Songwriters Are One Step Closer To Higher Royalties

This past Tuesday at the intimate 90 seated Bluebird Cafe in Nashville, Senators Lamar Alexander (R-TN), Bob Corker (R-TN) and Orrin Hatch (R-UT) announced the upcoming introduction of the Senate version of the Songwriter Equity Act, a bipartisan bill to amend two outdated portions of the U.S. Copyright Act and level the playing field for songwriters, composers and publishers seeking fair compensation for their work. The event was put together by the Senators to understand more about the Songwriter Equity Act.

Award winning songwriter, Rivers Rutherford, performed his hit song “Real Good Man” (originally recorded and released by Tim McGraw), for the room of Senators, songwriters and music advocates.

“The irony of the digital age is it’s getting harder and harder to make a living as a songwriter, even though our music is being heard by more people in more places than ever before. Songwriters today aren’t being fairly compensated for our work, but this bill would help level the playing field at a time when we really need it.” – Rivers Rutherford, Songwriter

Performers and master rights owners currently make about 14 times more for sound recording royalties than songwriters and publishers do for composition royalties on digital platforms like Pandora and Sirius/XM radio.

Sound Recording vs. Composition Royalties:

Every song holds two copyrights: one for the composition (the song – controlled by the songwriter or publisher) and one for the sound recording (the actual master recording, controlled by the record label or the artist). ASCAP, BMI and SESAC represent songwriters and publishers in the US and collect composition royalties, SoundExchange represents master rights owners and performers in the US and collects sound recording royalties.

What these Performing Rights Organizations (PRO) do, specifically, is license their catalog to outlets for the right to “publicly perform” the songs they represent.

However, if a company doesn’t like the rate the PRO sets, they can take the PRO to “rate court.” There is one rate court setup by the government for ASCAP and one for BMI. There is one judge per each PRO, appointed for life, to preside over these disputes. The way the law is currently written, ASCAP or BMI cannot discuss other royalty rates in the industry when negotiating their own rates (like the sound recording royalty rate which is 14 times higher than the composition royalty rate).

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The Songwriter Equity Act looks to fix this. It is an update to Sections 114 and 115 of the US Copyright Act that have prevented modern songwriters from collecting fair market royalty rates for their work.

A Section 114 update would allow the Rate Court judge to consider other royalty rates (like the current sound recording rate) when hearing cases about what is a fair rate for composition performance royalties. And a Section 115 update would allow the Copyright Royalty Board to increase the mechanical royalty rate for both streams and sales. The mechanical royalty rate is currently 9.1 cents per reproduction (download/sale) and varies for streaming based on the number of subscribers.

The Songwriter Equity Act was introduced into the House of Representatives by Congressman Doug Collins (R – GA) on February 25th, 2014. It has bipartisan support in the House and is about 1/3 of the way through the evaluation process according to fellow supporter, Representative Tom Marino (R-PA).

The introduction of the Senate version of this bill brings songwriters one step closer to earning higher royalty rates for their songs.

“American music is the most popular music in the world. The men and women who create it deserve to earn fair payment for their craft. The time has come to modernize the music licensing system in a way that allows them to thrive alongside the businesses that revolve around their music. Senators Alexander, Corker and Hatch should be commended for introducing the Songwriter Equity Act. In joining Representative Doug Collins in this effort, they have proven themselves to be true champions of music creators.”- Paul Williams, ASCAP President and Chairman (and “Rainbow Connection” songwriter)

Photo is by Alison Toczylowski/ASCAP and used with permission.

20 Responses

  1. TuneHunter

    Scrap all government imposed payments. Payments out of what income? Out of free? …or almost free Spotify?

    We have to convert music back to merchandise so we can sale it 24/365 at anytime and any place on Earth!

    Then and only then we’ll have cash for say 3% royalty to song writer. Just like royalty to a patent holder.

    • TuneHunter

      This 9.1 cents sounds like a goat shit or line from 5 year plan in USSR.
      They are still it the era of CDs when $40B in sales was made by 3 billion $13 transactions.
      Today in the era of instant access, one click acquisition, 5 billion smartphones and almost 3 billion folks categorized as “middle class” we can make 100B industry out of 39 if not 25 cents transactions. GOOD LUCK, YOU WILL FREEZE YOURSELF OUT OF ANY MONEY. They will see more cash from penny paid by salesmen than imposed by government 9.1 cents

      • steveh

        Hey TuneHunter

        Why don’t you just shut the fuck up.

