Radio Free Nowhere

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Depressing tale in LA's City Beat, of the Copyright Royalty Board/Library of Congress decision to hike music royalties high enough to strangle internet radio.

Up until March 6, webcasters figured their royalty payments as an affordable percentage of total revenues. In the case of KCRW, that was a negligible number for Seymour, since the entire NPR network had negotiated a flat fee and it was paid by the Corporation for Public Broadcasting. Maybe not anymore. Under the new system, which requires that Internet broadcasters pay per performance – meaning each time one person listens to one song – her new bill for 2006 went from essentially zero to about $350,000. And it's going up. For each of the next four years, the rate goes up at least 30 percent every year.

"This is ridiculous," she adds. "You're getting an automatic increase, but then, if you get more listeners – which, of course, you hope you do – you're paying more, too. If you can figure out how much you're paying – that'll probably be a full-time job!"

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  1. Wait, she is complaining that paying for content is too hard for her crew to calculate?

    Seems the broadcast journalist major’s collective smugness toward the business majors is coming home to roost 🙂

  2. Pardon me for not getting the vapors over this ruling. Here’s, IMHO, the money quote of the article:

    “My real beef is: You have to make a distinction between commercial and non-commercial. And it’s absolutely unacceptable if you don’t,” says Ruth Seymour, KCRW’s longtime general manager. “There wouldn’t be any Public Broadcasting System if you didn’t. That difference is sorta ingrained on the federal level – except with these guys! Who are purists, and believe that a song is a song. But a song isn’t a song. You cannot divorce the medium from the message, if you will. And that’s, in effect, what they’ve done.”

    Golly, imagine NPR having to pay the same fees private, for-profit stations are required to pay! Why, it’s outrageous!

    Now, we can argue about intellectual property in general and copyright and royalties and blah, blah, blah or whether this is some not-so-covert plot to keep internet radio from competing with broadcast stations, but I still have a hard time coming up with a single reason for the continued existence of PBS and NPR, and if this helps shut them down I say, “Well done!”

  3. I hope this puts internet radio out of business. What this country needs are fewer outlets for creative expression, not more. If we could have one single outlet controlled by the RIAA, CD sales would instantly jump to 1998 levels. Then the RIAA companies would have all kinds of money to develop new talent and everything would be great! The business majors have gotten music to this wonderful place where very few people want to buy RIAA music and American Idol is our collective A&R rep, what could possibly be wrong with that? Music is better now than ever, especially since Paris and Lindsay are in the mix…..

  4. It’s hard to see who wins if they set royalty rates so high that the stations that would pay those rates go out of business instead.

    That said, it’s pretty silly for KCRW to make this about public vs. private. The real point is that this will strangle web radio, and the diversity it offers, in the crib.

  5. That’s the point. The RIAA doesn’t want outlets it can’t control. It’s much easier to lobby a governmental agency than it is to innovate.

  6. DAR,

    Private, for-profit broadcast stations are not required to pay these fees.

  7. Golly, imagine NPR having to pay the same fees private, for-profit stations are required to pay! Why, it’s outrageous!

    I wonder if that general manager applies the same rule to her labor? She seems fine with taking the labor of others for nothing.

    Or maybe I am making a bad assumption and everybody at NPR and CPB work as unpaid volunteers?

  8. Private, for-profit broadcast stations are not required to pay these fees.

    Are private, for profit, internet stations required to pay these fees?

  9. Don’t me distracted by the NPR person’s statement.

    The issue here isn’t commercial vs. non-commercial.

    It’s whether internet radio stations should have to pay royalty fees that are completely not paid by broadcast stations.

    I think we’re in a difficult area generally, because it’s hard to advocate for the government setting fiat royalty rates of any kind. But if we’re going to allow the state to set them, the least they could do is set them fairly, or with the appearance of fairness.

  10. I still have a hard time coming up with a single reason for the continued existence of PBS and NPR

    Perhaps because they provide high-quality programming?

  11. Dan –

    I’m against government-sponsored radio for the same reason I’m against a government-sponsored church.

    I bet some churches might have really nice music and real purty pictures, but the cultural benefit of that “high-quality programming” isn’t really relevant.

  12. I think we’re in a difficult area generally, because it’s hard to advocate for the government setting fiat royalty rates of any kind. But if we’re going to allow the state to set them, the least they could do is set them fairly, or with the appearance of fairness.

    I can agree to that, if you drop “appearance”.

  13. It’s my understanding that artists who own their own recordings may continue to offer their music royalty-free to any entity they choose. This would include all internet sites that play unsigned indies — you know, those sites that Lamar says will go out of business; the same sites that aid and abett “creative expression” and unusual and experimental stuff that Lamar fears will disappear. In reality, and ironically, it’s the more mainstream internet sites, playing the more mainstream (signed) artists, who are getting hit with the bill. The other sites have nothing whatsoever to fear. They also have their share of crappy music, but that’s another story.

  14. commercial or not
    today’s radio lacks soul
    pandora’s better

  15. Perhaps because they provide high-quality programming?

    You say that as if no private sector stations could possibly do the same thing. I hear that about PBS too, when I am not watching Discovery, TLC, History, Military, or HGTV.

  16. if they really want to be fair, then NPR and internet radio should get payola from indies like regular radio stations do.

  17. RTFA, folks.

    Oh, and Dan T., if there is a sufficient demand for such high quality programming, it doesn’t have to be subsidized.

