A Rational, 5-Point Plan for Modernizing Music Copyright…

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The following speech was delivered last week by Paul Williams, president and chairman of performance rights organization ASCAP in Los Angeles.

Good morning, everybody.  I’m Paul Williams, and I create music.

Welcome to ASCAP’s 2014 Annual Membership Meeting and the kick-off of the ninth ASCAP ‘I Create Music’ EXPO.

This is a milestone year for ASCAP – our 100th birthday.  And we commissioned that wonderful film you just saw as a way to shine a light on you – music creators – who are the heart and soul of ASCAP.

Way back in 1914, a small, visionary group of songwriters and composers had an idea. They believed that if they joined together to protect their copyrights and advance their profession, they would be far more effective than by any one of them going it alone.

And it worked.  For 100 years, ASCAP has given songwriters and composers a collective voice.

The original founders of ASCAP were tough and smart and willing to risk a lot to get this new organization off the ground.  They fought all the way to the Supreme Court.  In a beautifully written landmark decision in 1917, famed Justice Oliver Wendell Holmes established the right of songwriters, composers and their publishers to be paid when their music was performed publicly.

That right has been challenged over and over again with every new invention – from radio to television to cable to satellite to the internet and wireless services.  And over and over again, the brave women and men of ASCAP joined their voices together to ensure that songwriters and composers wouldn’t be left out in the cold every time a new business decided to build its profits by using our music.

The Board of Directors you elected continues that work with commitment, intelligence and passion.  And today the stakes are higher than ever.

Technology is changing the world in wonderful ways. And it’s creating incredible opportunities for music to reach whole new audiences. But it’s also creating challenges when it comes to licensing our work.

That’s because the rules and regulations that govern how we do business are outdated, and simply don’t work in today’s evolving music marketplace.

And that is what I want to focus on today. As music creators, the world we live in has changed. The way people listen to music has changed.

And yet, ASCAP and BMI are forced to operate within a regulatory structure governed by consent decrees created in 1941 and last updated in 2001, before the invention of the iPod. If ASCAP or BMI cannot agree with a licensee on the price of a license, then a Federal judge, or rate court, determines the amount we will be paid for our music from that licensee.

That, my friends, is unacceptable.

It’s unacceptable for the songwriter whose talent, hard work and sacrifice propels one of his songs to become an international smash, and after millions of streams on Pandora, receives a measly few hundred dollars for his achievement.

It is unacceptable that record labels and recording artists earn 12 to 14 times more than songwriters and publishers for the exact same stream of a song.

It’s unacceptable for the young songwriter, who is struggling to earn a living while pouring her life into her craft, knowing that outdated laws are allowing big music companies like Pandora to prosper, while many music creators struggle to pay the bills.

It’s not only unacceptable. It’s insulting.

It is no secret that the corporate internet giants who control all the pipelines of music delivery are lobbying aggressively in all arenas to protect their own economic profits, not yours. It is no secret that they want to find ways to avoid paying more for music. In fact, they’d like to pay less. That is why it is now absolutely critical for us to stand together as members of ASCAP and make our voices heard. We need to explain that we know we’ve chosen a profession that has no guarantees of success. We can live with that uncertainty. But when our music is successful, we shouldn’t have to accept the unfairness of a corporation making huge profits from music, while we get a pittance.

What are we going to do about it?

We need a long-term solution that works better for the music industry as a whole. The future of songwriting – and perhaps, the future of music – depends on us working together to fix these problems.

We know this.  And we know that, right now, change is within our reach.

Of course, some people will tell you change is too hard. The system is what it is. Some of these people are already trying to capitalize on the weaknesses in the system as it exists today. And for an elite few, that could be a lucrative strategy. At least in the short-term.

But it won’t help the vast majority of songwriters, who are struggling today to make a living. It won’t help to ensure that songwriting remains a viable profession for future generations.

That’s why ASCAP is taking a different approach.

That is why ASCAP is leading the charge to update the laws that regulate how songwriters and composers license our works.

We are working on the front lines with policymakers and others in the music industry to build a consensus around how we can create a more efficient, effective and modern music licensing system – one that better serves you, but also better serves the needs of music licensees and music fans everywhere.

And today I want to share with you the five core principles we’ve outlined to guide our efforts. We call it our “Music Advocacy Project” or MAP, for short. ASCAP’s path toward a modernized system that works better for all – writers, publishers, licensees and music listeners.



