Sony music publishers reportedly want royalties "on par" with labels for Apple Net radio

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Issue Date: 
May 28 2013 - 11:55am

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Some follow-up on our coverage from last week on slow-moving negotiations over iRadio between Apple and both Sony's record label and publishing (in RAIN here): Sony/ATV head Martin Bandier wants the songwriters and publishers he represents to collect royalties "on par with those of performers," the New York Post reports.

"Performers" here is likely PR-speak for "record labels," as both are paid on sound recording copyrights. While labels' share of streaming royalties dwarfs that collected by publisher/songwriter groups, music performers have complained vigorously about low pay for streaming play.

Apple reportedly hoped to launch its heralded "iRadio" Internet radio service by June, and sources said licensing deals with the two other major label groups (Warner and Universal) as well as performance rights organizations ASCAP and BMI (for most publishing) were in the bag. Now, apparently, the Sony Music label group and publishing group Sony/ATV are holding out (Sony/ATV withdrew its digital licensing from ASCAP at the beginning of the year, requiring services like Pandora to secure rights to their compositions directly, see RAIN here).

"Sony/ATV currently gets a 5% royalty but is pushing for a rate closer to 55% — what recorded music labels get," the Post wrote about the negotiations with Apple. "A source said that Bandier doesn’t feel he’s standing in the way of the launch — and that he would even accept a rate of 10% to 15% as a first step toward his goal of parity." Publishing group BMG Rights Management is reportedly also holding out for better terms now.

Besides simply seeing the high royalties labels are commanding, news source The Verge suggests consumers' changing music consumption is forcing publishers to demand more.

"Music publishers represent songwriters and composers, who make a big chunk of their royalties from CD and download sales. But those formats are in decline, disc sales have been plunging for a decade, and the growth in downloads has slowed to a trickle... publishers... don't make as much from streaming music."

The prolonged negotiations are also frustrating the other players who've already settled, according to the Post.

"There’s a frustration... [The Apple streaming service] is a net positive for the business. Apple is offering a 50/50 ad revenue share, minimum guarantees and royalties and the most successful ecosystem that’s ever been created. Unlike Pandora, the up-sell opportunity is enormous," an executive told the paper.

Read the New York Post here. Read The Verge here.

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