Urgent Message from NMPA Regarding Your Rights

[Bob Olhsson]

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 industry.

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 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 this directly, and would like to be added to the master NMPA communications list, please send your contact information to Jamie Marotta at jmarotta@nmpa.org.

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
http://nmpa.org/home/index.asp

[nobby]

Thanks for the heads up, Bob

[Immanuel]

The only words I have are: "I have no words! ... speechless for once ..."

[MacGregor]

The sad thing is that neither the RIAA nor the DiMA seem to realize that they bite the hand that feeds them.

Mac

.

[Bob Olhsson]

Even sadder is the fact that the DiMA has been winning the propaganda war by demonizing the RIAA and the RIAA has been the only party sticking up for artists.

The RIAA offers an insulting pittance while the DiMA says "fuck you."

[dwoz]

Originally Posted by Bob Olhsson

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!

If I read this correctly, and we're talking about a statutory rate...then for the most part, it will ELIMINATE the ability of an artist to compete, by having their own download site.

ANY rate based on overall revenue will result in ZERO payments to the artist, unless some minimum download "cost" is imputed with each download. There are only about a million ways to shuffle revenue around, and make it 'disappear' from the books. For example, all the "revenue" will go to a shell company offshore, which will 'pay' the label for "website maintenance services". The money will be off-books, and offshore, and thus unavailable for audit.

As has been noted, decimating the royalty rates seems like "biting the hand"...but unfortunately it really isn't. What is going on here, is an effort to actually DESTROY the ability of artists to demand compensation for their work, and that would seem counter-intuitive...why would the labels do that? Don't they realize that they "need us?"....ah, but they DON'T need us. Reality TV has shown them that, for the most part, the consuming mass of public, that is their customer, really doesn't recognize nor really care about exquisite quality. They seem just as happy with lowest-common-denominator junk.

Remember, as Bob O. put it recently...YOU are not their customer. ADVERTISERS are their customer. The music is not their product...YOU(the consumer) are their product.

The sad fact of it is, that all they have to do is pump out music content that "passes as listenable". They don't have to offer anything better. By doing so, they are putting out the BEST PRODUCT.

Let me explain that...

their "product" is the eyeballs and ears, aggregated together and bundled for the Advertisers, the REAL Customers. The best PRODUCT to offer to the Advertisers, are eyeballs and ears that are connected to consumers that really couldn't discern quality.

In other words, consumers that DON'T NOTICE that the stream has changed from music, and is now advertising.

And, in the process of making this change, they will simply drop "artists" altogether. They don't need us, there's a million people who can produce "music that sounds more-or-less listenable".

For the most part, the "common consumer" is not motivated by exquisite quality, but rather by "comfortable familiarity".


dwoz (d as in 'dystopian')

[Bob Olhsson]

The RIAA is an adversary but the DiMA is the mortal enemy of every professional songwriter, artist, musician, producer, engineer, actor, director, editor and screen writer. They have been seeking a statutory royalty for everything in Congress.

This is a battle to turn all of us into creatively and politically impotent non-union corporate employees.

[myrtlebacker]

Originally Posted by Bob Olhsson

The RIAA actually proposed that songwriters and music publishers should get the equivalent of .58% of revenue.

What happens with the remaining 99.42% ? Does the streamer keep all of that ? That .58% number seems so out of proportion, that I don't believe it.

[Bob Olhsson]

The most insulting part of this is that negotiating a separate deal is trivial with today's communication system.

A compulsory license amounts to nothing but a congressionally imposed cap on what people can get paid. It made sense before the internet but technology has made the need for it obsolete.

[Dr. Bob]

I for one have posted this message on my site.

I encourage each of you to do the same. The word needs to get out ASAP!

The insult upon injury of what DiMA is doing is just plain morally wrong. The RIAA is bad enough...

[grilla]

Wow..........I had no idea!

Glad to hear some decisions finally being made regarding internet royalty rates and the like. But am saddened by the tactics and claims of DiMA and the RIAA.

What else can we do to help this thing along?

[myrtlebacker]

I think I see a little clearer now. There is a "performance license" and a "reproduction license". Apparently regular radio only has to pay the "performance license". Streamers apparently have to pay both. I assume the .58% of the RIAA would be the "reproduction license" for streams on top of the "performance license". That would make more financial and political sense to me.

As far as I can see, even if DIMA would prevail, it wouldn't mean that copyright holders get nothing, just the same but not more than from radio ?

http://www.billboard.biz/bbbiz/conte...7029310c4068a8

[Bob Olhsson]

Streamers are divided into two groups. They are on demand which is owning access to playing a particular file from a remote server and the equivalent of regular broadcasting where the broadcaster decides when and if the music will be played.

[mousdrvr]

The whole thing boils my blood but I can't even get my head around the hypocrisy of a ZERO valuation. What service do they claim to be offering, under what economic logic does the aggregation and distribution of something which has no value constitute value?

I'm shocked that this is even being considered even though I know I shouldn't be. Have the Judges all been bought and payed for?



-mous

[radiationroom]

Originally Posted by dwoz

They don't need us, there's a million people who can produce "music that sounds more-or-less listenable".

dwoz has a point. As long as there are myrids of people who will do anything (up to and including murder if necessary) to have their 15 minutes of fame, it will be an uphill battle to level the entertainment business playing field. The fact that there is a glut of supply on the musician's end drives down the income potential of everyone working in the biz. Scarcity brings power, and aspiring music stars are anything but scarce.

