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The Impact of the DOJ Decision on Songwriters

By | Lessons, Music Business | No Comments
In a brilliant article originally posted to Daily News Bin, prolific songwriter Maureen McDonald (professionally known as Mozella) describes the dire situation that Congress has placed songwriters. If we don’t get these consent decrees updated, and if 100% licensing isn’t repealed, the music industry will never recover.

In recent years, technology and innovation have changed the music industry in many good ways. While the listeners, the technology companies, and record labels have benefited from the growth of streaming music companies, those changes have negatively impacted the livelihood of songwriters. The antiquated laws, or consent decrees, that have traditionally regulated songwriting royalties for radio play and other uses of music does not address streaming music. As a result, the royalties paid to the songwriters for streaming are miniscule compared to those paid for commercial radio.

Songwriters like me depend on collective licensing through the two main performing rights organizations (PROs) in the U.S., ASCAP and BMI, to negotiate with licensees, track our performances, collect and distribute our royalties to us. Songwriters cannot do this on our own. There are trillions of performances of our songs by hundreds of thousands of businesses every year. ASCAP and BMI both operate as not-for-profits and pay out as royalties to us all the money they collect, deducting only operating expenses. They are governed by Department of Justice consent decrees to allow them to aggregate and license our rights without antitrust concerns. But those consent decrees were written in 1941 and are woefully out of date in the new music economy dominated by streaming, which wasn’t even invented the last time they were updated.

Music is enormously valuable to the streaming services. In fact, it is the only product they offer to consumers. And songwriters are the ones who make all of the music possible. The problem is that because of the outdated consent decrees songwriters make almost nothing when our work is streamed while the streaming companies build their businesses on our creative work, without paying us fairly.

In a devastating blow to songwriters last week, the Department of Justice (DOJ) ruled that they will not review or update the consent decrees, ignoring the voices of copyright experts, members of congress, and thousands of songwriters like me. Those of us who write the music are held hostage by these antiquated consent decrees that make it impossible for us to be paid fairly in today’s world of streaming services that pay us almost nothing. All we asked for were reasonable updates to those consent decrees so we could negotiate fair rates. Instead, the DOJ sided with the streaming businesses in essence picking them as marketplace winners at the expense of individual songwriters who are struggling to make ends meet. Under the consent decrees, streaming services like Pandora and Spotify can use our music even before we agree to the rates, and if we cannot agree, they still get to use our music and a single Federal judge appointed for life sets the rate.

Here’s where it gets really unfair: record labels (and the vocal artists signed to them) are allowed to set their own rates for streaming and they do. They do not have the same DOJ rate court system, so they are free to negotiate a fair market price for their product. And guess what? They’re making money. At the moment, the master recording of a song owned by a record label is earning about 14 times as much as the songwriter of the same song. For example, I co-wrote and own about 23% of the song Wrecking Ball by Miley Cyrus. Pandora streamed Wrecking ball 260 million times according to the statement they sent to me. They paid me $3,000. My payment was similar from Spotify. The Wrecking Ball video also has nearly a billion (yes, that’s billion with a B) views on YouTube and I’ll will most likely make another $3,000 there.

Terrestrial pop radio has traditionally reimbursed songwriters at a fair rate but the music streaming industry is growing rapidly. Soon, streaming will be the only format for music listening and at current streaming reimbursement rates, even hit songwriters will not be able to make a living. Currently, many talented but less commercially successful songwriters are giving up songwriting altogether. Eventually, America’s greatest export (pop music) will disappear.

Still with me? There’s more. In addition to the decision to not update the consent decree, the DOJ also ruled in favor of something new called 100% licensing. This means the traditional, logical practice of ASCAP and BMI licensing only the shares or fractions of songs written by the songwriters they represent will be ended. In Variety magazine recently David Israelite, president and CEO of the National Music Publishers Assn., said that the decision was “a massive blow to America’s songwriters.” “The interpretation that the consent decrees demand that all works must be licensed on a 100% basis is both unprecedented and disastrous to the songwriting community,” he said. “The decision represents a misunderstanding of copyright law and directly violates the legal guidance given by the Register of Copyright. The defiance displayed by these career antitrust lawyers in ignoring the legal opinion of the Register of Copyright is shocking”.

Most hit music is written in collaboration with a number of other writers. Songwriters work together and negotiate what percentage of the song each is entitled to. The collaborating songwriters may be represented by different PROs. Historically, each PRO would negotiate for the percentage of the song that the represented songwriter owned. Under the new 100% licensing, ASCAP and BMI may be asked to license shares of songs by writers they do not represent, throwing the entire music licensing system into unnecessary chaos for no good reason. The uncertainty about how works will be licensed will have a chilling effect on the creative freedom of songwriters to write with the collaborators they choose. If a PRO is collecting for a writer they don’t represent at a rate they didn’t approve, what rights do writers have regarding transparency, payment, etc.?

So why did the DOJ decide on the side of huge technology companies and not hardworking, independent songwriters? The technology lobby is highly organized and powerful in the nation’s capital and unfortunately independent songwriters are not. Keep in mind that when you pay for your streaming service, or when advertisers pay for streaming service ad time, the technology companies are making the money and not paying the songwriters fairly. With all the money they make, they hire lobbyists who work to influence decisions made in our nation’s capital. We need your help!

Help protect the future of the soundtrack to our lives: music.

The DOJ was unfair to us and we need your voices. Please email your local congressman/woman and senators in support of appealing these DOJ rulings and also in support of the Songwriter Equity Act which amends the Copyright Act and also voice your rejection of the 100% licensing ruling. It’s a small step, but everyone’s voice matters. Thank You.

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Songwriter’s Pie Anyone?

By | Music Business, Music Publishing | No Comments

by Shelly Peiken, as seen on Huffington Post

I can’t believe I’m actually going to say this. I many never work in this town again. But here goes.

As a professional songwriter for over 25 years, I was drawn to a piece that was put out on the wire by the Associated Press last week. Reporter, Mesfin Fekadu posed the question, “How Many Songwriters Does it Take to Produce a Hit?” He was told that these days it often takes as many as 8-10, or as John Legend aptly put it in the piece, “writing by committee.” Or, as some of my colleagues call it, “Frankenwriting.” Because it feels more like building a song than crafting one.

I’ve just finished writing a memoir, Confessions Of A Serial Songwriter, which addresses this new approach to writing a song as well as other recent interesting twists and turns in music industry culture. Mr. Fekadu’s article just scratches the surface of the ways in which mainstream songwriters are being given a run for their money. Or should I say scrambling for what little money is left on the table.
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Music and How the Money Flows

By | Copyright, Music Business, Music Publishing | No Comments

via FutureOfMusic.org

How are musicians and songwriters compensated when their music is played on the radio, sold on digital platforms, webcast or streamed on interactive services?

It’s complicated. That’s why, in June 2013, Future of Music Coalition released a set of infographics that illustrate how the money flows from various services back to US-based musicians and composers/songwriters. TThis infographic has been quite popular, with mentions on CD Baby, Hypebot and Digital Music News, to name a few.

Click the image below to see it in a larger format.

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