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Webcasters, labels sing the same tune - September 23, 2008

The Digital Media Assn., the RIAA and the National Music Publishers Assn., three groups that have been at each other's throats over royalty rates for music streamed over the Internet, have apparently reached a deal. In a joint press release Tuesday, the three organizations said they were on board with draft regulation setting out royalty rates for various online business models that will be submitted to the Copyright Royalty Judges. The agreement "proposes for the first time mechanical royalty rates for interactive streaming and limited downloads, including for subscription and ad-supported services," the release said. "The agreement proposes a flexible percentage of revenue rate structure, with minimum payments in certain circumstances."

From the release:

• The agreement proposes mechanical royalty rates that cover both limited downloads and interactive streaming, including when offered by subscription and ad-supported services.
• The percentage rate structure in the agreement provides much-needed flexibility for new business models.
• The agreement permits the use without payment of certain kinds of promotional streams, in the interest of encouraging paid uses of musical compositions.
• The agreement confirms that the mechanical licenses issued under its provisions will include all reproduction and distribution rights necessary to provide the licensed limited downloads or interactive streams.
• Outside the scope of the draft regulations, the parties confirmed that non-interactive, audio-only streaming services do not require reproduction or distribution licenses from copyright owners.

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.
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