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“Our mission to make it easier for digital music services to launch cutting-edge business models and streamline the licensing process."
—-Cary Sherman, RIAA Chairman/CEO

MAJOR MUSIC INDUSTRY GROUPS REACH HISTORIC AGREEMENT ON DIGITAL ROYALTIES

Agreement Touted to Enable New Cutting-Edge Business Models

In an agreement that could pave the way for more varied ways of distributing digital music, three major music trade groups have filed an agreement that sets mechanical royalty rates and standards with an eye toward supporting “cutting-edge business models to help consumers access and enjoy music.”


The Recording Industry Association of America (RIAA), National Music Publishers Association (NMPA) and Digital Media Association (DiMA) are filing an industry-wide agreement that fully resolves the Copyright Royalty Board (CRB) Rate Proceeding under Section 115 of the Copyright Act.


The settlement provides for the development of new digital music services and business models offering music to consumers by creating new rates and terms for five new categories, which include:

·         *Mixed service bundles (for example, a locker service, limited interactive service, downloads or ringtones combined with a non-music product such as a mobile phone, consumer electronics device or Internet service)

·        *Paid locker services (subscription-based locker providing on-demand streaming and downloads)

·         *Purchased content lockers (a free locker functionally provided to a purchaser of a permanent digital download, ringtone or CD where the music provider and locker have an agreement)

·         *“Limited offerings” (subscription-based service offering limited genres of music or specialized playlists)

·        *Music bundles (bundling music products such as CDs, ringtones and permanent digital downloads)

The 25-page proposed agreement will be submitted to the CRB by the various parties and resolves the pending mechanical royalty rate proceedings without litigation. The agreement covers the years 2013-2017 and must be formally be approved by the CRB. It establishes a royalty rate category for these new business models and rolls forward, with limited changes, all existing rates and terms for CDs and downloads.   

 

RIAA Chairman/CEO Cary Sherman insisted, “Our mission to make it easier for digital music services to launch cutting-edge business models and streamline the licensing process. This is a major win for consumers, the music community, and entrepreneurs and investors in new music services.  Getting to an agreement was a challenge, and I want to thank Steve Marks, our lead negotiator, for his persistence and creativity in getting a deal done.”

 

DiMA Executive Director Lee Knife was similarly upbeat: “Today’s agreement paves the way for our members to continue developing exciting new business models that satisfy consumers, create greater revenue opportunities for music creators and effectively fight piracy, the music industry’s greatest threat.”

 

NMPA President/CEO David Israelite called the agreement “an important show of industry cooperation, but a testament to the value of the creative content being provided to consumers… It represents the culmination of months of discussions among the music industry, digital service providers and technology companies, and will provide more consumer choice with respect to when and how to access music while ensuring songwriters and music publishers continue to thrive in the digital age.” 

 

Added NARM's Jim Donio: “The standardizing of rates and terms encourages innovation and fosters growth of new digital and physical products and services in the marketplace, giving consumers more choices around the music they love. Our members look forward to engaging in the next steps of this process as they look at how these new rates and terms will figure into their own visions for the next decade of creative and competitive music delivery.”

 

 

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