1) Simplification

The music licensing process must be simplified, streamlined and reflective of how people listen to music today. Figuring out how to get paid from digital services is overly complex and time-consuming for music creators who’d prefer our time writing music, not chasing down pennies. Our members would like us to be able license all the rights that are implicated when a song is streamed digitally, not just the performance right, but we can’t because of outdated consent decree rules. Licensees want the same thing. It is easier, more efficient and reduces transaction costs. It also means more money in the pockets of songwriters and composers – and less money in the hands of middlemen who see dollar signs in an overly complex and confusing system.

2) Market Rates

The free market should determine the value of music copyrights, just as it does in other entertainment sectors. Songwriters, composers and publishers are forced to accept what amounts to government-imposed caps in two of the three main areas we earn revenues – performing rights and reproduction, or mechanical, rights. Rate court is expensive and can be used as a pressure tactic by companies who don’t want to pay a fair market rate for music. And oversight over mechanical rates by the government’s Copyright Royalty Board has led to a situation where mechanical rates have increased by only 7.1 cents over the past 100 years, which doesn’t even come close to matching the rate of inflation.

Forcing songwriters to sell our creative works to buyers at prices we deem unfair does not incentivize more creation. We need a better way.

Which leads me to our third principle…

3) Consumer Choice:

Music listeners want access to a wide variety of music on any device they choose at reasonable prices. And creators want our work to be heard. The interests of creators and the public are fundamentally aligned here. If we are paid fairly by businesses that profit from our creative work, then we can continue to contribute diverse and high quality new music. This gives consumers the kind of variety of wonderful music they want and deserve.

That’s the way to sustain a healthy music market.

If ASCAP is unshackled by outdated regulations, then music lovers get more choice, more access, more music! That’s a good thing.

4) Creator Control

In music, everything starts with the songwriter or composer. There would be no music business without the music creators. And therefore, music creators must be at the center of every effort to reform copyright. We have a vibrant creative class, but businesses that want to diminish copyright for their own economic benefit are working hard to change that. As a nation, do we really want to diminish one of the creative areas where we, as Americans, excel? And where music also helps spread our values of freedom and truth to the world? We should be able to sustain a viable living as professional songwriters and composers.

Let’s preserve a strong copyright law. It works to foster creativity for the public good.

5) Access

A robust collective licensing system is proven to be the most effective way to ensure that creators are paid and that music lovers have more ways to listen to your music legally. ASCAP keeps the music playing, ensures our members are paid, and enables new businesses to launch legally at a reasonable cost.

If we are guided by these five core principles – simplification, market rates, consumer choice, creator control and access – I believe we can create a system that better serves creators, licensees and music lovers everywhere.

Let me report on some encouraging developments.

In February, Representative Doug Collins of Georgia introduced the Songwriter Equity Act. It already has strong bipartisan support. Early co-sponsors include Hakeem Jeffries of New York, Marsha Blackburn, Steve Cohen and Phil Roe of Tennessee, Judy Chu of California, Bob Brady and Jim Gerlach of Pennsylvania, Trent Franks of Arizona, Terri Sewell of Alabama, Howard Coble of North Carolina, Ted Deutch of Florida and Tim Griffin of Arkansas.

The bill would amend two outdated portions of the Copyright Act, Section 114(i) and Section 115, to remove the artificial barriers that keep songwriter and publisher compensation below fair market rates.

Specifically, the Songwriter Equity Act will allow the ASCAP and BMI “rate courts” to consider the rates being paid to record labels and recording artists as evidence when establishing digital performance rates for songwriters and composers. And it would adapt a fair rate standard for reproduction, or mechanical rates.

The Songwriter Equity Act is a small, but important first-step to wider reform. And we know reform won’t come easily or quickly. But there is a growing consensus that it needs to happen, starting with review of the consent decrees.

To that end, U.S. Register of Copyrights Maria A. Pallante recently announced a study to evaluate the effectiveness of the current music licensing system, noting specifically:

“The time has come to re-examine whether the consent decrees governing ASCAP and BMI are serving their intended purpose and whether the consent decrees are facilitating or hindering a robust and competitive marketplace.”

This is huge development. And your fellow ASCAP members helped make it happen by joining us in Washington and making the case for reform to policymakers face-to-face.

Over the past year, we’ve had invaluable support from songwriters Josh Kear, Dan Wilson, Ne-Yo and others who have come with us to Washington to share their stories with policymakers.

And the chorus for consent decree reform is growing in other venues… The legendary Burt Bacharach recently placed an op-ed in the Wall Street Journal on this topic.

And it’s gotten so loud that the Chairman of the House Judiciary Committee in Congress, Rep. Bob Goodlatte, is now holding a series of hearings on music licensing, with a view toward understanding what is working and what needs a fresh look. I can assure you that ASCAP will continue to be on the frontlines in Washington fighting on your behalf.

