Tag: Music Creators North America

Music Creators North America Letter to Copyright Royalty Board on Unfrozen Mechanical Rates

Music Creators North America

                                                                                 April 9, 2022

Via Electronic Delivery

Chief Copyright Royalty Judge Suzanne M. Barnett                                                                                                                                                                                                                                 Copyright Royalty Judge David R. Strickler
Copyright Royalty Judge Steve Ruwe 
US Copyright Royalty Board
101 Independence Ave SE / P.O. Box 70977                                                                                      Washington, DC 20024-0977

Re: DOCKET NO. 21-CRB-0001-PR-(2023-2027) Making and Distributing Phonorecords (Phonorecords IV) Notice of Proposed Rulemaking re: 37 C.F.R. Part 385 Subpart B

To Your Honors:

 On behalf of the hundreds of thousands of songwriters, composers and lyricists represented by the various organizations listed below,[1] we extend our thanks to the Copyright Royalty Judges for their dedication to the rule of law.  The rejection on the basis of unreasonableness of the “Frozen Subpart B Mechanical Rate” settlement proposal in the CRB’s recent ruling of March 24, 2022 accomplished at least two crucial results for music creators, as were specifically intended by Congress under the US Copyright Act.

First, the decision rejects a grossly unfair royalty arrangement proposed by the NMPA, the NSAI and the major music publishers along with their own, vertically integrated and/or affiliated major record companies.  Second, it likely quashes a potential plan by digital music distributors like Spotify to urge the CRB to enact a similar freeze on its royalty obligations to songwriters and composers on the pretext of “what’s good for them should be good for us.”  Both results could have been catastrophic to future music creator income. [2]

We have every confidence that the ruling will withstand every level of groundless criticism and appeal, and that together, the various segments of the music community can soon move forward with an equitable, sane approach to addressing the issue of maintaining royalty value for music creators in these highly inflationary times.  Those few multinational music corporations who insist on ignoring that their very businesses are built on the backs of the same creators they seem intent on denying fair compensation, have already revealed the shameless nature of their corporate strategy.  It is reassuring to know that the CRB is very much aware of that fact and willing to act accordingly, as it did in recently rejecting the proposed insider frozen subpart B mechanical rate agreement.

Further in that regard, the independent music creator community, led by the signatories to this letter, want to be crystal clear in our willingness to work with our colleagues in the recording and music publishing sectors in helping to frame a new, voluntary CRB royalty settlement proposal that will be agreeable to the US and global songwriter and composer community as a whole.  As interested but non-participating parties (for reasons of economics) in the CRB proceeding, we have taken careful and consistent note of the CRB’s favorable inclination toward approving voluntary royalty-adjustment proposals that account for cost-of-living adjustments (such as the recent Webcasting V decision).  As the CRB further noted in its Phonorecord IV decision of March 24, 2022:

In the dynamic music industry, there is insufficient reason to conclude that a static musical works rate is reasonable. The determination rendered in 2008, with an effective date of 2006, cannot continue to bind the parties sixteen years later, absent sufficient record evidence that the status quo remains grounded in current facts and is a reasonable option. Since 2006, the retail marketplace for music has changed dramatically with regard to the Subpart B Configurations. From 2006 to 2008 (and, indeed, in years prior) the Subpart B Configurations dominated the recorded music marketplace. 

By 2020, industry data collected by the Recording Industry Association of America showed that various forms of digital streaming accounted for 83% of recorded music market revenues. Notwithstanding the decrease in revenues attributable to Subpart B Configurations, in 2020, vinyl record sales surpassed the volume of CD album sales, signaling a resurgence in vinyl as a music medium. Even if the sales figures were otherwise, however, sixteen years at a static rate is unreasonable under the current record, if for no other reason than the continuous erosion of the value of the dollar by persistent inflation that recently has increased significantly. In this regard, application of a consumer price index cost of living increase, beginning in 2006, would yield a statutory subpart B royalty rate for 2021 of approximately $0.12 per unit as compared with the $0.091 that prevails, which adjustment, as noted supra, represents a 31.9% increase. 

The disparity between the static rate and the dynamic market is even more stark when considering the “controlled composition clause” that contractually lowers the statutory rate by 25%. Add to that the record labels’ limit on album royalties to ten tracks, regardless of the number of songs actually included in each album. In other words, the statutory rate is not the effective rate record labels use in compensating songwriters and publishers. 

The proposed settlement did not include any adjustment to subpart B rates, not even an indexed increase. Adjudication of rates may provide the parties an opportunity to present evidence of the advisability of such an indexed increase. 

