Open the Pod Bay Doors

Editor's Note: The following is the text of the August 18 edition of Doc Searls' SuitWatch newsletter. Sign up [1] to be a subscriber of this bi-weekly newsletter.

I'm drafting this just before driving from Santa Barbara to San Francisco to attend LinuxWorld Expo. I'm preparing to ease my trip with a collection of podcasts, chief among which will be the latest edition of The Roadhouse [2]--"the finest blues you've never heard"--by fellow Linux Journal writer Tony Steidler-Dennison.

The Roadhouse features "podsafe" or "non-RIAA" music, mostly offered through Creative Commons [3] licenses. Playing podsafe music is easy for the podcaster and good for the artist, which is why it feeds a fecund and rapidly growing independent music ecology.

But ignoring the huge portfolio of conventionally copyrighted (RIAA) [4] music is nearly impossible, thanks to the countless tunes that have been running in our heads since we were babies. Plenty of podcasters, me included [5], want to be able to play chunks of this music--even to help sell it. How can we do that on a podcast? Better yet, how can podcasting participate in what Lawrence Lessig calls "remix culture" [6], which he says has been the very nature of culture itself since our ancestors painted pictures of bison on cave walls.

Turns out I'm not the only one asking this question.

A few days ago, "Storm clouds gather over podcasting" [7], by Michelle Kessier, appeared in USA Today. It's about the podcasting travails of KEXP [8] and KCRW [9], two of the best noncommercial radio stations in the country. In addition to radiating over the airwaves, both [10] also [11] stream on the Web and syndicate [12] podcasts.

Here are the key paragraphs:

A podcast is a digital recording of a radio-style audio program that can be downloaded from the Internet and played on a digital music player. Many podcasters think the technology could revolutionize radio as TiVo did television.
But record labels worry that listeners will pirate the songs contained in the downloaded radio shows. The result: yet another Napster-like standoff over piracy and music rights.
Podcasting is a great way for KEXP to reach thousands of new listeners, especially those outside of Seattle, Richards says. But the station can't podcast programs such as John in the Morning - Richards' variety mix of independent and mainstream music - because record companies haven't provided an easy, affordable way for podcasters to license songs. That's why most podcasts today are talk radio.

In fact, KCRW's Morning Becomes Eclectic show [13], one of the best music programs on radio, is selectively offered for podcast [14] by KCRW. From what I gather, only the podsafe ones pass through. (I just checked with Apple's iTunes podcast directory, and the list of available shows from the Morning Becomes Eclectic catalog is down to just one item, from June 28th of this year. Last time I looked there were many more.)

Since podcasts are recordings, they can be played at any time. Listeners can pause, fast-forward or rewind them. And since podcasts are posted online, listeners can download programs from radio stations and independent broadcasters from all over the world.
The podcasts can also be hacked and pirated. An enterprising listener could pull songs out of a podcast and turn them into music files or CDs.
That's why many record companies say the technology is promising but problematic. For example, OK Go and several other emerging bands with EMI have their own podcasts. But EMI is not ready to approve a blanket podcasting license. "Podcasting is potentially very exciting," says Executive Vice President Adam Klein. But the company needs contracts "that are responsible to everybody," he says.
Ruth Seymour, general manager at influential Los Angeles public radio station KCRW, worries that those contracts will take years to be worked out. That would keep podcasting from reaching its potential, she says.
Several of KCRW's programs - notably a well-regarded new-music show called Morning Becomes Eclectic- would be perfect for podcasting, Seymour says. Many already have fans worldwide thanks to an early form of digital radio called streaming media.
Streaming media is different from podcasting because it's not a recording, which makes it harder to pirate. A stream is essentially a broadcast that travels over the Internet instead of the airwaves.
Record and radio companies have struck a blanket licensing agreement for streaming based on traditional radio licenses. No such agreement exists for podcasting. So if Seymour wanted to podcast Morning Becomes Eclectic, she would have to sign individual contracts with each record company.
"That's an impossible process," says digital music analyst Phil Leigh at Inside Digital Media.
For now, KCRW is podcasting only talk programs, live performances and independent bands. "I really want to podcast (major label) music!" Seymour says. "It's where the future is ... (but) I don't want a cease-and-desist order."

There are buildings full of lawyers in Los Angeles that "clear rights" for a living. Without them, movies would be much easier and cheaper to make and distribute. But, thanks to Hollywood's native regulatory regime, the movie Tarnation [15], which wowed the 2004 Cannes Film Festival and cost $218 to produce, faced a bill upwards of $400,000 to "clear rights" for the video clips used in the movie.