[radiationroom]

Originally Posted by Bob Olhsson

A compulsory license amounts to nothing but a congressionally imposed cap on what people can get paid. It made sense before the internet but technology has made the need for it obsolete.

Is it possible to file a lawsuit to get the compulsory licenses ruled as unconstitutional, at least in the USA? The GOP libertarian whiners are all about free markets, but the compulsory license is anything but free market. If Ron Paul would like my support, he ought to take up this issue.

[Bob Olhsson]

AN URGENT MESSAGE FROM MARILYN BERGMAN

Copyright Royalty Board Begins Critical Mechanical Rates Hearing

January 28, 2008

To All ASCAP Members,

Over the years, ASCAP has worked tirelessly to convince Congress and the courts that all songwriters, composers and music publishers are entitled to fair compensation for their copyrighted musical works. As you know, ASCAP represents the performing right, a large and growing part of your compensation. But mechanical and synchronization rights are also a critical element of your livelihood.

Today, the Copyright Royalty Board (CRB) begins a hearing that will determine mechanical rates for every songwriter and music publisher in America. It will be critical 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.

Our friends at The National Music Publishers' Association (NMPA) will be representing the mechanical right interests of songwriters and music publishers in this hearing. They will be fighting vigorously to protect those mechanical right 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 Media Association (DiMA). Both the RIAA and DiMA have proposed significant reductions in mechanical royalty rates that would be disastrous for songwriters and music publishers.

David Israelite, NMPA President and CEO tells us, "The current rate for physical phonorecords is 9.1 cents. The RIAA 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 to 5.5 cents per track, and DiMA is proposing even less. 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. And DiMA is taking the position that songwriters' and music publishers' mechanical rights should be zero, because DiMA does not believe we have any such rights!"

Irwin Robinson, ASCAP Board member and Chairman of the NMPA added, "Our opponents in this hearing are proposing a rate structure which would have devastating consequences for songwriters, composers and music publishers trying to make a living, now or in the future." The initial hearing will last four weeks, followed by a rebuttal hearing in May, and a final decision expected on October 2. Among the ASCAP writer members testifying at the hearing are Rick Carnes, Phil Galdston, and Board member Stephen Paulus.

And while all this is going on, ASCAP has been leading the fight for fair performance right compensation in Federal Court against DiMA members AOL, Yahoo! and RealNetworks. Our case has been heard and we expect an outcome this summer.

Clearly these are perilous times for those of us that create the music that generates profit for those that use our music. But remember this, there would be no profit without our musical compositions that they are fighting to use so freely!



Marilyn Bergman

[Bob Olhsson]

http://www.songwritersguild.com/crb_statement.htm

Songwriters Guild President's Statement on the
Start Of Proceedings That Could Determine the
Future Of The Songwriting Profession

January 28, 2008
Rick Carnes
Rick Carnes, President of The Songwriters Guild of America (SGA), commented today on the opening of hearings before the Copyright Royalty Board (CRB) that will set the "mechanical" copyright royalty rate for physical and digital uses of musical works.

"Today begins a critical proceeding that will determine whether songwriters will receive a fair return for their creative work or whether record companies and the digital music industry will succeed in destroying the songwriting profession.
"In an effort to disguise their proposal to cut songwriter income in half, the Recording Industry Association of America (RIAA) and the Digital Music Association (DiMA) have attempted to portray the CRB rate adjustment hearings as an intramural fight between large corporations that own both the major record labels and some of the largest music publishing companies. But no characterization could be further from the truth or the facts.

"Plain and simple, the CRB proceeding represents a fight between individual creators seeking merely to survive so that they may continue to practice the profession they love -- songwriting -- and those large corporations that seek to enhance the historic benefit they have derived from our artistic labors without providing us with fair compensation. The RIAA and DiMA strategy to portray corporate music publishers as their only adverse party is cynical and fraudulent. Everyone in the music business knows that songwriters create the musical compositions and that any ownership interests they transfer to music publishers still require that approximately two-thirds (2/3's) of the revenues received be returned to the songwriter. The music publishing profession consists largely of the promotion, collection and distribution of independent songwriter revenues. It is the fate of these revenues (these songwriter revenues) that the CRB will decide in the coming months. And songwriter organizations such as SGA will be vigilant in ensuring that their message is heard, because it is their money and their livelihoods that are truly at stake.

"I look forward to my testimony before the Copyright Royalty Board this week on behalf of The Songwriters Guild of America. And along with my fellow songwriters, including the Nashville Songwriters Association International (NSAI), I look forward to the opportunity to demonstrate the financial ruin that the RIAA and DiMA propose for our profession and to show that songwriters are not merely the poor stepchildren of the music publishing industry.

"I have faith that the CRB process will produce a fair return for songwriters, so that we may continue to practice our profession. American music will suffer greatly if that is not allowed, which would be contrary to the intent and purpose of the Copyright Act. I would respectfully encourage the Copyright Royalty Judges to review with caution the RIAA and DiMA attempts to focus the proceeding on music publishers. Even if some of the revenues from our proposed adjusted rate would flow initially to a large corporation connected to a record company, those revenues would then flow from that publisher to independent U.S. songwriters. This proceeding is really about songwriters and what we need to survive as creators. We look forward to demonstrating this critical point as the hearing proceeds."

[Bob Olhsson]

http://www.loc.gov/crb/proceedings/2...dex.html#trial

For those who'd rather read the facts than listen to opinion.

[daleandtheguitar]

Originally Posted by dwoz

If I read this correctly, and we're talking about a statutory rate...

Is that a typo? Seems like it to me....

D.