This email went out today to Sony Music Publishing songwriters from Sony CEO Jon Platt, a great records man. Just like their leadership role in bettering recoupment structures for streaming, Sony is taking the lead in driving a fair settlement for physical mechanical rates. Ideally, the new increased rates will fix it so that the long-frozen rates don’t distort publisher revenues from the booming vinyl market where supply has not come close to meeting demand.
I really appreciate Jon’s support and look forward to putting this rate increase behind us and enjoying a far more collaborative approach to the CRB process.
I am writing to share an important update regarding the Copyright Royalty Board’s Phono IV proceedings. In December I mentioned that this rate-setting process is currently the most critical issue facing songwriters and music publishers in the United States.
Every five years the CRB sets the U.S. mechanical royalty rates for both physical (CDs, vinyl) and digital formats (streaming and downloads). At the beginning of the Phono IV process, the National Music Publishers’ Association (NMPA) and major record labels entered into a settlement agreement that fixed the physical and download rates at the current 9.1 cents. Physical and downloads make up a small percentage of the mechanical royalties that songwriters receive, and a decision was made to focus our resources on fighting for higher streaming rates – the dominant and growing format.
Yesterday, after hearing the objections of songwriters, the CRB rejected that settlement. The CRB judges listened to the voices of songwriter advocates who made a strong case for higher physical and download rates and agreed that they should be increased. While it is still too early to predict the outcome, we are pleased that the CRB is receptive to higher rates, and we stand by these songwriter advocates and applaud their grassroots efforts and achievements.
Moving forward, our primary focus will continue to be on the fight for increased streaming rates which make up most of songwriters’ mechanical income. Streaming holds the promise of even greater financial opportunities for songwriters, and we are hopeful for a positive outcome when the CRB process concludes.
I will reach out directly with further updates on the CRB. Until then, please don’t hesitate to contact us for more information.
Chairman & CEO, Sony Music Publishing