In anticipation of this equitable and well-reasoned conclusion by the CRB, our groups submitted in Comments to the CRB dated November 22, 2021 in which we proposed draft language for an alternative voluntary settlement agreement.  We stand by that proposal, which reads as follows:

The Copyright Royalty Judges shall adjust the royalty fees payable under 37 C.F.R. Part 385 Subpart B for the year 2023 by adjusting the current fees to reflect the aggregate, compounded change occurring in the cost of living from September 2006 to September 2022 as determined by the Consumer Price Index for All Urban Consumers (U.S. City Average, all items) (CPI-U) published annually by the Secretary of Labor. The Copyright Royalty Judges shall thereafter adjust such royalty fees each subsequent year to reflect any changes occurring in the cost of living as determined by the most recent Consumer Price Index for All Urban Consumers (U.S. City Average, all items) (CPI-U) published by the Secretary of Labor for September to September of the preceding year. At no point, however, shall such royalty fees be adjusted by the Copyright Royalty Judges below the level of rates set in 2006.

We further noted in our Comments the underlying rationale, background and benefits of the above language, which we consider to be a fair and even-handed approach:

We believe this solution to be both sound and equitable, principally only restoring without retroactive effect the financial position of music creators and music publishers to the royalty rate values they achieved in 2006, the time of the last rate adjustment of royalty fees payable under Subpart B.  (It is important to note that precedent and support for such a prospective adjustment methodology can also be found in §805 of the Copyright Act).

Later in those same Comments, we took specific note of the recent Webcasting V precedent:

Moreover, in June of [2021], perhaps sensing that inflationary times were about to return, the CRB acted decisively on the recommendation of the record industry in the Webcasting V proceeding. The Board established new webcasting rates regarding sound recording uses under §114 for the years 2021-25 that will include the following royalty rate adjustment formula:

The Copyright Royalty Judges shall adjust the royalty fees each year to reflect any changes occurring in the cost of living as determined by the most recent Consumer Price Index for All Urban Consumers (U.S. City Average, all items) (CPI-U) published by the Secretary of Labor before December 1 of the preceding year. 

One might wonder how the record industry can successfully advocate for CPI adjustments for its own royalties in Webcasting V, and yet refuse to accept such adjustments for the mechanical royalties it pays to music creators and music publishers in Phonorecords IV. One might also be justified in questioning how NMPA and NSAI can possibly accept this position and still be considered as “advocates” for the music creator.

We hope our music industry colleagues will seriously consider joining us in making this equitable settlement proposal a reality.  As stated, we are ready, willing and able to commence discussions as soon as they are.  Moreover, the post-decision comments of NMPA[3] and other music publishing industry representatives reflecting their support for what they term the “grassroots” music creator community give us encouragement that they, too, are ready to cooperatively move forward.  In fact, according to SONY music publishing head Jon Platt, “The CRB judges listened to the voices of songwriter advocates who made a strong case for higher physical and download rates and agreed that they should be increased. While it is still too early to predict the outcome, we are pleased that the CRB is receptive to higher rates, and we stand by these songwriter advocates and applaud their grassroots efforts and achievements.”[4]   

In closing, we also wish to inform the CRB of our intention to follow through on a legislative initiative that would amend Chapter 8 of the US Copyright Act in order to expand the ability of interested music creator groups to more actively participate in proceedings before the CRB– despite the enormous gap in resources between multi-national recording and publishing conglomerates on the one hand, and creator groups on the other.  The current system simply does not adequately account for the disparities in the participatory abilities of the two segments, a situation so obviously unfair that we believe it is essential for Congress to act promptly to address it.  That is not in any way to denigrate the enormously important efforts of songwriter George Johnson, whose participation in CRB proceedings on a pro se basis without the benefit of legal counsel is much appreciated– but acknowledged by Mr. Johnson himself as often a matter of him being spectacularly outgunned.

Judging from the reaction of those who disagree with the CRB’s decision on the frozen rates proposal, and the arguments framed by some record labels which literally amount to “if you’re too poor to fully participate in proceedings, your opinion is as worthless as your economic status and welfare,” we expect to find at least some sympathetic ears on Capitol Hill.  We hope that the US Copyright Office will support us in championing such reforms, as well.

Thank you again for your consideration.

Respectfully submitted,

Rick Carnes                                                     Ashley Irwin

President, Songwriters Guild of America      President, Society of Composers & Lyricists

Officer, Music Creators North America         Co-Chair, Music Creators North America

cc:    Charles J. Sanders, Esq. 

