September 25, 2008

Streaming Royalties

Royalties Deal in Online Music

Record labels, music publishers, songwriters and online music services have reached an agreement on how to compensate music creators for online distribution of their content, they said.
Under the proposal, providers of such services will pay a royalty of 10.5 percent of revenue after other royalties are calculated.

From The Digital Media Association (DiMA):

The agreement, in the form of draft regulations submitted to the Copyright Royalty Judges, proposes for the first time mechanical royalty rates for
interactive streaming and limited downloads, including for subscription and
ad-supported services. The agreement proposes a flexible percentage of revenue
rate structure, with minimum payments in certain circumstances.

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

The agreement does not address royalty rates for physical product or permanent music downloads. The Copyright Royalty Judges are expectedto issue a ruling on those rates on or before October 2