NMPA, NSAI Propose 2018-22 Mechanical Rates for Streaming Services, Limited Downloads

The National Music Publishers Association and Nashville Songwriters Association International jointly proposed Tuesday that interactive streaming and limited downloads of a song should be assessed mechanical royalties for 2018-22 that are the greater of a $0.0015 per-play rate or a flat $1.06 per-end user royalty per month. Days earlier, the two groups reached a settlement with Sony Music Entertainment in which the label agreed to a proposal for the Copyright Royalty Board to maintain existing mechanical rates for CDs, digital downloads and ringtones. Sony agreed to withdraw as a party to portions of the CRB’s 2018-22 mechanical rate-setting as it related to on-demand and streaming services (see 1610310060). The NMPA/NSAI rate proposals for streaming mechanical royalties “properly align royalties with economic value and consumption and balance the interests of licensors and licensees in achievement of the policy objectives” in Copyright Act Section 801(b), the groups said in a filing. “As demonstrated by the Copyright Owners’ economic witnesses, the proposed rates are not merely reasonable, but are well below the expected rates that would be obtained in an unconstrained market, by reference to the most comparable benchmarks available.” The existing licensing model “is structured as a percentage of revenue, and we must change this to a structure where songwriters are paid in accordance with the inherent value -- and popularity -- of their work instead of the success of a given service’s business model,” said NMPA CEO David Israelite in a statement. “We are laser-focused on achieving royalty rates that are set on a per-play and per-user basis.”