Rich Fiscus
4 Mar 2008 2:40
The RIAA is trying to convince the U.S. Copyright Royalty Board (CRB), which is responsible for setting the mechanical (automatic) royalty rates paid for music publication, that the flat rate calculations ($0.91 per song) used to pay songwriters should be changed to a percentage of the label's revenue. It was about the same time last year that the CRB made headlines by adopting a controversial proposal by SoundExchange, who collect royalties for a number of labels including every RIAA member, setting a flat royalty rate for webcasters.
In the wake of last year's CRB decision a number of webcasters have indicated that the royalties would quickly exceed revenue, resulting in the near demise of the entire industry in the U.S. This argument fell on deaf ears in the CRB, as they chose to adopt the SoundExchange proposal without amendment.
Ironically this mirrors the RIAA's argument. They claim that due to a failing CD industry, and lower revenues from online distribution, they should only be charged based on what they earn. Of course, as the artists who are waiting for their cut of the hundreds of millions of dollars collected last year when various online services settled copyright infringement lawsuits can tell you, in the entertainment industry every project officially loses money until the artists' lawyers and accountants prove otherwise.
If the CRB decides to go along with the RIAA proposal they risk a backlash from Congress, who have so far not had the resolve to overturn webcaster royalties through legislation. However, if the RIAA's request is granted they'll effectively be giving CRB critics ammunition.