Frequently Asked Questions
- What is the NMPA Late Fee Program about?
- What time period did Group II include?
- Who is the Program Administrator?
- Who was eligible to participate in the NMPA Late Fee Program?
- What did I need to do to become a member of the NMPA?
- Who is eligible to join the NMPA?
- What was the first step for participation in the Group II phase of the NMPA Late Fee Program?
- What happened after I submitted a Group II Late Fee Program Registration Form?
- How did a publisher who did not participate in Group I become a Group II Participating Publisher?
- Was I represented by the NMPA or its counsel in this process?
- What was the publisher share distribution methodology involved with determining the payment amount for the NMPA Late Fee Program?
- What if I do not agree with the amount of the publisher share calculation?
- When can a Participating Publisher expect to receive a payment for the Group II period (2007-2008)?
- When is the distribution of future payments expected?
- When did the MOU expire?
- Did the MOU cover product made and distributed outside of the United States, its territories and possessions?
- Was there an audit process for Participating Publishers?
- What did I give up if I became a Participating Publisher in Group II?
- Are steps being taken to improve communications between Participating Publishers and Participating Record Companies?
- How will songwriters get paid?
- When did payments for Group II Product commence?
- Why was my Initial Group II Distribution different from the Estimated Group II Distribution printed on my Opt-In/Confirmation Update Form?
- I am not a member of the NMPA. Does this affect my Group II Distribution?
- What are Unassigned Shares?
- My Opt-In/Confirmation Form listed Unassigned Shares. What was the next step for me?
- I received the April 15, 2011 letter listing my Unassigned/Contested Shares. How was I supposed to proceed?
- How can I get a copy of the "Group II Payment and Conflict Resolution Guidelines"?
- What happens if the competing publisher and I could not reach an agreement about the contested share(s)?
- I have submitted a Letter of Direction (“LOD”) to the Program Administrator. How soon will I receive payment?
DEFINITIONS
- What is the "CRB"?
- What are the "Record Companies"?
- What is the "NMPA"?
- What is the "HFA"?
- What is the "RIAA"?
- What is the "MOU"?
- What is the "NMPA Late Fee Program" or "Late Fee Program"?
- What are "P&U Royalties"?
- Who are "Registered Publishers"?
- What is "Group II Product"?
- What is "Group III Product"?
What is the NMPA Late Fee Program about?
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 LLC (“HFA”), and the Recording Industry Association of America (“RIAA”) entered into a Memorandum of Understanding (the “MOU”) on November 10, 2009. The MOU created a comprehensive program (“NMPA Late Fee Program” or “Late Fee Program”) whereby the Record Companies and music publishers work together to improve mechanical licensing practices and encourage prompt dispute resolution. In exchange for waivers of certain late fees through 2012, the Record Companies had to comply with the provisions of the MOU, including paying participating music publishers and foreign societies their respective publisher share of accrued P&U Royalties. Registration for the distribution of P&U royalties accrued for products released on or before December 31, 2006 (“Group I”) and for products released from January 1, 2007 through December 31, 2008 (“Group II”) has ended. The Group II distribution – involving potentially up to about $36 million – was based on accrued royalties that have not been cleared through the cooperative efforts of Record Companies and music publishers.
The MOU expired on December 31, 2012, and MOU 2 is now in effect.
What time period did Group II include?
Group II included physical and digital product distributed in the United States of America with a release date in 2007 or 2008, regardless of when distributed.
Who is the Program Administrator?
Group I of the Late Fee Program was administered by Kenneth Feinberg of Feinberg Rozen, LLP. For Group II, the NMPA engaged The Harry Fox Agency LLC (“HFA” or the “Program Administrator”) to determine and distribute payments to music publishers and foreign societies through the Late Fee Program. In addition, the NMPA engaged HFA to handle continuing quarterly payments for Group I Product after the initial Group I Fund was distributed.
Who was eligible to participate in the Group II Late Fee Program?
