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Songwriters Are One Step Closer To Higher Royalties

posted May 16, 2014, 8:02 AM by Unknown user   [ updated May 16, 2014, 8:04 AM ]
Thursday, May 15, 2014 
by Ari Herstand


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announced the upcoming introduction of the Senate version of the Songwriter Equity Act, a bipartisan bill to amend two outdated portions of the U.S. Copyright Act and level the playing field for songwriters, composers and publishers seeking fair compensation for their work.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).

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