More squabbling between the recording and publishing sectors of the music industry now - though this time the squabble is across the Atlantic. And, to be more precise, the squabble is now over because the US Copyright Office has spoken.
The squabble centred on the licensing of music for ringtones. The US record labels, who have only relatively recently got into the ringtone space big time, have been arguing of late that ringtones should be covered by the compulsory licence provisions in section 115 of the US Copyright Act. Basically this would mean that rather than having to make specific arrangements with music publishers every time they want to use a composition for a ringtone, record labels or ringtone firms could automatically use any previously released compositions for ringtones, providing they pay the publisher a set royalty fee, a fee that is fixed by the Copyright Royalty Board.
The labels say this would simplify the ringtone production process and reduce the amount of bureaucracy involved - which, they argue, would save money, to everyone's benefit. However, the publishers aren't keen on the idea, because it takes a lot of control away from them in the ringtone domain. Currently they can set their own royalty rate for ringtones, dependent on demand or other market factors. Plus, crucially, they can refuse to allow a track to be used at all.
With this debate gaining momentum in the US industry, the Copyright Royalty Board last month asked the US Copyright Office to clarify whether ringtones should or should not to be covered by compulsory licences. And yesterday they ruled that they should, providing compositions are used in their original form.
Needless to say, Steven Marks, General Counsel for the Recording Industry Association Of America, welcomed the ruling, telling reporters: "This decision injects clarity into the marketplace - clarity that will help satisfy fans' hunger for the latest hits from today's best artists by affording record companies and ringtone providers the ability to move new offerings quickly and easily to consumers. Ultimately, we're all seeking a vibrant mobile market. This decision helps us further that goal".
Just as needlessly to say, a spokeswoman for the National Music Publishers' Association was critical of the ruling, saying: "We are disappointed in the Register's decision, which could hurt songwriters significantly and represents an unprecedented broadening of the compulsory license for musical works. Of particular concern is that copyright owners who have negotiated ringtones licenses in the free market for years will now be subject to government regulation. We see no justification for this, and are currently reviewing our legal options."
Interested parties now have to mid-November to make their case as to what the compulsory royalty rates should be.