On Monday, January 28th, the Copyright Royalty Board (CRB) began what will be four weeks of hearings.  The CRB will hear testimony from interested parties on both sides of issues which will ultimately determine the statutory mechanical rates for songwriters and music publishers. The CRB sets these rates periodically, but these particular hearings are more critical than usual 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.

On one side of the issue is the Recording Industry Association of America (the “RIAA”), which represents the major record labels’ interest,  is proposing that the current rate of 9.1 cents per mechanical copy produced be reduced to 6 cents!  That reduction would roll back the rates to, well, let’s just say to well before the birth date of most of the college students the RIAA is prosecuting across the country for downloading.  For digital reproductions, the RIAA is proposing an even lower rate of 5 to 5.5 cents per track.

On the other side of the issue, representing the publishers and songwriters, is the National Music Publishers Association, the NMPA.  In contrast, the NMPA proposes increasing the statutory rate to 15 cents, and for digital reproductions, a rate of the greater of 12.5% of revenue, 27.5% of content costs, or a micro-penny calculation based on usage.

This are important issues, and I’ll try to keep you posted here on Law on the Row as developments happen.