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.