Press Release

Washington, D.C. November 5, 1997 -- Hilary Rosen, President and CEO of the Recording Industry Association of America (RIAA), Edward P. Murphy, President and CEO of the National Music Publishers' Association, Inc. (NMPA), George David Weiss, President of The Songwriters Guild of America (SGA), Randy Sharp, President of The National Academy of Songwriters (NAS), Bart Herbison, Executive Director of The Nashville Songwriters Association International (NSAI), and Lisa Alter, Director of AmSong, today announced the filing by music copyright owners and users of a joint petition to the U.S. Copyright Office to adjust statutory royalty rates for the making and distribution of physical phonorecords and delivery of phonorecords by digital transmission.

The proposal calls for the present physical phonorecord royalty rate of 6.95 cents to be increased to 7.1 cents as of January 1, 1998, and for automatic step increases every two years thereafter. In 2000, the rate will increase to 7.55 cents; in 2002, it will be 8.0 cents; in 2004, it will be 8.5 cents; and in 2006, 9.1 cents. Corresponding increases are proposed for the per minute long work rate, currently 1.3 cents/minute. The statutory royalty rate structure for physical phonorecords can be reviewed again in 2007.

The joint proposal also sets forth royalty rates for the delivery of phonorecords by digital transmission. With certain exceptions -- such as for excerpts of sound recordings transmitted for promotional purposes -- the rate for the delivery of phonorecords by digital transmission will continue to be the same as the physical rate. The parties agreed to this rate structure on a two-year basis because the marketplace for the delivery of phonorecords by digital transmission is still in the early stages of development. The promotional use provisions generally allow either the copyright owner of a sound recording or the copyright owner of the underlying musical work to deliver by transmission a phonorecord of up to 30 seconds of the recording for promotional purposes without paying a royalty. The rates for the delivery of phonorecords by digital transmissions are due to be reviewed next in 2000.

The representatives of RIAA, NMPA, SGA, NAS, NSAI, and AmSong all expressed their hope that the Copyright Office would act favorably on the petition.