NMPA CEO David Israelite On What He'll Discuss At Annual Meeting
NMPA CEO David Israelite On What He'll Discuss At Annual Meeting

As music publishers convene in New York Wednesday for the National Music Publishers Assn. (NMPA) annual meeting, NMPA president/CEO David Israelite says he will address some of the same issues that he covered in his Congressional testimony last week for the session on the Future of Audio.

Billboard Power 100: David Israelite

In a statement to the Energy and Commerce's Communications and Technology Subcommittee, Israelite pointed out that current law deprives songwriters of the ability to "negotiate the value of their intellectual property in a free market" because of the compulsory license system that allows labels and radio to license music. He also says the vast majority of what constitutes public performance rights is regulated by consent decrees that the performance rights organizations like ASCAP and BMI have agreed to with the U.S. Department of Justice.

On the other hand, the law does not regulate synchronization licensing of music and rates are negotiated in the free market. "For songwriters and music publishers, the future of audio presents both opportunities and challenges," Israelite told Congress. "We must find efficient ways to license our copyrights and empower new business models. Much of the current licensing system is outdated and inefficient. It was built to service outdated business models."

At the NMPA meeting Isrealite will show that music publishing revenue derives 36% of its income from mechanical licensing, 30% from performance licensing, 28% from synchronization licensing and 6% from other.

With regard to mechanical licensing, interactive streaming is now a small component that will grow. But there is a need to reform how that licensing is done, Israelite says. Digital music service providers tell Billboard that it's easy to license about 75% of the music, but finding out who publishes the other 25% of music is a time consuming, inefficient process.

Moving over to performance licensing, the most important challenge is for songwriters and publishers to get proper compensation from new media. "Look at Pandora. Record labels get $14 in revenue for every $1 that publishers get. That can't continue," Israelite says. "For the future, we have to fight harder to get our fair share of the revenue pie."

While music publishers are able to negotiate synch rights in an open market, the music publishing sector is not built to license that right for new media. "While the You Tube example is a good model on how to license new media, that took a lawsuit to get to that place," he says. "For the future, it shouldn't have to take a lawsuit."

While the music publishing sector does not like operating under the compulsory licensing system or under consent decrees, the industry has to devise a system to handle mass synch licensing. Previously, the industry tried to shape legislature that would create such a central clearing house -- Section 115 Reform ACT (SIRA) of 2006 -- but that effort never became law.

The music publishers are not alone in calling for changes to music licensing regulations.

"Online music services agree with the notion that the existing set of laws governing the mechanical licensing of musical compositions is outdated and inefficient. Many of these laws were developed more than a century ago and fail to accommodate the needs of the digital age," Digital Media Association director of government affairs Greg Barnes said in a statement to Billboard made after the Future of Audio hearing.

Barnes said that while the last attempt to update Section 115 of the Copyright Act ended without the enactment of SIRA, "it's time for Congress to invite all interested stakeholders to the table and start anew."