Statutory Royalties

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California Federal Court Ruling on Pre-1972 Sound Recordings

Posted in News by A2IM

One of the issues artists and labels face is receiving fair compensation and protection from infringement for their copyrights. One current issue has been the lack of federal protection and access to compulsory licenses for sound recordings made before 1972 because recordings made before 1972 were not granted federal copyright protection under the Sound Recording Act of 1971 or the Digital Millennium Copyright Act. As a result, some non-interactive digital services have historically excluded pre-1972 recordings from their statutory rate payments.

On Monday, a U.S. District Judge in California affirmed copyright owners’ rights under the state’s Civil Code, including the exclusive rights to determine how and when a work is publicly performed.  The judge ruled that the plaintiffs in this case, The Turtles, must be properly compensated for royalties related to the public performance of their copyrights by SiriusXM. The decision is expected to have major implications for sound recording owners and non-interactive digital services.

Read more here.

Read the full ruling here.


Merlin and Pandora Announce Direct License

Posted in News by A2IM

PrintPandoraLogoSQRMerlin has concluded an agreement with the internet radio service Pandora ( for the US. Read the  press announcement HERE.

This agreement is available to all Merlin members who control non-interactive internet radio rights in their catalogs. If you are not a Merlin member, and are interested in participating in this agreement, please contact A2IM or Merlin (click HERE).

In order for you to participate, Merlin will require you to confirm that

1. You control the necessary rights to do so, which will mean confirming that:

(i) You have not granted any non Merlin member company exclusive rights to your catalog for non interactive internet radio usage; and

(ii) Your rights have not already been included in Merlin’s agreement with Pandora by any other Merlin member company (e.g. via existing digital distribution arrangements); and

2. You are able to arrange delivery of a DDEX compliant content/meta data feed to Pandora.

If you need to have a third party deliver on your behalf, consider contacting A2IM associate members:  AudioSalad, Consolidated Independent, finetunes, FUGA, or NueMeta or you can have Merlin provide a list of providers who offer this service.

A2IM President, Rich Bengloff, said about the deal, “Collectively, the independent market share of US recorded music sales has risen dramatically. However, in contrast to this we have seen major labels extract disproportionate value from the emerging online market.  Merlin’s direct partnership with Pandora appears to reverse this trend – putting the independents first in line. We applaud Merlin for its role in protecting and upholding the value of the worldwide Independent music label community and their artists.”

Read Glenn People’s Billboard article on the announcement HERE.


Sirius/XM VS. A2IM Case Dismissed

Posted in News by A2IM

On Thursday, January 31, 2013 the Sirius/XM -VS- A2IM was settled and dismissed via a Stipulation Agreement signed by Judge Griesa of the U.S. Southern District Court.

The Stipulation Agreement:

  • Reaffirms A2IM’s First Amendment rights including the freedom to express whatever opinions A2IM wishes about Sirius/XM and any proposals or terms for licensing with Sirius and the right to make recommendations on such issues, to advocate for or against such issues, and to express agreement or disagreement with the opinions of others on these issues.  This court signed precedent that allows us to freely counsel our members is a huge win!
  • At the same time, the A2IM staff and board reaffirms that, at the end of the day, while the statutory rate has ensured equitable treatment for independents, each music label must determine for themselves their own promotional and commerce plans and that we respect that independent entrepreneurial spirit. We’ll just suggest to our members that before agreeing to any direct licenses they should please consider all factors and their effects on their music label’s results, now and in the future, and make an educated decision. In accordance with the entrepreneurial spirit of our members who run their businesses, each of our members should continue to do what is in their business’ best interests knowing, whatever decision or statements they make, that every A2IM label member will always continue to get full A2IM support and benefits. In other words we are required to operate A2IM the way we do today, respecting all of our member’s individual freedom of speech and their freedom to do business in whatever way is in their best interests.
  • The full stipulation agreement is HERE.

With this lawsuit behind us, the entire A2IM community looks forward to working closely with Sirius/XM to expand their already strong support of independent music, for both independent music discovery and monetization, especially for certain genres not often heard via other non-on demand broadcast mediums, where we normally do not get much support outside of services like Pandora, SomaFM or public radio.

Finally a big “Thank You” to our lawyers at Mitchell, Silberberg & Knupp (Eric German, Michael Chait, Kevin Gaut and Paul Licalsi) who delivered such a terrific result.

PRESS:  Billboard 2/1/2013


The Value of a Copyright: A Letter From A2IM’s Rich Bengloff

Posted in News by A2IM

All sound recording copyrights are created equally and should be paid equally.

In my personal collection I have many recordings from independent artists of many niche genres ranging from Jazz to Blues to Americana to Classical.  I also have music from big superstar artists such as Columbia’s Beyonce.  All are stunning artists who deserve attention for their recordings.   But there is no good justification for why Beyonce’s copyrights should be compensated at a higher per play/per-use rate than the independent artists’.

