Sweeping Changes in Royalties: U.S. Copyright Releases Recommendation

Pictured: U.S. Register of Copyrights Maria Pallante, NSAI’s Sr. Director of Operations Jennifer Turnbow, President Lee Thomas Miller, past-President Steve Bogard and Legislative Co-Chair Roger Brown in Executive Director Bart Herbison’s office An EXECUTIVE SUMMARY of the much anticipated report from the U.S. Copyright Office that contains their recommendations on changes in the music-licensing-rate setting procedures for the United States can be found here. This is a summarization of report that is over 200 pages long.

The report suggests many changes NSAI has sought for years with several recommendations that would benefit songwriters and take us closer to a “free market” environment when it comes to setting royalty rates. These are the “Guiding Principles” for the recommendations as outlined by the Copyright Office:
-Music creators should be fairly compensated for their contributions.
-The licensing process should be more efficient.
-Market participants should have access to authoritative data to identify and license sound recordings and musical works.
-Usage and payment information should be transparent and accessible to rights owners.
Copyright Office recommendations include the creation of MUSIC RIGHTS ORGANIZATIONS (MRO’s), very similar to today’s performing rights societies.

MRO’s would: be able to collect mechanical and performance royalties; ASCAP and BMI rate courts would be eliminated—rate setting would move to the Copyright Royalty Board; and standards that govern how rates are set would be more songwriter friendly. Under this structure publishers who do not agree with rates set by the CRB can withdraw the digital portion of their rights from the MRO and try to negotiate their rates in a free-market environment. In that instance songwriters could still choose to have their royalties paid directly by the MRO instead of through the publisher. These are ONLY recommendations. We are still waiting on a separate report from the Dept. of Justice regarding the future of ASCAP and BMI Consent Decrees. And please understand that this report is one part of a process that is still going to take a few years to determine.