Papa's Got a Brand New Bag

In April, music trade associations and streaming services reached an agreement on formulas for new mechanical royalties due songwriters that cover five emerging models. Pending approval by the Copyright Royalty Board, these rates will go into effect in 2013. The agreement also renewed the mechanical royalty rate of 9.1 cents per download and physical formats, 24 cents per ringtone, and the previous rates set for free and subscription-based interactive streaming services.

Paid Digital Music Lockers

AKA subscription cloud storage with on-demand streaming and downloads: 12% of revenue or 20.65% of total content cost or 17 cents per subscriber, whichever is greater

Free Digital Music Lockers

AKA cloud storage provided with purchase of download or CD, etc: 12% of revenue or 22% of the total cost of content, whichever is greater

Mixed Service Bundles

AKA music locker and cloud services integrated with cell phones or other mobile devices: 11.35% of revenue or 21% of total content cost, whichever is greater

Limited Interactive Services

AKA subscription services with limited playlists or genres: 10.5% of revenue or 21% of total cost or 18 cents per subscriber, whichever is greater

Music Bundles

AKA combined formats such as CD, downloads, and ringtones: 11.35% of revenue or 21% of total content cost

  • More of the Story

  • Pennies From Heaven

    The new streaming economy is here, with or without royalties

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