Late last month, the three-judge Copyright Royalty Board (CRB) rejected a proposed mechanical-rate freeze for physical formats (including vinyl and CDs) and permanent downloads. Now, the Association of Independent Music Publishers (AIMP) has officially responded to the decision.
Notwithstanding this 16-year freeze, which means that inflation has dramatically lowered the figure in terms of actual value, the National Music Publishers’ Association (NMPA), the Nashville Songwriters Association International (NSAI), and the Big Three labels jointly submitted a “notice of settlement in principle” to the CRB in March of 2021.
Said notice of settlement proposed that the CRB should keep the mechanical rate the same through the 2023-2027 period. Additionally, the NMPA and the major labels indicated in this document that they had finalized “an agreement in principle concerning a separate memorandum of understanding addressing certain related issues.”
Predictably, songwriter organizations promptly took aim at the proposal and the “agreement in principle,” demanding greater transparency from the CRB given the inherent conflict of interest between the major labels (which own massive publishing companies) and the NMPA. Execs from each of the Big Three’s publishing divisions sit on the NMPA board.
And as mentioned at the outset, the CRB took notice of these far-reaching concerns by rejecting the proposed mechanical-rate freeze in late March. “Even if the sales figures were otherwise, however, sixteen years at a static rate is unreasonable under the current record, if for no other reason than the continuous erosion of the value of the dollar by persistent inflation that recently has increased significantly,” the CRB relayed.
The Association of Independent Music Publishers sent a joint statement on the matter (specifically from national chair John Ozier, Los Angeles chapter president Teri Nelson Carpenter, and New York chapter president Michael Lau) to DMN today.
“The AIMP supports the recent decision by the Copyright Royalty Board (CRB) to unfreeze the 9.1-cent mechanical rate for physical music sales and allow it to come up for debate during the upcoming Phono IV trial,” the entity said. “Even more promising are signals that the courts feel an increase in the mechanical rate is warranted, given the tremendous contributions of songwriters and the independent music publishing community to our culture and well-being.
“Like other industries and the general economy that adjusts with the trends, creators deserve the same respect and consideration. We encourage the CRB to follow through with an increase in the mechanical royalty rate, and stand with organizations such as the National Music Publishers[’] Association (NMPA) that will be fighting this case in front of the judges,” concluded the AIMP.
Of course, the CRB in its remarks about the suggested mechanical-rate continuation described as “a warning flag” the “vertical integration linking music publishers and record labels.” Plus, Songwriters Guild of America president Rick Carnes said of the CRB verdict: “This decision scuttles a very bad royalty deal proposed by the NMPA, the NSAI and the major music publishers with their own, affiliated major record companies.”