Music Industry, Online Services Strike Deal

Record labels, music publishers and digital music services have reached an agreement on proposed royalty rates for a range of online services, potentially making it easier to offer music in new ways via the Internet.

The proposal would create guidelines for five new types of services, including online "locker" services such as Apple’s iTunes Match and Amazon 's Cloud Drive. Some of the new rates address music bundled with other goods, such as Internet-service plans, cellphones and vinyl records, which are sometimes sold with codes that allow downloading of MP3 versions of the music. The agreement "reflects our mission to make it easier for digital music services to launch cutting-edge business models and streamline the licensing process," said a statement from Cary Sherman, who heads the Recording Industry Association of America, the trade group for the record industry. The deal expands the number of categories for which royalty rates are set by law. Under federal law, the rates for royalties collected by music publishers on sales of recorded music, known as mechanical royalties, are set every five years. Until now, those rates have been established for three types of music delivery: physical sales, such as CDs, records and tapes; digital downloads from online stores like Apple's iTunes Store or Amazon; and on-demand music services such as Spotify and Rhapsody. To go into effect, the new royalties require the approval of the Copyright Royalty Board, part of the Library of Congress.