For some reason, there’s a focus at the moment on songwriter royalties and in particular for streaming royalty rates. Notice that I said “rates” not “share” or the one I find particularly irritating, “share of the pie.” Let us be clear—there is no “pie” there are only “rates”. Or should be. Let’s investigate why.
To frame this idea (speaking for the U.S. market), let me take you back to a conversation I had with a Nashville session musician and hit songwriter many years ago back before physical mechanical royalty rates were frozen.
He looked at me and said, “Why do I have to take this government cheese royalty rate? I get double scale when I play a date, why can’t I get double stat?”
What he was really saying was why can’t I set my own price as a songwriter for mechanical royalties? And the answer is the same today as it was then: Because songwriters allow the U.S. government to set the price and terms for mechanicals. Or rather the “minimum statutory rate” which is a joke because the “minimum statutory rate” has never been a minimum, it has always been both a minimum and a maximum.
There has also long been an obsession with songwriters and publishers comparing their rates to what artists and record companies get. This comparison was only compounded in the digital era particularly for interactive streaming. If you combine song rates and recording rates, some people get a pie. Other people (like me) get an error message. I’ll explain why.
Through a LinkedIn email, I learned that a recent staffer on the Senate Judiciary Antitrust Subcommittee was recruited by Amazon’s public-policy arm this month. I took to Twitter to express my dismay, and quickly learned that another staffer on the Senate Judiciary Committee was recruited by Facebook’s competition policy arm in May 2020.
These two staffers are now working for the tech platforms, and presumably against my ideas, after having heard my ideas in a private setting.
It is important to note right here that I have no beef with these fine folks.
But I do.
I was fortunate to moderate an excellent panel at the SXSW Continuing Legal Education seminar this week. Our topic was “The Future of Mechanical Licensing in the U.S.” Little did we know when the panel was booked in September that this would be such a hot topic following the introduction of the deeply controversial Music Modernization Act on December 21.
One of the legal process questions the panel discussed was the MMA’s “reachback” safe harbor that retroactively limits infringement claims filed after January 1, 2018 without regard to when the MMA’s blanket license is actually available.
[Editor Charlie sez: This tinkering with the board seats changes the songwriter vote from 2/10 to 4/14, a change from 20% to 28% on the new collective created by the MMA, aka the self-licking ice cream cone. This board structure is still wildly out of sync with every other creator collective in the world and will no doubt be opposed by ex-US writers. Remember–the MMA covers all songs ever written or that ever will be written, including both US and ex-US works exploited in the US. If the last compulsory license is a guide, the MMA will last 100 years after the Spotify IPO. And still does nothing to police the mass NOIs that are filed every day. But good news about extracting support for Google-opposed Copyright Small Claims Court.]
What the law ultimately says is up to members of the House and Senate, who will write the legislation and the subsequent regulations, but in the meantime, negotiations…have resulted in a proposal that allows songwriters and composers to have four seats on the now-expanded 14-seat board of directors, instead of the initially allotted two seats for songwriters on a smaller 10-seat board; while the unclaimed royalties oversight committee will now be evenly divided between publishers and songwriters. It also has resulted in additional clarifications to how payouts from unclaimed funds are distributed.
While the…the NSAI and SONA…had already come out in favor of the proposed legislation, the Songwriters Guild Of America initially withheld endorsing the legislation, saying it had some reservations about elements of it. But now SGA president Rick Carnes says his group is on board….
As part of the proposed changes, Carnes says that exclusionary clauses in older songwriter/publishers contracts sometimes prevent songwriters from collecting royalties because that clause allows publishers to take the stance that they don’t have to share the money with songwriters if it comes in unattributed to a song. “We tried to clarify that language so songwriters can get their fair share,” Carnes says.
In another move, as part of the negotiations with songwriters, the publishing community has “pledged to lend its full support on Capitol Hill to secure quick passage” of the pending Copyright Alternative In Small-Claims Enforcement (CASE) Act of 2017, which will provide music creators with an alternative to a full blown copyright infringement actions against unlicensed users of music.
[Editor Charlie sez: After the many letters from songwriter organizations, it is looking like what The Bible described as the “full throated endorsement of licensing reform” was more like a throat full of cram down by Big Tech–and their search for yet more loopholes and even safer harbors.]