  18. and Discovery, HGTV, and TLC no longer provide high-quality programming and are now dominated by reality TV and thinly-disguised advertising. Tonight’s TLC lineup: Flip That House, Flip That House: Updated, Take Home Chef, and What Not to Wear.

  19. This is a whole group of fees that internet broadcasters pay that radio broadcasters don’t have to.

    It is part of RIAA’s ongoing luddite crusade against digital anything.

    I used to buy a lot of music. I don’t anymore, and I don’t download or swap MP3s either.

    Between the homogenous, out of date, crap that clear channel and the rest of broadcast radio stations provides and the riaa efforts to strangle internet radio it is not easy to discover new music. You just don’t hear it these days.

    Those ignorant folks at the RIAA apparently expect people to go into a music store and buy CDs at random. Because you sure can’t hear a fraction of the music available before you buy it. You used to be able to on the internet with streaming radio stations but the RIAA is killing that.

    RIAA is cutting their own throat while acting like a bunch of %^^$&. CD sales were down 20 % this year and I hope those *&$^%# continue to choke on declining sales and have a bigger decline next year. Miserable *&^%)& that they are.

  20. Hey, D.A., you just asked for a reason.

  21. DAR,

    (not answering for anybody else here)
    if there is a sufficient demand for such high quality programming, it doesn’t have to be subsidized.

    You must remember, the general sheeple are not bright enough to know what is good, so we need NPR to provide it for the people who know what quality really is. Sort of like that music that nobody listens to, but is superior to what is in the “middle” of the dial.

    Just ask anybody at WBAI or the rest of the Pacifica Network (yes, they receive public funding too, and deny it endlessly)

  22. ed:

    In what bizarre little twisted world does “indie rock = creative content”? Have the Yo La Tengo fans fooled you with their glasses? Last I checked, indie rock was just as much about tits and ass as RIAA music, just wearing different colors and denying it. Don’t fool yourself into thinking you have any idea about my musical preferences. The day indie rock saves anything will be the day the dinosaurs come back. Oh yeah, perhaps you might want to know that most “indie” labels are RIAA affiliated, so you whole post is moot.

  23. It is part of RIAA’s ongoing luddite crusade against digital anything.

    Thank goodness I never bothered to switch from analog LPs to digital CDs then!

  24. DAR: And ask Brittany Spears about quality music. If its in the middle of the dial, it must be good!!!!!

  25. Regarding radio, I get the feeling that a lot of nostalgia for the “good old days” is just that. I mean, the radio stations of the 70’s and 80’s were basically playing the cheap crap of their day just like today’s does.

  26. Dan T,

    NPR sole purpose in life is to kill any liberal talk radio outlets (air america) that try and establish themselves.

    Why listen to commercial liberal radio when you can get the same thing on NPR with better production and no commercials?

  27. Well, Malcom was posting as I was writing. Somehow, he was able to pick out the shows that I avoid on thise channels and pretend that is all that they show.

    Oh, I forgot the SPEED Channel.

    So, we need PBS to please Malcom? Maybey you need to make a donation?

  28. it is not easy to discover new music. You just don’t hear it these days

    It has never been easier, actually.

  29. Dan T., yeah, well, you know, I mean, like, um… how about a good reason?

  30. You are so wrong, ed. Oh wait, my bad. I thought you were making a bullshit statement, but now I see you ended your sentence with “actually.” Well, I’m convinced.

  31. If PBS’s main franchise is Sesame Street, why can’t the merchandize from the show subsidize PBS? Or does it already? See ed, when we have no idea what we’re talking about, we indicate as much.

  32. D.A Ridgley,

    Thank you for being pedantic:-) Let me rephrase my statement.

    It is part of RIAA’s ongoing luddite crusade against digital anything that can be distributed in digital form over the internet.

    There, is that better?

  33. I’ll try to find you left of the dial.

  34. The day indie rock saves anything will be the day the dinosaurs come back

    By “indie”, Lamar, I mean just that: independent. And who said anything about “saving” music? Independent artists (and other humans) are not asking for anyone’s help. They and we don’t require “saving”. Careful now — all that straw you’re playing with may ignite.

  35. TJIT is right because the battle is about control of outlets. Digital outlets can’t be controlled, and internet outlets are more difficult to control. Whichever side you take on government enforcement of IP, it is difficult to say that control of outlets isn’t the issue. Without control of the outlets, all the rest is just PR blather, on both sides of the issue.

  36. dude, pandora is retarded. i put in lightning bolt. (two piece noise rock outfit that will rip your eyebrows off live) it plays 3 lightning bolt songs and then gives me a whole slew of really bad queens of the stone age esque pop stoner metal (think van halen meets uh, queens of the stone age)

    like what? WHAT? WHAAAAAt.

    no.

  37. and now it’s playing chrome songs. at least that’s slightly more on topic.

  38. “Between the homogenous, out of date, crap that clear channel and the rest of broadcast radio stations provides and the riaa efforts to strangle internet radio it is not easy to discover new music. You just don’t hear it these days.”

    i have to disagree. if anything it’s too easy. there are mp3 blogs, there are dozens of snotty asshats like me who are more than happy to tell you what to check out, etc. (for starters, not hella. they suck)

    this isn’t even counting p2p groupings. soulseek has given me dozens of breezeblock and betalounge recordings i would not have been able to get otherwise, so i have live sets from some of my favorite dudes and dudettes that inspires me to peep other new stuff, etc.

  39. Ed,

    I appreciate your ability to know where I lived and how I have been able to listen to music for all of my life.

