking forward to what I expect will happen sometime in the future, but I expect to be ready in case it does.

Matt May posted this at his Best Kung-fu blog. Republished with permission.

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