Vinyl records, one of several physical formats judged as ‘de minimis’ by the NMPA (photo: Bru-nO)
The National Music Publishers’ Association (NMPA) tried valiantly to serve the labels, its real patrons, in the latest round of mechanical royalty rate proceedings before the Copyright Royalty Board. But, alas, the CRB rejected the NMPA’s pact with the labels to freeze the current rate of $0.091, set in 2006, for another 5 years.
The CRB ruling is a treasure trove of findings that should forever disqualify the NMPA from pretending to protect and enrich songwriters. Could its songwriter gaslighting days be over?
Here are the standout nuggets:
The NMPA argued that, since download and physical record licenses comprise only 15% of the total mechanical licenses, they are not worth the legal fees necessary to fight for an increase, especially since judges in prior hearings accepted low rates.
“It is too low, it is not fair, it is not enough,” NMPA president and CEO David Israelite recently stated, referring the 9.1 cent rate. “We are not minimizing the importance of physical, but let’s say we get a 10% increase, we would spend more on [litigation] to get that rate. So the decision was made to focus on streaming rates where the real fight is and not get into a fight on 9.1 cents.”
The CRB saw it differently. “Royalties from [physical records] are not inconsequential to the rightsholders,” it ruled. The Board also seemed to chastise the NMPA for treating these royalties as “de minimis” and a “throw away negotiating chip to encourage better terms for streaming configurations.”
The NMPA was unconcerned that the nominal rate set 15 years ago is worth less today just by virtue of normal cost of living factors.
The CRB considered it very relevant. The Board computed that the “application of a consumer price index cost of living increase, beginning in 2006, would yield a statutory … royalty rate for 2021 of approximately $0.12 as compared with the $0.09 that prevails, which adjustment … represents a 31.9% increase.”
The NMPA basically asserted that the terms of its “private contract” with the labels that preceded their joint “settlement” to keep the mechanical rate static was nobody’s business.
The CRB begged to differ. “It appears rather to be an attempt to modify the application of the terms of statutory licenses they allegedly are negotiating in the context of a rate-setting proceeding under the Copyright Act.” That’s judicial speak for “something’s rotten in Denmark.”
I’m reminded of a quote given many years by the larger-than-life music publisher, Marty Bandier, in a Billboard Magazine puff-piece about the NMPA when he exclaimed, “There’s no ‘S’ in ‘NMPA,’ but it does a great job of representing songwriters, too.”
The CRB concluded quite the contrary: the NMPA does a lousy job of representing songwriters. So, it’s perfectly appropriate to leave out that ‘S.”