Audio News for October 21, 2008

Hollywood Lawsuit Against RealNetworks for DVD Copying Software – A suit has been filed in Los Angeles District Court by leading Hollywood studios – including Paramount, Sony, Fox, Universal, Disney and Warner Bros. – to prevent RealNetworks from distributing DVD copying software called RealDVD.  Users can purchase RealDVD for $30 and use it to copy commercial DVDs to computers or hard drives, though the program prevents transferring the files to other users. RealNetworks calls the software “100% legal” on its web site, and claim that copying one’s personal DVD collection falls under the “fair use” allowed by law. However, there is nothing to prevent users from burning copies of rental DVDs, and the studios say that the Digital Millennium Copyright Act makes it illegal to circumvent the copyright protection technology without express permission of the copyright holders.  Asking for a restraining order, the studios argued that a California state court ruling last year in favor of a company selling entertainment centers allowing DVD copying is irrelevant to their case.

Pandora May Quit Due to Doubled Royalty Fees – One of the Net’s most popular radio services – www.pandora.com – may be pulling the plug because of the new government-mandated per-song performance royalty collected by the Copyright Royalty Board (CRB), which must be paid to performers and record companies. This fee has been doubled for webcasters, but not for satellite radio, and traditional over-the-air radio stations are exempt from such fees.  Pandora’s fees in 2008 will be a crippling 70% of its projected revenue. The unreasonable rate hikes will affect the other biggest Net-only radio services as well – Yahoo, AOL, MTV and RealNetworks. They will be paying more than 50% of their total revenue to the CRB for this single royalty. This will force them to go for “mass appeal” to get the largest number of advertisers, replacing the diverse programming available via webcasters with something more like today’s generally boring terrestrial radio.

But it will bankrupt most of the small webcasters, such as the thousands of public radio stations now simulcasting on the web.  A $500 per channel minimum royalty is required of them. The royalty rate is increasing from 7/100 of a cent per song to 19/100 – nearly triple. More than seven million Americans listen to Internet radio each day, and hundreds of thousands of artists depend on Net radio to reach new fans. But it is still the smallest broadcasting medium and yet is being asked to pay the highest royalties. A sensible alternative is The Internet Radio Equality Act which is in the House and Senate. Learn more at the SaveNetRadio Coalition web site.