Coin for copyrights slips through 'Net
Royalty issues start debate
If someone in Chile, for example, were to download a song from a Web site in the United States, where is the copyright fee owed?
U.S. copyrights should apply because the music originated from the United States, Recording Industry Assn. of America prexy Hilary Rosen contended at a panel session Thursday sponsored by the Senate Commerce Committee, an idea that drew support from Emusic.com's Robert Kohn and RioPort.com's J.D. Heilprin.
"Why should a digital download cost more in one country than another?" Kohn asked, suggesting that there be a uniform international copyright law.
Rival methods
Royalty org ASCAP is determined to protect its right to collect royalties on downloaded music, but it's not yet willing to side with the record companies and Internet music sales sites when it comes to royalties. ASCAP, along with BMI, the other major copyright org, have agreements with similar groups in other countries that allow them to collect copyright fees for each other.
"From ASCAP's point of view, a download is a performance of our music" and thus triggers a copyright fee, said ASCAP spokesman Jim Steinblatt. "But if it occurs in France, we are not going to touch that."
Jim Lucier, an analyst with Prudential Securities, said it makes sense to collect copyright fees based on the rules where the song originates as it's easier to track. "(A company) may not know (a song) is going to France, but they know where they are."
Reciprocal agreements between copyright orgs, Lucier cautioned, "represent an overall world view that's becoming obsolete."
BMI, on the other hand, is beginning to debate with its peers in other countries over the collection of copyright fees from Internet radio stations. BMI said it should collect money for services provided by U.S.-based Internet radio stations; but groups in other countries said they should collect them and then forward the coin to the U.S.
Currently, BMI collects less than $6 million in copyright fees incurred because of online stations, but the org expects these numbers to increase exponentially. "This is really important," BMI spokesman Robin Ahrold said after the panel session.
Internet issues
The collection of copyright fees from cyber-radio, where music is streamed to a listener, is one of several Internet commerce issues that are on the table this week in Versailles, France, where 10 of the world's top copyright organizations are meeting.
Unlike through downloading, music that is broadcast via the Internet does not require a credit card or other transaction and thus is much harder to trace. The copyright fee is also a fraction of the charge involved when a song or other CD is sold via the Internet.
"The real public policy issue is jurisdiction on the Internet," said Kohn, who estimates that eventually 25% of all music sales will come through downloads.
Rosen and Kohn suggested the issue of cross-border copyright collections should be raised at the upcoming World Trade Organization meeting in Seattle.
