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News November 27, 2015

Majors won’t be paid higher royalties for webcasting than indies

Recently the Copyright Royalty Board in the US posed the question to the Copyright Office whether webcasters such as Pandora and Spotify should have a structured pay rate system which would see major labels benefit more then indie labels.

This question not only unsettledthe music community but also highlighted a new battle that has been somewhat overlooked since the digital revolution of music composition.

For the past five years the answer to the Board’s question has been a resounding ’No’. Although the pay rate system has remained level, the ambiguous question posed by the Board has caused concern for all involved. The potential of a bias and somewhat discriminatory pay rate scheme has been a slow burn that has continued to creep into the consciousness of major players as streaming and digital consumption continued to grow.

Now, the Court has delivered a Non-Ruling on the matter meaning that no changes will actually take effect. Major and indie labels will be paid the same statutory webcasting rates over the next five years in the US. The decisionregarding Webcasting IV was handed down Tuesday by the Register of Copyrights.

The question of whether the pay rate should change for webcasters has been somewhat convoluted as music industry commentators suggested multiple meanings to the question posed by the Board. One theory was that the royalty structure didn’t necessarily refer to licensed artist and the label they were assigned but rather the genre in which they played. It was suggested that this question could be interpreted to pay different rates to different genres. This however is circumstantial and the music community has speculated as to the exact proposition and its outcome.

The Non-Ruling is considered to be a major win for the independent community. David Grimaldi, director of public affairs at Pandora stated: “Pandora supports a uniform rate structure for all musicians, we look forward to the certainty the CRB’s December decision will bring to the music industry, particularly as Pandora continues to improve our partnerships with music makers. “

A2IM Interim President Molly Neuman has told Hypebot it’s “a win for independents everywhere, including the artists and the independent publishers who stood with us on this issue.”

Neuman added: “However, the battle for a fair and equitable licensing system continues, as long as the multiple rate question remains unsettled for future proceedings andcompanies like Sony and Universal work towards getting government to enshrine an unfair advantage for just the biggest companies.”

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