In a letter to its members, IODA is asking indie record labels not sign deals with free on-demand music streaming services like Imeem and Lala until the organization has time to negotiate better royalty rates on their behalf.
IODA has been in talks with both services for months, with no agreement yet. Fearing the services would reach out and strike deals with IODA members individually, IODA president Kevin Arnold told Billboard the letter was sent to explain the status of its talks and ask members to "stick it out" with them until a deal is reached.
While both services are paying royalties, Arnold says their rate structures are such that indie labels could see very little in return. For instance, Imeem has not committed to a base per-stream fee, which IODA says could result in payments below the DMCA non-interactive rate of .0014 per stream. Lala meanwhile suggests caps on streaming payments in return for CD sales.
IODA is still negotiating with both companies but said "we're very concerned about partnering with sites that dramatically devalue music, or those that shortchange independent music in favor of the majors."
Imeem has licensing deals with all four major labels. Lala to data has deals only with Warner Music Group.