Sony/ATV, the Publisher, Wants the Same Royalty Rate as Sony Music, the Label

The planned June launch of Apple’s streaming service is set to be delayed because Sony Music, the record label, and Sony/ATV, its publishing arm, are holding out for better deals.

Sources have told the New York Post that the other major labels are peeved about it, but there’s no word on what the other major publishers think.

Chances are they couldn’t care less, if previous streaming deals are anything to go by.  The amount they’d be getting from Apple is mostly negligible.

While the royalty rate songwriters get for airplay in Europe is largely on par with what the labels/artists get, the labels get more than 12 times what songwriters get per stream on Pandora.  Still, Pandora is taking ASCAP to court in order to lower the rates even more.

But how much lower can you go than $587.39 for 33 million streams ($0.00018/stream, by our calculations)?

That’s why Sony/ATV, with the other major publishers hot on its heels, pulled out of the performing rights organisations at the beginning of the year, in regards to digital licensing.  While ASCAP and BMI are bound by a consent decree with the US Department of Justice that prohibits them from withholding rights to their catalogues, a freestanding publisher such as Sony/ATV is free to negotiate as it sees fit.

As a result Sony/ATV reportedly managed to increase its Pandora rate by 25 percent earlier this year. And now its boss, Marty Bandier, is looking to up the rates till they’re on par with the performers’ share, starting with Apple’s streaming service – and why not?

How can labels in the US go from accepting nothing for terrestrial radio airplay – for which songwriters do get royalties, albeit much less than what they get for UK airplay – to over 12 times what songwriters get for online radio?

According to a Post source, Bandier is even willing to accept getting a fifth of what the labels get from Apple, as a first step toward his goal. The only reason Sony/ATV is the only major publisher to kick up a fuss is because the other major publishers are largely under the thumb of their respective record labels. Sony/ATV, on the other hand, operates completely separately due to the publisher being partly owned by ATV.

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At an IFPI press conference about the cost of launching an artist, back in 2010, one major label executive exclaimed that all the investment in the world couldn’t make an act succeed if it didn’t have a great song.  Yet, that same year, the record labels took the side of Danish music subscription service TDC against songwriters and publishers when the songwriters tried to hold on to their 40% share of “the royalty pie“.

It’s true that songwriters rely on performers to interpret their songs and for labels to promote them, but performers and labels are as reliant on songwriters for hit songs – and being a hit songwriter is a fulltime job. Guy Chambers once said he had written more than 1,000 songs in the past 15 years, of which 21 ranked in the UK top 10 – that’s one hit for every 47 songs, and a pretty common strike rate for a successful writer.

Instead of complaining that Sony/ATV is being unreasonable, labels need to work with the publishers to agree on a fairer split of “the revenue pie”. Then publishers could join the fight for performers and labels to get royalties for airplay on terrestrial radio in the US.

Written while listening to “No One Will Ever Love You” – written by Steve McEwan and John Paul White, performed by Connie Britton and Charles Esten.

20 Responses

    • Dry Roasted

      Yeah. Go Marty, go kill Pandora, go Kill iRadio, awesome.

      • matthew king kaufman

        You’re right. Let’s keep these wonderful contributors to our culture by eliminating any reward for songwriting.

  1. Visitor

    It is the label and artist who pay for the production of the album. They pay and work their butts off for the promotion and are the ones who make it possible for the songwriters to make any money to begin with. If songwriters want half the money then they should payhalf the bills.

    • Helienne

      Songwriters don’t get half of the money for sales – they get much less – and he’s not talking about sales. He’s talking about online radio. Songwriters have always been on par with labels/performers for terrestrial radio in the West (apart from the US, where performers/labels don’t get anything).
      Demos today have to sound exactly like a record to even have a chance to get cut, so one can argue that songwriters spend more on recordings than artists, as far from every song gets released. I do agree that labels pay for marketing and promotion so they should get more – which they do, for sales – not over 12 times more, though. Even a major label exec I talked to said that he thought it would be fair if labels got 3-4 times what songwriters get.

      • Perspective

        Why is it that the songwriter needs the label if the publisher can do it all themselves? I am not diminising their contribution by any means however the sentiment that the artist and the label don’t do pretty much everything past the point of creation seems pretty hollow. The last time I checked a publisher never has paid for scale musicians, less and less are they paying for recording (insisting writers have their own studios or do demos on their personal computers), actually come up with a plan to promote the music, rolled up their sleevs and then promoted it, pressed up millions of CD or pushed pushed content to 1000 different digital retailers, tracked all of those and tried to collect on the sales, dealt with returns on product that didn’t sell, etc. Instead if it were not for artists and labels songs would sit as demos in a drawer or on a computer and create zero value for the publishers/writers. It’s like saying gasoline should get all the credit for the car industry and make 50% of the car’s selling price? Eventually the car industry will either start their own refineries or look for alternative fuel sources.

    • Visitor

      It does make sense actually, if songwriters want to share in the royalties they ought to front some money in creating the album.

  2. Visitor

    I don’t understand why songwriters get royalties to begin with, it should be a flat free for service kind of thing.

