Hey, Aren’t Markets Supposed To Solve All Our Problems?

If so, what could possibly be wrong with this? Auction of Software Flaws Stirs Concernspdf

A Swiss Internet start-up is raising the ire of the computer security community with the launch of an online auction house where software vulnerabilities are sold to the highest bidder.

The founders of WabiSabiLabi.com (pronounced wobby-sobby-lobby) say they hope the new service offers a legitimate alternative for security researchers who might otherwise be tempted to sell their discoveries to criminals. Vulnerabilities that could be sold on the site range from those present in hardware that supports critical information infrastructure, such as Internet routers, to flaws in common desktop applications, such as Web browsers and instant messenger and e-mail programs.

Social Networking Site Imeem and Warner Settle

Music giant settles suit against Imeempdf

Warner Music Group Corp. said Thursday that it had settled its copyright infringement lawsuit against the social-networking website Imeem by agreeing to license its music and video content to the site for a slice of its ad revenue. Financial details of the settlement were not disclosed.

Under the agreement, Imeem Inc. can carry music and videos from all of the record company’s artists, who include Madonna, Linkin Park and Red Hot Chili Peppers.

Dream Negotiations for SoundExchange

And the likely stifling, if not elimination, of independent webcasters: Judges clear way for higher Internet radio royaltiespdf

A federal appeals panel has declined to delay a substantial increase in royalties that Internet radio stations must pay for playing music, clearing the way for the rates to take effect Sunday.

Webcasters had sought an emergency stay from the U.S. Court of Appeals for the District of Columbia Circuit, arguing that the higher rates would drive many of them out of business.

[…] Big webcasters such as Yahoo Inc. and RealNetworks Inc. also are fighting the new rates, as are National Public Radio stations and other traditional broadcasters that stream music online.

[…] The Copyright Royalty Board, an obscure group of federal judges, set the new rates in March, eliminating a provision that allowed small webcasters to pay 10% to 12% of their revenue instead of a set per-song fee for every listener. The current rate of .0762 of a cent each time a song is played will more than double by 2010, and many Internet radio stations will face royalty payments greater than their revenue.

Many broadcasters earn little or no money from their online stations, so the decision makes webcasting prohibitively expensive.

Although the appeals panel declined to stop the rate hike before it kicked in, an appeal was still pending before the court. Congress also is considering legislation that would halt the increase, although it could be months before a bill comes up for a vote.

In the meantime, webcasters are negotiating with SoundExchange, the organization that collects and distributes Internet music royalties. It has the power to strike separate deals.

See also Shaken Internet Radio Stations Face Specter of New Fees Sundaypdf

Michael Huppe, SoundExchange’s general counsel, said it was still negotiating with Internet broadcasters to reduce the burden on small and non-commercial webcasters. Yesterday during a meeting of both sides organized by members of Congress, SoundExchange offered an annual fee cap of $50,000, if the broadcaster reports everything that is played and adopts technology that limits the ability of listeners to copy broadcasts. The annual fee can be deducted from the royalties paid to artists and record labels.

But as it stands now, starting Sunday, webcasters will retroactively pay artists and record labels the difference between the new and old royalty rates for 2006.

“Nobody wins when Internet radio gets shut down, including artists who ostensibly are being represented by SoundExchange, the organization pushing for high rates,” [Pandora founder Tim] Westergren said. “It’s ironic. If SoundExchange gets their way, it means less money for musicians because people will cease to pay royalties all together.”

[…] Royalties for Internet radio differ greatly from its satellite and terrestrial counterparts. Internet companies 0.000762 of a cent per song, per listener. Satellite radio companies pay a percentage of their revenue. Under copyright laws, land-based radio stations, traditional AM and FM radio, pay nothing.

Later: gamesmanship, or something else? SoundExchange Tells Webcasters to Keep Streaming (citing HR 3015) and Net Radio Wins Partial Reprieve as Royalties Loom; also Public Outcry Staves Off Destruction of Internet Radiopdf; later Reprieve on Royalty Increase Being Pursued for Internet Radio