Playing Music on the Net

By Marie D’Amico, 

The net is the newest avenue for emerging and established recording artists to deliver their product to the public. Most major music publishers and a slew of startups have built Internet-based radio stations which play pre-chosen channels of music (pop, rhythm & blues, rap) or specific songs users select. The Digital Performance Right in Sound Recordings Act of 1995 , which became effective February 1, 1996, changes the U.S. Copyright Statute and the legal landscape for all of these companies.

Any song is composed of two copyrightable parts - the underlying musical work and the sound recording. While Eric Clapton copyrights his cover of "I Shot the Sheriff," Bob Marley , the song’s writer, copyrights the composition. The U.S. Copyright Statute specifies that only songwriters, but not recording artists, own the exclusive right to publicly perform their copyrighted works. So, to publicly play this popular ditty, you get a license from and pay Marley, but not Clapton.

For the Internet, the Act alters this authors-only licensing arrangement. To publicly play music on the Internet, now you must procure a performance license and pay both the songwriter ( Marley ) and the singer (Clapton). The music performing societies, ASCAP , BMI , and SESAC , control composers’ public performance rights in the U.S. To broadcast absolutely any tune on the Internet, you should secure licenses from all three societies.

Both BMI and ASCAP have issued experimental license agreements which allow anyone to play the compositions in their catalogs on the Internet. These agreements are fraught with unanswered questions and indicate the infancy of Internet-based music. SESAC has no license for Internet-musical performances, but says they’re currently contemplating a draft of an agreement.

Besides a BMI and ASCAP performance license, to adhere to the Act you also must procure a performance license from each recording artist whose ditty you desire to play. Most such songsters have assigned these rights to their respective record labels, which means you need to acquire agreements from scores of separate corporations. Each record label could refuse your request or make you pay a prohibitive price.

No court or copyright tribunal has officially interpreted the complex and convoluted clauses of the Act. Copyright owners and copyright licensees naturally disagree about the application of the ill-defined terms of the Act. However, everyone agrees that if your Internet transmission fits the following five criteria, you are entitled to compulsory licenses from the record labels:

- it is non-interactive

- it doesn’t exceed the sound recording performance complement

- it doesn’t publish a program schedule or specify the songs to be transmitted

- it doesn’t automatically switch from one program channel to another, and

- it is accompanied by certain information, such as song title and recording artist.

To be non-interactive, you cannot allow anyone to request songs to be played particularly for him. You can, however, permit people to request songs, which are then played to the public at large. To satisfy the sound recording performance complement, you can play, within any three hour period, three cuts from a CD, but no more than two cuts consecutively. Or, you can play four songs from any singer or from a boxed CD set, but no more than three cuts consecutively. So, a triple shot of Springsteen satisfies the Act, but not a quadruple shot.

The Librarian of Congress was set to convene a copyright arbitration panel to determine royalty rates and terms for compulsory licenses. Nothing has happened so far. We’ll keep you posted.

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© 2006 NetGuide Magazine