Skip to main content

Musicians Makes Money From Streamed Media

An announcement was made today that online music services, record labels, music publishers, and songwriters have actually reached a mutual agreement in regards to royalties of content distributed online.

According to the agreement, online services (Napster, Rhapsody) offering limited downloads and streaming content must pay a mechanical royalty of 10.5 percent of revenue after other royalties are calculated. Services offering permanent media downloads (iTunes, Amazon MP3, Wal-Mart) will not be affected, as they already pay the royalty fee.

"This agreement provides a flexible structure to support innovative business models in the digital music marketplace that will benefit music fans, creators and online services," said Mitch Bainwol, Chairman, and CEO of the Recording Industry Association of America (RIAA).

The RIAA is one of five trade groups involved with the pending agreement. Others include the Songwriters Guild of America, the Nashville Songwriters Association International, the National Music Publishers’ Association, and the Digital Media Association.

The Copyright Royalty Judges will make a final ruling on October 2. If ruled in favor of the agreement, the new mechanical royalty would finally settle a financial dispute between the music industry and online music sites.