A2IM Applauds the U.S. Copyright Office’s Decision to Not Endorse Multiple Rates Based on Licensor for Sound Performance Statutory Licensing, However A2IM Remains Concerned As Multiple Rate Question Persists

NEW YORK, November 30, 2015 -- In her circulated opinion, the Register of Copyrights, Maria Pallante, said that she would not consider now the question of whether the Section 114 statutory license for digital and internet radio performances permits multiple rates segmented by licensor, for example, one rate for the biggest companies and another rate for everyone else. The Copyright Royalty Judges (“CRJs”) had referred this question to the Register in September, in connection to the ongoing Web IV rate proceeding set to end in December. The Web IV rate proceeding will determine the rates that webcasters like Pandora, iHeart Radio and Sirius XM are required to pay to labels and artists when they perform their recordings.

The Register notes that “no participant in the proceeding in fact proposed rates or terms that differentiated among licensors and, accordingly, such a structure was not understood to be a subject of litigation” and that “no party has identified any basis upon which the CRJs could reasonably rely to adopt a differentiated rate structure.”

A2IM’s position remains, as we filed in response to this referral question when it first arose, that only a single rate for all licensors is permitted by the sound performance statutory license. While Pallante’s opinion falls short of endorsing our viewpoint at this time, we commend her for advising the CRJs that it would be an over-reach, on due process grounds, to apply multiple rates segmented by licensor to the current Web IV rate proceeding.

A2IM Vice President/Interim President Molly Neuman:

““This is a win for independents everywhere, including the artists and the independent publishers who stood with us on this issue. However, the battle for a fair and equitable licensing system continues, as long as the multiple rate question remains unsettled for future proceedings and companies like Sony and Universal work towards getting government to enshrine an unfair advantage for just the biggest companies.”

A single rate in collective licensing ensures a fair and transparent market for all music creators. A recorded song is valued as a song, regardless of the size or market clout of the label that releases it. A single rate also protects the efficiencies that the statutory regime brings to digital music licensing, to the benefit of all participants.

A2IM Board Member and Beggars Group Chairman Martin Mills released this statement in response:

“This is excellent news for indies, through A2IM, and performers, who argued jointly against multiple rates in that the current framework maintains the essential level playing field in collective licensing and avoids a costly administrative nightmare. However, the danger remains for the future, and the fact that we have the two largest labels arguing that their music is worth more than anyone else’s simply because of their scale remains a huge threat to the interests of performers and labels as a whole, and to principles of fair treatment within the industry.”

ABOUT A2IM

Celebrating its 10th anniversary, A2IM is a 501(c)(6) not-for-profit trade organization headquartered in New York City representing a broad coalition of over 350 Independently-owned American music label small and medium-sized enterprises (SMEs). The organization represents Independents’ interest in the marketplace, in the media, on Capitol Hill, and as part of the global music community, as well as, supports a key segment of America’s creative class and the small business community that represents America’s cultural and musical genre diversity. Billboard Magazine, using Nielsen SoundScan data, identified the Independent music label sector as 35.1 percent of the music industry's U.S. recorded music sales market in 2014 based on copyright ownership, making Independent labels collectively the largest music industry segment.

The organization's board of directors are composed of the following: INgrooves General Manager Amy Dietz; Razor & Tie President Craig Balsam, Concord Music Group President Glen Barros; Smithsonian Folkways Director of Marketing & Sales Richard Burgess, Epitaph/Anti- General Manager Dave Hansen, Beggars Group Chairman Martin Mills; Dualtone Music Group CEO/Co-Founder Scott Robinson, Kill Rock Stars Owner/President Portia Sabin, Ole SVP Digital Jim Selby; Tommy Boy Owner/CEO Thomas Silverman; and Secretly Group Co-Founder/Co-Owner Darius Van Arman. A2IM's president's advisory committee is Curb Records Vice President Taylor Childress; Red House Records Vice President Chris Frymire; and Innovative Leisure Co-Owner Nate Nelson. A2IM's Worldwide Independent Network lead representative is Hopeless Records Owner Louis Posen.

For more information on A2IM, please visit a2im.org.