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The following open letter comes from David Israelite (pictured), the president and CEO of the National Music Publishers’ Association (NMPA). NMPA is the trade association representing American music publishers and their songwriting partners. Today (July 28), Israelites and other leading figures in songwriting and music publishing speak at a workshop on competition in public performance licenses from music in front of the Antitrust Division of the US Department of Justice.
The Covid pandemic has changed the way songwriters write songs a lot. Songwriting is often a collaborative effort, and many songwriters adapt by learning to write in different ways.
Many more could change this year. The United States Department of Justice is currently examining important issues that could improve the way songwriters make a living, and the question is whether the music industry can adapt to ensure that songs receive their fair value from digital music services. After all, without songs, these services wouldn’t exist.
It affects all songwriters. While most people get into music because they feel an artistic vocation, there is a business side that creators need to understand in order to advocate for changes that will help them make a living from their gifts.
“ASCAP and BMI are incredibly small – and their writer members pay the price.”
Today’s songwriters face an incredibly difficult industry. For an artist, a hit song can turn into a tour, a sponsorship deal, and countless opportunities. But for those who are strictly songwriters, their sources of income are much more limited and increasingly depend on how they are paid by streaming services. The people behind the music are paid so much less than they deserve, not because their contributions lose value, but rather because of the way the antiquated rules of how the federal government decides that value, instead of the market.
The majority of songwriters’ income comes from the licensing of public performance rights, which most songwriters collect through ASCAP or BMI – and these performing rights organizations (PROs) offer huge benefits. While today there are only two PROs left, only ASCAP and BMI are incredibly restricted – and their author members pay the price because the price of songs in the ASCAP and BMI catalogs is not evaluated in such a way. fair.
These restrictions are due to a decision taken in 1941 on the mode of operation of ASCAP and BMI. Much has changed since then.
Unlike other forms of property – such as books and works of art – the work of a songwriter is not bought and sold on an open market. Instead of streaming companies negotiating with music publishers over the value of songs, they go to ASCAP or BMI for millions of works, and if a price cannot be agreed upon, a federal judge of New York decides the price. This flawed and arbitrary process resulted in royalties that are undoubtedly less than the value of the songs.
Because there are millions of songs that streaming services want to license, there is a need for efficiency, but that efficiency should not come at the expense of the value of the music. There is a way to isolate the way songs are licensed to the relatively few dominant streaming services – operated by giant tech companies – while still taking advantage of the efficiency of bulk song licensing in places like the restaurants, places and bars.
Amazon, Google, Apple, Spotify and XM / Sirius, owner of Pandora [are] all being at an advantage in their negotiations with songwriters because of archaic regulations. “
Today’s digital licensees number in the billions and billions of dollars. The vast majority of music streamed in the United States is consumed through one of the five very big companies – Amazon, Google, Apple, Spotify and XM / Sirius, owner of Pandora. These companies, both individually and collectively, eclipse not only each individual music publisher, but the music publishing and songwriting industries as a whole.
In fact, Wednesday the House of Representatives Judicial Committee to Hold Hearing with CEOs of Amazon, Google, Apple and Facebook to address antitrust concerns related to their dominance in the digital market. What do all of these giant tech companies have in common? They all have an advantage in their negotiations with songwriters because of these archaic regulations.
These companies are nothing like the nascent broadcasting industry of the 1940s, and they do not look like the general licensees of today, but they enjoy the same protections. An unintended consequence of these decades-old rules is that songwriters essentially subsidize massive streaming companies. This needs to be corrected.
Allowing songwriters to negotiate their digital broadcast rights directly with digital services makes sense and is a narrow change that will have a huge impact on songwriters. These rights are extremely valuable as streaming services attract millions of subscribers and run into billions. Yet, due to these Department of Justice restrictions, songwriters are not capitalizing on the popularity of these platforms.
The artists and the record companies are negotiating directly with the streaming companies, as it should be. Doesn’t it make sense that music publishers, who regularly represent their songwriter partners in agreements, are the ones negotiating with services that want to use their work? The Department of Justice should let the publishers do their job.
“We need to fix this system that was put in place in 1941, before streaming was possible. “
You’ve read plenty of headlines about how streaming is helping music recover since piracy devastated the business. But in many ways, in the current system, it simultaneously saves the recording industry while slowly sinking the songwriting industry due to the fact that songwriters and publishers cannot negotiate the record. fair value of songs with streaming services.
Songwriters want to keep creating. They want streaming to grow and take advantage of that growth. To enable them to do so requires a simple, narrow and fair change.
The Department of Justice is supposed to determine what’s fair, and that definitely gives songwriters the right to maximize the value of what they create, because that’s what the whole industry is built around.
We need to fix this system that was put in place in 1941, before streaming was possible. As the world grapples with so many pressing issues, music continues to be a comfort, inspiration, and career for many. You have to pay attention to it now, otherwise the creators of tomorrow will no longer stand a chance.
Music trade around the world
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