Can't you just move your servers to another country?

Many people ask us, why can't you just move your servers to another country?

Gary Greenstein, former general counsel for SoundExchange recently said:

The RIAA and the major labels have take the position that the law in the territory of destination of a transmission will govern and that off-shore webcasters streaming into the US will still have liability for transmissions (i.e., public performances) that terminate in the US. Therefore, moving a webcaster's facilities off shore will not immunize them from liability or the reach of US courts, particularly if the owner/operator still has sufficient business in the US.

We would have to move our entire business operations, not just our servers. So this isn't really a tactic that will work, especially for the long term. It's not practical for SomaFM to move our entire operations overseas; and if we retained ownership of a foreign company that was broadcasting to the USA, we would likely be the target of a lawsuit.

But, the good news is that we're not going to have to pay SoundExchange for our audience that's outside the USA. The bad news is that soon we'll likely have to pay royalty collection agencies in other countries:

David Oxenford, a broadcast law Attorney, says:

In the first CARP (I believe) there was a specific statement that a "performance" was a play to a US listener. So webcasters have excluded performances to non-US IP addresses when computing their royalties. After the first CARP, a number of large UK streamers cut off their service to US listeners, worried that they would have to pay the royalty.``

``In the last year or so, the performing rights organization from the UK has been in contact with some US streamers looking for royalties for performances that are heard in the UK. I understand that both Yahoo and Clear Channel block streams to IP addresses that are clearly not in the US, possibly to avoid this issue. ``

Really, the only solution is to fix the problems with the royalty rates in the USA. Running away from them won't solve the problem for the long term.