Washington - The Copyright Royalty Board (CRB) began hearing arguments from music publishers, record labels, and digital music distributors on Monday, on how much songwriters and music publishers should be paid when music is streamed or downloaded, according to the Hollywood Reporter.

Record labels represented by the Recording Industry Association of America (RIAA) argue that the "mechanically royalty" at issue should be lowered, as their businesses have been in decline while profits at music publishing houses have increased.

Digital music distributors like Apple and Yahoo, represented by the Digital Media Association (DiMA), are lobbying for an even lower rate than the RIAA, arguing that the digital marketplace is still "fragile" and shouldn't be saddled with excessive costs.

DiMA also argues that streaming songs should be treated like traditional radio, which does not pay a mechanical royalty to songwriters and publishers.

Meanwhile, the National Music Publishers Association (NMPA) is asking the CRB for a mechanical royalty rate increase for both physical and digital recordings.

The royalty rate setting process launched this week by the panel of three copyright judges is expected to take months.

Update: Billboard reports that the Copyright Royalty Board has rejected the Digital Media Association's request that the Register of Copyrights determine whether music webcasters should have to pay a compulsory mechanical royalty to songwriters and music publishers for "interactive" streaming.

Webcasters have argued that their services are similar to traditional radio, which does not pay mechanical royalties.

The CRB stated that the Copyright Act does not define "interactive," and therefore the CRB will have to decide the matter, rather than the Register of Copyrights.

Related Links:
http://snipurl.com/1z20j (Hollywood Reporter)

http://snipurl.com/1z20l (PDF: DiMA request to CRB)

http://www.nmpa.org

http://www.riaa.com