SoundExchange Owns Me?

By Richard Menta 1/30/07

I find it interesting that if I record myself singing in the shower and post it as a stream on the Internet I may owe SoundExchange a performance fee. If that sounds ludicrous - and it is of course - it is possibe that doesn't matter. According to an article running on the Daily Kos I may indeed owe SoundExchange a fee. But that's ok, I can get my fee back…as long as I join SoundExchange and pay their fee to collect the fee they collected from me. Hmmm.

It seems SoundExchange, an affiliate of Record Industry Association of America, is claiming that the group won the right to collect compulsory license fees for all performances on the Web. This includes the performances of non-RIAA members. The Daily Kos pulled this from the SoundExchange site:

"The recent U.S. Copyright Office ruling regarding webcasting designated SoundExchange to collect and distribute to all nonmembers as well as its members. The Librarian of Congress issued his decision with rates and terms to govern the compulsory license for webcasters (Internet-only radio) and simulcastors (retransmissions)." (http://soundexchange.com/faq.html#b4)


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One of the supposed end-arounds for Web radio stations, who are infuriated at the latest escalation in Internet radio performance fees, is to simply play the music of non-RIAA record labels. Indeed, there are several small labels looking for exposure for their artists who have already come out and waived the online tariff.

But it would not exactly help the RIAA and its members if frustrated Net stations took a mass exodus and punted their playlists right to the independent labels. That's because radio in all of its forms is still the biggest promotion mechanism for music and Internet radio is growing dramatically in influence. In that light it makes strategic sense for the lobby to simply lay out a broad claim to ALL performances, those that blanket the entire digital music landscape, as it theoretically gives them tremendous control. Of course, theoretical and real control are two different animals. Good luck extracting performance fees from unsigned bands who stream their music on MySpace.

If this interpretation is correct, from SoundExchange's viewpoint if I wish to stream just my own music I not only have to pay for a Webcasting license, but also a fee to subsidize the collection of those performance fees for my own performance.

And if I disagree with this interpretation? I guess I can ignore it as they probably won't come after me for posting my bathtub arias online. Another action I can take is to ask the courts to clarify this matter, a perfectly reasonable avenue to address a grievance. Anyone have $200 million they can lend me for legal fees?

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