Webcasters will pay 10.5 percent of their revenue to songwriters and publishers minus any performance royalties already being paid to labels. The move comes as part of music publishers' drive to start collecting mechanical royalties for compositions played online after giving online radio a free pass while business models developed.
“This historic agreement is the foundation for a new generation of music distribution," stated president and CEO of the National Music Publishers' Association David Israelite. “This agreement will ensure that songwriters and music publishers continue to thrive in the digital age." RIAA chairman and CEO Mitch Bainwol also waxed enthusiastic in the announcement, as did representatives of every other organization involved -- the Digital Media Association (representing webcasters), the Nashville Songwriters Association International, the label EMI and the Songwriters Guild of America.
For once, it appears, these various parties have agreed on something. All that remains is for the Copyright Royalty Board to stamp its approval on the agreement. This marks the first time a mechanical royalty rate has been set for music webcasters. As opposed to performance royalties, which cover specific recordings, these mechanical royalties deal with compositions created by songwriters.
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