Musicians Win Web Royalties

Thanks to an agreement reached in October, musicians, rather than their record labels, will receive royalty payments for the use of recordings distributed over the Internet or broadcast over cable and satellite systems. Royalty collection agency SoundExchange will distribute payments directly to performers, regardless of their contracts with the record companies, according to a statement issued the second week of November.

SoundExchange paid out $5.2 million to artists and music publishers in October, the first month that the agreement was in force. The agreement was signed by representatives of the Recording Industry Association of America, the American Federation of Television and Radio Artists, the American Federation of Musicians, the Recording Artists Coalition, the Music Managers Forum, and the National Academy of Recording Arts and Sciences.

The signatories will have equal control over the functions of SoundExchange, organized to steamline the collection and distribution of royalties for sound recordings. Prior to the agreement, there was widespread uncertainty about who was responsible for collecting and disbursing royalty payments for web, satellite, and cable play.

In a related development, the World Trade Organization has determined that European musicians have lost royalties of approximately $1.1 million annually to inconsistencies in US copyright law. The ruling by an arbitration panel in Geneva clears the way for the European Union to seek compensation from the US if the law isn't changed by the end of the year, according to a November 9 report from the Associated Press. European musicians' groups had estimated their US royalty losses at as much as $27 million per year.

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