Final agreement on new digital rates

May 2012

Internet, music publishing

More than two decades after the first song went online, a mechanical royalties settlement has been reached that acknowledges some of the new business models digital music has spawned.

The newly reached deal pretty much keeps existing rates for CDs and downloads, but it also adds five new categories.

Three trade groups were signatories to the settlement, which now goes forward for approval by the U.S. Copyright Royalty Board: the Recording Industry Association of America (RIAA), National Music Publishers’ Association (NMPA) and Digital Media Association (DiMA). If approved, which is expected, the agreement will run from 2013 TO 2017.  The five new bands of royalties apply to paid locker services; free cloud storage that comes with a purchased download; mixed bundles of content such as streamed music in a mobile phone package; services with a limited amount of interactivity; and music that comes in a combined package, like a free download with purchase. The current rate for downloads and CDs stays at 9.1 cents and 24 cents for ringtones.

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