On October 2, 2008 in Washington, the Copyright Royalty Board announced new mechanical rate terms for physical products (such as CDs), permanent downloads (such as iTunes) and ringtones.  Songwriters and music publishers will be paid a rate of 9.1 cents for digital downloads. The CRB judges also ruled that the rate for physical products will remain at 9.1 cents.  Each will be subject to an overtime rate. The CRB judges also established for the first time a rate of 24 cents for each ringtone subject to the Section 115 mechanical license.  Furthermore, music publishers will have the right to seek a 1.5 percent late fee, calculated monthly.

The Board also adopted the terms of an historic industry settlement on rates for two other types of services – interactive streaming (such as some Napster services) and limited downloads (such as Rhapsody To Go). Details of that agreement between NMPA, the Nashville Songwriters Association International (NSAI),  the Songwriters Guild of America (SGA). the Recording Industry Association of America (RIAA) and the Digital Media Association (DIMA) were announced last week.

The announcement is the culmination of a trial that began in January, and marks the first time the Board has established mechanical royalty rates for songs distributed digitally.

The Songwriters Guild of America (SGA) said, they were gratified that the CRB has adopted these rates, which will assist music creators in their quest to make a living from their profession.

David Israelite, President and CEO of the National Music Publishers’ Association – represented songwriters and music publishers before the Board. He hailed the decision as a positive development for all songwriters and music publishers. He adds, “Today’s announcement is the culmination of months and months of tireless work by staff and outside counsel on behalf of music publishers and songwriters, and I want to acknowledge and thank them for their commitment.”

This was an excerpt of the [1] NMPA Hails Copyright Board’s Rate Decision