Group II of the Late Fee Program was 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 2007 and 2008. Publishers and foreign societies that had already opted into the Late Fee Program had already agreed to participate in the Group II phase. Publishers who did not participate in Group I could have participated in Group II by registering no later than December 15, 2010. A registered publisher then had the option of opting into the Group II program. A Participating Music Publisher (but not a foreign society) must have been 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.
What did I need to do to become a member of the NMPA?
To participate in the Late Fee Program, each music publisher (but not a foreign society) must be a member of the NMPA. If the music publisher was not a member of the NMPA, it could have joined at the same time it registered or at any time, as long as it was before the filing of the Opt-In Enrollment Form with the Program Administrator. The music publisher may join by sending the NMPA Membership Application to: The Harry Fox Agency LLC 601 West 26th Street, Suite 500, New York, NY 10001, Attn: NMPA New Member Application.
Who is eligible to join the NMPA?
Any person, firm, corporation or partnership that meets the following requirements is eligible for NMPA membership:
- They are actively engaged in the business of publishing music, and
- have been in business for a period of at least one year, and
- are based in or have an office in the U.S.
Election to membership is by approval of the Board of Directors. Complete applications will be presented to the Board at the first meeting following receipt and processing by NMPA.
What was the first step for participation in the Group II phase of the NMPA Late Fee Program?
Please Note: The deadline to submit Registration and Confirmation Forms has passed. All Registration and Confirmation Forms had to be received by the Program Administrator no later than December 15, 2010.
Publishers and foreign societies who did not participate in Group I of the Late Fee Program:
For publishers and foreign societies who did not participate in Group I of the Late Fee Program, there were three steps in participating in the Group II phase of the Late Fee Program:
First Step: A music publisher or foreign society must have submitted a registration form to the Program Administrator either electronically or by mail no later than December 15, 2010. The Program Administrator sent a Group II Program Registration Form to each music publisher and foreign society identified on Record Company or HFA payee lists who did not participate in Group I of the Late Fee Program, for which HFA or the Record Companies have accurate mailing information in their royalty systems. Group II Program Registration Forms must have been received on or before December 15, 2010.
IMPORTANT POINT - Registering did not commit a publisher who did not opt into Group I of the Late Fee Program to participate in Group II of the Late Fee Program.
Registration simply provided the Program Administrator with key information to allow the Program Administrator to determine each publisher’s estimated share of the
Group II distribution. A registered publisher did not become a party to the Late Fee Program until the registered publisher “opted in” to the Late Fee Program,
as described below in the "Third Step."
Second Step: After the initial registration period was over, the Program Administrator calculated the estimated Publisher Share distribution for
each newly registered publisher and foreign society, and sent each newly registered publisher and foreign society: (1) an estimate of the amount the publisher can
expect to receive from the initial distribution of the P&U Royalties that will be distributed by the Program Administrator; and (2) an opt-in form
(“Opt-In Enrollment Form”). The deadline date was indicated in the Opt-In Enrollment Form, and was also posted on the website.
Third Step: If a registered publisher who did not opt into the Group I of the Late Fee Program decided to participate in the Late Fee Program,
the registered publisher must have submitted the Group II Opt-In Enrollment Form, and it must have been received by the Program Administrator before the deadline
set by the Program Administrator (March 4, 2011). The deadline was clearly identified in the Opt-In Enrollment Form, and was also available through the Late Fee
Program Website. When a publisher opted in by sending the Opt-In Enrollment Form to the Program Administrator, the publisher then became a Participating Publisher
(“Participating Publishers”) under the MOU, and became eligible to receive its share of the distributed royalties.
