In an agreement that ends some cases of litigation and encourages new ways for consumers to listen to music online, a number of key industry groups have reached an agreement on digital royalties and have sent the recommendations to the Copyright Royalty judges. (Read DiMA's press release here.) This agreement was necessary to encourage new models without scaring away current and future entrepreneurs and enthusiasts.

The Digital Media Association (DiMA), the National Music Publishers’ Association (NMPA), the Recording Industry Association of America (RIAA), the Nashville Songwriters Association International (NSAI) and the Songwriters Guild of America (SGA) have agreed upon a framework for compensating creators and owners for music streamed through certain music models. The agreement does not cover royalties on permanent downloads of physical product. The agreement does end litigation or threat of litigation against some DiMA members.

The RIAA's Mitch Bainwol called the agreement "flexible" while the NMPA's David Israelite called it "historic." The press release lacks many specifics but does give a broad overview of the agreement. Limited downloading and interactive streaming services will usually pay 10.5% of revenue less any amounts owed for performance royalties. (Note: I accidentally typed "non-interactive" originally. Those services are not covered under this agreement.) The amount payable is flexible and in some cases can be a minimum payment. In addition, the groups agreed that non-interactive services do not need reproduction or distribution licenses from copyright owners. Royalty-free, promotional streaming will be allowed in certain cases.

As interactive (user-chosen) streams now have an agreement, Internet radio services, which uses non-interactive streams, is may feel more optimistic about their situations. After the Copyright Royalty Board announced new non-interactive rates in March of 2007, there was great concern that some music services would be unable to pay current and especially future rates. Yahoo and AOL mulled dropping their online radio services. Pandora warned the new rates would "end internet radio, period," and heated up the PR campaign last month.

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