    I also appreciate your ability to understand where I live currently and what access I have to new music both in digital and broadcast format.

    Given your spooky ability to discern all of this I suggest you apply for work at the CIA or NSA. They will appreciate and have good use for your talents.

    However, I would suggest that you don’t use this talent too much outside of the CIA or NSA. It tends to make you look like a know it all blow hard.

    Cheers,

    TJIT

  40. Dan T., yeah, well, you know, I mean, like, um… how about a good reason?

    You mean a reason that you’ll accept? That might be a tall order.

    How about this: because the citizens of the USA have decided that they want it and have expressed that view through their elected representatives?

    Remember that voting is a market where everybody has the same amount of money.

  41. TJIT:

    Yes, actually, it is. Thanks. See, I think intellectual property owners should be entitled to protect their property, set the fees they seek and the market will pay for its use, etc. Now, we can discuss whether, for example, RIAA is a monopoly and how the legal system should respond to monopolies (hint: I’d say the response to, say, a monopoly on water should be different from a monopoly on pop music), and if so whether it is a vertical or a horizontal monopoly or oligopoly (think SONY here, a notoriously anti-technology company, right?) and whether these “Luddites” are conspiring to favor broadcasters over internet stations, etc., etc. All fair game.

    But, hey, if I were really pedantic I’d take you to task for misspelling my name. [smile]

  42. How about this: because the citizens of the USA have decided that they want it and have expressed that view through their elected representatives?

    Oh, I see, kinda like antebellum slavery then, huh? Okay.

  43. ed,

    “Indie” is like the word “alternative.” It may have once meant its literal meaning, but now it is a term of art. It denotes a genre of music.

    Also, I didn’t say that any specific genre (or description of the production values of certain musical instrument players, as you like it) needed saving. The music industry as a whole, if I’m not mistaken, has had a few bumps and bruises lately. I’d like to see the industry rebound, which I guess is against your definition of “independent.”

  44. Oh, I see, kinda like antebellum slavery then, huh? Okay.

    Um, wasn’t slavery a free-market situation that was put to end by the government?

  45. “See, I think intellectual property owners should be entitled to protect their property, set the fees they seek and the market will pay for its use.”

    So we can agree that when the government does it, it works out poorly?

  46. “It denotes a genre of music.”

    not in this context it dun’t.

    besides, the industry ate itself to death and in the end, this will probably be a good thing. right now, however, it’s ugly, especially on the production side. (sony studios sold out in nyc, the hit factory went condo, and battery is shutting down at least half of its facility and having a fire sale, last i heard)

    but that’s good news for my friends, who run a mid sized studio. they get a lot more clients now who don’t have to pay 1000 bucks a day for just a b room.

  47. Um, wasn’t slavery a free-market situation that was put to end by the government?

    Sure, but prior to that time it was a market enforced and protected by the very same government. Just another case of the tyranny of the majority: in principle, no different from forcing me to subsidize your enjoyment of NPR.

    Lamar:

    Sure.

  48. D.A. Ridgely,

    I agree with you that intellectual property owners are entitled to protect their property. I’m not a napster / bit torrent, file swapping person.

    What I am tired of is the RIAA and MPAA reflexive effort to kill any new technolgy for distributing their intelectual property. This is an old habit of theirs and I think their ongoing efforts to croak new technology ends up costing them and their artist much sales potential.

    Did I get your name right this time?

    TJIT

  49. TJIT, agreed.. and yes, thanks!

  50. How about this: because the citizens of the USA have decided that they want it and have expressed that view through their elected representatives?

    You see, it wasn’t a “Bridge to Nowhere”, because the citizens of the United States decided they wanted it and expressed that view through their elected representatives.

  51. Sure, but prior to that time it was a market enforced and protected by the very same government. Just another case of the tyranny of the majority: in principle, no different from forcing me to subsidize your enjoyment of NPR.

    I suppose any law, in principle, is tyranny of the majority. But I think the term “tyranny” loses its bite when it’s applied towards any type of social arrangement.

  52. Whether we’re talking about indie (the genre – have you all been asleep for 10 years?) or the description of a bands status, isn’t really relevant. Neither are going to save the industry. Though I can now see that the term “unsigned indies” is redundant, it doesn’t change the fact that artists who don’t affiliate with the RIAA have significantly less outlet options than RIAA artists. Some of this is due to money and some due to lobbying the government and even some of it is due to suing innovative companies for the transgressions of the consumer.

    Oh yeah, the term “indepedent” really has no meaning in this context because independent artists can range from someone trying like hell to get into the RIAA to somebody who should probably be trying to get into rehab.

    But hey, my whole point was that the RIAA wants to shut down outlets it can’t control, and it will use any government agency it can to accomplish such a goal.

  53. we all agree with your final point (i presume) it’s just more fun to quibble.

    believe it or not, there are plenty of indie folks who make a decent life for themselves outside the RIAA’s radar. (there are also plenty who struggle and get fucked over by people who download but don’t buy or go to shows, etc)

    and now for some classic steve albini essay writin’!

    http://www.negativland.com/albini.html

  54. Um, wasn’t slavery a free-market situation that was put to end by the government?

    Ummm, you really don’t have any concept of a what a free market is, do you?

  55. I’m kind of getting to a point where I don’t even support IP rights at all any more. RIAA and MPAA are just so far out there that the only solution may be to kill it off entirely. End patents and copyrights altogether. In the modern age they’re causing more harm than good.

