Under a decision handed down by the Copyright Royalty Board (CRB), the mechanical royalty rate that digital retailers like iTunes must pay songwriters and music publishers will stay the same - 9 cents per song. In deciding to freeze royalty rates, the CRB rejected both the publishers' petition for a 66% rate hike and digital retailers' request to cut royalty payments to songwriters by 55%.

The CRB also established for the first time a rate of 24 cents for each ringtone subject to the mechanical license, and gave publishers the right to seek a 1.5% late fee, calculated monthly.

The board's decision follows a recent agreement between digital media firms, record labels and music publishers on mechanical royalty rates for streaming and limited downloads on subscription and ad-supported services.

"These events will bring clarity and order to an environment that for the past decade has been hampered by litigation and uncertainty on all sides," said David Israelite, president and CEO of the National Music Publishers' Association (NMPA).

"During this challenging time for the music industry and digital stores and services, we are pleased with the CRB's decision to keep royalty rates stable for the next five years," said Jonathan Potter, executive director of the Digital Media Association (DiMA), which represents digital music retailers like Apple, Amazon and Best Buy.

"Keeping rates where they are will help digital services and retailers continue to innovate and grow for the next several years, which will benefit songwriters, artists, labels and publishers."

For the South African music industry, these are interesting developments as Collection societies and Mobile and Digital Service Providers continue to lock horns over mechanical rates for digital usages.

Related Links:

http://www.nmpa.org/pressroom/showrelease.asp?id=165

http://www.dmwmedia.com/news/2008/10/02/copyright-royalty-board-rejects-rate-hike-songwriters

http://snipurl.com/413wq (previous coverage)

http://www.digmedia.org

http://www.loc.gov/crb