New Royalty Agreement Promises More Money For Musicians And Labels

Record labels and music publishers hope the agreement will give consumers more choice in how they listen to music, while ensuring that songwriters and publishers get paid.
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If you purchase a cell phone and got song as a ringtone, if you pay for a subscription to an on-demand service such as Spotify, if you stream your own collection via a "locker" like Amazon's Cloud Player or Apple's iCloud, a new agreement between music industry officials, cell phone companies and digital streaming services will determine how much the copyright holders will make each time you press play.

Announced yesterday via a joint release from the Recording Industry Association of America (RIAA), the National Music Publishers Association (NMPA) and the Digital Media Association (DiMA), the agreement will establish the royalty rates which labels, songwriters and recording artists will be paid for songs delivered by a variety of formats through 2017. It includes rates for new technologies, including the so-called music lockers and cloud services that have emerged over the last year, during the time in which negotiations for the agreement were taking place.

The rates for these royalties have not yet been revealed, but according to Lee Knife, the executive director of DiMA, the agreement extends the rates and terms from a 2007 agreement that set royalties for digital music sales. Because it also extends these royalty rates to new delivery mechanisms, labels and songwriters can reasonably expect a new income stream.

Knife also says that because all parties in the negotiation agreed to the same terms, the Copyright Review Board must approve the agreement, though the U.S. Copyright Office will have the opportunity to comment and insist on changes once it's been published in the Federal Register.

DiMA represents the interests of Amazon.com, Apple, Microsoft and Nokia, among other digital service providers. Knife, along with Cary Sherman of the RIAA and David Israelite of the NMPA, the two organizations which represent content producers and copyright holders, all released statements expressing hope that the agreement would allow new, innovative services to develop.

The agreement comes amid signs that the decade-long slump in music sales is finally coming to an end. According to Nielsen SoundScan, overall album sales were up slightly in 2011, with digital album sales rising nearly 20 percent over 2010. Still, overall sales are less than half of what they were in 1999.

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