Features
Gigs & Bytes: A Mechanical Breakthrough
This time all groups involved are agreeing on mechanical royalties for music streamers and “limited download” services. It is the first such mechanical royalty agreement, which is why all groups involved are trumpeting that they really can work well with others.
While streaming is pretty self-explanatory, the “limited download” concept refers to music subscription services where the downloads are “tethered” to the service – meaning if the subscription is canceled, the music ceases to play – or to ad-supported services such as Spiral Frog where users watch ads in return for keeping their downloads rockin’.
The agreement calls for fees based on a flexible percentage of revenue, and minimum payments in certain circumstances.
Under the new agreement, limited download and interactive streaming services will generally pay a mechanical royalty of 10.5 percent of revenue, less any amounts owed for performance royalties.
Outside the scope of draft regulations, all groups involved also agreed that non-interactive, audio-only streaming services do not require reproduction or distribution licenses from copyright holders.
All that’s left is for the Copyright Royalty Judges to sign off on the proposal and the new agreement becomes the law of the land.
While all groups involved issued a joint statement, that doesn’t mean the bickering is over, mainly because the agreement does not affect more controversial issues such as Internet radio royalties.
“This historic agreement is the foundation for a new generation of music distribution,” National Music Publishers’ Association President and CEO David Israelite said. “This agreement will ensure that songwriters and music publishers continue to thrive in the digital age. I am grateful for the good faith efforts of everyone involved in the discussions leading to this important announcement.”