  56. Sure. I mean, who really needs property rights anyway? Besides, the, um, property-holders.

  57. I’ll leave the Rollins web site to those who already buy into his star power.

    103.1 pushing the Artic Monkeys. Very, very indie. Though the site isn’t entirely terrible, it appears to be more concerned with Mountain Dew drinking, snowboarders than, uh, music.

    Gemm.com: the first record to come up was Mario Lanza’s “The Student Prince.” #1, I already own it. #2, not very indie or independent, #3, the rest are RIAA acts.

  58. ed: thanks for the clueless one liners. Here’s my entry to the asinine ed-ism of the day:

    Who needs intellectual property except the intellectuals!!!!

    Pithy and stupid. Do I win?


  59. Ummm, you really don’t have any concept of a what a free market is, do you?

    Perhaps you don’t. Unless you think slavery was a socialist institution.

  60. Rush is explaining this right now on his show.

    On his ‘net stream, he stopped playing music during commercial breaks and plays parodies. The broadcast still has music bumpers.

    Seems these price gougers lost one of the largest internet audiences out there.

  61. I’m kind of getting to a point where I don’t even support IP rights at all any more. RIAA and MPAA are just so far out there that the only solution may be to kill it off entirely.

    I support the right, just not some of their representitives.

    Kinda like my take on unions. Fine to join any club you want, but when the leaders start thinking more about promoting themselves than the people they represent I chose not to associate with their club.

    Too bad the feds can’t adopt the Montag standard.

  62. “I support the right, just not some of their representitives.

    Kinda like my take on unions. Fine to join any club you want, but when the leaders start thinking more about promoting themselves than the people they represent I chose not to associate with their club.”

    I support two entire paragraphs from Guy Montag. All before 1pm.

  63. Perhaps we’d quibble with the term “right”, but I’m in a forgiving mood today.

  64. Dan T., yeah, well, you know, I mean, like, um… how about a good reason?

    Public radio does provide much better local coverage of news and events and goings on.

    WTTW-11 Chicago provides quite a few Chicago/Illinois-centric shows (Chicago Tonight, Wild Chicago, Chicago Matters, Chicago Stories, Arts across Illinois, Check Please) and provide a lot of local perspectives and coverage of issues that are important to the community. Most other radio stations and braodcast networks don’t either because they are national, or can make more money off of less localized programming

    They also provide educational info that you would be niche on other stations that might not have great commercial appeal.

    If private radio can do the same, why haven’t they produced something like Frontline.

    I’m not gonna pretend that everything they produce would be unavailable anywhere else, but to act like they provide no value and have no valid reason to exist is beyond stupid.

  65. If private radio can do the same, why haven’t they produced something like Frontline

    Err …private radio should be “private broadcast stations”

  66. and Discovery, HGTV, and TLC no longer provide high-quality programming and are now dominated by reality TV and thinly-disguised advertising. Tonight’s TLC lineup: Flip That House, Flip That House: Updated, Take Home Chef, and What Not to Wear.

    Meanwhile tonight’s offering from PBS is a 12-hour begathon featuring such intellectual beacons as Suze Orman and her guide to turning a million in real estate into $250 cash, a 1-hour lesson on becoming a piano virtuoso using only your ass cheeks, capped off by a compendium of 50’s nostalgia acts performing their biggest hits all without a single original member of the group.

  67. Unless you think slavery was a socialist institution.

    Pretty much confirms it for me.

    Hint: it does not have to be “socialist” to not be a free market.

    To everyone else: Yeah, I know don’t feed the troll. I’m sorry, I’m just amused by his trollishness. Oops, that actually probably makes me a troll. hehehe

  68. Dan –

    Actually, slavery may not have been a socialist institution, but it certainly wasn’t a free market institution.

    Systems where some participants have vastly different economic rights as a result of government action and not market forces aren’t “free markets”. You may as well say that serfdom was a free market institution. Slavery required the state to assign persons to different classes with different economic and political rights and then enforce those differing rights with state violence. Maybe “feudalistic” is the best way to describe it?

    Also, it’s generally conceded by most freedom-loving people that it is, in fact, tyrannical for a state to tax the citizenry to support the promulgation of religious beliefs they don’t share. And here’s the thing: it’s impossible to actually delineate what constitutes “religious belief” without arbitrarily establishing religion in exactly the way we’re not supposed to; it’s also impossible to supply any really good reason why religious belief is different from political, philosophical, aesthetic, etc., belief and what makes it so unique that it requires unique protection. And if you can’t do those two things, I don’t see how to avoid concluding that it’s just as tyrannical to take tax money from citizens to support a radio station as it is to support a church.

  69. Um, wasn’t slavery a free-market situation

    No. Slavery is not by definition a “free market” anything. Its very basis is theft and the use of force. This is not rocket science.

  70. Of course slavery wasn’t a free market situation. The government said that humans were property, and therefore they were. Sort of the same foundation as IP. Clearly, slavery was never a fundamental right and never should have been an enumerated right.

  71. I’m not gonna pretend that everything they produce would be unavailable anywhere else, but to act like they provide no value and have no valid reason to exist is beyond stupid.

    Ah, well, claiming no value and claiming no valid reason to exist as a tax subsidized entity are two quite different things. I like listening to NPR news, too, and I wouldn’t for a moment argue that the programming PBS and NPR have built its reputation on has no value. Providing content for PBS can be a fabulously profitable venture. But the shows that do profit as such by using PBS and NPR (including, e.g., Frontline) could indeed be sold to the for-profits. The rest? [Shrug] Look, some people like opera and some don’t. But no one who doesn’t like opera should have to subsidize those who do. Same thing for public broadcasting.

