"Mechanical Rate Increase and Digital Royalties Update"
THE NEW mechanical royalty rate for physical phonorecords under Section 115 of the U.S. Copyright Act takes effect January 01, 2002. The previous mechanical rate of .0755/unit is replaced by the new rate of .08/unit--.0155/minute.
The next scheduled physical record compulsory rate change to .085/unit--.0165/minute will take place January 01, 2004.
We are pleased to note the Harry Fox Agency, of which Trowbridge Publishing is a Publisher Principal, is expanding licensing for on-demand downloads to independents as well as RIAA (Recording Industry Association of America) major labels.
For those of you who have followed the tumultous RIAA majors vs. independents battles over digital turf and survival on record store shelves, (see News Archives http://TrowbridgePlanetEarth.com/T2/T2C1/T2C1Cat.html) HFA's inclusion of independents such as Listen.com and Streamwaves.com may be welcome news and may portend healing in the ranks of the music industry.
In a nutshell the RIAA, HFA, and independents are reaching agreement that mechanical licensing of on-demand and limited downloads is necessary and benefits everyone, from the songwriter and artist to publishers and record labels.
Internet subscription services will be issued under the compulsory license provisions of the Copyright Act. Record labels will pay such royalties retroactively. Record labels have paid HFA $1M in nonrefundable advance royalties for digital downloads. Exact royalty rates are still under negotiation.
Streamwaves.com is a subscription on-demand streaming service. Streamwaves will pay .10 per song encoded, and either 10% of Streamwaves' adjusted gross revenue (AGR) or $1.00/month per subscriber.
Gary L. Churgin is the new Harry Fox Agency (HFA) President and CEO. He speaks today, 01/16/02, at an Association of Music Publishers (AIMP) meeting in Los Angeles, CA.