Music orgs pact on royalties

Agreement covers online distribution

Major music industry and artist organizations have agreed on a way to get paid for music that is digitally distributed but not necessarily downloaded.

The Recording Industry Assn. of America, the National Music Publishers Assn., the Digital Media Assn., the Songwriters Guild of America and the Nashville Songwriters Assn. Intl. have reached an agreement that covers “interactive streaming and limited downloads, including subscription and ad-supported services.”

According to Tuesday’s announcement, deal also “proposes a flexible percentage of revenue rate structure, with minimum payments in certain circumstances.”

Terms of the agreement call for interactive streaming and limited downloading to pay a mechanical royalty of 10.5% of revenue less what may be owed for performance royalties.

The pact should provide a formula for payment to artists whose music is used in subscription services, which are expected to gain more traction in the marketplace as they become more readily available on mobile devices. Services that could be affected include Rhapsody, which offers subscriptions, and a site such as Wolfgang’s Vault, which offers streaming of concert recordings.

Royalty-free promotional streaming is allowed in some instances; noninteractive and nondownloadable streaming “do not require reproduction or distribution licenses from copyright owners,” the announcement said.

The agreement comes in the form of draft regulations that have been submitted to the copyright royalty judges.