       
Archive of SRN correspondence related
to CARP Royalty rates
Reply of 7/25/03
Text
version PDF
version (if you receive an error
message, check your computer settings for cookie or script blocking)
HTML
version ->
Before
the
COPYRIGHT OFFICE
LIBRARY OF CONGRESS
Washington
,
D.C.
____________________________________
)
In the matter of
)
)
Digital Performance Right in
Sound
)
Docket No. 2002-1 CARP DTRA3
Recordings and Ephemeral
Recording
)
____________________________________)
RESPONSE
TO ORDER TO SHOW CAUSE AND RESPONSE TO REPLY COMMENTS OF THE RECORDING INUSTRY
TO SRN OJECTIONS TO THE
PROPOSED
SETTLEMENT AGREEMENT PUBLISHED ON
MAY 20, 2003
On
July 21, 2003
the Copyright Office ordered that SRN show cause why it should not be dismissed
from this proceeding. This letter is
submitted in response to that order.
1. SRN has a specific
interest in the rates and minimum fees
SRN has a specific interest in the rates and minimum fees because SRN is
a functioning webcaster that would stream covered content if
the rates and minimums were reasonable. Because
SRN is a functioning webcaster, with a long operating history, its interest is
not a “vague or unspecified desire to form a business that would make use
of” a statutory license. See
Order, July 3, 2002 at 68 FR 39837.
SRN Broadcasting has
been syndicating original programming to terrestrial radio stations since 1994.
The company has archived broadcasts of its non-music programming as far
back as 1997. All content available
contains no copyrighted material. SRN
has music programs available for transmission digitally, but has not chosen not
to apply for a statutory license thus far. In
their comments of July 16, the RIAA states that there is no evidence that SRN
“is making any digital audio transmissions of sound recordings at this time,
or plans to do so.”
SRN officials emphatically stated to
the RIAA attorney that the sole reason (SRN does not stream) was purely due to
cost. .
Furthermore, on the SRN/InternetFM.com
website at: http://internetfm.com/acid/listen.htm
It is stated: “We
are unwilling to provide streaming audio of this program. Current pending
legislation fails to provide an affordable rate structure and our financial
cost would be prohibitive. We regret the inconvenience.”
If
SRN were to apply for a statutory license that would by definition imply
acceptance of the terms of the agreement. From
our years of industry experience, we know the relative cost of producing,
archiving, and maintaining online audio. The
proposed minimum licensing fees, in addition to the songwriters’ fees (BMI,
ASCAP, SEASAC,) along with the cost of operation, make it a financial
improbability. There is ample
anecdotal evidence in the media as to the paucity of Internet advertising
dollars at the present. This will
continue into the near term.
2.
SRN’s interests and proposals are like those of other small webcasters
SRN is very typical of the smallest
webcasters. The RIAA has failed to
demonstrate that they have taken into account the concern or realistic needs of
the smallest webcasters with a low level minimum fee.
A $500 minimum is not financially sustainable, even in the best of times.
A $100, $250, and $500
graduated scale is the only way to ensure the long term survival of small
webcasters.
Respectfully
submitted,
SRN BROADCASTING
& MARKETING, INC.
By:
______________________________
Steven Leventhal
SRN Broadcasting
PO Box
414
307 E.
Washington
Lake Bluff
,
IL
60044
(p) 847-735-1995
(f) 847-735-1998
Text of the letter
sent by SRN 5/30/03 to Office of the General Counsel re: proposed CARP royalty rates
Office of the General Counsel
James
Madison
Memorial
Building
Room LM-403
First and
Independence Avenue, SE
.
Washington
,
DC
20559-6000
To Whom It May Concern:
This letter of May 30, 2003
serves as our notice that pursuant to the April 3, 2003 petition, as amended by
the April 14, 2003, correction of the proposed regulations, that Steven
Leventhal, as beneficial owner of 75% of SRN Broadcasting and Marketing, Inc. is
filing a written objection with the Copyright Office and an accompanying Notice
of Intent to Participate in the upcoming CARP proceeding.
Our objection(s) to the current royalty
rate(s) is/are as follows:
|
1)
there is no percentage of revenue provision for
non-subscription transmission |
|
2)
the Small Webcaster Settlement Act of 2002 has no provision
to exclude good and services by a media or entertainment company that are
unrelated to the transmission of copyrighted material |
|
3)
the minimum royalty fee is too expensive and still creates a
substantial barrier to entry for “hobbyists” or “very” small
webcasters (defined as annual revenues of less than $10,000) |
Discussion of objections:
Non-subscription transmissions -
Not every entity wishes to charge a subscription for access to its
product. There is ample anecdotal
evidence that with the enormous amount of choices – internet, radio, and
television persons do not have to subscribe to a service to receive content.
Many viewers are offended by charging for content and refuse to pay,
regardless of how low the price may be. Nonetheless,
no licensing arrangement should discriminate against sites that do want to
charge a subscription fee.
Sales
of other internet goods or services
- Our organization has
been in the entertainment business for ten years.
For the past four years, we have generated income through the sale of
sports audio interviews to third parties.
The
provisions of the agreement can be construed such as to substantially include
all of that income
To
wit - Section 8 (h) of the agreement defines "gross revenues''
as “all revenue of any kind earned by a person or entity”
That would put a business similar to
ours at a competitive disadvantage by placing additional costs of operation that
were not related to the costs of goods sold, and nor accrued by businesses not
involved in transmission of copyrighted works.
No company should be forced to create a separate entity (with associated
accounting and other costs) solely for purposes of such transmissions.
We have spent many years building a branded name for our organization and
its products to create a host of separate entities.
The
minimum fee is too high –
at $2000 for revenues of up to $50,000, is
unreasonable for many “hobbyists” or “very” small webcasters who will
likely have revenues of less than $10,000, including most startups.
By creating a sliding scale of minimum
fees, the agreement could be made palatable to most businesses, offer a greater
opportunity to succeed in the long run, and provide real income for copyright
holders.
We propose a rate similar to the one
used by songwriters and publishers, which is about 2% of revenues and has been
arrived at by successful negotiation over many years.
For example –
|
Fee |
Revenues |
| $250 |
0 -
$10,000 |
| $500 |
$10,001
- $20,000 |
| $750 |
$20,001
- $30,000 |
| $1250 |
$30,001
- $50,000 |
If these suggestions were incorporated
into the current agreement, it would create a climate that would encourage more
entities to provide entertainment on the Internet, thus increasing the variety
of choices and even if few succeeded it would be more than under the current
system.
Respectfully submitted
Steven Leventhal
President
SRN Broadcasting produces
the syndicated radio program
A
mind expanding journey of sight and
sound ™
Listen
to the show | Kind
Links | List of
Stations | Album reviews
| 
