New Site Raises Webcast Issues

LOS ANGELES‹SHOUTcast, a new World Wide Web site launched by Nullsoft on Dec. 31, 1998, provides a free and easy tool for hobbyist Webcasters to compile playlists and broadcast them online.
However, in its larger context, the service also frames some of the challenges ahead for rights organizations and trade groups making an effort to license Webcasters and collect mechanical royalties online.
SHOUTcast, which lets users stream audio in the MP3 format, is free for "general nonprofit use" but charges $299 per server for a commercial license.
At press time, there were more than 200 "stations" Webcasting everything from electronica to dirty jokes to stations featuring the music of one or two artists (BillboardBulletin, Jan. 5).
Other companies, such as TalkNetRadio.com, are also initiating programs designed to accommodate individual Webcasters. The TalkNet site, which is currently registering users, will let them broadcast for free to a set number of people. A similar service, Destiny Broadcast Network (www.radiodestiny.com), launched a few months ago. Destiny, which requires a proprietary streaming technology, had 12 stations streaming at press time.
"Our goal is to do for would-be DJs what free home pages do for would-be publishers," says Nullsoft director of online strategies Rob Lord. "All you need is a WinAmp, and you're in the streaming business."
WinAmp is Nullsoft's popular desktop MP3 player, which can be downloaded from Nullsoft's Web site.
Most stations listed at the SHOUTcast site can accommodate no more than 32 simultaneous listeners.
ASCAP senior VP of new media Marc Morgenstern says the performing right society has begun discussions with Nullsoft and is assessing the situation.
As with other rights organizations, ASCAP already has several classes of Webcasting licenses in place. Its lowest-end license costs $250 a year.
Asked whether ASCAP might help develop a new class of license for these nonprofessional Webcasters, Morgenstern says, "We need to get a lot more information first, but we have a very open mind toward figuring out something that fairly reflects the use of the music. We recognize that this is pretty scaled-down usage."
Tools such as the BMI Bot and ASCAP's EZ Seeker scour the Internet for unlicensed Web sites streaming music.
As John Parres, author of digital technologies Web site the Geek Report, points out, determining exactly how many people are ultimately hearing these Webcasts can be tricky.
"It's sort of a pyramid distribution scheme," says Parres. "The first computer may have the ability to send out about 30 streams, but maybe 20 of those streams are picked up by 20 other computers that can send out 20 streams each."
Additionally, SHOUTcast Webcasters may be held accountable by the Recording Industry Assn. of America (RIAA), which was able to secure‹as a provision in the recently passed Digital Millennium Copyright Act‹the right for sound recording holders (i.e., record labels) to charge Webcasters a compulsory licensing fee (Billboard, Aug. 15, 1998).
Much of the programming generated by SHOUTcast hobbyists clearly does not qualify for this compulsory license, which has strict guidelines regarding the degree of interactivity, repetition of songs, and other factors.
For example, stations dedicated to individual artists such as Oasis or Pink Floyd, as well as those that provide a playlist of offerings, would not qualify.
Still, fees for the compulsory Webcasting license, and the manner by which Webcasters may negotiate for a license allowing more interactive and aggressive programming, have not been established.
RIAA VP/deputy counsel Steven Marks plans to speak with Nullsoft representatives in the near future. He says the organization will begin an "educational outreach" to make sure SHOUTcast Webcasters are aware of licensing issues.
"We would expect people to respect the rights of artists and the record companies," says Marks. "If they don't comply with the [forthcoming] statutory license, we hope they will stop Webcasting, and if they do comply, they will be able to get a license separately."
Compounding matters, a component built into the WinAmp player allows users to record these streamed Webcasts onto their hard drives.
Bob Kohn, chairman of GoodNoise, a record label that sells legitimate MP3 downloads, believes this may be the issue looming over SHOUTcast.
"This is not an ASCAP or BMI issue," says Kohn. "They shouldn't have any difficulty tracking sites and licensing those sites for those performances. The issue may become, If the consumer can make a [high-quality] MP3 file from these broadcasts, how will the music publisher be able to track when these recordings are made [and collect fees]?"
This is especially pertinent when users have the ability to select what songs they would like to record, says Kohn. In the case of a random-playlist broadcast, however, it is a problematic legal question to determine whether a mechanical royalty will be owed to publishers, he says.
For Nullsoft's part, Lord says the company hopes to work with all interested rights organizations.