MUSIC PUBLISHERS, SONGWRITERS VS. RIAA, DIGITAL MUSIC ASSOCIATION

The National Music Publishers’ Association (NMPA), which represent the interests of songwriters and music publishers, are calling it “the most important rate hearing in the history of the music industry.”

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 NMPA has vowed to “fight vigorously” to protect those interests to ensure that musical compositions are compensated fairly.

Both the RIAA and DiMA have proposed significant reductions in mechanical royalty rates.

The current mechanical rate for physical phonorecords 9.1 cents. The NMPA is proposing an increase to 12.5 cents per song. The RIAA, on the other hand, has proposed slashing the rate to approximately 6 cents a song.

For permanent digital downloads, NMPA is proposing a rate of 15 cents per track, with the RIAA countering with 5-5.5 cents per track and the DiMA less than that.

The real difference comes in the area of interactive streaming services, where the NMPA proposed a rate of the greater amount between 12.5% of revenue, 27.5% of content costs, or a micro-penny calculation based on usage. The RIAA have countered that songwriters and music publishers should get the equivalent of .58% of revenue, while the DiMA is insisting that songwriters and music publishers shouldn’t receive any mechanical royalties.

The initial hearing will last four weeks, with the three permanent CRB judges hearing arguments Mondays through Thursdays. 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, RIAA and DiMA are expected to spend millions of dollars attempting to sway the court of public opinion in the dispute.