Ringtone Wars between Labels and Publishers

The Register has an informative article on the current battle between labels and publishers regarding ringtones. Although all four major labels also own the four major publishing. Despite this fact they are involved in what The Register terms a “civil war”. The main dispute between the two sides is if ringtones come under a compulsory licensing law in the US. If the law changes it could see ringtones from acts such as The Beatles become available for the first time as ringtones. From the article:

“The labels pay production costs running into millions for the production of master recordings, but publishers control songs simply by signing a songwriter to a contract. The compulsory license provided by Section 115 of the United States Copyright law…permits anyone to make a mechanical or digital copy of a full song for only 9.1¢; So some publishers, for instance those controlling songs by the Beatles, Aerosmith and Jimi Hendrix, have refused to license their music for ringtones for any price, thus denying the labels significant potential revenues. Therefore, it was hardly a surprise that last September the labels, through their trade organization, the RIAA (Recording Industry Ass. of America), challenged the Copyright Royalty Board (CRB) to determine whether ringtones are subject to the compulsory license provided under Section 115 of the US Copyright Act.”