A2IM: American Association of Independent Music

Posted in News by A2IM

In a major settlement between the music industry trade associations for record labels, music publishers and digital music providers, the Copyright Royalty Board, is expected to maintain the mechanical rate structure set forth from prior proceedings concluded in 2008 while creating new rates and terms for five new digital music service categories.

The agreement, which must still be formally approved by the CRB, maintains a song rate of 9.1 cents for downloads, CDs and other physical formats, 24 cents for ringtones, and the same formulas, with limited changes, used to determine the mechanical rate for different kinds of subscription and free interactive-streaming services.  Read the full story originally published in Billboard.biz by Ed Christman HERE.

Posted in News by A2IM

As an update to previous A2IM news, Apple has begun to offer 90 second free song previews on the iTunes store.  A representative from iTunes’ legal team has once again verbally assured A2IM and our members that the gratis licenses extended to Apple by labels is only for the masters and compositions that the labels control and that there should be no risk of mechanical claims from publishers.

Answering a question posed by a number of A2IM members, iTunes informed us that songs that are of a duration of less than 2 minutes 30 seconds long would only be available for a 30 second long preview on the iTunes store.

On a separate but still iTunes related note, Apple notified us that the music contract updates are now being made available via the iTunes Connect developer system with easy “click” to accept terms plus the new ability to upload ringtones and concert films on-line for sale.  If you have questions, you should contact your iTunes representative.

Posted in News by A2IM

In an update to our message to you from last week regarding iTunes’ announced move to stream 90 second promotional spots.

During the past week we spoke to an iTunes legal representative who assured us that iTunes is only looking for music labels to offer mechanical gratis waivers for tracks where the label also has publishing control and specifically stated that their use of the word “affiliates” in their letter means any entity owned by the label. They also represented that the major labels have agreed to this plan and that “everyone is going to be treated the same way including the Indies”.

Separately we have heard that the NMPA (National Music Publishers Association) has reached an agreement with Apple and will be messaging their publisher members that it would be a good idea to grant gratis licenses for 90 second spots.  We’ve also had it confirmed that the Harry Fox Agency has distributed a letter to the publishers they represent advising them of the iTunes gratis license for the 90 second previews which each publisher would have to “opt-out” from if they do not wish to grant these gratis licenses. Obviously we do not know what the results of this messaging will be, which publishers will say no if any, and what the ramifications will be in that event.

We did ask iTunes what will happen for songs where publishers are unwilling to grant gratis license clearances.  They noted that in those cases “the exposure is to Apple and the only collateral damage to a label is their track being pulled off the service”. The iTunes representative then noted  that while they are looking for a “uniform customer experience” they might switch those tracks back to 30 second spots.

In conclusion, nothing is settled yet but at least iTunes is aware of our concerns and they represented that indie labels and indie publishers will be treated on the same basis as the major labels and major publishers. We cannot warrant that all risk is removed – as with anything in business, there is potential risk – but we did want to update you on what we learned over the last week and will continue to report any future news regarding this matter.

Please don’t hesitate to call or email Rich, or Jim at A2IM if you have any questions.

Posted in News by A2IM

iTunes distributed a letter to labels on Tuesday informing them that their store intends on moving from 30 second to 90 second long free previews of tracks and that if your label leaves your music up on the iTunes store you’re agreeing to give them a gratis mechanical license for these free streams.  The risk here is that if you grant iTunes this royalty waiver it could put your label at risk for claims for mechanical royalties from publishers on tracks which you do not control the publishing rights.

A2IM is continuing to make calls, ask questions, and seek answers on behalf of our members and we will update you with anything that we learn.  As Apple is unlikely to make any switch to 90 second samples until they’ve struck a deal with publishers and as we believe that there will be a public announcement of a launch date for this switch, you might not need to take any immediate action but we did want you to at least be aware of the potential concerns.

According to reports in the press, including this item in CNET:

“Apple stated in the letter (to labels) that it would roll out longer samples soon at iTunes and that anybody who left their music up at the Web store was automatically agreeing to give Apple the right to offer the longer song samples “gratis,” or for free. The message is pretty clear: accept the longer previews for longer songs, or pull them off iTunes. An Apple representative confirmed that the note was sent but declined to comment for this story.”

We have had it confirmed to us that reports in the press are true that the NMPA (National Music Publishers Association) is negotiating with Apple to reach an agreement on this license and how it’ll pertain to mechanical royalties.  Given that there is no statutory mechanical rate set for 90 second streams of music, any agreement struck between Apple and the NMPA will be forwarded to NMPA members for opt-ins and will be reported in the press.  We’ll update our members as this agreement emerges and with anything else that we learn as it pertains to risks (if any) for independent labels who do not control the publishing rights for their music.

Until then, we’d only advise that you have conversations with any publishers you work with or that control the publishing copyrights for songs on your label to make sure that you’re aware of their position and whether or not they believe you’ll owe them a mechanical royalty for this 90 second free preview on the iTunes store.

Posted in 2010 #31, Advocacy, Newsletter by A2IM

Many of our A2IM members have music publishing companies and, as outlined in previous A2IM newsletters, you maybe entitled to unclaimed publishing royalties. You can ascertain whether or not you are entitled to these funds prior to agreeing to the settlement discussed here.

NMPA Late Fee Settlement