Ordinary, over-the-air radio, including Sirius and XM satellite radio, doesn't have to deal with that kind of hassle. By terms worked out when radio was young, stations only have to pay composers. They do this through ASCAP, SESAC and BMI. That's it.

Podcasting is a new breed of service. As a music podcasting pioneer, Tony has to blaze trails through a copyright jungle. He explains:

My concern with securing permissions is that I really have to do it in a black box. All the rights--mechanical, performance, composition, etc.--are negotiable details in a contract between the artists and the labels. Obviously, I'm not privy to the details of those contracts, so I'm always a bit nervous about whether the person granting the rights actually has to power to do so.
I've asked for and been granted permissions by several independent labels: Black and Tan, Alligator, TopCat, and Blue Sunday Entertainment. In every case, it's gone through the president of the company, though the discussion may have started with a radio rep.
In fact, I'm currently hammering on Tone-Cool (Fabulous Thunderbirds, Hubert Sumlin, Susan Tedeschi, Double Trouble, Taj Mahal, Rod Piazza and the Mighty Flyers) President Richard Rosenblatt, but he's been a little less than responsive. I've also gotten e-mail from them explicitly granting permissions to play the music of specific artists in the podcast. And, I make it clear that for the format of my show, I'm actually tighter than the streaming guidelines of the DMCA. It might be a thin approach, but I figure if someone comes after me, I have some deeper pockets to fall back on--the label itself as represented by the president, and tighter controls than Congress has required for similar technology.

Two things to note here. First, Tony is dealing only with independent labels, not with the giant labels--Sony and Warner--that comprise the RIAA. Dealing with the big copyright holders poses a challenge beyond the endurance of all but the entertainment lawyers who thrive on this kind of thing and the fees they bring. Second, there's this business about "the streaming guidelines of the DMCA".

"Guidelines" are an understatement. To Web cast legally, one must:

Register with the Copyright Office, filing a Notice of Use of Sound Recordings Under Statutory License. This "compulsory license" costs $20.
Not provide an "interactive service" that provides listeners a choice of songs played.
Not allow call-in requests for music, unless the Webcaster chooses among multiple requests, so the caller has no direct influence.
Play no more than three selections from any album or CD in a three hour period.
Play no more than three selections from any one artist in a three hour period.
Play no more than three of the two items above consecutively.
Not publish advance program schedules that allow listeners to know exactly when any particular selection will be played.
Identify the song title, the album or CD, the artist and information encoded by the copyright owner identifying related information, in text.
Not broadcast bootlegged or pirated copies of recordings.
Not associate music with visual images that suggest a connection between the music and the images.
Play music from a site that is principally concerned with music, rather than product sales.
Cooperate with industry "anti-piracy" efforts.
Pay royalties [16] on a per-song, per-listener basis.
Keep track of and report on all the above.

Accounting information and royalties go to SoundExchange [17], the recording industry's instrument of administration, collections and other fun stuff.

There are different rates if you qualify as a "commercial Webcaster/broadcast simulcaster", "small commercial Webcaster/broadcast simulcaster", "noncommercial Webcaster/simulcaster", "noncommercial educational entity" or "NPR/CPB member station".

This regulatory morass all springs from the belly of the Digital Millennium Copyright Act (DMCA), which was passed by Congress in 1998, but left settlement of sticky Webcasting copyright issues up to opposing parties to solve among themselves, through a Copyright Arbitration Royalty Panel (with the four words arranged in that order to avoid the spelling derived when the middle two are reversed), or CARP.

The only Webcasters not clobbered by the "agreement", which nobody on the Webcasting side liked in the least, are the public radio stations.

As the Copyright Office of the Library of Congress put it in "Determination of Reasonable Rates and Terms for the Digital Performance of Sound Recordings and Ephemeral Recordings; Final Rule" [18], entered into the Federal Register on July 8, 2002, "...NPR reached a private settlement with the Copyright Owners..."

In effect, that allows KCRW and KEXP to simulcast on the Web. In other words, as bad as the situation may be for them, they are in a privileged Webcasting caste. The USA Today piece doesn't say that. Nor does it bring up this little item I just found near the bottom of SoundExchange's rates page:

National Public Radio ("NPR") member stations and public stations that are qualified to receive funding from the Corporation for Public Broadcasting ("CPB") may be covered by a license agreement entered into between NPR/CPB and SoundExchange® that covers transmissions made between October 28, 1998 and December 31, 2004. No private license agreement has yet been entered into between NPR/CPB and SoundExchange for the 2005 license period. For further information, public radio stations should contact Denise Leary, NPR Deputy General Counsel Programming and Senior Legal Counsel at dleary@npr.org.

Note the word "may" in the first sentence.

Looks like the RIAA and SoundExchange are looking to get some fresh bucks out of the public stations as well.

