The American Association of Independent Music (“A2IM”) submits these comments in response to the Copyright Office’s Notice of Inquiry on alternative fee structures for registration. A2IM is the nonprofit trade organization representing the U.S. independent music community: more than 600 independently owned record labels and related music businesses, ranging from established independent companies to single-artist labels and self-releasing recording artists. The independent sector accounts for roughly 35% of recorded-music consumption in the United States, a direct expression of the democratization of creative production that the copyright system exists to encourage. Of the four fee structures the Office has put forward, we write to support a reduced registration fee for small entities. It is the structure best suited to the creators and businesses we represent. We also urge the Office to pair it with long-overdue improvements to group registration for music, and we offer below our perspective on why this approach fits the independent sector and how it might be designed.
The independent music community is, overwhelmingly, a community of very small businesses. An average A2IM member is not a large corporate rightsholder; it is a limited-liability company with a handful of employees, or an individual artist releasing music through a small business entity. Economically, these members are indistinguishable from the individual creators the Office already supports through its lower-cost group options. This is why the small-entity option matters so much to us, and why it fits music better than a fee that simply separates “individuals” from “organizations.” Most independent labels are small organizations and a structure that charges every organization the higher fee would penalize exactly the price-sensitive creators a differentiated fee is meant to help.
The reason fee levels weigh so heavily on our members is that they have almost no ability to pass those costs through. The primary revenue source for which copyright protection is sought, on-demand streaming, pays independent rightsholders only fractions of a cent per stream, commonly between roughly $0.003 and $0.005, at rates our members do not set and that are determined largely by agreements between the major labels and the dominant platforms. Independent creators are price-takers. At the same time, registration is not an optional formality for them; it is the gateway to enforcement. Without a registration, a creator cannot bring an infringement suit, cannot recover statutory damages or attorney’s fees, and cannot use the Copyright Claims Board that Congress created precisely to give individual creators an affordable remedy. For works infringed across the internet every day, registration is the difference between a right that can be enforced and one that, as a practical matter, cannot. Every independent work left unregistered because of cost is a work effectively stripped of meaningful protection.
We recognize that the Notice raises a reason for caution about small-entity discounts: a recent study found that the Patent Office’s small-entity discounts had no measurable effect on small-entity patent filings. We respectfully submit that this finding does not carry over to copyright, for the very reason the Notice itself identifies. For a patent, the filing fee is a small fraction of the total cost so a discount of a few hundred dollars cannot be expected to change anyone’s decision. Copyright registration is different. The Office’s fee is a substantial part of the cost, and for the many independent creators who file on their own, it is essentially the entire cost. Our members’ own experience, rationing registration by price today, is direct evidence of exactly the price sensitivity a small-entity discount would address.
On how such a discount might be designed, we encourage the Office not to invent a new test but to borrow the small-business framework the Patent Office already uses and that filers already understand. A “small entity” could be defined by reference to the Small Business Administration’s size standards. We take no firm position on the exact thresholds, asking only that they be set high enough to include the typical independent label and reach individual creators.
Whatever the Office decides on small-entity pricing, we urge it to address a related and long-standing problem: group registration for music has not kept pace with how independent music is actually made and released. The Office has long recognized, for other creative fields, that registering one work at a time is unworkable at scale; for example, a photographer can register up to 750 photographs in a single application for one fee. Music presents the same combination of high volume and low per-work margin, yet the current group options for sound recordings and musical works do not meaningfully accommodate independent-label output, and the gap is widening as streaming pushes creators toward more frequent, lower-margin releases. We ask the Office to move toward parity: an affordable, high-capacity group-registration option for sound recordings and the compositions they embody, and/or fees that step down as the number of works in an application rises. The small-entity discount and group registration should work together.
We understand the Office must weigh these changes against cost recovery, and that fees currently cover only about half to sixty percent of its costs. We would make three brief points. First, a small-entity discount is best understood not as lost revenue but as an investment in the public record: its purpose is to bring currently unregistered works into the system, which grows the very record the Office is charged with maintaining and broadens the fee base over time. Second, to the extent any shortfall must be recovered, it should not fall back on the same small businesses the discount is meant to help but should come from larger, less price-sensitive filers and from the appropriations Congress provides, particularly for modernization. Third, if the Office wishes to proceed cautiously, a limited or pilot rollout makes sense, and we would suggest prioritizing sound recordings and musical works, where the volume-versus-price problem is most acute and registration lags furthest behind output.
A reduced fee for small entities, paired with real improvements to group registration for music, would be fair and equitable, would give genuine effect to the copyright system’s purpose of encouraging creation and building a complete public record, and would advance the Office’s own commitment to “Copyright for All.” We appreciate the opportunity to comment and would welcome the chance to provide additional information and to work with the Office as it develops these options.
Respectfully submitted,
American Association of Independent Music