Songwriters' Mechanical Rates Hearing: NMPA vs. RIAA

> On Monday, January 28, the Copyright Royalty Board (CRB) begins the
> hearing that will determine mechanical rates for every songwriter
> and music publisher in America. It will be the most important rate
> hearing in the history of the music industry because in addition to
> setting rates for physical products, rates will be set for the first
> time ever for digital products such as digital downloads,
> subscription services and ringtones.
>
> The National Music Publishers' Association (NMPA) will be
> representing the interests of songwriters and music publishers and
> will be fighting vigorously to protect those interests to ensure
> that musical compositions are compensated fairly.
>
> On the other side of this fight stands the Recording Industry
> Association of America (RIAA) and the Digital Music Association
> (DiMA). Both the RIAA and DiMA have proposed significant reductions
> in mechanical royalty rates that would be disastrous for songwriters
> and music publishers. This is literally a fight for the survival of
> our industry.
>
> To give you an example of what is at stake, the current rate for
> physical phonorecords is 9.1 cents. The NMPA is proposing an
> increase to 12.5 cents per song. The RIAA, however, has proposed
> slashing the rate to approximately 6 cents a song - a cut of more
> than one-third the current rate!
>
> For permanent digital downloads, NMPA is proposing a rate of 15
> cents per track because the costs involved are much less than for
> physical products. The RIAA has proposed the outrageous rate of
> approximately 5 - 5.5 cents per track, and DiMA is proposing even
> less.
>
> If you find that troubling, it gets worse. For interactive
> streaming services, which some analysts believe will be the future
> of the music industry, NMPA is proposing a rate of the greater of
> 12.5% of revenue, 27.5% of content costs, or a micro-penny
> calculation based on usage. The RIAA actually proposed that
> songwriters and music publishers should get the equivalent of .58%
> of revenue. This isn't a typo - less than 1%. And DiMA is taking
> the shocking and offensive position that songwriters' and music
> publishers' mechanical rights should be zero, because DiMA does not
> believe we have any such rights!
>
> The initial hearing will last four weeks, with the three permanent
> Copyright Royalty Judges hearing arguments Mondays through Thursdays
> from 9:30 am - 4:30 pm each day. At the conclusion of the initial
> hearing, there will be more discovery, followed by a rebuttal
> hearing in May, and a final decision expected on October 2.
>
> The NMPA will be spending millions dollars in this proceeding to
> protect the interests of songwriters and music publishers against
> the much larger record labels and digital media companies. And
> although we face such an enormous fight, we have an incredible
> advantage - we represent songwriters, without whom the record labels
> and digital music services could not exist.
>
> Please forward this to anyone who is involved in the songwriting and
> music publishing industry. We will be sending out regular updates
> as the CRB progresses to keep you informed. Through your networks,
> we hope to reach the vast majority of the industry. If you did not
> receive this directly, and would like to be added to the master NMPA
> communications list, please send your contact information to Jamie
> Marotta at jmarotta@nmpa. org.
>
> As always, we appreciate your support of the NMPA which allows us to
> wage this fight on your behalf.
>
>
> David M. Israelite
> President & CEO
> National Music Publishers' Association