In any case, commercial stations have it far worse. One sign of this situation is the disappearance of KPIG [19] from the Web after the Determination of Rates was made. KPIG [20] was the first commercial radio station to simulcast on the Web and one of the best by far. Today, KPIG is available only by subscription over Real's and AOL's closed and private systems. It's off the public Internet.

Between writing the last paragraph and this one, I drove up to LinuxWorld and back, listening to dozens of podcasts along the way, including many on the only radio station in the country that plays an all-podcast format, Clear Channel's KYOU/1550am in San Francisco. KYOU, the licensed call letters are KYCY, has a transmitter alongside Highway 101 in Belmont, California, and a signal pointed northwest, to the central and northern Bay Area. The signal has a null or a dent in the coverage, toward the South Bay. It's a third-tier signal in a top-five market and is good for testing out new formats. The jury is way out on this one, but I want to give the station programmers kudos for reaching out to myself and others for guidance. They need it. So do we all.

I also was intercepted by phone at a Starbucks by Steve Gillmor (on whose Gillmor Gang podcasts I serve), who argued with me about many of the subjects in this piece. That became a surprisingly listenable podcast you can find here [21]. It was relatively easy for the recording industry to strangle Webcasting in the cradle. I covered the crime extensively in Linux Journal and anthologized my series of reports in my SuitWatch from last September, which can be found here [22]. If you're interested in background, there's a rich trove of background materials there.

At best there were a few thousand Internet radio stations at the time the DMCA finished shutting many of them down. The ones that survive include some real gems. Bill Goldsmith's Radio Paradise is at the top of my personal list. Bill was highly involved in the CARP negotiations from the Webcasters' side, and he was the hacker-in-chief for KPIG during the whole time it lived out on the open Net.

I've been wondering if podcasting's relative strength will make a difference this time around. Last September 28, I ran a piece called "DIY Radio with PODcasting" on IT Garage (see Resources). Among other things, I wrote, "But now most of my radio listening is to what Adam Curry and others are starting to call podcasts. That last link currently brings up 24 results on Google. A year from now, it will pull up hundreds of thousands or perhaps even millions."

Millions it is. That search today brings back 18,600,000 results. If I were the RIAA, I'd want to take advantage of those kinds of numbers, not fight them.

So, what's the way to bet? I thought Bill Goldsmith would be a good one to ask. Here's an excerpt from a brief e-mail exchange we had yesterday:

Doc Searls: Does Radio Paradise adhere to all those Webcasting rules regarding number of artists from an album in a 3-hour period, not providing interactivity, etc.? If so, how is that going? Is it as big a PITA as it seems?

Bill Goldsmith: Actually, it's not that much of a pain. My vision for Radio Paradise includes a lot of variety--so the DMCA restrictions on the number of songs by the same artist or from the same album in a given period of programming is actually in excess of what we would ordinarily do. As for interactivity, I see radio as a creative medium--with the creator being the DJ. I can see the value in and attraction of services that allow the listener to customize their experience, but that's not what we're about.

DS: Is there any hope that the RIAA will be less awful to podcasters than it was to Webcasters during the CARP process?

BG: I would expect them to be even more rigid and less flexible toward podcasters, since inherent in open-format podcasting--that is, podcasts that will play anywhere without DRM restrictions--is the downloading to computers or devices of complete audio files of the podcast content, which in the case of a music podcast can be relatively easily separated into individual songs.

Do I personally think that sales of CDs or high-quality purchased downloads would suffer if stations like RP were allowed to podcast copyrighted material? No way. I agree with a substantial group of artists and small labels who feel that exposure is exposure and that the distribution of 128kbps-grade MP3 files of their music via free downloads, p2p networks or podcasts gives artists the best available opportunity to build a relationship with the largest number of potential fans at the lowest possible cost--and that once that relationship is established, there are many opportunities for the artist to profit by it: CD and download sales, concert tickets, merchandise, etc. A fan who feels a bond with an artist is happy to support them. That's been proven over and over again.

Do I expect the RIAA to get this? Not a chance.

Even if they don't, we have the independent music movement. As Craig Burton says, "resistance creates existence". The more the old record industry resists podcasting, the faster the independent music industry will grow with podcasting's help.

Resources

Summary of the Small Webcaster Settlement Act courtesy of Shelley Steinbach, American Council on Education and Ken Salomon, Dow, Lohnes & Albertson, PLLC. [23]

DIY radio with PODcasting [24]

Broadband on the Run [25]

RAIN: Radio and Internet Newsletter [26]

Internet Radio: Music Royalties - The Basics [27]

Future of Music Coalition [28]

Craig Burton Weblog [29]