How Will Yesterday's Royalty Ruling Affect Pandora? It Doesn't!
April 12, 2012 at 9:01 AM (PT)
YESTERDAY (NET NEWS 4/11), ALL ACCESS reported that groups representing labels, publishers, artists and songwriters have agreed to what they call a "historic" royalty deal with digital music services and cellular phone companies, "setting mechanical royalty rates and standards that supports a slate of new cutting-edge business models to help consumers access and enjoy music."
DIGITAL MUSIC NEWS quickly asked, "How Many Trade Groups Does It Take to Fix a Music License?" writing, "In total, this consortium added up to twenty-five different organizations, according to details shared with DIGITAL MUSIC NEWS by NMPA Pres. DAVID ISRAELITE. And the best part is that your music startup is still probably going out of business, especially if it involves major label licensing. And the reason relates to recording licenses that have nothing to do with this far smaller mechanical royalty sliver."
And the best part is that your music startup is still probably going out of business, especially if it involves major label licensing.
DMN Publisher PAUL RESNIKOFF discussed how this affects webcasters with ALL ACCESS, saying "PANDORA's biggest obligations come from non-interactive use of recordings, if you check out their payment obligations, a much smaller percentage actually goes to the publishing side (this agreement was related to mechanicals). Perhaps there are some tweaks and changes here and there for someone like PANDORA, but the big action comes from another CRB procedure that focuses on this non-interactive rate. And, even on this agreement, a lot of the status quo on mechanicals for downloads, subscription and ringtones remain the same, or are subject to just minor changes. Others, like combination mobile subscription and music services (think MUVE MUSIC), have dedicated updates and structures to think about."
"It's nice that some newer formats got attention and now have clarity on what to pay," continued RESNIKOFF, "even if it's just for one license type. Unfortunately I think this shined a depressing light on just how insanely complicated and legacy these licensing streams are. A mechanical license oftentimes makes no sense in the context of digital, and begs for a more simplified usage license. It's just comical for me to see 25 different organizations, plus who knows how many law firms, ironing out terms related to an exotic, emerging platform -- for one of several licenses needed."