For some time, performers a notch below Beyoncé and Taylor Swift have complained about the change in music delivery from CDs to downloads to streaming, today’s dominant system, as the progression has chipped away at their already-modest royalties. These gripes are legitimate, but even worse off is the nonperforming songwriter, who can’t go on the road and sell signed CDs and merch, and who takes home significantly lower royalties.
Desmond Child, the co-writer of Bon Jovi’s “Livin’ on a Prayer,” recently reported that the song had been played 6.5 million times on Pandora over three months, for which he had earned $110. There is also writer and performer Aloe Blacc, whose song “Wake Me Up” by Avicii “was the most streamed song in Spotify history and the 13th-most-played song on Pandora since its release in 2013, with more than 168 million streams in the U.S.,” as he wrote last year in Wired magazine. That yielded only $12,359 in Pandora domestic royalties, which were split among three songwriters and the publishers.
The entire U.S. system of music royalties is confusing, contradictory and inequitable, a monument to more than 100 years of haggling among creators, purveyors and users. To call it Byzantine maligns that great empire.
For one, a musical composition (“the publishing” in music-industry parlance) and its recording (“the master”) receive separate copyrights, with separate licensing systems. There are dramatically different rate-setting mechanisms: Broadcast radio pays royalties for the composition, but nothing for the recording. Digital media—Pandora and satellite radio, for instance—pay for both, but nobody pays for recordings made before 1972, which are not protected under federal copyright law. (They may soon carry a royalty in certain states, thanks to lawsuits filed by former members of the Turtles.) Hardly any music licenses are negotiated in the free market.
It has been 40 years since the last major overhaul to U.S. copyright law. Today’s technologies of music distribution bear no resemblance to those of the 1970s, and songwriters have borne the brunt of the ever-widening disconnect between law and reality.
But change may be afoot. In February the Copyright Office, part of the Library of Congress, issued a comprehensive study declaring that “the time is ripe to question the existing paradigm for the licensing of musical works and sound recordings.” To that end, the office put forth some “key principles,” including that music creators should be “fairly compensated,” that the licensing process should be “efficient,” that usage and payment rates should be “transparent and accessible,” and that a single standard “should apply to all music licenses.”
Coincidentally, the Justice Department agreed last summer to open a formal review of consent decrees that have governed the two major songwriters’ licensing organizations, Ascap and BMI, since 1941. The system has been clumsily adapted to the streaming world.
Accomplishing these goals will be challenging—especially changing copyright law, which must be done by Congress. The various interests have loud voices, varying agendas and, in the case of industry groups, deep pockets. Last year the Recording Industry Association of America spent more than $4 million on lobbying and the National Association of Broadcasters more than $18 million.
But another important stakeholder is involved—the public. “The immediate effect of our copyright law is to secure a fair return for an author’s creative labor,” Supreme Court Justice Potter Stewart wrote in the 1975 case 20th Century Music v. Aiken . “But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good.”
Remarkably, until the current moment, that is almost exactly what happened. A little over a century ago, the Copyright Act of 1909 established that when a recording of a song is sold, its authors are entitled to a royalty. Soon after, the Supreme Court held that they were also entitled to payment for the use of their music in restaurants, nightclubs or any other establishment.
Those royalties transformed American popular music from the schmaltzy waltzes and cringe-worthy novelties of Tin Pan Alley, sold in sheet-music form largely for home use, to the brilliant Great American Songbook inaugurated by Irving Berlin,Jerome Kern and George Gershwin.
As Berlin, Kern, Gershwin and others developed their art, they were the beneficiaries of lucrative Hollywood and Broadway contracts. Ascap and BMI, operating under government oversight, saw to it that they were fairly compensated. The system spurred the next generation—Harold Arlen,Johnny Mercer and later Jimmy Van Heusen,Jule Styne and dozens of others—to creative heights. The listening public benefited.
Half a century ago, talented young people aspired to write another “White Christmas” or “Summertime.” Today, after reading about the paltry rewards of Aloe Blacc or Desmond Child, a creative soul would more likely turn his or her attention to devising a new music-sharing app. But we’ve got plenty of apps. What we need is a new torrent of great songs. [Wall Street Journal]
