Royalty Rates Going Down?

Royalty Rates Going Down?

The Recording Industry of Association of America (RIAA) is demanding that a panel of copyright judges lower the rate of royalties given to music publishers and songwriters.

The RIAA believes that the current rate of royalties is "out of touch with reality" and feels it's time for the government to take action. The government hasn't adjusted the royalty rate since 1981 forcing music publishers, songwriters and labels to make their own deal. The RIAA cites that the rate changes are needed because the music industry has changed in the past 25 years.

"While record companies and music publishers were able to agree on royalty rates during that 25-year period, the assumptions on which those decisions were based have changed beyond recognition," the RIAA said in a statement.

According to the RIAA, though piracy runs rampant in the music industry, music publishers have seen a hike in royalties due to ringtones sales.

"Mechanical royalties currently are out of whack with historical and international rates," RIAA executive VP and general counsel Steven Marks explained. "We hope the judges will restore the proper balance by reducing the rate and moving to a more flexible percentage rate structure so that record companies can continue to create the sound recordings that drive revenues for music publishers."

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