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Issue Date: Vol. 52, No. 5, May 2012, Posted On: 4/20/2012

Music Industry Reaches Tentative New Copyright Agreement For Online Services

by Staff Reporter
digital jukebox, juke box, Recording Industry Association of America, online music distribution, locker services, music royalty, music copyright, digital music rights, on-demand music, National Music Publishers' Association, Digital Media Association, music publishers, songwriters

WASHINGTON -- The Recording Industry Association of America said on April 16 that leading music and communications industry organizations have endorsed a new 25-page agreement that, if adopted, will formally standardize, permit and facilitate certain categories of online music distribution and sales. | SEE ANNOUNCEMENT

If approved by the U.S. Copyright Office, the agreement would provide mechanical royalty rates and standards for these new categories from 2013 to 2017. Under federal law, the rates for royalties collected by music publishers on sales of recorded music, known as mechanical royalties, are set every five years.

Limited (if any) impact is expected on downloading music for existing digital jukeboxes and their current packages of music sales and services. CD jukeboxes would also be unaffected by the agreement if adopted. The RIAA said the new agreement "rolls forward, with limited changes, all existing rates and terms for CDs and downloads."

Assuming the government approves the agreement, the deal would enable the music industry to avoid the scheduled Copyright Royalty Board (CRB) Rate Proceeding, pursuant to the U.S. Copyright Act. In this case, the agreement would establish broad new standards for digital music sales in an amicable manner that avoids costly and protracted litigation.

By providing standardized rates, fees and regulations for possible new providers of many online music services, the agreement will save new music sellers the difficulty and expense of undertaking separate negotiations with hundreds of independent publishers.

Signatories to the agreement include the RIAA, the National Music Publishers' Association and the Digital Media Association, collectively representing labels, publishers, songwriters, digital music services and cellphone service providers.

The agreement creates five new supported categories for digital music sales. Music bundles like CDs, ringtones and permanent digital downloads may be sold under the new standard. A mixed service bundle would support sales of a cellphone or Internet service with music downloads or ringtones as part of the package, among other combinations.

"Locker" services supported by the agreement include subscription-based, on-demand streaming and downloads as well as free online lockers for customers who permanently purchase rights to hear a particular song, ringtone or CD. "Limited offerings" supported by the agreement include subscription-based service offering limited genres of music or specialized playlists.

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