Tuesday, January 29, 2008

Who's Your Daddy And What Does He Do?

David M. Israelite, President & CEO of the National Music Publishers' Association (NMPA) has issued a statement to the songwriters and publishers of America regarding the Copyright Review Board's hearing to determine mechanical royalty rates for Internet and traditional licenses of music. The participants are the CRB, the NMPA, the RIAA, and the DiMA. Both the RIAA and DiMA have proposed significant reductions in mechanical royalty rates that would be disastrous for songwriters and music publishers. Isrealite says :
"To give you an example of what is at stake, the current rate for physical phono-records is 9.1 cents. The NMPA is proposing an increase to 12.5 cents per song. The RIAA, however, has proposed slashing the rate to approximately 6 cents a song - a cut of more than one-third the current rate!For permanent digital downloads, NMPA is proposing a rate of 15 cents per track because the costs involved are much less than for physical products. The RIAA has proposed the outrageous rate of approximately 5 - 5.5 cents per track, and DiMA is proposing even less."
Ok, let's dig into this alphabet soup for a moment, shall we? What is the CRB? Who are the RIAA ? Who are the DiMA, the NMPA, and the MPA? I don't mean "what do the initials stand for" I mean what do the organizations stand for and who are the real advocates for songwriters?

The Copyright Review Board (CRB).

"On January 11, 2006, Librarian of Congress Dr. James H. Billington appointed three copyright royalty judges... who oversee the copyright law’s statutory licenses, which permit qualified parties to use multiple copyrighted works without obtaining separate licenses from each copyright owner.

Among other duties, the Judges are responsible for determining and adjusting the rates and terms of the statutory licenses and determining the distribution of royalties from the statutory license royalty pools that the Library of Congress administers.

The current judges are : * William J. Roberts (two-year term) * James Scott Sledge, Chief Judge (six-year term) * Stanley C. Wisniewski (four-year term)"
Constitutionally speaking, this triumvirate should favor protection for copyright owners, who are often songwriters, and they often do. But... sometimes the actual copyright owner is a Publisher or a Record Company, and sometimes there are conflicts between these groups when it comes to rights.

So, the advocate for the Publishers is the National Music Publishers' Association (NMPA)

From the NMPA Mission Statement :

"The National Music Publishers’ Association is the largest U.S. music publishing trade association with over 700 members. Its mission is to protect, promote, and advance the interests of music’s creators. The NMPA is the voice of both small and large music publishers, the leading advocate for publishers and their songwriter partners in the nation’s capital and in every area where publishers do business."
"The interests of music’s creators"...now surely this organization is your daddy right? Not so fast.

Back in December 2005, the NMPA and MPA (Music Publishers' Association) announced they would be targeting websites that traded user-generated guitar chords and tablatures. One copy of a letter sent by a law firm on behalf of the NMPA/MPA was transcribed and posted on Guitar Tabs.com:
"The versions of these publishers' musical works that you post on your website are not exempt under copyright law. In fact, U.S. copyright law specifically provides that the right to make and distribute arrangements, adaptations, abridgements, or transcriptions of copyrighted musical works, including lyrics, belongs exclusively to the copyright owner of that work."
Says Michael Carroll, Associate Law Professor at Villanova University :

"Rather than work with this online community that has formed around the music, by perhaps adopting an advertising-based and value-added approach, the publishers want to disband it and preserve a sales model that would force (consumers) into a passive consumption role."
Consequently the site was shut down.

But are there benefits to the copyright owners who allow their lyrics to be posted for free?

Yes. How many times have you heard part of a song and Googled a phrase or two, and found the lyrics, title and artist listed on a lyric site? And if it was an obscure song it was probably not posted on a sanctioned lyric site. But when you found what you were looking for maybe you went to itunes and bought the song. This scenario happens hundreds if not thousands of times per day.

Like many songwriters I want people to know the words to my songs so they can sing them. When I get requests for lyrics I just email them to people. I don't ask for a dollar. According to my publisher I'm violating his rights.