  72. I love how people rag on PBS because it gets government money, and then use its fundraisers in highlighting how crappy the programming is. If you hate gov’t money going to PBS, you should applaud (but under no circumstances are you to watch) whatever god-awful programming they use to raise money.

  73. I’m kind of getting to a point where I don’t even support IP rights at all any more. RIAA and MPAA are just so far out there that the only solution may be to kill it off entirely. End patents and copyrights altogether. In the modern age they’re causing more harm than good.

    Patents and copyrights are fine. The problem with copyrights are the MPAA and the RIAA and that is what should be ended. There was no problem with copyright until those organizations came to be what they are today. You want to kill the wrong thing.

    What problem have patents ever caused you, btw? Were you afraid for 5 minutes that someone might take your Blackberry? Pharmaceutical patents may have gotten out of control, but as to other patents, what is the skin off of your nose?

  74. Ah, well, claiming no value and claiming no valid reason to exist as a tax subsidized entity are two quite different things

    Yes they are, but you didn’t make any such claim. You said :

    I still have a hard time coming up with a single reason for the continued existence of PBS and NPR

    I don’t see any mention of subsidization in your statement. So don’t demand nuance that you aren’t willing to provide, yourself.

    As to your issue about whether tax dollars should go to public broadcasting, last I checked there are quite number of objectionable things that our tax dollars go to despite what many of us would prefer. Using tax dollars to support localized community programmings is one of the least offensive — and arguably a more valid use of the monies. When I can choose to not fund the war on drugs, agricultural subsidies, foreign aid or pie in the sky missile defense programs and divert my money to PBS instead, then maybe I’ll worry about whether or not PBS shouldn’t be getting tax dollars from those who don’t want to support it.

  75. Dave W.

    I don’t know if there are any concrete examples, but the fear is that a company will purchase all the patents so that there can be no competing products.

    Then there are the patent trolls, which also grab headlines.

  76. ChicagoTom:

    You have a point, up to a point, but my point stands. The subsidized entities I was referring to were PBS and NPR. There is no reason for them to continue to exist as such, assuming there ever was, in a media market begging for content. I have no qualms about some of the programs they air, which is really a separate issue, because the good ones would find other venues. I would have no qualms about PBS and NPR continuing to exist without tax subsidies — they can beg for audience and corporate contributions all they want, for all I care — but there is no defensible basis for a continuation of the status quo. However lacking in clarity I may have been, that was my point in the first place.

    As to your second point, my old Left2Right sparring partner, philosopher David Velleman, used to call such comments “whataboutery.” Sure, tax subsidies to public broadcasting is chump change and there are much bigger fish to fry (how’s that for a mixed metaphor!) but we’re talking about public broadcasting, not the war, foreign aid, etc. So, to put it more tersely, your second point is irrelevant.

  77. The government said that humans were property, and therefore they were. Sort of the same foundation as IP.

    And real property. Don’t forget that all real property was initially a grant from the sovereign.

  78. Then there are the patent trolls, which also grab headlines.

    I never understood that patent trolls term. Was Edison a patent troll? Tesla? The Wright Bros.?

    If a patent troll is one who brings frivolous patent litigation, then i would ask how you know it is frivolous. Have you ever read a patent “claim?” (they are difficult to follow). Have you ever attempted to read “prior art” on a patent claim? If not, I am not sure how one would know which patent litigation was frivolous and which not (although I suspect many people just trust the newspapers on that characterization.)

    As far as patent pooling (eg, fear of one cartel buying all the patents), that is an antitrust violation. Just like the MPAAA. Just like the RIAA. Once again, the remedy is to bust the trust, rather than the patent system.

  79. RC Dean:

    1000’s of years ago your testicles would have been a grant from the sovereign. I’m not sure that line of reasoning holds up.

    Dave W.:

    The idea of a patent troll isn’t based on frivolous litigation. It is based on the idea that one can purchase patents then seek out potential infringers. Many times the litigation is non-frivolous. The point is that patent trolls don’t further the justification for patent restrictions.

    Frivolous litigation is a whole other issue, but that debate isn’t limited to IP.

  80. Ahhh, then we have the question of when is a trade group a monopoly or trust.

  81. The point is that patent trolls don’t further the justification for patent restrictions.

    Sure they do. If you are an individual or a small company, then your expertise is making new technology, not litigation.

    Making new technology can be a low overhead, low capital investment thing. It requires a lot of math / science aptitude, but not neccessarily verbal or juridical acumen. Even getting your US patent will only cost you ten or twenty thousand dollars. Peanuts really.

    Suing on a patent, especially a pioneering one is a horse of a different color. You need to not only pay lawyers who think really well, in legal terms, but also to think like a lawyer yourself to assess risks and make executive decisions about the litigation. More importantly, the required capital investments are huge. What I am saying is that expertise is required, and it is a very, very different expertise than the expertise of a great inventor.

    So, it makes sense in a division of labor way for small companies to outsource patent litigation. Same reason any company outsources any function — to get the work done in a better and more cost effective way. Big companies have sophisticated in-house legal departments. Little companies don’t and shouldn’t. it is a boon that they can still make some (discounted, of course) money of their patents by selling them.