For publishers and foreign societies who opted into Group I of the Late Fee Program and have already agreed to participate in the Group II phase:
Publishers and foreign societies who have already opted into the Late Fee Program were sent a Group II Late Fee Program Confirmation Form to
confirm certain information necessary to process their Group II distributions. Failure to return the Confirmation Form to the Program Administrator promptly, either
electronically or by mail, will delay a participating publisher’s Group II distribution. The Program Administrator sent a Group II Program Confirmation Form to
each music publisher and foreign society who participated in Group I at their address on record. Group II Program Confirmation Forms must have been received on or
before December 15, 2010 to ensure timely distribution.
What happened after I submitted a Group II Late Fee Program Registration Form?
After the initial registration period was over, the Program Administrator calculated the estimated “publisher-share” of the Group II Fund for each newly registered publisher and foreign society, and sent each newly registered publisher and foreign society an Opt-In Form that included an estimate of the amount the publisher can expect to receive from the initial distribution of the Group II P&U Royalties.
How did a publisher who did not participate in Group I become a Group II Participating Publisher?
After the initial registration period was over, the Program Administrator calculated the estimated "market-share" distribution for each newly registered publisher and foreign society, and sent each newly registered publisher and foreign society: (1) an estimate of the amount the publisher can expect to receive from the initial distribution of the P&U Royalties that will be distributed by the Program Administrator; and (2) an opt-in form ("Opt-In Enrollment Form"). The deadline date was indicated in the Opt-In Enrollment Form, and was also posted on the website. When a publisher opted in by sending the Opt-In Enrollment Form to the Program Administrator, the publisher then became a Participating Publisher ("Participating Publisher") under the MOU, and became eligible to receive its share of the accrued Group II P&U Royalties.
Was I represented by the NMPA or its counsel in this process?
Each publisher was advised to seek independent legal counsel regarding all matters relating to the Late Fee Program. The NMPA, the Program Administrator, HFA, or any vendor, agent or attorney representing the same, will not act as legal counsel to any publisher, and should not be relied on for legal advice. Each publisher seeking legal advice should obtain its own legal counsel.
In order to permit the Program Administrator to determine distribution amounts for Participating Publishers, the Participating Record Companies and HFA provided the Program Administrator with records of payments made by the Participating Record Companies to music publishers and foreign societies during the Group I period (2000-2006) and the Group II period (2007-2008). In addition, Participating Record Companies engaged outside auditors to attest to the accuracy of historical payment information and the amount of their accrued P&U Royalties for Group I Product and Group II Product. The payment data was used by the Program Administrator to calculate the relative market shares of publishers who received payments from the Participating Record Companies during the Group I period, and similar calculations were made for the Group II period, which, in turn, was used as the basis for distributing the Group II funds.
What if I do not agree with the amount of the publisher share calculation?
A Participating Publisher has the right to make a claim to the Program Administrator to contest the determination of the market share calculated by the Program Administrator. The Program Administrator has sole discretion to alter the publisher share calculation for a particular publisher or to maintain the first calculation. There is no right of appeal after the Program Administrator adjudicates the Participating Publisher’s claim.
When did payments to Participating Publishers for the Group II period (2007-2008) commence?
Participating Publishers began receiving distributions of funds from the Program Administrator for accrued P&U Royalties for Group II Product, based on a market share allocation methodology, in March of 2011.
Distribution of accrued royalties for Group II Product is net of the costs and fees identified in the Registration materials, Opt-In materials, and the MOU.
When is the distribution of future payments expected?
Participating Publishers began receiving market share distributions for then-accrued P&U Royalties for Group II Product that remains uncleared in March 2011. In addition, Participating Record Companies will continue to accrue P&U Royalties for ongoing sales of Group I Product and Group II Product and contribute them to the Group I and Group II funds on a quarterly basis. The Program Administrator will continue to make market share distributions for these ongoing sales to Participating Publishers for the indefinite future.
The MOU expired on December 31, 2012, when MOU 2 came into effect. However, certain provisions relating to payments of P&U Royalties by Participating Record Companies for sale of Group I Product and Group II Product after that date, as described below, remain in effect.
No. The MOU only covers product made and distributed in the United States, its territories and possessions.
