It’s been no secret that Amazon has been working on their streaming service and plans to launch in less than 2 months. Most speculate that their streaming service will be bundled together with Amazon Prime, which currently goes for $99 a year and includes 2 day shipping, Prime Instant Video and Kindle Owners’ Lending Library.
There was just one problem. Independent publishers refused to sign their contract. The president of one of the largest independent publishing companies in the world told Digital Music News this past April upon reading Amazon’s Music Publishing Rights Agreement: “this is entirely unacceptable.”
Amazon was trying to bypass Section 115 of the US Copyright Act and create its own mechanical royalty rate – well below the rate set by congress, and the rate all of the other streaming services are abiding by.
Amazon tried to muscle its way into the streaming game like it muscles its way into everything else. They tried to lowball the independent publishers with a “take it or leave it” deal. A deal that limited their liability to $50,000. A deal that forced publishers to rip down music from ALL other streaming services if they removed it from Amazon. A deal that allowed Amazon to change the mechanical royalty rates at any time without renegotiating with the publishers.
Well, the independent publishers did their songwriters right by refusing to sign this completely unfair contract. Amazon must have realized that music lovers want to hear more music than just 6 month old major label hits.
As of May 27th, 2014, Amazon has begun to send out notices of intentions to obtain compulsory mechanical licenses.
2014 will be the year of streaming. With Spotify announcing last month it has signed up 10 million paying subscribers, Apple purchasing Beats (to likely launch its streaming service very soon), and digital downloads already down 12.5% in the first quarter of this year, everyone is trying to jump head first into streaming.
Your move, iTunes.