Music groups agree online deal

2008-09-25 14:58

Savio D'Souza

Bangalore - Record labels, music publishers, songwriters and online music services have reached an agreement on how to compensate music creators for online distribution of their content, they said.

The agreement is designed to settle how the industry calculates royalty rates for limited downloads and music that is streamed online, including when it is provided by subscription and advertising-supported services.

Fans using on-demand music streaming can select the songs they want to hear but do not keep a permanent copy.

Under the proposal, providers of such services will pay a mechanical royalty of 10.5% of revenue after other royalties are calculated.

The agreement does not cover merchandise or permanent downloads and a ruling on the proposal by Copyright Royalty Judges is expected by October 2, the groups said.

The Digital Media Association (DiMA) described the agreement in a statement on its website as a breakthrough that would facilitate new ways to offer music to consumers online.

The other groups involved include the National Music Publishers' Association, which represents American publishers, the Recording Industry Association of America, the Nashville Songwriters Association International and the Songwriters Guild of America.

"This agreement provides a flexible structure to support innovative business models in the digital music marketplace that will benefit music fans, creators and online services," said Mitch Bainwol, Chairperson and CEO of the RIAA.

- Reuters