Similar conflicts of interest arise when published songwriters try to promote their own music with MP3s and videos on the Internet. Recently I did several videos for a company called Blue Comet Cafe.com. The website streams videos as a showcase vehicle for singer-songwriters. The budget was very tight, and I requested a gratis sync license from my publishers. Universal and BMG consented. EMI wanted a hefty $250 per song, which was impossible. Keep in mind, I'm trying to promote songs I wrote that EMI owns administration and publishing rights to. My own publisher, a member of the NMPA, prevented me from promoting my own songs. Ludicrous.

And let's be honest, many songwriters have to audit publishers to get all of their royalties. My catalogs have been bought and sold so many times I'm not even sure who owns them anymore. But, in this particular battle over the future of Mechanical Royalties, ok, we songwriters are in bed with you, NMPA. But we don't trust you, so don't take us for granted.

The MPA (Music Publisher's Association) is a similar organization.
"Founded in 1895, the Music Publishers Association is the oldest music trade organization in the United States, fostering communication among publishers, dealers, music educators, and all ultimate users of music"
Note the emphasis is "users" and "publishers". If you don't publish your own songs, you may at times run into conflicts with this group.

The DiMA (Digital Media Association)

Here is how their website defines the organization :

"DiMA was founded in 1998 by seven leading webcentric companies that agreed on a common principle - that consumers' desire to enjoy digital entertainment should not be hampered by outdated laws, regulations and business models. At the time there were no trade associations representing companies whose core businesses depended on the distribution and streaming of digital entertainment content. The founding companies believed that webcasters, technology companies and online music and video retailers needed a stable legal environment in which to build ideas into industries, and inventions into profits."
Clearly not your Daddy. In fact, as David M. Israelite of the NMPA cites :

"For interactive streaming services, which some analysts believe will be the future of the music industry, NMPA is proposing a rate of the greater of 12.5% of revenue, 27.5% of content costs, or a micro-penny calculation based on usage. The RIAA actually proposed that songwriters and music publishers should get the equivalent of .58% of revenue. This isn't a typo - less than 1%. And DiMA is taking the shocking and offensive position that songwriters' and music publishers' mechanical rights should be zero, because DiMA does not believe we have any such rights!"
This organization exists purely for the purpose of compromising copyright income from the Internet. They want it cheap, they want it all, and songwriters can eat dirt.

The RIAA (Record Industry Association of America)

From their "Who We Are" web page :
"The Recording Industry Association of America (RIAA) is the trade group that represents the U.S. recording industry. Its mission is to foster a business and legal climate that supports and promotes our members' creative and financial vitality. Its members are the record companies that comprise the most vibrant national music industry in the world. RIAA members create, manufacture and/or distribute approximately 90% of all legitimate sound recordings produced and sold in the United States.

In support of this mission, the RIAA works to protect intellectual property rights worldwide and the First Amendment rights of artists; conducts consumer, industry and technical research; and monitors and reviews state and federal laws, regulations and policies. "
Hmmm... as far as I can tell, the word "songwriter" doesn't even appear anywhere on the website. You'd think they made records out of thin air.

This organization never was and never will be serving the interests of songwriters. Stephen Foster earned $.015 (1.5 cents) for each copy of sheet music he sold. Since there were no records, we can only compare apples to crab apples here. Up until recently (during my career) the mechanical royalty rate was $.0375 per record sold. That's little more than a $.02 earnings increase in a over a hundred years, a period which has seen the price of sheet music go from $.25 to $3.95, or roughly a 1600% increase. No doubt, if there had been records in the mid-1800s, there would've been a similar price hike. We've managed to get the rate up to $.091 and now the RIAA wants to slash it back to 1980s rates? Hey, RIAA, bite me.

Support the NSAI.

They may not be perfect, but they're still the best allies we've got.


Chad said...

It makes you think these groups haven't read your "5 must read music business articles." It's this kind of anti-writer nonsense that will be the catalyst of change. The writing artist already has options which will only be expanding. I noticed that you can have your songs licensed in iTunes and other sites, but of course promotion is everything. Those are an outlet but not very promotional for the smaller indie acts.

