Ready, set, singe
The RIAA and Digital Media Association (DMA) inked an agreement with organizations that represent musicians and songwriters, intended to provide a clear licensing procedure for digital music distribution.
The model applies specifically to streaming music services like Last.fm or Blip.fm, as well as subscription or ad-supported offerings like We7. Download-to-own music was not included.
Music organizations that signed the agreement included the National Music Publishers' Association, the Nashville Songwriters Association International, and the Songwriters Guild of America. Major players behind the DMA include Amazon, Apple and Microsoft, reports Ars Technica.
Online streaming music sites are currently required to issue royalties. Earlier this year, an ASCAP ruling determined sites like AOL and Yahoo owe legacy royalties for music streamed as far back as 2006.
That's a tall order, even for big names. Smaller streaming music sites, whose long-term viability depends on gaining a critical mass, are buckling under the weight of increasing numbers of users streaming songs. An April survey found 33 million people listen to online radio per week.
The new agreement between the RIAA, DMA and music/artist representatives introduces a mechanical royalty around 10.5 percent of revenue for interactive and restricted streaming "less any amounts owed for performance royalties."
Per the announcement, mechanical licenses comprise "all reproduction and distribution rights necessary to provide the licensed limited downloads or interactive streams."
Those rates apply to restricted downloads (proffered by subscription services) and streaming services, ad-supported or not. Broadcasters will also be permitted to advertise their wares via royalty-free promotional streams, though a definition for "promotional" was not provided.
The agreement was praised by pundits as a step toward protecting artist and record label rights, though it isn't clear how it eases the strain on streaming music over the long-term.
The agreement has been submitted to the Copyright Royalty Judges for approval.
