Harry Fox Gets Nasty with the Majors, Biting the Hand that Feeds Them
The New Year kicks off with the bitch-fight of the century: The RIAA verses
The Harry Fox Agency (HFA). Two companies that have enjoyed unprotected sex
with each other for about 25 years are now having a lover's spat. And it all
comes down to what else...? Money. In dispute: Internet radio royalties and
how to divvy up the new revenue stream. He wants the new stereo, she needs
shoes like nobody's business.
The money comes from the revenue generated from streaming songs across the
web. Soon a new royalty will be attached to this privilege, the rate for
which is the current business before the Copyright Office of the United
States. Both the RIAA and the NMPA (National Music Publishers Association,
a division of Harry Fox) in the past few months have filed petitions to
establish separate statutory royalty rates for the downloading and streaming
of music on the Internet. It seems the two entities can't agree on what that
rate should be or how the fee should be split between sound recordings (which
the RIAA represents) and the underlying composition (which the NMPA/Harry Fox
This is the start of a war. Look for lots of nasty skeleton-outing
sound-bytes in the media over the next few months. This one will definitely
get nasty as the potential pool of cash is well into the nine figures.
(That's a lot of shoes.)
Regardless of who wins this argument, the losers will be Internet radio
stations, most of who will likely be forced out of business rather than pay
this new royalty.
Interestingly, producers may find themselves in a new position of power, in
that they are considered "Authors" of SRs, and these new royalty streams
affect them significantly. Count on seeing more stringent language
concerning the transfer of authorship rights in your recording contracts.
HFA - www.nmpa.org/hfa.html
NMPA - www.nmpa.org
RIAA - www.riaa.com
US Copyright Office - www.copyright.gov