Music Industry Reaches Agreement On Online Royalties

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The Digital Media Association (DiMA), the National Music Publishers’ Association (NIMPA) and the Recording Industry Association of America (RIAA), along with the Nashville Songwriters Association International (NSAI) and the Songwriters Guild of America (SGA) have reached an agreement on how music creators will be compensated for music distributed online.

The agreement proposes for the first time mechanical royalty rates for interactive streaming and limited downloads, including subscription and ad-supported services. The agreement proposes a flexible percentage of revenue rate structure, with minimum payments in certain instances.

Limited download and interactive streaming services will generally pay a royalty of 10.5 percent of revenue, less any amounts owed for performance royalties. In certain circumstances, royalty-free promotional streaming is allowed. The parties said that non-interactive, audio-only streaming services do not require reproduction or distribution licenses from copyright owners.

The agreement does not cover royalty rates for physical product or permanent music downloads. The Copyright Royalty Judges will issues a ruling on those rates by October 2.

"This agreement provides a flexible structure to support innovative business models in the digital music marketplace that will benefit music fans, creators and online services," said Mitch Bainwol, Chairman and CEO, RIAA.

"The agreement demonstrates that our industries can work collaboratively to solve complex issues."

Music Industry Reaches Agreement On Online Royalties
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  • Rusty Hodge

    This still doesn’t solve the problem that internet radio has. This only covers download and on-demand performance (e.g. Rhapsody, Napster to Go).


    Internet radio still has not settled on a workable royalty on the sound recording, which the CRB judges ruled would be paid to SoundExchange on a per song, per listener basis rather than on a percentage of revenue basis.


    Internet radio services pay based on "performances" of songs, where the above agreement is based on making "copies" of songs.


    Internet radio pays royalties on both the underlying composition as well as to the sound recording copyright holders.  This agreement was all about the underlying composition; download services have no "compulsory" license and must negotiate deals with sound recording copyright holders directly.


    Broadcast Law attorney David Oxenford has more details in his blog.  Oxenford has been representing many internet radio stations in negotiations with the RIAA and is considered one of the experts in this field.




    • Susan Pillsbury-Taylor

      I put out an album under Sweet Fortune label in 73 with Mike Berliner, entitled Susan Pillsbury. I continued in music after that, but that was one of the more notable endeavors. I found out years later it has been receiving increasing internet interest in Korea, the UK and here as in Acid Archives. It is on numerous play lists and itune lists. I am registered with Ascap and wonder why I have never received a penny. All the songs on the album but one are mine. Would getting a lawyer help? Or is it not worth the effort.
      I was also considering re-releasing that old album with a few new recordings, adding a byline for interest and new pictures …having heard that real collectors would be interested in something original from the songwriter that isn’t boot-legged. But if I do that, I will make sure I retain some control.
      any response?

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