NMPA (National Music Publishers Association)

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 procee ding 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[at]nmpa.org.

As always, we appreciate your support of the NMPA which allows us to wage
this fight on your behalf.