    • Visitor

      The engineers don’t get royalities and they do much of the creative work putting together the final song these days… the system is more based on tradition than sense.

    • GGG

      Because there should be a difference between a songwriter who writes a bunch of flops and one that writes hits.

      • Visitor

        But tealistically, the artist makes the song a hit, not the songwriter. Almost nobody even knows or cares who the songwriter is (or assumes it is the artist itself). Sure there are exceptions but you have 10000x better chance of making a pop hit if you are writing for Lady Gaga then if you are writing for that college student busking on the street. Don’t fucking matter what the content of the song is, in fact most successful pop stuff is just quazi-literate gibberish about partying and sex.

        • Visitor

          You’re a fucking idiot. The artist makes the song a hit???? All music starts with the songwriting duh. And then, if the song is matched with the right artist, right marketing plan, right promotion, right points of distribution and everything else in between, the artist MAY have their shot IF the labels bureaucratic bullshit doesn’t kill the path. Go write for Lady Gaga. See how far that gets you. You have to co write with her to land on her records. You obviously have NO CLUE how the music business works. Go read some books on it and then post something constructive 😉

          • Visitor

            You can’t break into songwriting for majors unless you’ve sucked the required cocks.

        • steveh

          “Don’t fucking matter what the content of the song is, in fact most successful pop stuff is just quazi-literate gibberish about partying and sex.”

          Hey fuckface! Let’s hear your songs that you have written.
          Where are they?
          Cummon – don’t be shy – we want to listen!

          • Visitor

            I typically listen to Niki Minaj and Ke$ha in my reading room with a fine Cuban cigar while my fellow gentlemen debate the merits of neo-objectivism inherit in the deeply profound lyrical genius of these songwriters.

  3. Visitor cause I cant log in fo

    As per usual, Sony (and this time its Sony/ATV) is just being a bunch of penis heads, trying to throw its weight around..
    I get it , ATV is just trying to protect their interests, but sometimes (judging by past history) Sony just does things to be difficult..
    It can be argued that Sony does have the “better” catalog making them pretty darn powerful.. but someday , someone is finally going to say ‘frack you’ and just leave them out.. and as we have talked about many times here, the ‘caration’ power of Terrestrial radio is slipping,
    IE: If sony keeps on acting like a bad mannered gorilla, it might just leave them in the cold one day..

  4. Farley

    “While ASCAP and BMI are bound by a consent decree with the US Department of Justice that prohibits them from withholding rights to their catalogues, a freestanding publisher such as Sony/ATV is free to negotiate as it sees fit.”
    I thought the point of ASCAP and BMI, and the decree, was that the technology of the time didn’t allow publishers to effectively track use of their products individually, so they couldn’t negotiate and charge individually. Modern technology does permit it, so the publisher can charge users for what they take of particular products, something like how a gas station owner charges you for whatever gas you put in your individual car. So if publishers can negotiate and charge users for products individually and do better than ASCAP or BMI blanket pricing, what’s wrong with that?
    (I prefer an answer that doesn’t mention my body parts.)

  5. Amanda Williams

    The comments above expose a very common view point about the importance of songwriters. When people think that songwriters are unimportant – that only the artist is responsible for making a song a hit – that is a clue that there is a bigger problem lurking beheath the surface than just figuring out how the royalites are going to be split.

    The fact is that everybody who has a hand in getting a song from idea stage to radio airplay should be fairly compensated for his/her time and work. That includes the songwriters, the artists, the record labels, the engineers, the musicians and the people we never even think about as being part of the process.
    Just because “nobody cares” who the songwriters are doesn’t mean they’re not important. “Nobody cares” who picks up the trash, who washes their dishes at their favorite restaurant, or who keeps the power plant cranking out electricity – but “somebody” would sure care if those folks weren’t there working behind the scenes.
    Music is more than just entertainment. Music creates culture, and anybody who doesn’t think so, just look at how fashion, art and other media are influenced by our musical artists.
    Music is important. To say that music should be free is fine. But to say that songwriters and artists should not be compenstated for their work is not fine. We can figure out how to pay songwriters and artists fairly while still enjoying music – and that’s what we need to focus on. The last thing we need to do is devalue our artists and songwriters – or to start fighting among ourselves.

  6. Perspective

    Other than paying dwindling advances to writers exactly what do publishers do to earn the bigger piece of the pie. They want to be paid on par with the record labels but are the cheapest businesses to run because they don’t pay for anything. Instead they nickle and dime record labels and licensees for uses that actually build their copyright value, and on a regular basis bite the hands that feed them. Sony ATV should be ashamed that they don’t do any of the heavy lifting to build the value of their copyrights. They are becoming traffic cops that say they are advocates for writers but keep their checkbooks tucked away when it comes time to put their money where their mouth is. The biggest risk they face is signing up everyone regardless of talent in an effort to control the market and leverage that market share with the hopes that maybe 1 in 47 songs are hits. They would be better off to focus on great talent, nurture it, and have a much higher batting average. It starts with a song, but if no one ever hears the song, what’s the point?