Index statutory mechanical royalties before inflation hits.Why Songwriters Should Care About Inflation Protection for Mechanical Licenses — Music Tech Solutions
Nik Patel, David Lowery, and Chris Castle feature in this podcast where they discuss the current issues of artists’ rights in the music industry. Find the Artist Rights Watch on your favorite podcast platform here https://linktr.ee/artistrightswatchpod Please subscribe, rate and share!
On the first episode of the Artist Rights Watch, Nik Patel, David Lowery, and Chris Castle sit down with Ivors Academy Chair, Crispin Hunt to talk about the frozen mechanical royalties crisis currently playing out in the United States and how it threatens UK songwriters and indeed songwriters around the world.
Crispin gives us his invaluable analysis of how the frozen mechanicals crisis affects songwriters around the world and the highly effective #brokenrecord and #fixstreaming campaigns that Ivors Academy supports in the UK that has lead to a parliamentary inquiry and legislation introduced in the UK Parliament.
The “frozen mechanicals” crisis is rooted in a private deal between big publishers and their big label affiliates to essentially continue the freeze on the already-frozen U.S. mechanical royalty rate paid by the record companies for CDs, vinyl and permanent downloads. The private deal freezes the rate for another five years but does not even account for inflation. Increasing the royalty rate for inflation, does not actually increase songwriter buying power.
The major publishers and labels have asked the Copyright Royalty Board in the US to make their private deal the law and apply that frozen rate to everyone.
In the past, the music industry has experienced a $0.02 mechanical royalty rate that lasted for 70 years, and with the current mechanical royalty rate of $0.091 being set in 2006, advocates hope it’s not a repeat of the past.
In this Artist Rights Watch episode, we cover its numerous implications and consequences such as controlled compositions clauses, the Copyright Royalty Board, CPI and fixed increases, how the UK compares, and potential resolutions.
Below are some links for further reading on frozen mechanicals and Crispin Hunt:
Controlled Compositions Clauses and Frozen Mechanicals. Chris Castle
What Would @TaylorSwift13 and Eddie @cue Do? One Solution to the Frozen Mechanical Problem. Chris Castle
The Trichordist posts on frozen mechanicals
The Ivors Academy Joins the No Frozen Mechanicals Campaign
Year-End 2020 RIAA Revenue Statistics
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.
Save the date! September 25, 2020 at 1:35 pm ET Chris Castle will moderate a panel for the Music Business Association Entertainment & Technology Law Conference, an online event. Registration is required at the even site.
Panelists are Rick Lane, CEO, Iggy Ventures, LLC, Gwendolyn Seale, Attorney, Mike Tolleson & Associates, David Sterns, Partner, Sotos Class Actions, and Trent Teyema, Principal, Global Threat Management and former FBI Special Agent.
The panel will cover:
1. TikTok Data Functionality: Trent and Chris
2. The TikTok Executive Orders: Rick and Chris
3. Copyright Infringement on TikTok: Chris and Gwen
4. Copyright Infringement Class Actions in the US and Canada: Chris and David
The meltdown of WeWork’s CEO and Mark Zuckerberg’s bizarre threat to sue the U.S. offer a teachable moment: When you concentrate vast and unaccountable control over major companies in founders — no matter how creative or capable — bad things happen.
In Silicon Valley, the problem starts with “supervoting” stock structures that let the CEO (mostly) boy wonders raise mountains of cash from star-struck investors without giving up meaningful control over the company. The trick is a gimmicky “dual-share” stock structure in which the insiders’ own shares have powerful voting rights but ordinary investors are stuck on the sidelines. SEC Commissioner Robert Jackson has warned this dual class in effect creates “corporate royalty.”George Orwell would probably say it’s just another example of the “Some Animals Are More Equal Than Others” corruption that eventually poisons pretty much every revolution.