I’d like to touch upon another matter that could have a major impact on music creators, and that is the Aereo case being heard before the Supreme Court.  Aereo is a company that sells a device for capturing over-the-air broadcasts that then allows viewers to watch the programming on demand.  Television broadcasters claim that this violates the public performance right in their copyrighted programming, and we agree.  After all, your copyrighted music is contained in those programs.

If Aereo wins in the Supreme Court, this could have a devastating impact in all creative sectors that invest and contribute to audio-visual programming for television.

Of course, Silicon Valley is siding with Aereo.  It’s not surprising that they are supporting a technology that flies fast and free with someone’s else’s intellectual property.  ASCAP joined with BMI, SESAC, NMPA, RIAA, The Recording Academy, The Songwriters Guild, NSAI, and Sound Exchange in filing an amicus brief opposing Aereo.  We are closely watching the outcome of the trial.

If you are staying for the ASCAP EXPO, I encourage you to attend the legislative panel tomorrow morning called “Congressional Review of the Copyright Act.” I’ll be joined by members of Congress Judy Chu and Tom Marino, and we’ll explore in greater depth the issues and challenges that are affecting our lives as music creators.

I also urge you to visit The ASCAP Music Advocacy Project booth in the exhibit area. From there you can write to your Congressman and ask for his or her support of the Songwriter Equity Act.

Add your voice. Get involved, even it is simply sharing our message on your social media channels. The more we can speak with one collective voice, the stronger our voice will be heard.

The future of the music industry depends on a system that better serves music lovers everywhere – and allows songwriters and composers to flourish, along with the businesses that use our music. It is our mission to ensure that all songwriters and composers get the full value of our work; that we’re paid in a fair, objective, transparent way; and that we retain control of our music.

Above all, we want to keep the music flowing.

The music you write – American music – is the most popular music in the world.  I firmly believe that our ability to continue to create and export this music to millions of people who want it, who love it, who need it around the globe depends on all of us working together to build a more sustainable future for music – one in which you, and all of your fellow music creators, can thrive alongside the businesses that use it.

Thank you all for being with us today. Thank you for being part of this great organization. And, welcome to the next 100 years.

Now, please welcome our CEO, John LoFrumento.


20 Responses

  1. jw

    So… essentially, ASCAP wants more people to hear more songs, but doesn’t want anyone’s piece of the pie shrunken. So they’re asking for more in return for less.

    If the value created by a play is not determined by the revenue created by corresponding advertising, & the value is simply what songwriters would like for it to be, that’s not a fair market rate, that’s a fantasy rate. Is it not ASCAP’s responsibility to consider where this money is supposed to come from?

    I fully support balancing fixing the songwriter/performer imbalance, & I understand that ASCAP doesn’t want to say “performers/sound recording owners are going to have to make room for us,” but pitting the songwriters against technologists in this way is disingenuous. The fact that they portray technologists as raking in cash, despite the fact that none of these companies are profitable, is absurd. These companies are being floated by venture capital, & that money & any revenue generated therefrom is flowing, by & large, straight into the pockets of songwriters & performers & record labels at a rate of ~$.70 per dollar, as I understand it. Does Paul Williams think that west coast investors & huge investment banks are going to keep emptying their pockets forever to support his troops?

    Sure, it all sounds awesome, but is it realistic? Here’s something to consider… maybe a few million plays on Pandora is actually only worth a few hundred dollars. We could doing some math, but judging from Mr Williams’ photograph some sort of gale force wind blew mathematics out the door a long time ago.

    The way that reality works, & I agree that this sucks, but when a certain amount of revenue is being made, in this case as a result of subscription payments or advertising accompanying the performance of recorded music, it’s very easy to divide the revenues by the plays & determine the percentage of revenue that each play is responsible for, & therefore in any rate that eclipses that value created is a fantasy rate. I wish that fantasy rates were real, but I think we all probably feel that we deserve more money than we’re actually getting paid. So when ASCAP says, “We want more money!,” that doesn’t come out of a magic treasure chest. It can really only come out of the split between performers & songwriters. So let’s just all be up front about that, & not suggest that companies like Pandora or Spotify ought to be paying out more than 70% of their revenue or else they’re unfair.

    • TuneHUnter

      You will get at least 5 to 10x more money if you lock the music in virtual walls, like in the old fashion store.

      Then and only then you will be abel to sale it again.
      Process is simple: fire Shazams and lyric ID as a music PIMPS
      and hire them as cash collectors for those who want to experience any tune again.

      No need for subscriptions.

