Mechanical Licensing Battle Royale Gets Started

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When it comes to mechanical licenses, recording labels want less, publishers want more, and digital music providers want none.

And that is the underpinning for the latest shouting match in Washington this week.

Just recently, online music providers argued that on-demand streams should not require a mechanical license, traditionally designated for song distribution and duplication.  “Digital music services believe that digital performances are like radio and should require a performance license only,” trade group DiMA declared in early January.

Publishers considered that a snub, especially given earlier agreements to pay mechanical licenses.  Either way, initial proceedings are now being handled by the US Copyright Royalty Board (CRB).

But the mechanicals fight goes beyond digital, and recording industry interests are also involved.  According to the Hollywood Reporter, the RIAA has now filed paperwork with the CRB to lower mechanical rates to 8 percent of total revenues, instead of current rates of 9-cents per song.  A motivation for the request is the quickly-sinking fortunes of recording units within major labels, offset in part by relatively stable publishing revenues.