This issue cuts directly to the core of A2IM’s mission:  insuring a fair marketplace for independents.  The value of a song or performance should not be determined by which music label owns the song.   If that is allowed to stand, independent labels and artists might be treated unfairly and paid a lesser amount, when there is ample proof that music fans want our music and that services that underestimate this fact do so at their own risk.

The statutory license for non-on demand streaming administered by SoundExchange insures this equitable treatment by services like Pandora, Slacker, SomaFM, Sirius/XM, FM Radio simulcasts, etc. for streaming radio.  Beyonce has a broader audience than most independent artists so her music is acquired or played/accessed more frequently and as a result, Beyonce and her label receive more income than some independent artists or their labels but not because Beyonce’s music receives a higher per play royalty rate.  That should be the compensation differentiation.  For sales of music, both independent labels and majors have the same iTunes menu options made available to them for pricing their music ($0.99 or $1.29 per track, $9.99 or $11.99 per album, etc.) with the same corresponding wholesale prices.  These parity examples, as well as many others, underscore that the recognition of the equal value of all recorded musical works on a per song/per access basis has precedent, is valid, and works.

Sometimes services come to our members seeking lower rates for the use of their music, noting the promotional value of their services or other “special opportunities”; there are examples of these types of requests elsewhere on the A2IM website. As always, A2IM reminds every member label that they have their own business plan and that they must make their own individual decisions as to what is best for their label. The purpose of this item is to suggest to our members that that they think about this “value of a copyright” paradigm when making these decisions. For example should any radio service, over the air or digital streaming, ‘threaten’ to not play your music on their service unless you do a deal on their terms, you might want to remind them of all the competition for ears that radio services face and confidently remind the person delivering the threat that the programmers that WIN play the very best music and that the programmers that LOSE play music based upon the instructions of back office paper pushers.

Just a thought for today, as always all should think through the best path for their businesses and make the best decisions for their individual label’s and their artists circumstances.


Statutory Rates Versus Direct Licenses for Digital Music Streaming

Posted in News by A2IM

An ongoing discussion in our community has been whether the independent music label community members are better off with statutory rates available to all labels or direct licenses, which need to be negotiated individually by each label or their distributor.  This has been highlighted by certain services such as Rhapsody seeking direct licenses for non-interactive streams from music labels.  Now we have heard on an unsolicited basis from members that Sirius XM Radio is contacting A2IM music label members seeking direct licenses instead of paying the statutory royalty rate to SoundExchange as available through the compulsory license.

SoundExchange was created to protect the sound recording copyrights of artists and music labels and last year collected $250 million from non-on-demand streaming services like Pandora, Music Choice and Sirius/XM. SoundExchange is an advocate for the highest possible royalty rates for non-interactive digital music streaming services (services like Pandora, Slacker, SomaFM, etc.)  and then SoundExchange administers the collection and distribution of those royalties. SoundExchange is a not-for-profit governed by a board of artist and music label representatives.  A2IM’s President Rich Bengloff is on the board, as are two other independent label representatives and fellow A2IM members

In general statutory licenses have been good for the independent music label community as statutory licenses insure that all music label copyrights, whether those of the major labels or those of independent labels or artists, are treated equally and paid the same rate amount for each stream (play) of that music. Under direct licenses there are cases where independents have received less than equitable rates. The authority of SoundExchange to aggressively pursue the best possible statutory rates and handle all of the administration, including processing and auditing, results in having a central group to protect Indie rights as the statutory rate is working and indie labels are benefiting from having a this central voice.

Member have been calling to ask about the SoundExchange statutory license so we just want to advise our members that the Copyright Royalty Board (“CRB”) set SoundExchange rate for 2011 is 7.5% of revenues and for 2012 will be 8% of revenues and for years subsequent to 2012 SoundExchange will be seeking a rate increase over the 8% of revenues rate in the CRB rate hearing. The SoundExchange statutory license covers non-interactive streaming and does not cover interactive uses of music such as on-demand streaming, downloads of music and other consumer interactive uses, which uses typically have a higher royalty value in the market place.  It should also be noted, in addition to these rate considerations, that the effect on other revenue streams of these interactive streams has been the subject of numerous research reports; some noting interactive streams of music may in some cases have a revenue replacement effect while non-interactive digital broadcasts of music in many cases may prove to be promotional and lead to increased revenues from other sources.

At the end of the day, while the statutory rate has ensured equitable treatment for independents, each music label must determine for themselves their own promotional and commerce plans and we respect that entrepreneurial spirit. We’re just suggesting to you that before agreeing to any direct licenses please consider all factors and their effects on your music label’s results, now and in the future, and make an educated decision. If you have any general generic business questions please always feel free to contact us at A2IM.