      • FarePlay

        Paul’s not talking about making the old fashioned way and many of these tech companies are not either. They are selling the fantasy of being future money machines for their investors. That’s it.

        Look at Pandora, they’re getting rid of the music guys, the same way record labels did in the 80’s when they were awash in money from the migration to CDs. Unfortunately, the labels drove their business into the ground with greed.

    • Retiel

      Amen, JW. You are a wise man. The old windblown stalwarts may not realize that a million plays might simply be run of the mill. If you have a thousand bands getting a million plays by virtue of a more democratic even playing field (instead of the one where record companies decide which ten bands will get the biggest push) then the value of the product is naturally diminished. Williams complains about the Tech companies being out for their own interest. Hello? What were the record companies doing all these years? What have the cable companies been doing all these years? Monopolizing their own interests. It’s very simple: unless you happen to hit the lottery of mainstream success, most musicians can’t survive on selling music. Never have and never will. Guys like Paul Williams are not going to protect the average musician. They want to keep their outdated royalty organizations relevant.

  2. Anonymous

    “our 100th birthday”

    And it shows. 🙁

    How can you not mention the only real problem we face today — piracy?

    • SCUD-letter B

      He’s got a lot going on………….lots of irons in the fire. He probably just forgot to add that bit in.

    • smg77

      Piracy isn’t a problem. Label greed is.

      • Anonymous

        Cutting music sales down by 50% is not a problem? 😉

    • Willis

      I’m sure glad labels having zero interest in artist development isn’t a problem.

      • Anonymous

        Um, and why is it that labels can’t afford artist development anymore?

        Because piracy cut music sales down by 50%.

  3. DUDE

    A lotta words used to say almost nothing of importance… sounds like the only concrete change he’s pushing is negotiated rather than stat rates, which is a terrible idea

  4. hippydog

    Market rates:
    Heres the slight problem with that.. Except for BMI, ASCAP has pretty much a monopoly.. “Markets rates” doesnt apply or work with monopolies or near monopolies..

  5. TuneHunter

    Those five points are wise but sort of general – actual plan for those wishes is in Discovery Moment Monetization.
    To do it quick, with minimum of politics Google has to flip up side down “lobby efforts” and convert YouTube to $50 billion dollar central hub of $100 billion dollar industry.

    Happiness and cash for all new comers and old dogs in less then 5 years!

  6. Insider

    Let’s see…in the digital realm, labels earn multiples of what publishers do, and that’s outrageous!! And in the traditional radio realm, where there’s a lot more money, publishers get 100% of the music royalties and labels get nothing, and that’s…!! Well, that’s not the subject of today’s talk.

  7. Buck

    In my opinion, ASCAP should implement a plan to “modernize” their sampling, credit, distribution and reporting methods. As they stand now, they are just as (if not even more) archaic than the copyright laws he’s railing against. They’re the worst of the PROs in that regard for sure and do a shitty job of distributing what money they do collect. Why should they be allowed to collect more?

    I find this especially interesting: “It is unacceptable that record labels and recording artists earn 12 to 14 times more than songwriters and publishers for the exact same stream of a song.”

    At the current mechanical stat rate of 9.1 cents, songwriters/publishers receive around 1/14 of the income generated on a 1.29 too. Admittedly, there is a distribution fee taken off the top of download income but the overall “piece of the pie” is about the same. I see this as the real heart of the issue

  8. hippydog

    Heres an interesting article I found..

    The part that really caught my eye was
    Quote “ASCAP then does what they refer to as “random” sampling of radio airplay, and through a bewildering series of calculations that weight the performances according to the estimated audience size of the station, they distribute money collected from licenses to owners of copyrights of material that has been logged in their surveys. ASCAP secretly tapes 60,000 hours of radio broadcast a year and 30,000 hours of television for their samplings. Based on their estimate of 600 million broadcast performances a year, at an estimate of 12 songs per hour, this divides out to about one tenth of a percent of all airplay gets sampled to determine who gets nearly $300 million!! ASCAP samples in 3 hour television and 6 hour radio segments, called units, and their strategies for taping are not public information. Neither ASCAP or BMI does any survey of performance venues (clubs, concerts, festivals, etc.); therefore all money collected from licenses of performance venues is paid out based on radio airplay. ”

    For me, that is one of their biggest problems..
    Payouts to this day are still being decided purely on Radio Play..
    So the numbers paid out will be inherently & incorrectly skewed..

    just sayin.

