The long-awaited decision from the U.S. Copyright Royalty Board (CRB) concerning mechanical royalty rates came down yesterday and not much changed.
The CRB left unchanged the per-song rate of 9.1 cents for physical product, set for the first time a statutory rate for permanent downloads of 9.1 cents (the same as the prevailing industry standard rate) and established a 24 cent rate for mastertone ringtones (mastertone royalty rates were previously negotiated and typically equaled about 10% of the retail price).
That decision seemed to please major sectors of the industry. But, around the Web, as expected, views were more varied – everything from “everybody wins” to “missed opportunity.”
Below, a quick Web roundup.
“The Copyright Royalty Board has handed Apple and other online music store operators a big victory, as it has decided to keep the royalty rate the same for physical media and “permanent” (nonsubscription) music downloads.”
“Faced with an industry in transition, with new rules being written every day, the three-judge panel opted to do nothing. And maybe that was the prudent thing to do. But by setting these rates for the next five years, the Copyright Royalty Board missed an opportunity to help put the entire digital music industry on a more rational footing.”
“It seems like everybody wins with the current royalty plan. While the music labels wanted to increase royalty rates to as much as 8 percent of total revenue, the Digital Media Association, of which Apple and Amazon.com are a part of, was trying to get royalty rates reduced. It turns out that the status quo is just the compromise both sides were looking for.”
Silicon Alley Insider:
“Apple caused a stir earlier this week by insisting (with a straight face) that it would consider shutting down music sales at iTunes (AAPL) if a US regulatory board jacked up the rates it was supposed to pay music publishers. That was never believable, but it would have been fun to see what happened if the Copyright Royalty Board went ahead and called Apple’s bluff by increasing so-called “mechanical” royalties. Alas, we won’t find out.”
“What all this means of course is that Apple will not be shuttering iTunes–as if there was ever much of a chance of that–and appears to remain very much in control over the economics of digital music.”
Click here for a further roundup of industry reaction.