         Mr. Eddie Schwartz, President, MCNA/International Council of Music Creators (CIAM)

         Ms. Carla Hayden, US Librarian of Congress

         The Members of the US Senate and House Judiciary Committees 

         The Members of the US Senate and House Appropriations Committees

[1] This letter is intended to further update information presented to the Copyright Royalty Board (CRB) in Comments dated November 22, 2021, submitted by the Songwriters Guild of America, Inc., the Society of Composers & Lyricists, Music Creators North America, and the individual music creators Rick Carnes and Ashley Irwin (endorsed by the Alliance for Women Film Composers (AWFC), the Alliance of Latin American Composers & Authors (AlcaMusica), the Asia-Pacific Music Creators Alliance (APMA), the European Composers and Songwriters Alliance (ECSA), The Ivors Academy (IVORS), Music Answers (M.A.), the Pan-African Composers and Songwriters Alliance (PACSA), the Screen Composers Guild of Canada (SCGC), and the Songwriters Association of Canada (SAC)).

[2] Quoting directly from the CRB’s decision:

“Pursuant to section 801(b)(7)(A)(ii), based on the totality of the present record— including the Judges’ application of the law to that record, as well as GEO’s [participant George Johnson’s] objections, which, as noted supra, are consistent with the non-participant comments—the Judges find that the proposed settlement does not provide a reasonable basis for setting statutory rates and terms.19  Furthermore, the Judges find a paucity of evidence regarding the terms, conditions, and effects of the MOU [the moving parties’ private memorandum of understanding]. Based on the record, the Judges also find they are unable to determine the value of consideration offered and accepted by each side in the MOU. These unknown factors, as highlighted in the record comments, provide the Judges with additional cause to conclude that the proposed settlement does not provide a reasonable basis for setting statutory rates and terms.” 

19 Section 801(b)(7)(A) does not state which party—proponent or objector—might bear a burden of proof in connection with the Judges’ evaluation of a proposed settlement and objections thereto. The Judges do not believe that a “burden of proof” issue exists in this settlement process, because evidence as described in the Judges’ Rules, 37 CFR 351.10, is not required. However, were a burden of proof applicable in this proceeding, the Judges find that, if the burden were placed on the proposers of this settlement, they failed to meet that burden and, if the burden of proof were placed on GEO and/or the other commenters referenced above, they have met that burden.

[3] https://www.billboard.com/pro/mechanical-royalty-rate-ditched-new-crb-ruling/#recipient_hashed=3a259dd7948fa5cf81748fd59fbfdb0cdc19448cf6f4bf505f19cde98578e9d3&utm_medium=email&utm_source=exacttarget&utm_campaign=billboard_BreakingNews&utm_content=341171_03-29-2022&utm_term=2803480 

[4] https://www.billboard.com/pro/mechanical-royalties-crb-rate-settlement-major-labels-publishers/

Music Creators North America: The Murder of Ethiopian singer-songwriter Hachalu Hundessa Reminds us to Protect the Lives of All Music Creators

Press Release:

PROTECTING THE LIVES OF MUSIC CREATORS THROUGHOUT THE WORLD

 July 29, 2020. NEW YORK CITY. The member organizations of Music Creators North America (MCNA), an alliance representing tens of thousands of songwriters and composers across the United States and Canada, wish to express both their grief and their continuing deep concern over the murder last month of celebrated Ethiopian singer-songwriter Hachalu Hundessa. Tragically, hundreds more Ethiopians have been killed or injured in the violent protest events that followed the murder. MCNA appreciates that Ethiopian Prime Minister Abiy Ahmed Ali has offered condolences, and assurances that a vigorous investigation is ongoing.

Our hope is that this effort will be carried out transparently, providing foreign embassies the opportunity to closely monitor developments.

Through his music, Hundassa was an outspoken critic of the unequal treatment of Ethiopia’s ethnic Oromo minority, of which both he and the Prime Minister were and are members. And like other artists and songwriters before him, including revered Chilean folk singer and composer Victor Jara who was murdered by the Pinochet Junta a half-century ago, there is a distinct possibility that Hundassa was targeted because of his political influence as a musiccreator.

We are optimistic that a thorough, independent investigation will uncover the reasons for this brutal crime, and that constructive suggestions for how bloodshed can be avoided in the future will be acted upon.

Political violence against singers, writers, journalists and other creators is on the rise in general throughout the world. MCNA joins the rest of the global community of music creators in condemning and demanding an immediate end to this viciously, anti-democratic trend, and will be petitioning governments to take immediate action in pursuit of that goal on an international basis.

MCNA also joins with the US National Music Council and the International Music Council in the following statement: “All persons enjoy the right to freedom of artistic expressions and creativity…as well as the right of artists to dissent, to use political, religious and economic symbols as a counter-discourse to dominant powers, and to express their own belief and world vision.”