Was there an audit process for Participating Publishers?
The Program Administrator had the right to audit Participating Record Companies on behalf of Participating Publishers for ongoing sales of Group I Product and Group II Product, and will be able to examine the P&U accrual rates used by the Participating Record Companies with respect to ongoing sales of digital product.
What did I give up if I became a Participating Publisher in Group II?
In consideration for making Group I and Group II payments, Participating Record Companies received a release from Participating Publishers for claims arising from the reproduction and distribution of Group I Product and Group II Product as to which P&U Royalties have accrued, including claims for nonpayment, late payment and infringement. The signed release was submitted with a Participating Publisher’s Opt-In Enrollment Form, but was not effective with respect to any particular units of product until the Participating Publisher received payment based on P&U Royalty accruals for those units under the MOU. The release covers additional units of product as the Participating Publisher receives additional payments based on sale of those units. Additionally, upon receiving payments under the MOU, Participating Publishers released the parties to the MOU, Participating Record Companies, the Program Administrator and its vendors for claims relating to the implementation and administration of the MOU itself.
In consideration for receiving Group I and Group II payments and implementation of the Default Rules and Best Practices, Participating Publishers agreed not to collect certain late fees that would otherwise apply to Group I, Group II and Group III Product pursuant to the Section 115 statutory license or another mechanical license such as a Section 115 variance mechanical license (e.g., an HFA license). While a late fee waiver applies to P&U Royalties attributable to ongoing distributions of Group I and Group II Product so long as a Participating Record Company continues to make its required payments of P&U Royalties, late fee waivers for product released on or after January 1, 2009 terminated upon the expiration of the MOU on December 31, 2012.
Yes. Participating Record Companies and Participating Publishers will adopt certain additional measures to improve the clearance process. Best Practices include various efforts to improve communications between Participating Publishers and Participating Record Companies, including regular meetings to review lists of unlicensed product. A Best Practices Group, composed of representatives from Participating Record Companies and Participating Publishers, will oversee implementation of the Best Practices and Default Rules.
Participating Record Companies and Participating Publishers will implement certain rules to govern future licensing and payment procedures. Among other procedures, the Default Rules require Participating Record Companies to seek claims information from writers and their representatives prior to release and pay royalties through in certain situations, including some split disputes, if they are not to be potentially subject to statutory late fees (where applicable).
How will songwriters get paid?
By definition, the funds that were the subject of this settlement were not categorized by song title. Instead, this settlement involved an agreement by all who choose to participate to distribute these funds using a publisher share analysis conducted by the Group II Program Administrator, The Harry Fox Agency LLC (using payment data provided by the Record Labels). It is anticipated that many publishers distributed these funds to their songwriter partners using a distribution formula these publishers develop that takes into account each publisher's unique issues involving songwriters whose works it controlled during the relevant period of the settlement. The publisher share analysis used by the Program Administrator to allocate the settlement proceeds is not intended to be a formula used by any particular publisher to allocate such funds among its songwriter partners. Songwriters whose songs were not properly licensed would not be recognized in any publisher share analysis.
The Program Administrator, HFA, and NMPA will not dictate or provide guidance as to how publishers should distribute the settlement proceeds allocated to each publisher. Furthermore, the Program Administrator has not been authorized to address, nor will he respond to, questions relating to how songwriters get paid. We suggest songwriters contact their publishers directly for guidance.
When did payments for Group II Product commence?
Participating Publishers began receiving distributions of funds from the Program Administrator in March 2011 for accrued P&U Royalties for Group II Product based on a market share allocation methodology.
The Estimated Group II Distribution printed on the Opt-In and Confirmation Update Forms was based on the Publisher Payment Data and HFA Payment Data available at the time the Forms were mailed. The Program Administrator subsequently received updated Payment Data, and the market shares of all of the Group II publisher shares were adjusted in order to accommodate this new information and ensure that they accurately reflected the most up-to-date information available.
