The music industry has undergone some seismic shifts over the last several years with the explosion of streaming services, and now creators of music content and lawmakers are pushing to transform compensation and help content creators capture a greater share of the pie.
Several factions of the music industry are backing two new bills introduced in Congress this year that would amend the Copyright Act, creating new revenue streams for songwriters, recording artists, performers and record labels.
The Songwriter Equity Act, reintroduced in the U.S. House of Representatives this spring by a group led by Rep. Doug Collins of Georgia, seeks to ensure that songwriters are fairly compensated for their intellectual property.
The bill’s supporters claim that the current mechanical rate songwriters receive in royalties, 9.1 cents per song on physical recordings (CDs, record albums), is far below a fair market price. To back this assertion, proponents point out that the rate has only risen 7 cents in the last 100 years.
Supporters claim the bill will also help address ongoing concerns about the impact of a rate disparity that values the performances of sound recordings at a level approximately 12 times greater than the actual musical compositions from which they are created.
While the bill is supported by some of the country’s largest Performing Rights Organizations and trade groups, it is opposed by both radio and Internet streaming services.
Another piece of legislation also hopes to put more money in artists’ pockets. The Fair Play Fair Pay Act (FPFPA), introduced by Rep. Jerrold Nadler of New York in April, hopes to shake up licensing rules for digital and terrestrial radio broadcasts as well.
“The Fair Play Fair Pay Act would be the most significant step forward for artists in the last 20 years,” said Ted Kalo, executive director of musicFIRST, an advocacy organization for music creators’ rights. “It would allow all artists — from household name stars to unknown session players — to earn royalties when their work is used on AM/FM radio for the first time in the history of broadcast radio.” Currently, performing artists, unlike songwriters and music publishers, are not entitled to any revenues for terrestrial radio play.
In addition, the act would be a major coup for artists with sound recordings prior to 1972. There is no federal copyright protection for sound recordings made before February 1972 – the month Congress created the public performance copyright interest.
“Everyone with a stake in the music business, artists, record companies, music services, and fans alike, will benefit as a result,” of FPFPA, Kalo said. Many artists have come out in support of the bill. The bill has been gaining support from both Congress and artists since it was introduced in April. According to musicFIRST, nearly 25,000 people have written to members of Congress in support of the bill.
In July supporters organized the “Music Community Week of Action in Support of the Fair Play Fair Pay Act,” an initiative intended to highlight the global support for this bill.
“In the new global digital marketplace, content remains king,” according to Denise Colletta, senior vice president and team leader in City National’s Entertainment Division. “With the ever-growing consumer appetite for music, the creators and owners of content stand to extend their leverage in fighting for a greater share of the music revenue pie.”