Sony Music, Accused of Meddling, Strikes a Deal on Publishing Royalties

Following what many perceived as meddling in the Copyright Royalty Board's rate-setting process by Sony Music Entertainment, the major has now agreed to the same terms that Warner Music Group and Universal Music Group acceded to, negotiated between them and the National Music Publishers Association (NMPA) and the Nashville Songwriters Association International (NSAI). In July, the NMPA and the NSAI petitioned the Board to remove Sony Music from the process.

Music publishers and songwriters were upset that Sony had petitioned to participate in the rate-setting process -- both publishers and songwriters accused Sony of trying depress publishing prices so that an increase couldn’t potentially come at the expense of recorded music royalty payments, which are more lucrative for its parent corporation.

Sources say Sony had actually proposed an increase above the current headline rate of 10.5 percent of gross revenue, suggesting it be changed to 12.5 percent of revenue. (That proposal did fall below the 15 percent of revenue rate the NMPA is seeking.)

As part of the settlement, Sony will withdraw from the Copyright Royalty Board royalty rate-setting process and will agree to abide by the existing mechanical rates for CDs and downloads, $0.091 cents per song, and that for ringtones, $0.24 cents. Universal Music Group and the Warner Music Group agreed to the same terms this past June.

“Sony Music and the music publishing community value their relationship, and as the music marketplace continues to evolve, it is more important than ever that the music community stands united to demand fair market pay for songwriters and artists from all digital music services,” the three organizations write in a joint statement on the deal.