    It should also be kept in mind that “patent trolls” are generally willing to license at a fair price. Litigation only happens when the license offer is refused, generally speaking. Of course, it can be hard for a large company to decide when to license and when to force a lawsuit — which is yet another reason that small companies, without that expertise, should not be making those decisions on the patentee side. Not only that, but when a “patent troll” has more than one patent, they can better decide which to fight hard on, and which need to be relegated to the “going real cheap” file. Some patents deserve to have someone fighting them hard. This decision is going to be made more efficiently by someone who has a decent sized patent portfolio, then by a company that does not.

    Furthermore, it is not like the inventors don’t get paid. They sell to patent trolls because it is sometimes the only way they can get paid.

    Finally, a have started a patent blog:

    http://fedcirpatentcaseblurbs.blogspot.com/

    If you read my case blurbs (a lot less complicated than the cases themselves), ask yourself what a phD in physics or chemical engineering would make of my case notes. Smart scientists are smart, for sure, but do they really have the particular kind of expertise to do well in patent court?

  82. To clear up a point of fact:

    Internet radio royalties have become a thorny issue in part because conventional stations do not pay to use recordings. Both online and regular stations pay royalties to songwriters. But under a 1995 law, companies that transmit music using the Internet, cable or satellite must compensate both. The money is split between the owner of the recording, usually the label, and the performers. – New York Times, March 19, 2007

    Perhaps the RIAA doesn’t care so much about FM radio’s analog signal, but digital broadcasting is starting up, under the slogan HD Radio. Are they going to demand that the same radio stations that now get a free ride on performance royalties have to pay when they go over-the-air digital? Fair’s fair, right?

    Routing the digital output of an HD Radio receiver to one’s computer would seem to me to be a trivial technical feat, and while any permanent files created might not be as rich as one could expect from a high-bitrate stream over broadband, they ought to be close enough for rock n’ roll. The P2Pers who aren’t maniacal audiophiles won’t care.

    People get sloppy with nomenclature when discussing stations associated with “public radio.” Many of the affiliates of PBS and NPR are licensed to governmental bodies, such as state broadcasting boards, government colleges and school districts, but quite a few of those licenses are held by private universities and private non-profit organizations. The government licensees raise cash from private sources, while most of the private stations avail themselves of at least some aid from the taxpayers. Many of the big name PBS stations are not government-owned: WNET, WGBH and WETA come to mind. The Corporation for Public Broadcasting claims it is a private non-profit, though it depends on federal funds for most of its budget. I guess it’s a “private corporation” the way the Postal Service is.

    I don’t dislike non-commercial broadcasting per se. My town has a great non-NPR FM that is owned by the local private engineering college, operated by students and community volunteers, and, AFAIK, doesn’t get a penny of tax money. The school district’s station just changed formats, contracting out the operation of the outlet to a foundation especially created to provide an alternative to standard radio fare. The fully “professionalized” radio oiand TV stations are still commercial in this sense: the on-air talent, independent producers and paid staff are all making a living at what they are doing, just as they would if their employers or clients were for-profit enterprises. If station WLEF, a non-profit, has an annual budget of $10 million, while commercial competitior KRAP has revenues of $10 million, they should probably pay similar broadcast royalties if they have audiences of about the same size. If KRAP rakes in much more than its neighbor down the dial, they ought to pay more.

    As to the whataboutery mentioned above, I happen to think that government owning or paying subsidies to broadcasters ought to be considered a violation of the First Amendment. Separation of press and state ought to include the electronic press. That makes the question of funding media qualatatively different from spending on the military, or roads, or anything elde that is arguably constitutional.

    Kevin

  83. I assume your presentation of the theory behind patent holding companies is for others. I’ve never been persuaded by that rhetoric given that contingency fees are widely used (in the area of small biz). The whole theory goes out the window. You run a biz based on IP, yet you sell your IP the second it gets developed? There are far too many companies that will manage your IP portfolio for you to sell your viable patents. It’s the nonviable patents that the trolls go after.

  84. The subsidized entities I was referring to were PBS and NPR. There is no reason for them to continue to exist as such, assuming there ever was, in a media market begging for content.

    Again, unless readers are expected to mind read or make assumptions about what you meant, in your head your complaint was about about funding but in print your comments were about why their existance. Do you agree that as entities (regardless of funding) they serve a purpose and do in fact have a reason for existing?

    All I am asking is that in your zeal to poo-poo public radio you at least make clear points your objections rather than say silly things like “what’s a good reason for them to exist”

    So, to put it more tersely, your second point is irrelevant.

    Then let me make a more relevant argument. I believe providing tax dollars / subsidies to public broadcasting that provides local programming/focus which can’t be found elsewhere or may be neglected/underserved by commercial enterprise is a very valid use of those tax dollars. I believe that it’s quite valid for tax dollars to be used to provide outlets like PBS and NPR the ability cover community events, despite the fact that some taxpayers may not care. And I also think that complaints because some segments of the programming may be not as useful as others are misguided. No entity provides programming that appeals to everyone all the time.

    If we have to pay taxes, which we do, I believe these are much more valid uses of tax dollars than most other things that those monies are used for.

  85. I assume your presentation of the theory behind patent holding companies is for others. I’ve never been persuaded by that rhetoric given that contingency fees are widely used (in the area of small biz).

    A patent is not a lawsuit. It was always designed to be an alienable, tradeable, divisible commodity. It has been that way since long, long, long before contingency litigation became the rage.

