Artist Compensation and the Future of Music

It used to be that big companies were able to define the parameters for debate about music industry issues, and make all the big decisions. What was good for corporate media and big money, we were told, was good for the artists, and for the music industry as a whole.

The desire to tell a more complete and accurate story centered on the needs and experiences of musicians was a big part of why Future of Music Coalition got started 14 years ago. By now, more people understand that the agendas of a handful of giant music companies may sometimes align with artists, but not always. In fact, these companies are very capable of misdirection when it benefits their bottom line. And tech companies don’t have a lot of experience working directly with artists, in part because the existing structures so often compel big-money negotiations with the major rightsholders. Today, we’re thrilled to see more and more artists speaking openly about the issues that impact their livelihoods. Independent labels are getting bolder too, in demanding fair treatment and respect for their different way of doing business.

You can see this change at work in evolving debates about payments to performers and songwriters on various digital music services. Many artists aren’t receiving much money from certain platforms, and we want that to change. We also understand how complicated and counterintuitive the rules governing compensation can be (that’s why we create stuff like our How the Money Flows chart).

Some of the complexities and variances in payouts are due to quirks and loopholes in copyright law, which hasn’t been updated in decades. Some are due to relationships between traditional players (like the major labels and publishers), and new entrants (like Internet companies and service providers). Much of this is invisible to fans, who now have a range of ways to experience music—whether it’s via digital download, streaming, physical purchase or some hybrid.

Future of Music Coalition supports equitable compensation for musicians and composers wherever their music is used. In debates about royalties and rate-setting, this means looking not only at how much artists are getting paid, but also at how their compensation is structured. In fact, we have a list of “musts” for anyone that would use artists’ music—whether it’s a royalty and collection society, distributor, label or publisher:

1.     Pay artists
2.     Pay artists fairly
3.     Where possible, pay artists directly
4.     Be transparent

We support those who invest in music, those who enable its discovery, those who help get that music to listeners and those who facilitate payment to creators—every part of the ecosystem is important in getting artists paid. Labels, publishers, performing rights organizations (PROs), music services, distributors, artists and fans all have a role to play. FMC is here to highlight the benefits of working together towards a common goal: a brighter future for music where creators are fairly compensated and fans can find the music they want.

Right now, there are intense debates between indie labels and majors, big music publishers, PROs and digital services and other industry players, and we want musicians and composers to have a voice in these debates. FMC doesn’t see technology as the enemy. We don’t see labels or publishers as the enemy either (and we’ll defend them when they do the right thing). But we do see the lack of information that can be utilized by creators as a real problem. It’s one we’ve been committed to solving for fourteen years—often when the major industry players would prefer that we didn’t.

Currently, a lot of attention is being paid to the “consent decrees” that govern how ASCAP and BMI license compositions for public performance (think AM/FM and internet radio, as well as performance in physical venues). The big publishers think they can get more money from direct deals and are threatening to pull their catalog from the PROs. The PROs feel like they have to go along with at least a partial withdrawal, because they’re in a position of being made irrelevant should the major publishers walk away (for the record, we think PROs are super-important). This is not a great position to be in. We understand that most folks want songwriter compensation to go up (we do, too). But we don’t want to trade direct payment and fair splits in a Faustian bargain that could put all the power in the hands of just three major music publishers.

We’ve listed the many reasons why this is troubling—we encourage you to have a look— but we are hardly alone in voicing our concerns. Recent statements from the indie labels, the Music Managers Forum, David Byrne and celebrated songwriter Desmond Child illustrate that on issues like direct deals between giant music companies and services, there is a growing concern that artists and indies will lose their leverage .

As a creator, you can only make informed choices and push for change if you have the complete set of information. A small handful of multinational publishers and big labels aren’t going to be perfectly straight with musicians and composers. And they can use their considerable influence to bully other groups that should have artists’ interests at heart into towing the line.

We choose a different path. The one where we examine how things work for the purposes of letting artists know what’s actually at stake in these debates. That way, musicians and composers can make informed choices and decide for themselves what fairness looks like. Maybe sometimes these decisions fall in line with the big media companies. Maybe they don’t. But at least there’s a place to start.

We’re going to keep doing this work on behalf of all music creators, big and small. Please join us.

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