I am not a member of the NMPA. Does this affect my Group II Distribution?
Pursuant to the terms of the Late Fee Program, a publisher must be an NMPA member in good standing to receive any distributions from the Program. Therefore, your Group II distribution may be delayed until we can verify your NMPA membership. If you are not currently a member of the NMPA, a membership application form is available here.
Unassigned Shares are the market shares of those entities that the Program Administrator determined were paid by one or more Participating Record Companies in the years 2007 through 2008, and that were identified by you and at least one other Participating Publisher in response to Section II of the Registration Form/Confirmation Form. These Unassigned Shares were NOT included in your Estimated Total Publisher Share or Total Estimated Group II Distribution provided on your Opt-In Form/Confirmation Update Form. Pursuant to the Memorandum of Understanding, these Unassigned Shares are deemed “Contested Shares,” and are subject to the conflict resolution process described in the Group II Payment and Conflict Resolution Guidelines.
My Opt-In/Confirmation Form listed Unassigned Shares. What was the next step for me?
Unassigned Shares are shares that were also claimed by at least one other Participating Publisher. Therefore, they were not included in the ongoing Group II distributions. A letter regarding Unassigned Shares that were deemed to be Contested Shares was mailed on April 15, 2011.
Publishers had until June 29, 2011, to submit a Letter of Direction ("LOD") signed by all Contesting Publishers, instructing the Administrator to pay the Contested Share to a specified party, or to divide the Share between the parties.
On July 29, 2011, the Program Administrator issued payments for Contested Shares that were resolved during the Resolution Period. If you are a Participating Publisher with outstanding Contested Shares and would like more information about conflict resolution and the next stages of the Program, please review Attachment 2, "Group II Payment and Conflict Resolution Guidelines," to the Group II Summary of NMPA Late Fee Program Terms.
How can I get a copy of the “Group II Payment and Conflict Resolution Guidelines”?
The Group II Payment and Conflict Resolution Guidelines is available on this website (Attachment 2 to the Group II Summary of NMPA Late Fee Program Terms). You can also contact the Program Administrator by phone or e-mail and request that a copy of the Guidelines be sent to you.
Please refer to Attachment 2, “Group II Payment and Conflict Resolution Guidelines,” which is available on this website.
If your valid Letter of Direction was received and processed by the Program Administrator before June 29, 2011, and your Contested Share(s) was resolved, the Program Administrator sent payments for resolved Contested Shares on July 29, 2011.
If you are a publisher with outstanding Contested Shares and would like more information about conflict resolution and the next stages of the Program, please review Attachment 2, “Group II Payment and Conflict Resolution Guidelines," to the Group II Summary of NMPA Late Fee Program Terms.
DEFINITIONS
The Copyright Royalty Board, empowered under U.S. Copyright Law to set compulsory mechanical royalty rates to be paid by music users.
What are the "Record Companies"?
The four major record companies participating in the program.
The National Music Publishers’ Association.
The Harry Fox Agency LLC, the Group II Program Administrator.
The Recording Industry Association of America.
The Memorandum of Understanding entered into on November 10, 2009 by The National Music Publishers’ Association ("NMPA"), The Harry Fox Agency LLC ("HFA"), and the Recording Industry Association of America (“RIAA”) in response to the imposition of the late fee by the CRB ruling. 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. At the time the MOU was entered into, the Record Companies represented there was approximately $275 million in “pending and unmatched” accrued royalties (the “P&U Royalties”) that had 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 publisher share of accrued P&U Royalties.
What is the "NMPA Late Fee Program" or "Late Fee Program"?
A comprehensive program to improve mechanical licensing practices and distribute "pending and unmatched" royalties.
"Pending and unmatched" accrued royalties that have not been distributed to the music publishers.
Who are "Registered Publishers"?
Music publishers and foreign societies that submit a Group II Late Fee Program Registration Form received by December 15, 2010.
Product released in 2007 or 2008.
Product released on or after January 1, 2009.