The federal Copyright Royalty Board on Thursday left the royalty that songwriters receive on sales of CDs and digital downloads at 9.1 cents per song for the next five years.
Both songwriters and music sellers applauded the ruling _ but for different reasons. Apple Inc., which had threatened to shutter its iTunes store if the rate increased, appeared to have scored a clear win.
The Recording Industry Association of America was pleased that the rate was frozen for the first time since 1977, meaning that if song prices increase, royalties will make up a falling percentage of the companies’ costs.
This was the first time in nearly three decades that the recording industry couldn’t set a fee on its own for sales of recorded music. The last government hearing to set the so-called mechanical royalty rate was in 1980 and was triggered by a change in federal law.
Part of the disagreement stemmed from the vast array of new ways of distributing music and the rise of digital downloads _ driven in large part by Apple’s iTunes store. Downloads had never been treated separately from CD sales, which are plummeting.
Digital downloads grew 38 percent from 2006 to 2007 to become a $1.26 billion business, making up 23 percent of the market for recorded music, according to the RIAA.
Sales of physical music media such as CDs, cassettes and DVDs declined 19.1 percent to $7.5 billion in the same one-year period.