The ongoing dispute between Sony Music Entertainment and the National Music Publishers’ Association (NMPA) on the rate proceedings for mechanical royalties has finally come to a resolution.
The NMPA, the Nashville Songwriters Association International (NSAI) and SME filed on October 28 a joint agreement with the Copyright Royalty Board (CRB) which the three parties said would resolve "open issues among them concerning the ongoing rate proceedings for mechanical royalties payable under Section 115 of the Copyright Act for the period between 2018 and 2022."
As opposed to its competitors Warner Music Group and Universal Music Group, as well as indie labels body A2IM, Sony Music intended to take part in the rate proceedings before the Copyright Royalty Board, which under Section 115 of the Copyright Act, would determine the rates for the period 2018-2022. SME was determined to file comment in the rate setting process that did not concern directly the record company, such as rates paid by digital services and other non-recorded music entities.
The agreement clinched by SME is similar to NMPA’s previous settlement with WMG and UMG, including a roll-forward of rates in Subpart A of the 115 regulations, covering physical products, digital downloads, and ringtones (i.e. mechanical rates on recordings that Sony will pay directly). Under the terms of the settlement, SME will withdraw from Subparts B & C, which applies to on-demand streams (i.e. usage of music that does not involve directly Sony). Additional terms were not disclosed.
At the end of July, the NMPA and the NSAI filed a joint motion to exclude Sony Music Entertainment from participating in the next round of rates proceedings set up by the CRB. In an interview with Music Week, NMPA President/CEO David Israelite said at the time that he was still hoping that SME would “do the right thing,” and withdraw from the proceedings.
In a joint statement commenting on the deal, NMPA, NSAI and Sony Music said, “The parties are pleased to have reached a mutually beneficial settlement in this matter. Sony Music and the music publishing community value their relationship, and as the music marketplace continues to evolve it is more important than ever that the music community stands united to demand fair market pay for songwriters and artists from all digital music services. We look forward to working together to pursue that shared objective.”