A group of Internet music-subscription services including RealNetworks and Yahoo have failed to agree with songwriters on royalty payments...
A group of Internet music-subscription services including RealNetworks and Yahoo have failed to agree with songwriters on royalty payments for tunes streamed over the Web, leaving the writers unpaid.
Talks on a payment rate broke down Aug. 16, with a service-provider group offering 6.9 percent of total revenue and songwriter groups asking for 14 percent, said a writers’ representative. Six writers’ groups yesterday leveled bad-faith negotiating charges against the providers, whose representative suggests the writers want to provoke congressional action.
The services, which let consumers play songs but not own them, can still operate under a 2001 interim agreement that calls for payment of advance royalties into accounts for writers. A resolution would clear one of many intellectual-property battles spawned by the Web. Until then, writers will go without compensation.
“We’re not interested in shutting anyone down. We just want a fair price for the songwriter,” said David Israelite, chief executive of the National Music Publishers Association, a Washington, D.C., writers representative.
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Israelite said the music services pay record labels 45 percent to 50 percent of their total revenue for rights to use what the labels publish. The Digital Media Association, which represents the service providers in the talks, says songwriters and composers get 8.5 cents per tune on a typical compact disc.
The provider’s association, also based in Washington, D.C., sees another reason for the breakdown. The writers are trying to get . Congress to settle the issue, said Jonathan Potter, the provider association’s executive director. The writers, he said, are “holding the negotiations hostage” because they want the U.S. Congress to settle it.
“Everyone wants the songwriters to get paid,” Potter said. “We aren’t interested in paying money into a fund that sits and gains interest. But they are trying to exploit their business opportunity to get double and triple the royalties they have historically gotten and we’re not going to go there.”
The songwriter groups are trying to secure far higher payments than writers receive for song play on Internet, satellite radio and CD sales, he said.