    Look at it this way: you don’t have to take your lawsuits to the US Lawsuit Office to be examined to try to assure they are meritorious. On the other hand, you do have to take your Patent Application to the Patent Office. And there will generally be a substantive negotiation with the patent examiner to decide whether you get a patent at all, and, if so, what that patent will entitle you to out in the world of commerce. You may come out with nothing. This takes about 4 years — often more — so you have to wait four years to rush to court. Then there is the ten or twenty thousand dollars I mentioned. Peanuts compared to the type of capital investment for a patent lawsuit, but still a hurdle — there are cheaper ways to get a ticket for a frivolous suit if that is what you are after.

    I sense a dicomfort on your part, Lamar for the mere fact that patents give one a right in tort, ultimately, rather than the fact that patents are freely alienable. A lot of HnRers seem uncomfortable with tort. Maybe that is why it was so easy for RIM to get the sympathy of the press and populace in the Blackberry case. However, not all tort cases are created equal. The “free markets” we so crave at HnR were built, in part, about a solid foundation of tort law. Certain aspects of the tort system (eg, frivolous claims, high punitives, class actions) may indeed be out of control. However, not all tort litigation suffers from these problems, and I would submit that patent litigation currently does not. The Blackberry case may have been pitched to you as some horrible thing, but it wasn’t. What happened is that a lot of people got news about the case from periodicals where RIM adverstised, and the patentee did not.

    Now if parties did start pooling their patent to the egregious extent that the RIAA and MPAA effectively pool copyrights, then that would be a problem. However, none of the so-called patent trolls even remotely resembles the RIAA or MPAA in terms of money, power or consolidation. If they did, it would, but that is a moot issue. You don’t see the party who bought the patent at issue in the Blackberry case lobbying Congress for favorable laws, the way the RIAA and MPAA do as a matter of course these days. Whoever that patent-purchaser-cum-litigant was (and I have forgotten their name), they just are not anywhere near the big leagues.

  86. Is there any reason why these operations could not be moved offshore to avoid the royalty issues? This is internet radio, after all, so location really should not be a problem.

    Dave W. – nice patent blog, thanks for the link

  87. lamar: bleep.com is so indie it actually is a van posing as a website, and ramen posing as mp3s.

  88. Dave W.:

    I’ve tried enough cases to be comfortable with tort law and suspicious at the same time.

    You made so much sense earlier, and now you are talking about the differences between a lawsuit and a patent. I don’t understand where you are going. It’s like saying there is a difference between a parking ticket and a carbureator.

    Being in the patent biz, I assumed you’d be familiar with patent trolls. When somebody talks about patent trolls, they aren’t talking about the small business concerns you were talking about. They are talking about the businesses set up to take dubious patents (i.e., the “shopping cart” on a website was patented!) and make a quick buck. I guess you see that as cool. I see it as a waste.

  89. side note to Lamar:

    I plan on getting a couple of your songs in my radio loop for April if they are up on myspace.

    dhex gave me a nice tip on a breakbeat band for this month’s loop and got a shoutout.

    here is the link to the loop:

    http://www.live365.com/stations/farces

  90. Perhaps soon. I’m a little new to the rock band with a synth idea, so it’ll take couple of weeks to get a set down.

  91. They are talking about the businesses set up to take dubious patents (i.e., the “shopping cart” on a website was patented!) and make a quick buck. I guess you see that as cool. I see it as a waste.

    I haven’t seen a lot of companies like that, although I have to admit that I haven’t been following patent litigation too closely since 2002.

    My company certainly has some patents we would be willing to part with, and it is not exactly like anybody is beating my door down to get at them (which is probably a good thing).

    Most of my feeling that this patent troll stuff comes from the fact that the Blackberry case was so widely pitched as trolling. I put off looking into the case, but when I did, it did not seem frivolous or untoward or a waste. It seemed like a small-time inventor leveraging its brains against a behemoth company in the most efficient way. i decided that if that is the standard of “trolling” then the trolling problem is overblown.

    I remember watching Refac lose time and again at court, back when I read all the patent cases in the early 90s. Was surprised to see Refac still around, in some sense, but haven’t seen them popping up in the captions so much now.

    Is there a specific case, besides Blackberry, that you think is a troll? Or is this one of those things where we don’t really get to hear about the trolls because they are “payed off” without making the media?

  92. the “shopping cart” on a website was patented!) and make a quick buck. I guess you see that as cool.

    I don’t know if it is cool or not. Why do you think it is uncool? What exactly do you think was wrong with the shopping cart patent?

    To ask a slightly different question, let’s say your friend walked up to you around the time the “shopping cart” patent application was filed, and said, “Hey, Lamar, I have to show this stuff in my Internet shopping cart!” How would you have interpreted that? Let’s say, for the sake of argument, that this was 1990. How would you have responded to your friend’s comment in 1990?

  93. Upon further researc, it turns out that the “shopping cart” patent was filed in 1994. still, the question remains, what if somebody wanted to show you their “Internet shopping cart” back in 1994. Would you have had any idea what they were talking about?

  94. Yes, absolutely. It is obvious. Very, very obvious. And not the hindsight is 20/20 kind of obvious. It’s the “how did they ever patent that” kind of obvious. I realize that many people have selective memories as to how the world was in 1994, but that argument cuts both ways. We weren’t as sophisticated about a lot of things, but we also weren’t sloths living in trees either.