MUSIC CREATORS NORTH AMERICA
February 1st, 2018
Dear Chairman Goodlatte and Ranking Member Nadler:
Thank you for the opportunity to submit these comments for the record of the House Judiciary Committee field hearing, “Music Policy Issues: A Perspective From Those Who Make It,” held in New York City on January 26, 2018. They are submitted on behalf of Music Creators North America (MCNA), an alliance of music creator organizations that represent the rights and interests of composers and songwriters, principally in the United States. Each of MCNA’s member organizations is run exclusively by and for music creators. As such, MCNA is the pure voice of North American music writers and, through our global alliances, a half-million songwriters and composers around the world.
For the sake of clarity, however, this submission should be regarded as principally representing the view of MCNA’s thousands of American members, rendered with the full support of the MCNA-aligned international music creator community.
Specifically, we would like to address issues concerning the Music Modernization Act (HR. 4706). In doing so, we want to stress that MCNA and its coalition partners enthusiastically support the principles underlying HR 4706, and wish once again to thank Representatives Doug Collins, Hakeem Jeffries, and the other co-sponsors of the bill for their hard work and devotion to the cause of protecting the creative community.
We note that, at the January 26 hearing, several members of the Judiciary Committee asked the panelists a significant question that went unanswered. In the paraphrased words of Representative Demings, if, as some panelists indicated, the MMA is not perfect, how can it be improved? Since none of the panelists addressed that important inquiry in detail, we would like to take this opportunity to draw to the Committee’s attention three crucial clarifications, among a number of concerns, that would give great benefit and comfort to the community of American songwriters and composers, issues we very much hope to discuss with the Committee’s Members prior to mark-up.
Chief among them is the selection of the members of the boards of the proposed Collective, both the number of seats allotted to songwriters and composers and the election process to fill those seats. As you and the members of your Committee well know, Article I, Section 8 of the United States Constitution recognizes the rights of authors and inventors and empowers Congress to protect those rights. The work of songwriters and composers (i.e. authors) is the foundation on which rests the entire music industry, the business of commercial entities that distribute music, and the enjoyment of music fans.
While songwriters and composers are free to engage in contractual relationships with publishers, record companies, and a wide variety of representatives covering other aspects of their careers, US copyright law gives most creators them the unfettered right to control their work from inception.
As the creators of these foundational works, we are simply seeking an appropriate voice in their exploitation. In order to ensure that our voice is truly heard, it is of crucial importance that the legislation provide the songwriter and composer community (as distinguished from, for example, those who administer our rights) with a democratic means of selecting a number of board members equal to those of music publishers and other administrators. These should be knowledgeable, independent, and unbiased music reators capable of ensuring in a cooperative way the protection of our rights and interests. We believe that the details of such a process can be arrived at with the cooperation of our colleagues in the music publishing community, and we look forward to that opportunity.
The second issue is a simple clarification in the “Songwriter Payments” provisions found on page 40, line 17 of HR 4706. In order to ensure that music creators get the full benefits of their contracts with music publishers, we believe that very concise language can be added for clarity to ensure that—as intended by all parties—the distribution of unmatched royalties is made by the Collective and by music publishers on a designated, per title basis. Without this language, it may be possible for a music publisher or administrator to pay such royalties to music creators at rates significantly below those set forth in their contracts. We will be happy to provide draft language in that regard if the Committee deems it appropriate.
The third issue concerns the integrity and structure of the mandated database,specifically, the vital inclusion of unique creator identifiers. As you are most likely aware, many music creators make relatively frequent changes in their contractual relationships with publishers, administrators, and others. (This, of course, is one of the frustrating situations with which music users must deal when seeking licenses.) But the name and, therefore, the identifying information of the creator of a composition, never changes. Therefore, for data accuracy and accessibility for music users, music publishers, and music creators to be fully realized, a creator’s number should be recorded on every musical composition in the database stipulated in HR 4706. This will greatly enhance the ability of individual music creators to identify their works, especially those compositions still unmatched, so that they can claim royalties for their uses.
We are pleased to report that discussions of these issues are underway between and among members of the music community. We ask for the Committee’s assistance, indulgence, and encouragement to allow this process to move forward prior to mark-up.
Thank you, Chairman Goodlatte and Ranking Member Nadler, for all you have done forthe American music creator community and the protection of copyright. We are grateful to have been provided with the opportunity to expand and clarify the record on these important issues. We look forward to working with you and the Committee to ensure that this enormously important piece of legislation is the very best bill it can be.
For Music Creators North America (MCNA)
cc: Members of the Committee on the Judiciary, United States House of Representatives
For a listing of MCNA Members and Associates, please refer to the website: www.musiccreatorsna.org