Index statutory mechanical royalties before inflation hits.Why Songwriters Should Care About Inflation Protection for Mechanical Licenses — Music Tech Solutions
By Chris Castle
If you’ve followed the frozen mechanicals debate, you’ll know that one of the asks from commenters was that the Copyright Royalty Board not restrictively parse who could and could not comment on the private party settlement that the settling parties asked the CRB to impose on the world.
In case you’re not someone who reviews the Federal Register or the CRB docket on the Friday before a national holiday long weekend, I’m pleased to let you know that the CRB has published for comment just the draft regulations that private party settlement proposed (with a couple of ministerial changes by the CRB).
Comments are due no later than July 26, 2021. Comments need to reference docket number 21-CRB-0001-PR (2023-2027) and can be submitted online through eCRB at https://app.crb.gov according to the Federal Register notice filed by the CRB–if you have registered with the CRB and been approved for an account.
Of course, if you just click on that link provided in the Federal Register notice, the link just takes you to the landing page for the electronic document system at the CRB. There’s no obvious way to know what you had to do in order to file a public comment. I’m sure this oversight is not designed to confuse you, but just another example of the rarefied air they breath at the CRB. If you are used to using Regulations.gov to comment on regulatory agencies like the CRB, you will find this process a bit more complicated and bureaucratic.
As far as I can tell, you register at this link: https://app.crb.gov/register/index and complete the required fields only. They might have told you that in the Federal Register, but you know, busy people. I emphasize the required fields because when you first look at it you may think that only lawyers can register because the CRB asks for your bar number which you probably don’t have. I don’t know why they do this unless they think that lawyers will be the most frequent users, but don’t be put off. You don’t have to be a lawyer to comment and you only have to provide the required fields and get your email address confirmed in order to start the account registration process.
Eventually your account will be activated allowing you to “File a Document”. Naturally, all the days that you have to wait for CRB to activate your account will count against the 30 day comment period and apparently all calendar days will be counted against your 30 days including the days that CRB are closed like the upcoming national holiday on July 5.
So the punchline there is that if you are planning on filing a comment or think that you might be interested, register for an account right away and do not leave your ability to be heard to the tender mercies of the government’s technical support staff.
It is also worth noting that the CRB clearly states that once adopted by the CRB, the private party settlement will apply to everyone:
If the Judges adopt rates and terms reached pursuant to a negotiated settlement, those rates and terms are binding on all copyright owners of musical works and those using the musical works in the activities described in the proposed regulations.
So they are telling you very clearly that the private party settlement and frozen mechanicals will be the law of the land if the CRB says so. Even though the CRB is all powerful when it comes to your rates, it is important to comment so that there is a full record for appeals.
It is one thing for the CRB to adopt a private party settlement that applies to every songwriter in the world when they reasonably believe that the settlement represents the consensus view.
It’s quite another thing for them to adopt that settlement when they have clear evidence that it does not. And unlike other government regulatory agencies, the way this game is played is that the CRB doesn’t have to have a consultation with anybody, they don’t hold round tables, they don’t do any inquiry. The only people they really have to listen to are the people who can afford to get in front of them which is a very, very expensive process.
These people are referred to by the CRB as the “Participants” and focus on this sentence in the Federal Register notice:
The Judges may decline to adopt the agreement as a basis for statutory terms and rates for participants not party to the agreement if any participant objects and the Judges conclude that the agreement does not provide a reasonable basis for setting statutory terms or rates.
The emphasis on “participants” is in the original–meaning the Judges of the CRB want to make sure you understand that an objection by a mere member of the public is not enough for them to reject a private party settlement under their rules. So any participant in the proceeding who objected in the proceeding should probably also object in the comments just to be sure that they don’t get game-ified.
So what to comment on? Most obviously the frozen rates and that’s a common sense thing given all the reporting on the vinyl boom that entirely undercuts the idea that physical is unimportant (of course Big Tech would like everyone to believe that vinyl is unimportant so they have a carotid crushing stranglehold on songwriters).
But you may also want to ask the CRB to require that the settlement document and the side deal referenced in the proposed settlement also be disclosed so that everyone knows what the consideration is for freezing the rates.
Plus as many commenters astutely raise, how can you approximate a free market rate using a “willing buyer/willing seller” standard when the willing buyer and willing seller are essentially the same entity? This is particularly true when songwriters have publishing deals and have essentially given up their “willing seller” status. Like so many other sloppy drafting glitches in Title I of the Music Modernization Act, this one should have been obvious from the beginning. And maybe it was.
Public comments are a way to get actual market conditions in front of the CRB because there was absolutely none submitted as part of this proposed private party settlement.
More to come on this, but the clock is ticking for any commenters. And if this entire CRB process seems overly complex and bureaucratic compared to even the Copyright Office rulemakings, it does raise the obvious and separate question about why it’s done this way in the first place and why there isn’t an independent advocate for independents.
[Editor Charlie sez: Ironic that this news comes as majors are attempting to freeze vinyl mechanical royalties for songwriters for another five years]
In just three days, Taylor Swift’s Evermore has set the record for the biggest sales week for a vinyl album in the U.S. since MRC Data began tracking sales in 1991.
The vinyl edition of Evermore, released on May 28, sold over 40,000 copies in the U.S. through May 30, according to initial reports to MRC Data. That beats the record for an entire single-week of vinyl sales, held by the debut frame of vinyl devotee Jack White’s Lazaretto, when it launched with 40,000 copies in the week ending June 15, 2014.
Read the post on Billboard