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URGENT: RIAA Tries to Slash Rates

From: Israelite, David
Dated: Friday, January 25, 2008 12:09 PM

Subject: Urgent Message from NMPA Regarding Your Rights

On Monday, January 28, the Copyright Royalty Board (CRB) begins the
hearing that will determine mechanical rates for every songwriter and
music publisher in America.  It will be the most important rate hearing
in the history of the music industry because in addition to setting
rates for physical products, rates will be set for the first time ever
for digital products such as digital downloads, subscription services
and ringtones.
The National Music Publishers' Association (NMPA) will be representing
the interests of songwriters and music publishers and will be fighting
vigorously to protect those interests to ensure that musical
compositions are compensated fairly.
On the other side of this fight stands the Recording Industry
Association of America (RIAA) and the Digital Music Association (DiMA).
Both the RIAA and DiMA have proposed significant reductions in
mechanical royalty rates that would be disastrous for songwriters and
music publishers.  This is literally a fight for the survival of our
To give you an example of what is at stake, the current rate for
physical phonorecords is 9.1 cents.  The NMPA is proposing an increase
to 12.5 cents per song.  The RIAA, however, has proposed slashing the
rate to approximately 6 cents a song - a cut of more than one-third the
current rate!
For permanent digital downloads, NMPA is proposing a rate of 15 cents
per track because the costs involved are much less than for physical
products.  The RIAA has proposed the outrageous rate of approximately 5
- 5.5 cents per track, and DiMA is proposing even less.
If you find that troubling, it gets worse.  For interactive streaming
services, which some analysts believe will be the future of the music
industry, NMPA is proposing a rate of the greater of 12.5% of revenue,
27.5% of content costs, or a micro-penny calculation based on usage.
The RIAA actually proposed that songwriters and music publishers should
get the equivalent of .58% of revenue.  This isn't a typo - less than
1%.  And DiMA is taking the shocking and offensive position that
songwriters' and music publishers' mechanical rights should be zero,
because DiMA does not believe we have any such rights!
The initial hearing will last four weeks, with the three permanent
Copyright Royalty Judges hearing arguments Mondays through Thursdays
from 9:30 am - 4:30 pm each day.  At the conclusion of the initial
hearing, there will be more discovery, followed by a rebuttal hearing in
May, and a final decision expected on October 2.
The NMPA will be spending millions dollars in this proceeding to
protect the interests of songwriters and music publishers against the
much larger record labels and digital media companies.  And although we
face such an enormous fight, we have an incredible advantage - we
represent songwriters, without whom the record labels and digital music
services could not exist.
Please forward this information to anyone who is involved in the songwriting and
music publishing industry.  We will be sending out regular updates as
the CRB progresses to keep you informed.  Through your networks, we hope
to reach the vast majority of the industry.  If you did not receive a message
directly via email and would like to be added to the master NMPA communications
list, please send your contact information to Jamie Marotta at
As always, we appreciate your support of the NMPA which allows us to
wage this fight on your behalf.
David M. Israelite
President & CEO
National Music Publishers' Association

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