    I’m surprised that obvious checkout methods are able to get a patent. Basically, Amazon tried to stop other companies from pre-registering customers. No? Is there much, much more to this? It even appears that Amazon’s founding programmers thought that their patent suit was bogus. Isn’t there a problem with software patents? Should there be a new form of software protection somewhere between copyright and patent? I don’t know the answer, but I do know that the shopping cart is so obvious it hurts.

  95. My problem with the shopping cart thing is that Amazon not only patented a process, they tried to own the result as well. I cannot see how this is any different than Viagra suing Cialis because they both make boners.

  96. Is there any reason why these operations could not be moved offshore to avoid the royalty issues?

    I presume it would be like moving your online gambling site offshore. You’d better make sure you move your physical body offshore along with your Internet radio station. Or risk arrest.

  97. Couple more notes on the “shopping cart patent” cases:

    The company that owns the patent now is called Soverain Software. I do not know if they have any substantial assets or business beyond their patent portfolio. I do know that they acquired the patent through 2003 bankruptcy procedings involving a company called Divine.

    Soverain sued Amazon on the patent and got a payment of $40 million on the eve of trial.

    I still don’t know if that is a good outcome or not because I still don’t know how obvious an Internet shopping cart would have been in 1994. I know that if somebody personally said “Internet shopping cart” to me in 1994, I would have been puzzled because I was not acquainted with the idea of buying things over the Internet at that time. my Internet experiences were quite limited at that time and did not include shopping, although I think I might have heard of a potential client who wanted to “sell music over the Internet” around that time. i remembered being quite puzzled at what “selling music over the Internet” meant. Years later, it became clearer.

    Of course, I am not an Internet expert. Maybe other people were all over Internet commerce prior to 1994. Of course, if that is so, then I would expect there to be “prior art” showing that, and probably even suggesting some type of Internet shopping cart. Failing that, I imagine that the shopping cart patent did bring something new and conceptaully substantial to the table, and that the $40 million was deserved.

  98. The programmers at Amazon seem to think that they just took an obvious idea (the shopping cart) and put it into their software like everybody else. Besides, like I said, they didn’t patent their method of clicking on a cart link, they tried to patent clicking on a cart link.

  99. I see no reason why all the popular shows on NPR couldn’t be successful in a commercial format. Note that “This American Life” just swung a deal to appear on Showtime.

    And the more obscure shows could find their niche, too. As podcasts or streaming Internet radio. Thanks to the government leaving their hands off the computer industry, computers and Internet access are cheap enough that poor people can afford them, too.

  100. I don’t know if it is cool or not. Why do you think it is uncool? What exactly do you think was wrong with the shopping cart patent?

    Because an online shopping cart has not only existed since the early 80s (well before the 1994 patent), but the concept is so basic and simple, that it shouldn’t be patentable. I ordered stuff online back in 1985 using a shopping cart. If you can’t understand why someone patenting a concept that has been in use for a decade before online, and for 100 years in the real world, is a problem, then you are either retarded or totally corrupt.

    I mean, just recently a patent was approved for linked lists (and yet, I looked over the patent, and the person patented linked lists). Linked lists have been in use in programming since the 1960s, and are a basic computer science 101 data storage technique. Now probably thousands of innocent people are going to have to pay millions of dollars in legal fees to defend themselves when some company chooses to agressivly litigate the patent. Innocent people, using the most basic technique that they teach in all computer science books are going to be financially destroyed, even if they win the case.

    The reason you support the current patent system is because you are one of the preditors that are exploiting the system for your own gain! I mean, obviously you have helped super simple prior art concepts get patents and then went after innocent people in court driving them into bankrupcy! You are a vile person! You are worse than a mugger, because at least a mugger isn’t a pudgy weak bastard like you and they take some personal risk when they steal! Shame on you, criminal thieving bastard!

  101. “The reason you support the current patent system is because you are one of the preditors that are exploiting the system for your own gain!”

    Any gain for Dave W. is a gain for experimental rock music. It’s called trickle sideways economics. Average Americans go to work, bring home money, then spend it on hyped up recording gear. I think Reagan coined the term in his home studio.

  102. What I find really interesting about this is who makes up the board.

    Check out the links on the website. It’ll blow your mind.

    Quite possibly the most most easily navigable government web site ever!

  103. Lamar and Dave,
    When you say the “shopping cart” has been patented, what does that mean? If I were to have a programmer create a custom shopping cart for my site(using 100% home grown code), am I supposed to send someone other than the programmer a check?

  104. If private radio can do the same, why haven’t they produced something like Frontline.

    1. Who cares.

    2. Just because you have not seen/heard something does not mean that it is nonexistant.

  105. Frontline is produced by a private station: WGBH. If the government subsidies funneled through CPB and PBS to WGBH and the other member stations were cut off, they could be replaced by more fundraising. That doesn’t mean that Frontline would necessarily disappear, though some programs with a lower profile might, if they couldn’t increase underwriting, viewer donations or merchandising .

    Ask yourself this question: Does the subsidized presence of PBS and NPR on our “dials” influence the programming execs at the commercial nets to be less likely to OK production of a series like the old CBS Reports or NBC’s White Paper? “What the hell, we don’t have to do this, PBS covers that beat. Let’s add another Anna Nicole segment to Dateline (or 60 Minutes or 20/20)!”

    ABC has actually partnered with Frontline, airing short versions on Nightline, that plug the full-on docco on PBS.

    Kevin

  106. Violent_K:

    The answer is probably. Get a lawyer. We’re the ones who really make out in all this, don’tcha know. IP is like permanent employment for all lawyers.

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