Music Groups Come Together

Updated:

January 11, 2017 11:24 am

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Music trade groups (the Digital Media Association, the Recording Industry Association of America), songwriter’s groups (The Nashville Songwriters Association International, the Songwriters Guild of America), and music publishers (the National Music Publishers’ Association) have announced, for the first time, a digital-royalties agreement for music distributed through certain online models.Music trade groups (the Digital Media Association, the Recording Industry Association of America), songwriter’s groups (The Nashville Songwriters Association International, the Songwriters Guild of America), and music publishers (the National Music Publishers’ Association) have announced, for the first time, a digital-royalties agreement for music distributed through certain online models.

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The most important piece of yesterday’s announcement centers on the standardization of mechanical royalty payments for digital distribution methods. In the past, involved groups agreed to royalty payments through party-to-party negotiations, legal settlements, or by indexing the royalties to the sales of physical product. Under the agreement, limited download services (iTunes, Amazon) and interactive streaming services (Rhapsody, Napster) will now “generally pay a mechanical royalty of 10.5 percent of revenue, less any amounts owed for performance royalties.”

In addition, the agreement provides for “royalty-free promotional streaming.” Reported on Monday, DiMA recently filed an amicus brief in ASCAP v. AT&T hoping to protect the royalty-free status of these 30-second samples, arguing that companies currently use these samples as a tool to encourage users to purchase full-length tracks.

The agreement also holds that “non-interactive, audio-only streaming services do not require reproduction or distribution licenses from copyright owners.”

Although light on practical details and still in a draft regulation form, the assemblage of music trade groups, songwriter’s groups, and music publishers have submitted their proposal to the Copyright Royalty Judges, who will ultimately have the final say on its enactment.