Music Industry Groups Reach Royalty Deal Regarding Digital And Cellular Services

Posted by on April 12, 2012

The battle over digital royalties has been well documented as of late. And while its mainly been between artists and labels, music industry groups have come to an agreement over a new royalty deal regarding digital and cellular services.

The Recording Industry Association of America (RIAA), National Music Publishers’ Association (NMPA) and Digital Media Association (DiMA) have reportedly come to a new agreement that establishes a royalty rate for new business models. The deal, which covers 2013 to 2017, will keep rates at 9.1 cents for downloads and physical formats and 24 cents for ringtones.

While Hypebot has posted the official file online, the new agreement establishes the following new models and rates (as explained by All Access):

-Paid locker services [ex. iTunes]: music publishers will get a mechanical rate of 12% of revenue or 20.65% of total content cost or 17 cents per subscriber, whichever is greater.

-Digital lockers providing free cloud storage with a download purchase: music publishers will get 12% of revenue or 22% of the total cost of content.

-Music services in cell phone services subscription rate: music publishers get 11.35% of revenue or 21% of total content cost.

-Subscription services offering limited music or playlists: music publishers will get 10.5% of revenue or 21% of total cost or 18 cents per subscriber.

-Music bundles offering a download with the sale of a CD album: music publishers will get 11.35% of revenue or 21% of total content cost.

Statements from members of each participating music industry group can be read over at All Access, but here is what DiMA executive director Lee Knife had to say about the deal:

“From the advent of Internet radio services, to online music stores, on-demand streaming and more recently, cloud-based music services, digital media providers thrive on creating new ways for fans to enjoy more music whenever and wherever they want. 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.”

While this certainly is resolves royalty issues with digital publishers, the debate about what artists are due from digital sales continues. With that said, this development does come about month after Sony came to a settlement with many artists.

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Categorised in: Digital Media

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