        You hijack every conversation.

        I can’t be bothered to read your agenda-driven drivel.

        Fuck Off!!!

        • Anonymous

          Here’s an alternative:

          Why not invite him to explain his agenda once and for all in a guest post and then politely ask him to shut the f*** up if it still doesn’t make sense? 🙂

          Couldn’t be worse than Nina’s or Ari’s stories.

          • steveh

            Not a bad idea. Anything to stop TH’s remorseless hijacking of discussions.

            But surely, if he had a decent concept why isn’t he out there doing it rather than endlessly spamming?

          • Anonymous

            Maybe he is.

            At any rate, most of us have agendas. I sure do:

            The Pirate Bay should die. So should Google, Spotify and Apple’s white earbuds. Nina should be fired, mp3s should go away, labels should to go to hell, Apple should buy YouTube, and YouTube should buy NetFlix.

            Mm, that felt good.

        • TuneHunter

          Give me till end of this year. In September it will be 15 years since I have filed my Music Identification Patent.
          Unfortunately to me and the industry this patent is derailed by $612 million precedent made in Blackberry /NTP case allowing FBI and CIA boys to use berrymail. Same case allows music ID services to free range and feed just their ego (not bank accounts) at the expense of music and musicians.

          Shazam with 400 million users is smaller in revenues than good grocery store in your neighborhood! …and that requires action and attention. Bravo labels – let’s do something productive. Discovery monetization is only avenue to recovery.

          • steve

            Why don’t you stop posting and shut the f**k up until the end of the year then?

            I find your drivel incomprehensible.

            This is a thread about songwriters. Not about attention seeking psychos like you.

          • TuneHunter

            Steve you must be from Universal – most folks in UMG foo not understand music industry it actually looks like someone pays the to destroy the business.

            As is I have simple and valid road to 100 billion dollar music industry.

            You are one of those dead fish flowing with the stream not willing to invest few minutes to see what is my religion.

          • Nick

            I’d take the time to listen, but from what you’ve said it doesn’t sound like something that can become ubiquitous. People are always going to find ways to get music for free, so I don’t see how you could possibly take the industry of paid music to $100 billion.

          • smg77

            Nobody is going to pay a per-use fee to use Shazam. It’s a dumb idea.

          • TuneHunter

            They will.
            It takes major cash to have current database with almost 30 million tunes and servers running at 24/365.

            Legal change in faire use would help, it would prevent Google music ID services from keeping music in the streets to support their cult of ADVERTISING.

  2. funn networks

    finally!!! this is wonderful for writers!!! everyone should be paid!!!

  3. George Johnson

    How about abolishing the Copyright Royalty Board and let us direct license our copyrights like normal people.

    Unfortunately, the SEA does nothing and is a complete waste of time. These music lobbyists should be ashamed of themselves, but hey have no shame much less any class, heart, brains, or talent.

    What’s incredible is that any CD or download rate increases are a minimum of 5 years away, if CD’s and downloads even exist in 5 years. Really?

    Plus, any streaming increases for songwriters and music publishers will be .00001 increases per year and the next song court will take 3 years minimum to complete.

    Why would anybody propose a bill that allows 3 judges to “consider” a free market rate in 5 years for a format that nobody will be using?

  4. Johnny Test

    Seriously, this is not irony. It is what happens when monopolistic marketing conditions are broken down and the market is opened up to everyone. We find the true market value by undergoing a series of swings between “too much” and “too little”.

    In the past, a small number of songwriters were getting enormously wealthy, while most songwriters couldn’t buy a Happy Meal with their earnings. In the future, more songwriters may make money, but there is less to go around. The days of the filthy-rich songwriting elite may be numbered, which naturally rubs those elite the wrong way. On the other hand, those writers who have produced something desirable — but who were systematically excluded from the market — will make a little more than the meager nickels and dimes they made before.

    If a song is only worth 99 cents to the consumer, and that 99 cents must be split between the costs of writing, recording, producing, and performing that song, then everyone involved should be preparing to receive a much smaller part of the pie.