For music industry, a digital path forward
To stem future lawsuits over royalty rates relating to digital downloads, record labels, music publishers and digital music providers have reached a settlement for future mechanical royalty rates arising from digital music services. The deal seeks to avoid past battles waged over rates for music streaming services while introducing new ways for consumers to enjoy music, all while deterring online music piracy. The Copyright Royalty Board must reiew and approve these new rates, which would be in effect from 2013-2017. The proposed settlement creates five new mechanical royalty rates for: 1) Digital locker services, services and products such as iTunes and Amazon.com that allow users to store music and provide on-demand streaming. In this category, music publishers will get a mechanical rate of 12 percent of revenue or 20.65 percent of total content cost or 17 cents per subscriber, whichever is greater. This rate will provide music publishers and artists with a lot of revenue based on the 17 cent per subscriber model. Clearly, the music industry understands the expanding importance of paid cloud services. 2) Free cloud storage with a download purchase. Music publishers will get 12 percent of revenue or 22 percent of the total content cost, whichever is greater. On the free cloud service rate, music publishers will not get the option to collect based on subscribers This is a victory for the cloud storage industry because...
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