Do you ever read the "The Big Takeover?" There's someone promoting music for the love of music and doing a great job. Jack has been at it a long time and I've discovered lots of great music that way. It's mostly indie stuff, but you'd be surprised at what gets covered - and what we miss because it isn't promoted on the large labels. My point is that music for me is about discovery so I will follow where the music goes and seek those who promote it. And I'm happy to pony up for the product. Of course, I never shop for music based on the label.

Did you see the flopped launch of www.qtrax.com? I don't see how they could generate the ad revenue necessary to sustain the idea, but at least someone's thinking about the next step. I buy most of my music in a digital format and, just as CD's overtook cassettes and cassettes overtook vinyl, so it will be with digital downloads.

Do you suppose Walmart is ultimately behind this? Are they going to outsource songwriting to India? Walmart could sign a deal with the majors, the majors could ring the call center and order up ten to twelve new country singles (uptempo, non-drinking, non-cheating, with perfect rhymes), the label could assign them to a development artist, package them in a footlong container with 3-D graphics, and put them on an "audio-only" cd-r which will only play on the Sony +R models, and then Walmart can place them in a 5 inch by 5 inch rack with a smiley face marked "New Low Price? Of course when they don't sell they can blame Napster, who will get the shaft a second time. And then cut the songwriter rate back to the 1800's. I think the issue is more about denial than survival with RIAA right now.

chromehead said...

Thanks for your comment, Chad. There's no doubt that Walmart and the RIAA both have something to gain from lower statutory rates. By 2012 the rate is supposed to be $.12 per song per CD. That's nearly $1.50 per unit sold. On a platinum CD we're talking about $1.5 million. Damn those pesky copyright owners! How can we get rid of them? Cutting the rate to $.06 means more money in the distributors' pockets as well, and Walmart is the main distributor of hard product. As for the outsourcing fantasy, you'd think, by the sound of things, that maybe there is an attitude that songs can be manufactured anywhere, why not China? The committees that write many of the current hits won't be missed, that's for sure. But no one can replace genius. As long as there are great artists like Dylan proving that fans of discerning taste still buy intelligent, artistic music, they can't kill it entirely. Music is indeed a discovery, and most people enjoy the quest. The RIAA wants to kill the quest. They want to hand music to the consumer like a utility company dispenses it's product. At the moment the ultimate nightmare for all of the major labels is that 10,000 indie artists will sell 50,000 CDs apiece, rather than 50 artists (theirs!) selling 5 million CDs apiece. Why, that would be...anarchy!! The RIAA needs to take it's partnership with the "new model" artist seriously.

Anonymous said...

Thanks for organizing the alphabet soup for me and educating me on these organizations. When I got the emails yesterday about this issue, I wondered in the back of my mind about the NMPA as well. Trying to sift through who is consistently supportive of the songwriter reminds me of a recent trip to find a water purifier for our house. We happened upon a knowledgeable hardware store employee whose previous job was implementing water purification systems for large companies, and he was indeed a fount of wisdom (pun intended). In our conversation with him, we learned that the city of Austin, whose tap water is supposed to be pretty good because it comes from its lakes, was told by the government that they needed to lower the levels of contaminants in the water because they were too high. Apparently the city allows the water levels of the lakes to be lowered at times during the year in order for the "high-rent" folks who own property around the lakes to clean their docks. This in turn causes the levels of contaminants to become more concentrated in the water and therefore makes the water not so good at those particular times of the year. Although we receive our water from a lake reservoir in the city of Pflugerville, still it was an interesting tidbit that made me think, and offers an analogy to the royalties issue. Money is driving a situation that just makes the water murky for everybody, and we all have to drink it. Perhaps it's time for us as songwriters to educate ourselves and purify our own water.

Tim Wheeler said...

one reason the cost has been reduced is the elimination of manufacturing and physical distribution. Effectively, this reduces the ownership by others, or in other words increases the percentage of ownership by the artists and songwriters.

RIAA wants to reclaim that ownership by reducing the writers share. Sorry. The work of physical distribution and manufacturing is dead. You can't profit from it any longer. I agree. Drink sand, RIAA

Tim Wheeler.