Since May 2013, the House Judiciary Subcommittee on the Courts, Intellectual Property and the Internet has undertaken a comprehensive review of the entire Copyright Act, including many issues of importance to musicians and songwriters. But the Act is not the only regulatory structure that impacts how creators are compensated.
It’s pretty weird when you think about it: when you hear “I Will Always Love You” performed by Whitney Houston on AM/FM radio in the US, neither the Houston estate nor her label get paid. But songwriter Dolly Parton does receive compensation, along with her publisher. We love Dolly a ton, but this seems unfair. That’s because it is.
Things look much different in the rest of the world, where performers, labels, songwriters and publishers ALL get paid for radio play. Consider how certain genres of music—like jazz and r&b—are powered by performances. “Respect,” belted out by Aretha Franklin. “My Favorite Things” as interpreted by the great John Coltrane. Yet due to a weird loophole in US law that exempts radio stations from paying performers or labels, countless American artists have been unable to collect money owed to them for airplay here and abroad. The problem is particularly acute for performers who aren’t in a position to tour, such as older, so-called “legacy” artists. When it comes down to it, the lack of a public performance right for over-the-air broadcasting amounts to the government giving away music to the rest of the world for free.
Welcome to Part Two of FMC’s look at transparency and why it matters to musicians and composers. In Part One, we described three different types of transparency, and outlined why each matters to anyone who wants to get paid in the digital age:
1. structural transparency: how different services function and how they compensate artists
2. rates and revenue transparency: how money is split, who gets paid what and why
3. repertoire transparency: readily available ownership information to facilitate more efficient licensing and accuracy in payment
Today, we’re going to look at a current hot topic—direct deals for performance rights in music publishing—as a case study.
Let’s say your metal band is playing a headlining club gig. At the end of the night, the promoter hands you an envelope containing $200. Is that a fair share?
Or say you’re a R&B singer with a CD released by an independent record company. Your label sends you quarterly royalty checks, but how do you know if the amount is correct?
Or imagine you’re the composer & lyricist of a popular country song that gets played on an on-demand streaming service. You get regular checks from your performing rights organization (PRO) for this use, but how do you know if the rate you’re getting is fair compared to what other songwriters get for plays of their songs?
When music is played on a non-interactive digital service like Pandora, Sirius XM, or cable radio, payment for the sound recording copyright is collected and distributed by SoundExchange, a non-profit performance rights organization. As we detail in our handy “Music and How the Money Flows” chart, this revenue is divided up in a standard formula: 45% goes to the featured artist, 50% goes to the sound recording copyright owner (usually a label), and 5% goes into a union-administered fund to compensate backing musicians and session players. We’re fond of this system because it treats all artists equally, ensuring direct payment that can’t be held against recoupable debt to a label, with equitable splits.
But what happens if you’re a self-released artist who doesn’t work with a label, but owns the copyrights to your sound recordings? You are entitled to collect both the artist share and the label share yourself. Unfortunately, many artists don’t know this, and end up missing out on money they ought to be collecting, because they’ve only registered for the artist share. Other artists haven’t registered with SoundExchange at all.
CD Baby, a popular distribution service with a large userbase of mostly self-released artists, recently announced a change to their terms of service that allows them to collect the label share from SoundExchange for their roster of distributed artists. This move was met with some minor controversy, as indeed, artists are entitled to collect that money themselves directly from SoundExchange, without the administrative cut that CD Baby charges. We decided to go directly to the source: CD Baby CEOTracy Maddux answered our questions this week via email.
by Sam Redd, Communications Intern and Kevin Erickson, Communications Associate
It’s happening again: another contemporary hitmaker is involved in a lawsuit with the estate of a well-loved musician over alleged unauthorized use of elements of the latter’s past work. In this case, the issue is Robin Thicke’s 2013 hit “Blurred Lines” and the Gaye family’s claim that the song illegally appropriates elements from Marvin Gaye’s #1 hit “Got to Give it Up,” released in 1977. After more than a year of legal wrangling, it now appears that the dispute may be one of the rare infringement cases that makes it to trial. But there’s a surprising wrinkle: in the course of litigating this dispute, Thicke may have let slip one of the music business’s more troubling open secrets.
Judge Colleen McMahon of the United States District Court in Manhattan said no-go to SiriusXM’s motion for summary judgment (a move to dismiss the suit), giving the satellite broadcaster until Dec. 5, 2014 to dispute remaining facts. This means that SiriusXM can be held liable for copyright infringement.
Currently, recordings made before February 15, 1972 do not enjoy federal protection, as there was no federal copyright for sound recordings until Congress passed a bill on that date. However, this legislation did not apply retroactive protections, which means older sound recordings are covered by a patchwork of state statute and case law.
Streaming music is getting a lot of attention lately. Some of this is because country/pop superstar Taylor Swift removed her catalog from Spotify, and majormediaoutlets like to ask folks like us what it means. But Spotify isn’t the only streaming game in town: there’s also Internet radio, which is an entirely different animal when it comes to how royalty rates are calculated and how musicians are paid.
Who gets paid, how much and under what terms when music is played on digital and AM/FM radio? Answering those questions isn’t easy, even for experts. But one thing is clear: 2014 has been a big year for the laws and policies that determine royalty rates for all forms of radio, and the intrigue will likely continue into 2015. read more