Music Licensing Issues in Second Life

SLNN recently ran an article concerning BMI and music Licensing in Second Life. SLNN reports that “Currently, DJs in Second Life are not required to pay performance rights organizations such as ASCAP, BMI, or SESAC, but that may change in the near future. The current legal climates for Second Life DJs is that they are providing a service and are being paid for that service; thus, are exempt from having to pay for licensing.”… We’re not? Wait a minute…

As a DJ, it is my understanding that in order to use licensed music, we HAVE to play licensing fees, that includes the fees to SoundExchange, BMI, ASCAP, and SESAC because we are still broadcasting music over shoutcast servers. With licensing you also should report any income that you make from your broadcasting services. Now while the article includes club owners into the mix (the possibility of club owners having to pay fees for playing licensed music) in most cases club owners will not have to worry about this (although I’m no lawyer!) Let me further explain:

As I mentioned before, if you are broadcasting (i.e. streaming) and you are playing licensed music, and people are tuning into your stream to listen to the music, much in the same way it happens with Internet Radio. Thus, DJ’s should be paying some sort of royalties. The fee you have to pay differs based on the sort of audience that you have, small webcasters work under a different tiered system than larger webcasters (the difference between an AOL ran radio station and a small radio station in Kansas). For small broadcasters, including those in Second Life there are several options (Live365, Loudcity, and the JPL Program formally known as swcast), for larger broadcasters it is my assumption that deals or direct talks with SoundExchange, BMI, ASCAP and SESAC are required.

These licensing fees have to be paid by the person who is running the broadcast (or shoutcast stream); in most cases it is the DJ who is broadcasting the music NOT the club owner. These fees are for broadcasting music over a certain audio server (stream) – this audio server is played directly on the listeners desktop. In the case of Second Life all it does is act as a media server (the same as Winamp, or Windows Media Player) which means that Second Life only plays the audio stream directly on the listeners desktop when that listener is in a certain area. In some cases, club owners are going to have to shell out some money, mainly when the club owners own the radio stream.

While I’m no lawyer (and I may be completely wrong on this issue legally) if you are playing copyrighted music and DJing for events in Second Life payments to BMI, SoundExchange, ASCAP, and SESAC are necessary. A larger discussion about my thoughts on the issue requires another post, mainly because I believe people should get paid for the use of their music but I don’t agree with a lot of the new rulings, payment systems that are being recommended. Second Life really does not change the method streaming happens, most of the discussions point at net radio stations but the language calls them “broadcasters”, which is really anyone who broadcasts music over an audio stream. Internet Radio Stations can provide a service (subscriptions, special events, even sponsorship programs and ad revenues) they still have to pay royalty fees that does not preclude DJ’s from doing the same, you still count as a broadcaster. Even though as a DJ you may not be DJing 24/7 or are providing a service, it is my understanding, AND my opinion that the appropriate persons should be compensated – this means paying your royalty fees. EVEN if I’m wrong to my knowledge there is no guideline for DJ’s – the closest are that of the services that LoudCity, JPL Program and Live365 have created to help protect individual DJ’s. Even if I’m wrong and Second Life DJ’s are excluded from paying licensing fees, as a professional DJ I rather be safe than sorry!

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30 Responses to Music Licensing Issues in Second Life

  1. Vint Falken says:

    In Belgium the price you pay to Sabam for music at parties and concerts depends on the fee you charge for entrace and either the amount of public or the largitude of your floor space.

    I think with a max of 60 avies, this would be cheap.. 😉

  2. Woah! That's an interesting system, but I wonder how would that work in Second Life where many people are not charging fees – may be cheap, like free cheap! 😉

  3. Randall K. says:

    There is still a legal obligation to pay royalties whenever a public performance of musical works and sound recordings takes place on the Internet.

    However, performing rights organizations like ASCAP and BMI, which generally administer blanket music license agreements, are still behind the technology curve. Therefore, they have yet recognize certain non Web-based music services like Second Life.

    Nevertheless, it would be unwise to presume that because of this legal shortcoming, that the performance right does not still apply to all music that is streamed via Second Life (refer to the respective provisions of the U.S. Copyright Act).

    Fortunately, the DMCA compulsory license, currently administered by SoundExchange, has a somewhat less restrictive application. Therefore a SecondLife user could theoretically pay royalties for his exploitation of sound recordings pursuant to the Section 114 and Section 112 statutory licenses.

    However, until more suitable agreements become available from ASCAP and BMI, there is no blanket licensing solution for digital music services such as Second Life.

    Note: The information contained hereinbefore is not intended to constitute legal advice or consultation.

    Randall Krause
    SWCast Network, Inc.

  4. Ameretat says:

    Any advice on how to list money earned in SL on those forms?

    I've been hoping to keep my RL identity and my SL identity separate, even for the purpose of DJing, but it looks like that won't last long after all.

  5. WannaBeDJ says:

    Very interesting. So, from what I'm seeing, it looks like the only legal way to DJ in Second Life is to get a license directly from BMI, SoundExchange, ASCAP, and SESAC. The ASCAP license alone is almost $300 USD per year. Using the JPL Program or any of the other services geared to small broadcasters doesn't seem to be legal due to the fact that the services' licenses require listeners to access the stream by going to the service web page and clicking a link. Therefore, putting the stream on an SL parcel is not permitted.

    So, how many DJ's in SL actually do have all the necessary licenses? I'll wager about zero!!!!

    I would really love to do some DJing in SL, and have experimented with it to make sure I have the software and stream server stuff working, but the roadblock here is the license. Looks like I will have to abandon this dream.

  6. RT Firefly says:

    In US v ASCAP, the 2nd Circuit court found that "playing music in public, when done without any commercial purpose, does not infringe copyright." (See section 110(4) of the Copyright act (Title 17) )

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  9. n songs says:

    That's an interesting system, but I wonder how would that work in Second Life where many people are not charging fees – may be cheap, like free cheap! 😉

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  25. Dont forget if you are broadcasting into other countries you will need to pay PPL PLI in thier countries too, so its not just in one country

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