This information was taken from an article on Tunecore.
A New Law Has Been Passed that Earns You More Money
Agreement Royale
On September 23, 2008, songwriters, publishers, record labels and digital music services announced they had reached an agreement on mechanical royalties for songs played on online music services.
Called a “breakthrough that will facilitate new ways to offer music to consumers online,” the voluntary agreement crafted by the Digital Media Association (DiMA), the National Music Publishers’ Association (NMPA), the RIAA, the Nashville Songwriters Association International (NSAI) and the Songwriters Guild of America (SGA) ended a longstanding dispute about mechanical royalties for interactive streaming and limited downloads.
According to the agreement, which still must be approved by the Copyright Royalty Board to take effect, limited download and interactive streaming services will pay a mechanical royalty of 10.5 percent of revenue, less any amounts owed for performance royalties. In certain instances, royalty-free promotional streaming is allowed.
This agreement garnered a significant amount of press and blog coverage last week, but lots of it jumped to the conclusion that this was the answer to the ongoing digital performance royalty fight between SoundExchange and webcasters like Pandora and soma.fm. Not so. That’s a different issue, related to a different part of copyright. We know this stuff can be horribly confusing, so we’ve put this blog post together in an effort to explain what happened last week, and how it affects musicians, music services and webcasters.