As often happens in Washington, sometimes the best solution is to meet in the middle. That appears to be the takeaway from today’s proposal to the Copyright Board (CRB) to increase mechanical royalties by 32% immediately — or from 9.1 cents to 12 cents per track — with respect to physical product, downloads, ringtones, and music packages.
Signatories to the proposal include representatives from Spotify, Google, Pandora and Apple, as well as key brand members of the Recording Industry Association of America (RIAA), as well as members of the National Music Publishers Association (NMPA) and the Nashville Songwriters International Association (NSAI). The CRB has yet to agree to the proposed new rate.
The rate was disputed, leading to a legal deadlock that threatened the rate’s ratification in the period 2023-2027. Rights holders and trade groups coveted 15 cents.
The proposal states that the National Music Publishers Association (NMPA) and the Nashville Songwriters International Association (NSAI) along with Sony Music Entertainment, Universal Music Group and Warner Music Group, as well as eligible copyright holders, have reached an agreement as Relevant on the rate of change, which will take effect in 2023.
Earlier this year, Sony Music Publishing Chairman John Platt described the rate setting process as “currently the most important problem facing songwriters and music publishers in the United States.”
Agreeing to the price would be a huge win for songwriters and publishers who have long argued that primary creators are not fairly compensated for their contributions to a song or recorded work. In fact, a rate of 9.1 cents was set in 2008 at the start of the so-called Phono IV process, which includes royalties for both physical (CD, vinyl, cassette) and digital (streaming and downloads) formats.
Physical vinyl has grown into a multi-billion dollar business, according to an end-of-year 2021 report from the RIAA. While it pales in comparison to the $12 billion in revenue that music streaming services brought in last year, it’s still a dominant format with no sign of slowing down.
In a statement, SONA CEO Michelle Lewis said, “SONA enthusiastically supports the proposed settlement of Part IV Recording Numbers, which governs the amount of money paid to songwriters and publishers for permanent digital downloads, vinyl and CD sales. It should All songwriters, big or small, always have a voice in the decisions that govern and affect our lives. We are grateful to hear our collective voice. This is a long-overdue step to correct the historically low rates paid to songwriters and it is time to get right to the underlying value of the song.”
“After extensive consultation with songwriters, publishers, and production companies, we are pleased to have come up with a solution that we believe addresses the fundamental concerns of CRB judges and the individuals and organizations who have shared their views during these proceedings,” RIAA CEO Mitch Glazer added. “As a music community, we are strongest when we come together to strike lasting, sustainable and win-win deals.”
See below for additional data regarding the CRC proposal:
This new settlement gives songwriters a 32% increase in vinyl, CD and download sales — raising the rate from 9.1 cents to 12 cents — and also crucially includes an annual cost-of-living adjustment to counter inflation. This very positive outcome is due in large part to the creators who made their voices heard in the CRB process. With the introduction of this settlement, we are opening the way to focus solely and tirelessly on raising broadcast rates. As we battle the biggest corporations in the world, who are pushing for the lowest ownership rates in history, songwriters and advocates stand more united than ever.” — David Israelit, NMPA President and CEO
“We want to thank CRB for pointing out an opportunity to increase physical rates. We welcome the 32% increase on CDs, vinyls and downloads and the fact that the cost-of-living adjustment is built in helps us sustain increases into the future.” – Bart Herbison, Executive Director, NSAI
“AIMP fully supports the proposed CRB Subpart B settlement, which would increase the mechanical rate of physical sales and digital downloads from 9.1 cents to 12 cents. This is a step in the right direction and would be a huge boon for the independent music publishing community. From now on, nearly all independent publishers will tell you that The future of the music business is on the way to streaming, and we commend the ongoing efforts of the NMPA to fight for better streaming rates for all independent music publishers and songwriters.” Independent Music Publishers Association
“I want to commend the NMPA and the RIAA for working together to work in the best interest of songwriters. This settlement demonstrates that when the music community works collaboratively, we can achieve meaningful progress for music creators.” Harvey Mason, Jr., CEO of the Recording Academy.
“This settlement provides a much-needed and long-awaited increase for songwriters that will make a real difference to their lives and livelihoods. Most importantly, it will also ensure that songwriters continue to be paid fairly over the next five years since this increase is inflation-adjusted.” – Evan Bogart, Head of the Songwriters and Composers Suite at the Recording Academy
The UK’s Efors Academy of Songwriters and Composers welcomes the news that the value of songwriting and publishing rights is starting to get better. This is an important compromise and indicates the necessary direction for travel.” — Graham Davies, CEO of Evos Academy
“This unprecedented increase in vinyl, CD, and download rates will have a significant impact on our industry and hopefully signal potentially higher rates for streaming than CRB. We appreciate the efforts made to reach this agreement and thank NMPA for working on behalf of songwriters and publishers.” – Britten Ashford, CEO of the US Music Publishers Association
“BMAC supports the settlement of the proposed IV audio recordings for Subpart B. Our organization commends the negotiators for proposing to increase artist payments by 32%, and we are particularly pleased to see recognition of cost-of-living adjustments for songwriters. As we recognize that there is still much to be done, we must acknowledge every step being taken in the right direction toward songwriter equality.” — Prophet, Co-Founder/President of the Black Music Action Alliance
This new settlement is a major step forward for all composers and songwriters and will be of great benefit to thousands of productive music creators whose work is also offered for sale to the public through CD, vinyl and digital platforms. We thank NMPA for negotiating a 32% increase and for continuing to fight for higher and fairer streaming rates at CRB this fall.” — Adam Taylor, Chair of the Music Production Association (PMA)
“With vinyl and CD sales continuing to rise, songwriters getting a raise in royalties show that the labels are starting to see that we deserve better prices. Hopefully with the impending CRB trial, all sides will try to work together so the songwriters can come close to getting A livable wage. – Tiffany Reed, Founder and CEO, The 100 Percenters
“We are very pleased with the 32% increase included in the Subpart B settlement negotiated by the NMPA. Songwriters are in dire need of better rates that fully reflect their contributions. We hope that CRB recognizes this in the larger broadcasting battle taking place this year and that this bodes well for things to come.” — Don Casson, President/CEO of the Church Music Publishers Association
“This settlement is an important win for songwriters who will see a 33% jump in physical music download and sales revenue starting in 2023 while securing future increases to keep pace with inflation for the duration of the deal. We are very grateful to the many advocates of popular songwriters who refused to accept the status quo settlement. And they kept knocking on CRB’s door until they were heard.” Artist Rights Alliance
“Music Artists Alliance commends and supports the proposed CRB settlement which gives songwriters a well-earned increase on physical sales and downloads. The songwriting community has successfully advocated for this rate adjustment and will continue to fight for an increase where it really matters — streaming. Finally, some good news for music creators!” — Susan Genko, Board Member of the Coalition of Musical Artists
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