  9. stephen Aristei

    Dear “Anonymous”
    It is a good thing to stay “Anonymous”, because when one speaks out about something they know nothing about, they embarrass themselves……And you certainly won’t do that by hiding behind “cover” ! It never fails to amaze me how so often people don’t read, don’t understand, yet “comment” ! LOL ! The topic that Paul was addressing was “changes in the copyright law” in light of this important, “landmark” case…!
    And “Hippydog”, I completely agree about ASCAP and BMI falling short on live performance venues, however, this can be corrected by members, voluntarily sending this information in and demanding payment…All the European PRO’s do it….and SESAC has been trying for years……However, lets face it….there are more “venues” then people to humanly or inhumanly collect….So I put that one back at cha…! Take responsibility for yourself and help make the society “make the change” !…..

    Record companies have not stopped developing artists, the problem is the same one that has always existed there….That being that in order for a label to “develop and artist”, they must first understand what and how that is done….Most of the “college educated” and “music degreed” people presently working within most record labels today, have “NO IDEA” , how to determine, let alone develop “talent”….They are going with an old business model (that’s right it is an “old model”) , that has proven not to work….And as in most social situations were people fail to learn (read??) from the past mistakes of others, they have this nasty habit of “repeating those same mistakes” ! Also, the record business was created by “gamblers”…people who we willing to bet on “talent” and many times they failed and lost everything and some times they succeeded…Those “creative gamblers” don’t exist in any of the “corporately owned” music (both record and music publishing) companies….!

    I find it fascinating that Stanford University is trying to teach a course of “entrepreneurism” and finding that in order for their “subjects” to succeed, they are having to “unlearn” much of what the university education has “drilled” into them ! Maybe it is a talent that is “born” and can’t be “taught”? It will be interesting to watch ! Look at all the major and groundbreaking companies that have been created over the past century…..Most of the founders did not have a complete college education…..Hmmmmmm? Although, I am sure of one thing…They all suffered from one form or another of ADHD or it’s many co-ocurring disabilities !

    The bottom line s that the system is completely out of “wack” and needs to be fixed. It also goes to show how “unfair agreements” and business practices, will ultimately strangle themselves and threaten the vary existence of the business they so greedily coveted !

    • hippydog

      Quote ” however, this can be corrected by members, voluntarily sending this information in and demanding payment”

      Zoe Keating (who paul has reposted some of her stuff, which is where i first heard of her) Posted some stuff in her blog about exactly that..

      Short story: in North america it doesnt work.. they dont want that information, and wont use it..
      How Europe does it (I think) is the way America should also.. (ability to self report and take in more sources then just radio)

      Quote “there are more “venues” then people to humanly or inhumanly collect….So I put that one back at cha…!
      The technology and infrastructure is already present where they could do it.. And no one is saying that they have to monitor every single song played in America, BUT they should at least have a fair sampling..

  10. LV

    This is an interesting comment section… many are willing to put their 2 cents in without disclosing what reason they have to make a comment on this matter. For the record; I am a unpublished songwriter looking to soon affiliate with one of the US PROs.

    That said, Mr. Williams’ speech is spot on in light of his position as President of ASCAP. What he has detailed is precisely what he should be doing in that position (and for some to comment on his photo? Ummm, really? Grow up and come back to us with a photo when you are his age).

    The issue being addressed is aimed at the ASCAP membership attending their own event. His outline of his agenda as ASCAP president is indeed are heartening.

    Will they correct all of the inadequacies of the current system?
    Is their own accounting system still in the dark ages?
    Will that be able to be changed with the current legal rules and antiquated consent decrees?
    Not likely with the lifetime of those here reading this… but one must start where they are and move one step at a time!

    One has to start somewhere and while these problems were in place for several decades, they are now seeking to remedy the problems these outdated legal constraints have placed on the current generation of creators. The current system are also likely to impact those to follow in the future even more (and their number and influence will be even less since it is less profitable to be a creative in today’s world, even less reason to pursue that career in another two decades).
    Yes, piracy is the 800 lb gorilla in the room and several have mentioned this but Mr. Williams’ responsibility is to his members. The issue of piracy should be dealt with by the law enforcement personnel who are tasked with that aspect of our legal system. They could easily pay for their work with the seizure of profits made by those who pirate IP content. Further, to say that the tech companies who profit from other people’s IP should be given a pass simply because they are so well connected to monied interests is disingenuous at best and does not pass the smell test… they are also complicit in their flaunting of IP laws…

    But do not complain about ‘piracy’ if you go to YouTube and listen to all of your favorite music without paying a dime. They are the “new radio industry” and their owners seek to have the same exclusions to paying royalties as the radio conglomerates do now.

    Hopefully that inadequacy will also be addressed in testimony before congress!

    Too much has gone uncorrected for far too long and a large vote of confidence for Mr. Williams in this matter!