How much to pay for a music download?

The Canadian Federal Court of Appeal has ruled that no royalty is payable for downloads (should that be “streaming”?) of those 30 second previews of music. Apparently, it falls with the fair dealing provisions for “research”. The “1709” blog has the story.

Meanwhile, last year, the Australian Copyright Tribunal accepted that music download services such as iTunes, Bigpond Music, Sony and Universal should pay composers a royalty of:

  • the higher of 9% of retail price or 9 cents per track, for music downloads; and
  • the higher of 8% of retail price or 8 cents per track,

for single track downloads. There is a sliding scale for the track rates where an album, rather than a single track, is downloaded.

As the price on iTunes is typically $1.69 per “song”, I guess the % rate will usually apply for single track downloads.

(This is just what the composers get paid for the transmission and reproduction on the ‘buyer’s’ computer; not what the record companies or performers (will) get.

The composers’ collecting societies, APRA and AMCOS, had started out trying to get 12% but, in the end, the monopolies and the monopsonistic buyer(s) wound up reaching agreement. Even the ACCC, after some twisting and turning seems to have gone along with the deal, perhaps in recognition of the fact that the Copyright Act specifically gives the Copyright Tribunal power to fix these rates.

By way of comparison, the Copyright Tribunal reported that the corresponding rates were:

• United Kingdom – 8%.
• Canada – 11%.
• United States – 9.1 cents.
The rate in the United States is a fixed monetary rate. The vast majority of single track downloads in the United States at present are supplied at a price of 99 cents per download. Thus the monetary rate is equivalent to 9.1% of the sale price.

Australasian Performing Right Association Limited and Australasian Mechanical Copyright Owners Society Limited [2009] ACopyT 2

ASCAP, AT&T and ringtones

ASCAP is suing AT&T in the USA for copyright infringements when an AT&T subscriber’s phone plays a ringtone. ASCAP is a collecting society for public performance and broadcast rights. It alleges that when the subscriber receives a phone call in, say, a restaurant and the phone plays a ringtone it is a performance in public that needs a licence.

Fred Lohman from the EFF says this claim is doomed in America. Their copyright act has §110(4) that excludes from the public performance right ‘performances made “without any purpose of direct or indirect commercial advantage.”‘

Why wouldn’t Telstra or Optus or, for that matter, Apple be liable in Australia if APRA or PPCA came calling?

We don’t have a §110(4) so, if you were in a restaurant or walking down Collins St in rush hour and your phone started playing a ringtone you had installed, you the phone owner wouldn’t be able to use Fred Lohman’s escape clause.

So could the phone company or Apple or whoever sold you the ringtone potentially be liable for authorising your infringement (if it be an infringement)? If we are still living in the world where Telstra was liable for the music on hold played by users of Telstra’s network (before the Act was changed by the Digital Agenda Act), the question doesn’t seem so fanciful?

The phone company or whoever could presumably be liable only on the basis of authorising the phone user’s conduct which would have to be infringing in itself. Now, liability for authorisation may not be a foregone conclusion; but in Cooper, the ISP was liable at least in part because it could have prevented the website even operating. Would it make a difference if the alleged authoriser just provided the phone or the ringtone?

One argument might be that if you, the subscriber, paid for and downloaded something described as a “ringtone”, there must be an implied licence. Maybe. But in an awful lot of cases, the person who can give you rights to download and store the ringtone on your phone will not have rights to license the performance right – that right will have been assigned to, you guessed it, APRA or another collecting society. Although APRA and AMCOS now seem to be “almost” the same entity.

Surely, a court would find that, although the ringtone might be heard incidentally in public by unwitting passersby or bystanders, the playing of the ringtone was really in private? Well, maybe. But then why have those exceptions in the Act for incidental uses of things like artistic works in public places (s 65) or reading or recitation of reasonable portions of published literary or dramatic works (s 45)? (At least, you wouldn’t have to pay a licence fee for the lyrics!) and making temporary copies as part of a technical process of use (s 111B)? And there is a specific statutory licence for the playing in public of sound recordings (s 108).

Maybe a court could be persuaded to look a little more liberally at whether or not a ringtone is a substantial part of the original recording? A ringtone afterall can only be 30 seconds in duration. This seems very unlikely given that 8 bars of  Colonel Bogey infringed.

Is there something wrong with the way we legislate specific exceptions for specific technological problems?