Wednesday, September 24, 2008

Change in online music royalties

According to this article in MediaPost there has been a major change in online music royalties. This covers streaming only and not downloads.

This week, the parties disclosed the exact terms of the agreement, which remained confidential until a draft version was drawn up for the Copyright Board. The settlement effectively averted a lawsuit that threatened to disrupt the growth of online radio.

Per the terms of the agreement, online music services will pay 10.5% of their total revenues to the musicians and studios that own songs played or temporarily downloaded online.

Previously, the Recording Industry Association of America had demanded a per-play royalty of $0.0019 per song for streaming and temporary downloads, which many online radio services complained would drive them out of business.

So my question is, what happens for sites that have no revenue? Also how do they police sites like Yahoo that offer streaming do they collect 10.5% of all Yahoo revenue or JUST the Yahoo music site?

And if i want to offer unlimited streaming of any music track ever produced for $10 per month on a subscription basis (as per my content cloudification article ) does this mean that i only have to pay the RIAA $1.05 per month for each of my subscribers?

At that rate what about if I set up a P2P torrent company that encrypted the content so only allowed streaming from the proprietary player and not downloading so apart from the initial/ongoing seeding bandwidth charges the costs of delivery is born by the users and i charged a license fee of $1 per month.....would the RIAA be happy with 10.05c per month?


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