IMPORTANT UPDATE: The Group I Registration and Opt-In period is closed. Unassigned Share Reports were mailed on July 20, 2010 and competing publishers had until August 24, 2010 to submit a Letter of Direction ("LOD") (the "Initial Resolution Period"). The Initial Resolution Period has concluded. If you did not resolve all of your Contested Shares by August 24, 2010, you were notified of the Extended Resolution Period, wherein you have an additional thirty (30) days to resolve outstanding Contested Shares. The Extended Resolution Period deadline is September 24, 2010.
Overview
The Copyright Royalty Board (“CRB”) is empowered under U.S. Copyright Law to set compulsory mechanical royalty rates to be paid by music users, including the four major record companies (“Record Companies”), to music publishers and foreign societies for the right to distribute and/or transmit physical and digital phonorecords, ringtones, interactive streams, and limited digital downloads. In the most recent CRB proceeding, the National Music Publishers’ Association (“NMPA”) requested, and the CRB ruled, for the first time, that music publishers and foreign societies are entitled to collect a late fee of 18% annually for late payments of royalties from Record Companies and other music distribution services.
In response to the ruling, the NMPA, The Harry Fox Agency (“HFA”), and the Recording Industry Association of America (“RIAA”) entered into a Memorandum of Understanding on November 10, 2009 (the “MOU”). The MOU creates a comprehensive program (“NMPA Late Fee Program” or “Late Fee Program”) whereby the Record Companies and music publishers will work together to improve mechanical licensing practices and encourage prompt dispute resolution. The Record Companies have represented there is approximately $275 million in “pending and unmatched” accrued royalties (the “P&U Royalties”) that have not been distributed to the music publishers. In exchange for waivers of certain late fees through 2012, the Record Companies must comply with the provisions of the MOU, including paying participating music publishers and foreign societies their respective market share of accrued P&U Royalties. The P&U Royalties will be paid in multiple installments to participating music publishers.
For more details, please consult the NMPA Late Fee Program Overview or the Frequently Asked Questions on this website.
Who is Eligible to Participate in the Program?
The NMPA Late Fee Program is open to music publishers and foreign societies with musical compositions initially distributed by one or more Record Companies in the United States during the years 2000 through 2008. A Participating Music Publisher (but not a foreign society) must be or become a member of the NMPA on or before the date of the submission of the Opt-In Enrollment Form. Independent Record Companies will have the opportunity to participate in the Late Fee Program in the near future as Participating Record Companies on substantially the same terms as in the MOU. If the music publisher is not a member of the NMPA at the time of registration, it may join by sending the NMPA Membership Application. As a courtesy, for new members, the first year NMPA membership fee of $100 is not required. Such publishers need to complete and send the NMPA Membership Application to the NMPA offices in Washington, D.C., or by filing electronically at www.NMPA.org. Instructions on how a new member will complete the NMPA Membership Application Form have been posted on the official website.
For those music publishers choosing not to participate in the Late Fee Program, their respective shares of P&U Royalties will be excluded from the NMPA Late Fee Program and will remain with the major Record Companies that are participating in the NMPA Late Fee Program (“Participating Record Companies”).
All music publishers who submitted a valid Late Fee Registration Form, were sent by email more detailed information about the NMPA Late Fee Program, including an estimate of their anticipated initial Group I distribution amount, and were notified of a 75-day enrollment period during which they can opt-in to the Late Fee Program. By submitting the Opt-In Enrollment Form, a music publisher became a Participating Publisher with respect to the distribution program for “Group I Product” (product released in the years 2006 and prior) and “Group II Product” (product released in the years 2007 and 2008). Administration costs, legal fees and the NMPA’s assessments, were recouped before market share was determined and distribution commenced.
A separate opt-in enrollment process will be instituted for the distribution of the Group II Product, but those publishers that enroll in the Late Fee Program only with respect to the Group II Distribution Process will not be eligible to participate in the Group I Distribution Process. Publishers who participate in the Group I Distribution Process will automatically be enrolled in the Group II Distribution Process.
How do I participate in the NMPA Late Fee Program?
There are three steps in the initial phase of the Late Fee Program. The Group I Registration and Opt-In period is closed. A similar three step process will be available to participate in Group II.
- First Step: A qualified music publisher or foreign society must have submitted a registration form (the “Late Fee Program Registration Form”) to the Program Administrator either electronically or by mail. The deadline for submitting a Group I Late Fee Registration Form was February 14, 2010 or February 24, 2010.
- Second Step: The Program Administrator calculated the Group I estimated “publisher-share” distribution for each registered publisher and foreign society, and sent each registered publisher: an Opt-In Form containing an estimate of the amount the publisher can expect to receive from the Group I period.
- Third Step: A registered publisher who decided to participate in the Late Fee Program must have submitted an Opt-In Enrollment Form before the deadline set by the Program Administrator. The deadline was clearly identified as 75 days from the date printed on the Opt-In Enrollment Form. The Opt-In Enrollment Form deadline has now passed. Publishers who opted in by sending the Opt-In Enrollment Form to the Program Administrator became Participating Publishers (“Participating Publisher”) under the MOU, and became eligible to receive their share of the distributed royalties. Participating Publishers also reviewed the Unmatched List and made claims to names on that list by email. There may be an additional opportunity to make claims to still unclaimed items from its Unmatched List. Please check back for further updates regarding this potential opportunity.
| Date | Event |
|---|---|
| February 14, 2010 or February 24, 2010 [Expired] |
Group I Late Fee Program Registration Form Deadline |
| December 31, 2012 | MOU Termination Date |
| 75 days from date printed on Opt-In Form [Expired] |
Group I Opt-In Deadline |
| August 24, 2010 [Expired] |
Initial Resolution Period Deadline: Contesting Publishers’ Letters of Direction (“LODs”) regarding Unassigned Shares due to the Administrator |
| September 24, 2010 | Extended Resolution Period Deadline |
| September 2010 | Group I Initial Distribution |
