MusicDish e-Journal - February 23, 2018
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DiMA Requests That Copyright Office Clarify If Section 115 Mechanical License Applies to Internet Streaming
By Mi2N
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Digital music services, music publishers and Congress have been seeking for years to resolve complex legal issues that have hampered digital music growth and innovation. One of these issues is whether internet radio or any form of digital streams intended to be enjoyed as immediate performances require a license under Section 115 of the Copyright Act, which has historically been viewed as relating to the distribution of musical compositions that are part of sound recordings. Today DiMA has asked the Copyright Royalty Board to formally request that the U.S. Copyright Office resolve this issue.

Digital music services believe that digital performances are like radio and should require a performance license only. Music publishers historically have asserted that "on demand" or "interactive" digital performances are subject to the both the public performance right and a publishing "mechanical" right (a combination of the reproduction and distribution rights that are generally granted together for the production and distribution of CDs or digital downloads).

Disagreement about the scope of the rights needed has impeded digital music innovation for almost ten years - since DiMA first raised it in Congressional testimony in June 1998, since the recording and music publishing industries first submitted the question to the Copyright Office in March 2001, and since the Copyright Office addressed the issue (but did not resolve it) in a report published in August 2001.

Stakeholders and Congress tried hard to resolve this issue amicably in legislation that stalled in 2006 (the Section 115 Reform Act) and continue to do so in connection with Section 115 royalty proceeding that is ongoing before the Copyright Royalty Board. However, the Copyright Royalty Judges are about to determine royalty rates for digital mechanical rights utilized by music services during the years 2001-2012, and so clarifying whether the royalty should be applied to Internet radio and other digital music streams is now necessary and unavoidable.

The Copyright Act sets out a "novel question of law" process to address substantive legal issues that arise during proceedings before the Copyright Royalty Judges. The Act requires the Copyright Office to decide these issues within 30 days of referral by the Copyright Royalty Judges. DiMA looks forward to this interpretation of current law being resolved.

Regardless of how the Copyright Office should decide, DiMA remains committed to working with publishers, record companies and Congress to ensure that public policy promotes legal, royalty-paying music innovation and creators' welfare.

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