Publishers, Majors Close To Online Distribution Pact
With fourth quarter deadlines looming for the major record labels to launch their music subscription services, and Congress taking increased interest in music licensing issues, music publishers are onWith fourth quarter deadlines looming for the major record labels to launch their music subscription services, and Congress taking increased interest in music licensing issues, music publishers are on the verge of an agreement with the majors that would allow the use of their content in the MusicNet and Pressplay subscription services, sources familiar with the situation confirm to Billboard Bulletin. While nothing has been finalized, an announcement could come as early as the end of the week.
Royalties to be paid for rentable downloads and on-demand streams -- a contentious issue between labels and publishers -- are not expected to be detailed in the pact. Instead, the labels are proposing that specific rates be settled in arbitration proceedings with the U.S. Copyright Office -- something publishers have long been pushing for.
The labels are offering to pay an advance of $1 million to the music copyright clearinghouse Harry Fox Agency to cover digital music publishing rights for the next two years -- with an annual advance of $750,000 to be paid to Harry Fox thereafter until formal rates are set.
Some digital music executives are characterizing the proposed pact as a pledge by publishers not to sue the labels when they launch their services. Says one source: "[These proceedings won't] set the rate but at least it legitimizes the concept of moving forward; and it gives the record companies the right to utilize material under a valid license."
As for the advance, publishers are calling it "tiny" and "irrelevant," but note that it represents a "new found spirit of cooperation" between labels and publishers.