Well, that happened. It’s a surreal episode that seems not to have any clear winners, as the US government on one side and hackers on the other face off over what is and isn’t freedom online. The mystery is, what will be the long-term outcome for people making content – or, for that matter, do these kinds of dramatics even really have any logic in your work at all?

While the music tech industry was holed away in the palm tree-lined walls of the Anaheim Convention Center, it seems full-blown war broke out over content on the Internet, in a surreal collision of players. Remember that bleak future painted by opponents of new US anti-piracy legislation, one in which your ability to upload your own content might get caught in the crossfire? It turns out it doesn’t necessarily require new laws, and it could look something like this:

MegaUpload file sharing site shut down for piracy by Feds [LA Times]

And then, in spectacular fashion, the hackers strike back…
Anonymous downs government, music industry sites in largest attack ever [RT]

Updated: The raid successfully stopped MegaUpload from operating … erm, except that it’s now right here, via a direct IP address and other sites appear to be phishing scams, so stay away.

It’s hard to imagine a more heated showdown. The US Department of Justice is behind the raid on MegaUpload, and just happened to time their crackdown the day after sites like Wikipedia blocked out content in protest of more restrictive rules in Congressional legislation, rules that claim to target just this kind of site. (MegaUpload was often named specifically, and – in fairness – had run rampant with pirated files. The authorities may have chosen the date as the founder’s birthday party, unrelated to yesterday’s blackout.) But that’s almost not the oddest thing about this story: it places a site endorsed by a number of high-profile musicians opposite labels like Universal Music Group. And don’t forget reports that the CEO is using an alias and is married to Alicia Keys, for added potential drama.

Now, clearly, MegaUpload was a venue for a significant amount of copyright infringement, and it’s inarguable that its owners benefited from that infringement. But artists themselves are already crying foul, partly because a service they used is unavailable. For instance, online radio station SOMA FM protests via Twitter:
“FBI shuts down megaupload .com, claiming no legit users. However lots of indie artists used it to send us (SomaFM) their new music.”

Show of hands. Are you now thinking:
1. I’m relieved! Now that the Federal government is cracking down on these sites, I can at last have the financial security as a musician of which I’ve always dreamed! Clearly, this will help drive more money into sales of music and other creative content, and we’ll all benefit!

2. Great. This will really mean is the next time I try to upload something, there will be all kind of annoying restrictions imposed voluntarily by services to avoid getting shuttered, all because people had to upload Adele albums. I’m just trying to send a darned demo.

3. Who was using MegaUpload, anyway?

Tally to follow.

In the meantime, these fireworks with Anonymous are sure entertaining to watch.

One alternative possibility occurs to me. Because it’s clearly possible to shut down MegaUpload without the benefit of damaging legislation, the MegaUpload closure actually makes an excellent case against the need for restrictive new laws. In other words, you can shut down an obvious infringer like MegaUpload, while leaving loads of other sites that support user content, and you didn’t have to change US law. So, even though Anonymous scored a dramatic protest, the raid itself might actually make a good case against new, tougher laws.

Downpressor, via Twitter, remarks “I’m not sorry to see sites like that go down.” And that’s the crux of this – a large number of parties actually do agree that some sites ought to go away through some sort of enforcement action. After the explosive saga here settles down, the upshot may be that this is left to enforcement mechanisms within the bounds of existing law, and not the kind of radical new laws recently proposed.

MegaUpload itself, though, may prove to be a bit divisive, because it will be seen through the eyes of some users who used it legitimately, even if those activities were a minority.

Policy, intellectual property, and changing business models remain hot threads to follow on this site as we watch the transformation of music distribution in the electronic age. This time, we welcome a new contributor to look inside the issues. Surprise: one radio host sides with the record industry, and the issues may not be as clear as you think. Jo explains. –Ed.

Imagine this:  A track from your new record is being played out on the radio — nonstop. All the major indie stations in Los Angeles, New York, Chicago, Miami and Atlanta have picked it up. At this point, I’m sure you’ve already ordered a fancy synth that you plan to pay for with your big check. But there is a problem: You did an acoustic version of Jimmy Edgar’s “My Beats.” So who gets paid? Jimmy Edgar. Guess who does not get paid? You!