For further information, contact Charles J. Sanders at 914 588 7231 or csanderslaw@aol.com.

 

Music Creators North America: PASSAGE BY US SENATE OF MUSIC MODERNIZATION ACT IS APPLAUDED BY MUSIC CREATORS NORTH AMERICA

PRESS RELEASE

Music Creators North America, Inc. (MCNA), a music creator alliance representing a US, Canadian and global coalition of over half a million songwriters and composers from around the world through its affiliates in the International Council for Music Creators (CIAM), applauded the passage today of the Music Modernization Act (MMA) by the US Senate.  The Act, if signed into law by the President once a unified version is agreed upon by both houses of the US Congress, will reform and streamline the music licensing process and force digital music distributors to take greater responsibility in ensuring the equitable, proper, and timely payment of royalties to music creators for distribution of their works in the US.

According to the member organizations of MCNA, the benefits of the MMA strongly outweighed its shortcomings, and its passage is a welcome step forward.  The Act, however, will require constant vigilance by the music creator community to ensure that all of the intended benefits to composers and songwriters are realized.  This includes encouragement of music creators to claim the royalties owed to them, careful monitoring of distributions of so-called “unmatched” royalties, and especially close scrutiny of actions undertaken by the music licensing collective established under the legislation and controlled by a board of directors that has only a minority of music creator members.  The members of MCNA have pledged their full energies in support of these and other efforts to safeguard songwriter and composer rights, including keeping a close watch on the process in which the US House of Representatives and Senate versions of the bill are reconciled.

 

Press Release: BOLD EUROPEAN VOTE ENDORSING FAIR PAYMENT FOR THE ON-LINE USE OF MUSIC CELEBRATED BY AMERICAN AND CANADIAN MUSIC CREATORS (MCNA)

[Editor Charlie sez:  This is a press release from Music Creators North America about yesterday’s vote in the European Parliament that was a total win for creators and a total loss for the Digital Music Association and its scammy members who backed an astroturf campaign that backfired.]

Music Creators North America, Inc. (MCNA), a US-Canadian music creator alliance representing a global coalition of over half a million songwriters and composers from around the world through its affiliates in the International Council for Music Creators (CIAM), expressed enormous satisfaction over the European Parliament’s visionary vote today in support of the rights of music creators, musical culture, and fair trade economic community.

“This is a crucial step forward for the protection in Europe of therights and interests of North American music creators,” stated MCNA’s cochairs, songwriter Rick Carnes and composer Marvin Dolgay. “It represents a landmark development in one of the world’s most important and influential music markets, and one that we hope will spur rapid implementation in the EU and the adoption of similar legislative action around the world.”

The European Parliament’s members were thanked by the MCNA member groups for their bold vote (438 to 226), unequivocally endorsing the principle of fair online remuneration for creative works. The EU has paved the way for the creative sector finally to be properly rewarded when their works are exploited online. A clear signal has been sent to those powerful digital interests that have, for too long, built enormous wealth upon the unremunerated use of the creative work of others.

In addition, the vote is a resounding commitment to principles of transparency, fairness, equity and affordable access to justice that can improve the professional standing of those whose creative works are entrusted to others for management.

Audiences in Europe may join in celebrating the fact that new mechanisms are now to be put in place that will promote the principle of fair and just reward to creators, and that it will no longer simply be corporations and distributors who are the greatest beneficiaries of the works the citizens enjoy.

MCNA President, Eddie Schwartz, who also serves as CIAM President, said today of the EU Parliament’s vote: “This is a seminal moment in the future of music creators, and indeed all creative people in the EU and around the world. The EU Parliament has clearly shown the way towards not only a new dawn for reinvigorated cultural industries and individual creators, but also the equitable distribution of earnings in the flourishing digital economy. We trust this watershed vote will be endorsed in January 2019. And we hope that future generations will see this as an historic moment, resulting from a newfound solidarity throughout the music creator community and the larger artistic communities as a whole that we shall build upon it in the months and years to come!”

Music Creators North America (MCNA) is an alliance of music creator organizations that represent the rights and interests of composers and songwriters in the United States and Canada. 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 creators and, through our global alliances, a half-million songwriters and composers across the United States and around the world. Its members include The Songwriters Association of Canada (SAC), The Songwriters Guild of America (SGA), The Society of Composers & Lyricists (SCL), The Council of Music Creators (CMC), and The Screen Composers Guild of Canada (SCGC).

Music Creators North America Letter to Congress Critiquing Issues in Music Modernization Act

[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.

Sincerely,

David Wolfert

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