RAIN: Radio And Internet Newsletter: RAIN 9/23: Despite what you've read elsewhere, Internet radio deal NOT done!

RAIN 9/23: Despite what you've read elsewhere, Internet radio deal NOT done!
·Sep 23, 11:18 AM
Posted by: Paul Maloney

INDUSTRY GROUPS REACH ROYALTY DEAL ONLY ON “MECHANICALS” FOR ON-DEMAND SERVICES: DiMA (the Digital Media Association) and several music industry groups have announced a “breakthrough agreement” covering interactive (that is, “on-demand”) streaming and “limited download” services.

Various industry news sources are reporting this morning (see example from PC Magazine here) that this is a deal that “saves” Internet radio, but the truth is that this deal is not about Internet radio at all. It’s about services like Rhapsody in which listeners can request a specific song right now — and even for those services it only covers one of the royalties involved, and not the critical one.

According to the terms of the deal, “limited download and interactive streaming services will generally pay a mechanical royalty of 10.5% of revenue, less any amounts owed for performance royalties,” according to a DiMA press release. The beneficiaries of this royalty are music composers and publishers.

Though this rate does not concern non-interactive webcasting services (i.e. Internet radio) directly, parties to the agreement “confirmed that non-interactive, audio-only streaming services do not require reproduction or distribution licenses from copyright owners.” Some industry observers had feared that webcasters, in addition to the two performance royalties they pay (one to publishers/composers, and one to recording copyright owners/performers), would be liable for the “mechanical” right (which covers the reproduction of recordings). More on this in RAIN here. This agreement takes that worry off the table (at least for the life of this deal).

Other parties to the agreement include the National Music Publishers’ Association (NMPA), the Recording Industry Association of America (RIAA), the Nashville Songwriters Association International (NSAI) and the Songwriters Guild of America (SGA).

Industry attorney (and RAIN contributor) David Oxenford has more on this story in his Broadcast Law Blog here. DiMA’s press release is here.

RADIO EXECS: SUBBING PSAs FOR ADS IN SIMULCAST STREAM ISN’T WORTH IT: During an NAB Radio Show session Thursday, KOIT-FM/San Francisco programmer Bill Conway reportedly commented that “We pay an enormous amount of money” to replace agency-produced ads from the on-air content before it streams, and that “only about 10% of commercials can’t be streamed” because of AFTRA contracts. CBS Radio president/CEO Dan Mason agrees its time to fix this problem: “The first thing is to get through the misinformation out there – as an industry, we can do a much better job.” As Tom Taylor, in Radio-Info.com, reports, Arbitron won’t include online listening with a station’s over-the-air listening if ads are substituted, and “sometimes the experience of listening online to a bunch of subbed-in PSAs and other content isn’t the most fun – it’s just not like listening to the station itself.”

AOL RADIO LAUNCHES 3 NEW THEME CHANNELS: AOL Radio has announced three new themed channels, including Kidz Stuff!, Oktoberfest and Halloween. Kidz Stuff! will be oriented towards young children, while Oktoberfest will feature traditional German folk and polka. Halloween will blend classic horror movie soundtracks with current picks from Rob Zombie and Marilyn Manson. For more, read RBR’s coverage here.

LAST.FM ROYALTY PROGRAM GOOD ENOUGH FOR THE DANDY WARHOLS: Last.fm’s Artist Royalty Program, which pays artists royalty payments every time their track is streamed on the Last.fm site, picked up its fair share of criticism after its debut (RAIN coverage here). But apparently the program is good enough for Portland’s underground rock group The Dandy Warhols. “Last.fm is where you can get your music out to music lovers and get paid directly, whether you’re established or completely new,” said lead singer Courtney Taylor-Taylor. “Last.fm is one of the first and one of the best.” For more, read Plug In Music’s coverage here.

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Comment

Isn’t this deal the saving grace for Pandora and other services like it? Technically those are on-demand since they operate nothing like a real radio station.

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