January 28, 2008 To All ASCAP Members, Over the years, ASCAP has worked tirelessly to convince Congress and the courts that all songwriters, composers and music publishers are entitled to fair compensation for their copyrighted musical works. As you know, ASCAP represents the performing right, a large and growing part of your compensation. But mechanical and synchronization rights are also a critical element of your livelihood. Today, the Copyright Royalty Board (CRB) begins a hearing that will determine mechanical rates for every songwriter and music publisher in America. It will be critical because, in addition to setting rates for physical products, rates will be set for the first time ever for digital products such as digital downloads, subscription services and ringtones. Our friends at The National Music Publishers' Association (NMPA) will be representing the mechanical right interests of songwriters and music publishers in this hearing. They will be fighting vigorously to protect those mechanical right interests to ensure that musical compositions are compensated fairly. On the other side of this fight stands the Recording Industry Association of America (RIAA) and the Digital Media Association (DiMA). Both the RIAA and DiMA have proposed significant reductions in mechanical royalty rates that would be disastrous for songwriters and music publishers. David Israelite, NMPA President and CEO tells us, "The current rate for physical phonorecords is 9.1 cents. The RIAA has proposed slashing the rate to approximately 6 cents a song - a cut of more than one-third the current rate! For permanent digital downloads, NMPA is proposing a rate of 15 cents per track because the costs involved are much less than for physical products. The RIAA has proposed the outrageous rate of approximately 5 - 5.5 cents per track, and DiMA is proposing even less. For interactive streaming services, which some analysts believe will be the future of the music industry, NMPA is proposing a rate of the greater of 12.5% of revenue, 27.5% of content costs, or a micro-penny calculation based on usage. The RIAA actually proposed that songwriters and music publishers should get the equivalent of .58% of revenue. And DiMA is taking the position that songwriters' and music publishers' mechanical rights should be zero, because DiMA does not believe we have any such rights!" Irwin Robinson, ASCAP Board member and Chairman of the NMPA added, "Our opponents in this hearing are proposing a rate structure which would have devastating consequences for songwriters, composers and music publishers trying to make a living, now or in the future." The initial hearing will last four weeks, followed by a rebuttal hearing in May, and a final decision expected on October 2. Among the ASCAP writer members testifying at the hearing are Rick Carnes, Phil Galdston, and Board member Stephen Paulus. And while all this is going on, ASCAP has been leading the fight for fair performance right compensation in Federal Court against DiMA members AOL, Yahoo! and RealNetworks. Our case has been heard and we expect an outcome this summer. Clearly these are perilous times for those of us that create the music that generates profit for those that use our music. But remember this, there would be no profit without our musical compositions that they are fighting to use so freely! Marilyn Bergman