Songwriters are officially calling for greater mechanical-rate transparency from the Copyright Royalty Board.
Tennessee- and Toronto-based Music Creators North America (MCNA), “an alliance of independent songwriter and composer organizations,” just recently issued the mechanical royalty rate-related demand to the Copyright Royalty Board (CRB), in the form of a more than 1,000-word-long open letter.
The lengthy message is addressed to the CRB’s current three judges (Chief Judge Feder, Judge Strickler, and Judge Ruwe) and signed by the Songwriters Guild of America’s president, Rick Carnes, as well as MCNA officer and co-chair Ashley Irwin.
Worth noting here is that Spotify, Amazon, Google, and other streaming players scored a victory against the CRB in the mechanical-royalty space in September of 2020 – the same month that Librarian of Congress Carla Hayden (who’s in charge of appointing CRB judges) named Shira Perlmutter Register of Copyrights.
Also in September of last year, the Songwriters Guild of America and the MCNA took aim at backroom agreements between streaming services and major publishers.
Keeping these points in mind, the organizations emphasize at the start of their newest open letter that they have “deep concerns” about the “notice of settlement in principle” filed before the CRB by the major labels and the National Music Publishers’ Association (NMPA) earlier this year.
“Several highly conflicted parties to this proceeding have apparently agreed to propose a rolling forward to the year 2027 of the current US statutory mechanical royalty rate for the use of musical compositions in the manufacture and sale of physical phonorecords,” the text indicates.
But this proposal “should neither be acted upon nor accepted by the CRB without the opportunity for public comment,” the document proceeds, “especially by members of the broad community of music creators for whom it is financially unfeasible to participate in these proceedings as interested parties.”
From there, the authors state that they’re looking “forward [to] receiving the CRB’s instructions as to how to proceed,” before elaborating on the reasons behind their requesting the opportunity to comment publicly on the suggested arrangement.
The stateside statutory mechanical rate (for physical) has remained at 9.1 cents per composition and copy since January 1st, 2006 – with a two-cent mechanical rate, “in one of the most damaging and egregious acts in music industry history,” having remained in place between 1909 and 1978, the message notes.
“Nevertheless, the recording industry now seeks to repeat that history by freezing the 9.1 cent rate for an era that will have exceeded twenty years by the end of the Phonorecords IV statutory rate setting period.
“How can the US music publishing industry’s trade association [the NMPA], and a single music creator organization [the Nashville Songwriters Association International] (which represents at most only a tiny sliver of the music creator community) have agreed to such a proposal?
“The three major record companies who negotiated the deal on one side of the table have the same corporate parents as the most powerful members of the music publishing community ostensibly sitting on the other side of the table.
“How on earth can these parties be relied upon to present a carefully reasoned, arms-length ‘Settlement in Principle’ proposal to the CRB under such circumstances, fraught as they are with conflicts of interest, without at least an opportunity for public comment?” the organizations ask.
And towards its conclusion, the text highlights the perceived conflict of interest’s possible impact on future mechanical-rate negotiations for digital, indicates that “the creator community” lacks the finances “to achieve full participation in CRB legal and rate-setting proceedings,” and reiterates the overarching call for a public-comment period.
At the time of this piece’s publishing, the CRB hadn’t formally addressed the MCNA’s demands. It bears mentioning in closing that the entity didn’t hesitate to separate itself (and, in turn, its creators) from leading publishing associations.
“We wish to make it emphatically clear that regardless of how the music publishing industry and its affiliated trade associations may present themselves,” the MCNA letter states, “they do not speak for the interests of music creators, and regularly adopt positions that are in conflict with the welfare of songwriters and composers. Their voice is not synonymous with ours.”
Publisher interests and songwriter interests have never been aligned.
David Israelite (and the NMPA) is the proverbial sheep in wolf’s clothing when it comes to songwriters. He has always pursued objectives that will serve only to enrich publishers (most notably, gutting DOJ Consent Decrees to permit publishers to
withdraw digital rights from ASCAP and BMI and allow “direct licensing” to gain
label size advances and guarantees from the streaming services that will never be
shared with writers). The major publishers that empower the NMPA serve first their corporate boards who seek to increase quarterly earnings, which is best achieved by minimizing payments to songwriters.
Songwriters should coalesce around the only industry-wide advocates with some modicum of a fiduciary obligation to them — the PRO’s. They should pressure ASCAP and BMI to stand for them and arouse public awareness to the inequities of the rate setting system in general. While this CRB fight is not about performance income (the domain of the PRO’s), it symbolizes the entrenched norms that continue to starve songwriters.