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The AIMP fully endorses the proposed CRB Subpart B settlement


The AIMP fully supports the increase of the mechanical rate for physical sales and digital downloads from 9.1 cents to 12 cents. Read more from Music Business Worldwide on the settlement reached, along with our full statement



Copyright Royalty Board Asked to Approve 32% Increase on Mechanical Royalties for Physical Products, Downloads
 

As often goes in Washington, sometimes the best solution is to meet in the middle. That appears to be the takeaway from today’s motion to the Copyright Royalty Board (CRB) to increase mechanical royalties by 32% immediately — or from 9.1 cents to 12 cents per track — as related to physical product, downloads, ringtones and music bundles.

Signatories on the motion include representatives from the major label members of the Recording Industry Association of America (RIAA), as well as members of the National Music Publishers Association (NMPA) and the Nashville Songwriters Association International (NSAI). The CRB still needs to approve the proposed new rate.

The rate had been disputed leading to a legal deadlock that threatened the ratification of the rate in the 2023-2027 period. Rightsholders and trade groups were aiming for 15 cents.

The motion states that the National Music Publishers’ Association (NMPA), the Nashville Songwriters Association International (NSAI) along with  Sony Music Entertainment, Universal Music Group and Warner Music Group, as well as qualified copyright owners, have come to an agreement as related to the rate change, which would take effect in 2023.

Read more from this Variety article, including the AIMP's statement.  


‘THIS AGREEMENT GUARANTEES A RAISE FOR CDS, VINYL AND DOWNLOADS, BUT WE KNOW THAT SONGWRITERS NEED MUCH MORE TO SUCCEED – THEY NEED FAIRNESS.’ 

David Israelite, the President & CEO of the National Music Publishers' Association). NMPA is the trade association representing American music publishers and their songwriting partners.  Read David's op-ed in Music Busines Worldwide, below.

A new settlement between the National Music Publishers’ Association (NMPA), the Nashville Songwriters Association International (NSAI) and the Recording Industry Association of America (RIAA) holds great promise for songwriters in the fight for fairer rates.

Every five years, the Copyright Royalty Board (CRB) sets rates for the next five year period. While the majority of this fight is between copyright owners and streaming services, since streaming makes up the bulk of today’s market, an important part of this proceeding is setting rates for physical product, CDs and vinyl, and downloads.

These ownership models have declined significantly over the years, but still encompass an important piece of the business.

In order to focus precious time and resources on the bigger streaming battle and avoid costly and risky litigation, it is advantageous for publishers, songwriters and labels to try to come to an agreement on their own, outside the proceeding, and due to the hard work and compelling voices of countless songwriters across the country, we have come to a settlement with an historic rate increase.

The agreement we have submitted to the court will give songwriters a 32% raise for what’s called “Subpart B” which comprises CDs, vinyl and downloads. The proposal would increase the royalty rate from 9.1 cents to 12 cents and include a yearly cost of living adjustment to address inflation. These increases would take effect for the years 2023-2027.

The leverage necessary to achieve this deal is a direct result of the submissions by songwriters during the comment period which the CRB judges stated was persuasive and influential. This new settlement outcome will enable creators to benefit from rate certainty, better, fairer royalties and provide necessary inflation increases without incurring significant litigation costs.

While these physical products and downloads make up less than five percent of today’s publishing and songwriting income, this sector is important, and some segments are even expanding. The growth in vinyl is an exciting development, and proves the enduring value of owning music. While we know that streaming will continue to dominate, we should not overlook these trends.

By extrapolating current trendlines into the near future, we see that by the end of the next five year period, 2027, physical and downloads may amount to less than one percent of the market, however, what is important about this settlement, and the judges’ willingness to consider it, is that it points to a inclination towards raising the value of songwriters’ contributions overall.

In this next proceeding, we are up against the biggest tech companies in the history of the world. Spotify, Amazon, Apple, Google and Pandora are fighting to lower streaming royalties to the lowest rates in history. At the same time, Spotify and Amazon continue to lead their unprecedented appeal of the 44% rate increase we won in 2018. The time and resources it takes to fight this dual-front war are considerable, and prove that this process is broken.

“WE SHOULD NOT HAVE TO GO ALMOST HALF A DECADE WITHOUT CERTAINTY ABOUT WHAT THE STREAMING RATES ACTUALLY ARE, AND WE SHOULD NOT HAVE TO SPEND MILLIONS OF DOLLARS YEAR AFTER YEAR TO FIGHT TECH GIANTS WITH UNLIMITED POCKETS TO FINANCE THESE FIGHTS.”

We should not have to go almost half a decade without certainty about what the streaming rates actually are, and we should not have to spend millions of dollars year after year to fight tech giants with unlimited pockets to finance these fights.

One of the most significant benefits of this settlement is that in coming to an agreement outside of the CRB, the record labels will not enter into the proceeding and fight against us alongside the streaming giants, therefore allowing all of our resources to go towards higher streaming rates.

Again, the credit for enabling us to get to this point, where an advantageous agreement could be achieved, goes to the individual creators who demanded better from record labels and had a considerable effect on the judges.

As we look to the summer and fall when the trial will begin for streaming rates, it is reassuring to know that after some disagreement, we are united as music creators and their advocates.

This will be the most significant period in a generation when it comes to the future of music and the songwriting economy. This agreement guarantees a raise for CDs, vinyl and downloads, but we know that songwriters need much more to succeed – they need fairness. Streaming fairness. The judges saw the necessity in raising Subpart B rates. Hopefully this is a sign of even better things to come. Stay tuned.

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