The eCRB Phonorecords IV Comment

July 23, 2021 – Via Electronic Delivery

Copyright Royalty Judge David R. Strickler
Copyright Royalty Judge Steve Ruwe
Chief Copyright Royalty Judge Jesse M. Feder

US Copyright Royalty Board
101 Independence Ave SE
Washington, DC 20024

To Your Honors:

Musicians for Musicians (MFM) is an association of professional musicians located in New York. We support the sustainability and dignity of working musicians, and we are troubled by the settlement agreement between private parties in Phonorecords IV, which concerns all musicians. We depend on, and many of us are, composers and songwriters; primarily independent creators. We are not represented by the private, non-transparent settlement agreement currently before the CRB.

The unfairness of frozen rates is an issue for which we seek redress. Compulsory mechanical licensing was established at a rate set by Congress which remained frozen for 70 years, from 1909 to 1978, at 2¢. This was unfair. In 2006, after it was adjusted for inflation to 9.1¢, it was again frozen for 20 more years. To remain frozen for another 5 years, while musicians are already struggling under pandemic conditions, is patently unfair.

The Nashville Songwriters Association Int’l (NSAI), which claims to represent music creator interests in the proceedings, also claims that physical and download mechanical royalty collections will represent less than 1% of the market within a short period of time. This claim demands further evaluation. Industry trade groups, both RIAA and IFPI, report the current market share of physical and download product as 12-20% of the market. As independent musicians relying directly on support of our audiences, we are dismayed by unviable streaming rates. For survival, we strongly rely on the sale of physical product, and in our segment of the industry, these sales are rising significantly and we expect them to continue rising.

Further, digital streaming services, which regard our demand for fairness as “entitled”*, are already using the potential frozen mechanical royalty rate on physical and downloads as a basis for suggesting freezing or reducing on-demand streaming royalty rates.

The secret agreement should be binding only on the parties who opt into the secret agreements, while everyone else should be subject to a different royalty rate determined by equitable and fair marketplace conditions and principles.

Sohrab Saadat Ladjevardi (MFM President)