The Performance Rights Act is a bill before the US Congress that would require terrestrial radio stations to pay royalties to the performer of a track. It is being supported by artists like Billy Corgan (who recently testified on behalf of the artists’ rights group, the musicFIRST coalition) Don Henley, Jay-Z, Billy Idol, as well as the Recording Industry Association of America (RIAA). Aside from the issue of “fairness,” the United States is one of the few countries that does not require payment to the performing artist when her track is played on the radio.

Celia Hirschman, host of “On the Beat” on Los Angeles’ KCRW public radio, a broadcast on changes and trends in the music business, says she agrees with the act. (Celia notes these are her personal views, and do not necessarily reflect the position of KCRW.)

“For decades, the laws have favored a free license to play artists’ music on radio,” says Hirschman. “This was ratified by Congress and basically accepted by all concerned…This free pass no longer makes any sense, especially for commercial radio. A reasonable compulsory license fee for all radio, with lower rates to non-commercial is an equitable solution for artists and labels.  Commercial radio stations earn their income by selling advertising because of their programming content.  It’s only fair that the content providers are compensated.”

“This free pass no longer makes any sense.”

Celia Hirschman, host of “On the Beat” on KCRW

Opposing the bill is the National Association of Broadcasters (NAB) who claim the legislation amounts to a “tax” and will force many radio stations to go bankrupt. Additionally, opponents of the bill point out that many artists were first discovered because of radio exposure, which translates into sales (ticket sales, album sales and merchandise) and promotion of their brand. If the station goes under, so does the performing artists’ potential income.

Dennis Wharton, EVP of NAB, claims that the RIAA “relies on cherry-picking international examples that paint a distorted picture of copyright law.” “The US protects sound recordings for 45 years longer than Canada and many countries in Europe, says Wharton. “If it’s “international parity” that RIAA is looking for, they ought to examine the entire landscape.”

In fact, the international landscape is not equal.  Many countries in Europe run stations owned or subsidized by government funding. The foundation of our copyright laws are different as well. In the United States, we use the term “copyright” whereas many European countries use a term equivalent to “author’s rights.” “Copyright” reflects an attitude that is concerned with the restriction of uses for economic reasons, whereas the term “author’s rights” reflects an attitude that is concerned with the extension of the author’s intellect and self.

I recently spoke with Brian Lee Corber, an IP attorney who has closely followed the Performance Rights Act. In his opinion the bill will not pass. “Collecting royalties for the songwriter is already inaccurate; it’s based off of surveys. Logistically, collecting royalties for the performer is even more complicated…what happens when the performer is an orchestra?” Corber feels this logistical nightmare may make it difficult for the legislature to justify passing this bill.

As a reaction to the Performance Rights Act, NAB is backing the Local Radio Freedom Act which calls for no tax or fee for the performance of a sound recording on the radio. As of March 24th, 9 more lawmakers signed onto the Local Radio Freedom Act, making the total number of co-sponsors 158.

For More Information:

Music First Coalition: www.musicfirstcoalition.org

National Association of Broadcasters: www.nab.org

KCRW: www.kcrw.com/etc/programs/ob

Sources:

Dougherty, F. Jay. Copyright Law Class at Loyola Law School, March 24, 2009.

“Mr. Corgan goes to Washington for a Bigger Piece of the Radio Pie”

http://blogs.suntimes.com/derogatis/2009/03/updated_mr_corgan_goes_to_wash.html

“NAB disputes RIAA Claim Ahead of Performance Rights Hearing”

http://radioink.com/Article.asp?id=1206143

“NAB, musicFIRST go Head-to-Head on Royalties”

http://www.fmqb.com/Article.asp?id=1235167

“Smashing Pumpkins Singer, Billy Corgan Testifies Before Congress”

http://www.opposingviews.com/articles/news-smashing-pumpkins-singer-billy-corgan-testifies-before-congress

Los Angeles-based CDM contributor Jo Ardalan is the Managing Director and Founder of Fixed Noise, a community-based company specializing in audio software development, artist management and business development in tech and entertainment.

She’s a veteran of Waxploitation and Native Instruments, an experienced sound designer and engineer, and consultant.

And she has a Reaktor tattoo.