Is Internet Radio Saved? Not Exactly
by Chloe Albanesius
The recording industry and a group representing digital media reached an agreement Tuesday regarding royalty rates for certain online music services, but the controversial issue of rates for Internet radio stations like Pandora has yet to be settled.
Under Tuesday's deal, sites offering interactive streaming and limited downloads will pay 10.5 percent of annual revenue as a "mechanical" royalty rate - or a fee that goes to songwriters, composers, and publishers.
Interactive streaming Web sites are music sites that let users select the songs to which they want to listen, like imeem.com. Limited download sites let users download a song and listen to it for a set amount of time, or as long as they continue to pay a monthly fee, like Rhapsody or Napster's subscription services.
The Digital Media Association (DiMA), the National Publishers' Association (NMPA), the Recording Industry Association of America (RIAA), the Nashville Songwriters Association International, and the Songwriters Guild of America (SGA) submitted the agreement to the Copyright Royalty Board (CRB) for final approval.
The debate goes back to 2001 when digital downloads were just emerging as a viable business plan. The RIAA hashed out a deal with the NMPA whereby the RIAA would pay $1 million as an advance until the two sides could reach a deal regarding mechanical royalty rates.
If the RIAA and NMPA did not reach a deal after two years, RIAA would have to pay an additional $750,000, according to the deal.
Seven years later, the debate was still raging and was turned over to the CRB in January 2008. Though the two sides have come to an agreement regarding interactive streaming and limited downloads, the CRB must still hand down its ruling regarding mechanical rates for physical CDs and permanent downloads like those available via iTunes. A decision on those issues is expected by October 2.
Jonathan Potter, executive director of DiMA, said he was pleased that the deal ends "litigation and threats of litigation involving several of our member companies, so that they can focus on building innovative businesses that can effectively fight piracy, the music industry's greatest threat."
"This historic agreement is the foundation for a new generation of music distribution," said David Israelite, NMPA president and CEO, in a statement. "This agreement will ensure that songwriters and music publishers continue to thrive in the digital age."
"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, chairman and CEO of the RIAA. "The agreement demonstrates that our industries can work collaboratively to solve complex issues."
One issue they have not resolved is royalty rates for Internet radio stations like Pandora.
Internet radio stations object to a March 2007 CRB decision that would increase the current price per stream of one user from $0.0008 to $0.0019 per stream by 2010 and impose a minimum fee of $500 per station.
Internet stations argue that such high rates will ruin them financially. They are also irked that satellite and cable providers were not subject to the same standards.
The two sides have been going back and forth for nearly 18 months, with no resolution in sight. Members of Congress have introduced bills that would reverse the CRB decision, but those measures have not seen significant action.
"Although this agreement does not address our business, Internet radio, we are encouraged to see copyright holders and digital services reach agreement on a rate structure that will enable the continued growth of those services while fairly compensating artists, labels, songwriters and publishers," a Pandora spokeswoman said Tuesday.
25 settembre 2008
Accordo tariffe, salve le Web radio americane? Non tutte
Sembra essere stato raggiunto l'accordo tra le organizzazioni americane che tutelano i diritti d'autore musicali e una parte di siti Internet che diffondono canzoni in streaming. Ma come precisa l'edizione online di PC Magazine in questo articolo l'accordo non rappresenta un'ancora di salvezza per tutte le radio che operano via Internet. Pandora, per esempio, insieme a tante radio musicali, corre ancora il rischio di vedersi raddoppiare le tariffe da versare per ogni brano diffuso ai titolari delle royalties. Nell'accordo di martedì scorso sono compresi solo i servizi come imeem.com, che permette di scegliere i brani da ascoltare, o i siti stile Rhapsody o Napster dove per poter ascoltare brani a piacimento occorre pagare un abbonamento. Pandora, che i brani li seleziona sulla base delle indicazioni ricavate in base alle affinità di gusto tra gli ascoltatori, resterebbe fuori dai nuovi accordi. I responsabili della stazione Web hanno però già fatto sapere di essere ancora ottimisti sul futuro esito di una nuova trattativa.