September 24, 2008

Good news for Rhapsody, Still No news for Pandora

From All Access- Radio and Internet Editor Paul Maloney has read the fine print of the announcement of a royalty deal and concluded that the agreement doesn't cover Internet Radio's royalty rate at all. The agreement between DiMA (Digital Media Association) and several music industry groups solely covers mechanicals for on-demand services, such as streaming and "limited download" services. They will basically have to pay 10.5% of their revenue. He says, "It’s about services like Rhapsody in which listeners can request a specific song right now.

Net radio interests currently pay two performance royalties (one to publishers/composers and the other to recording copyright owners/performers), they are not liable for "mechanical" rights (the reproduction of recordings).

Bottom line: Net radio parties such as Pandora are still on the hook for royalty rates that could threaten their very existence. Those services spend almost 90% of their revenue towards performance and recording royalities.

Anyway I hope this site's music player widget, which operates like Pandora, will continue.

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