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Major Music Industry Groups Reach Historic Agreement On Royalty Rates And Standards

 
Source: Recording Industry Association of America | Released April 16, 2012
(4/16/2012)

Agreement Enables New Cutting-Edge Business Models

WASHINGTON -- Organizations representing the music publishers and songwriters, major record labels, digital music services and cellular phone companies today announced an agreement setting mechanical royalty rates and standards that supports a slate of new 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 under Section 115 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 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.

Lee Knife, Executive Director -- DiMA
"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," said Lee Knife, Executive Director of the Digital Media Association. "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."

David Israelite, President and CEO -- NMPA
"Today's agreement is not only an important show of industry cooperation, but a testament to the value of the creative content being provided to consumers," said NMPA President and CEO David Israelite. "This agreement 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."

Cary Sherman, Chairman and CEO -- RIAA
"This is a historic agreement that reflects our mission to make it easier for digital music services to launch cutting-edge business models and streamline the licensing process," said Cary Sherman, Chairman and CEO, RIAA. "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."


About DiMA
The Digital Media Association ("DiMA") is the trade association representing the legal and policy interests of the nation's leading online distributors of digital music, movies and books. DiMA members are constantly developing new and innovative ways to provide consumers with increased access to legitimate online content, and DiMA helps its members accomplish this objective by representing the industry in a wide variety of legal, political and regulatory matters.

About the NMPA
Celebrating its 95th year, the National Music Publishers' Association (NMPA) is the trade association representing American music publishers and their songwriting partners. The NMPA's mandate is to protect and advance the interests of music publishers and songwriters in matters relating to the domestic and global protection of music copyrights.

About the RIAA
The Recording Industry Association of America (RIAA) is the trade organization that supports and promotes the creative and financial vitality of the major music companies. Its members are the music labels that comprise the most vibrant record industry in the world. RIAA® members create, manufacture and/or distribute approximately 85% of all legitimate recorded music produced and sold in the United States.

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