The music industry reacted favorably to the Copyright Royalty Board’s release Thursday of new mechanical royalty rates.
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).
Below, a further roundup of industry reaction.
Nashville Songwriters Association International president Steve Bogard:
“The [NSAI] International (with the California and Texas Songwriters Associations,) is pleased that the Copyright Royalty Board has chosen to recognize the personal investment and contribution of songwriters to the American music industry. The United States, the source of so much of the world’s great popular music must lead the way in compensating creators for their work and making it possible for our publishing partners to continue to invest in the nurturing and development of great young songwriting talent. NSAI believes that in the long run this decision is in the very best interests of consumers, digital media content providers, and the entire music industry.”
Songwriters Guild of America president Rick Carnes:
“The CRB has confirmed the proposal of rates for interactive streaming and limited downloads formulated cooperatively by songwriters, music publishers, the recording industry and the digital media groups, which will clarify the licensing of this growing area of digital commerce and provide needed royalty payments to songwriters. The Songwriters Guild of America is gratified that the CRB has adopted these rates, which will assist music creators in their quest to make a living from their profession.” Carnes added, “Today, the CRB also faithfully implemented U.S. copyright law by giving songwriters the ability to earn a fair return on their works. As so many songwriters testified during this process, our community has been struggling to keep our profession alive, and the CRB’s decision could not have come at a more important time.”
A statement from CTIA:
“CTIA is currently reviewing the CRB’s initial determination. The royalty rate of 24 cents for ringtones appears to be high, thus we look forward to reviewing the CRB’s rationale on how it arrived at that number. The CRB is expected to release its determination on Tuesday, Oct. 7th. After a careful review of the CRB’s decision, CTIA and its members will consider the appropriate options and venue for addressing the wireless industry’s concerns on this issue.”
A statement from Future of Music Coalition:
“Future of Music Coalition is encouraged that the parties involved in the proceedings seem pleased with the decision, and looks forward to reading the entire CRB decision when it is made public.
Harry Fox Agency president and CEO Gary Churgin:
“HFA has more than 80 years’ experience licensing, collecting, and distributing royalties – we have evolved with every rate and music delivery format in the history of the U.S. recording industry, and we have already issued millions of licenses for online music services,” said Churgin, in a statement. “With this decision from the Copyright Royalty Judges, we’re very pleased to finally be able to distribute these long-awaited royalties.
“Our systems are ready to handle these more complex royalty reports, and we also have the added strength of our highly skilled Collections and Royalty Compliance teams to ensure the application of the correct rate structure. Publishers and licensees can trust HFA to deliver for them as we have for nearly a century.”
The latter part of the statement refers to the complex formula set up to calculate royalty payments for interactive streaming and limited downloads. While that royalty is set, in general, at 10.5% of royalties, less composition performance royalties, it is actually a four-step process that uses different barometers for five different kinds of digital services: the standalone non-portable subscription that allows streaming only; the mixed standalone non-portable subscription service that allows subscribers to get either interactive streams or limited downloads; the standalone portable subscription; bundled subscription services; free non-subscription/ad-supported services.
Click here for a roundup of reaction from around the Web.
