Rick Carnes, songwriter and president of the Songwriters Guild of America, realized in 2016 that he would only get $16,000 in royalties if he wrote a song that sold 1 million records, an amount that would cost him qualify for food stamps.
Carnes, who has written songs recorded by artists such as Garth Brooks and Dean Martin, said he would ask people at workshops: “How many of you would be willing to settle for being paid once a year, every year, a share on a million-selling album. year for the rest of your life? All the hands in the room went up.
“And then I said, ‘Now, how many of you would be willing to live on food stamps and government subsidies for the rest of your life?’ Every hand went down,” he said. “Don’t kid yourself that these are mutually exclusive groups.”
Carnes, alongside others, is fighting for a higher increase in mechanical royalty rates that would increase the amounts songwriters earn from physical phonograph recordings – CDs and vinyl records – as well as permanent digital downloads. He says a proposed increase of more than 30% is not enough to keep songwriters out of poverty.
Lawyers point out that Copyright Royalty Board costs and procedures are preventing songwriters from reaping their rewards and extracting more from the ongoing rate-setting process.
Under the most recent proposal, made in May, royalties for mechanical licenses would increase for the first time in 16 years, from 9.1 cents to 12 cents per track, with annual adjustments for inflation. The proposed increase of 2.9 cents would be the first since 2006. It would come into effect on January 1, 2023 and run until December 31, 2027.
Songwriter George Johnson, the only individual songwriter taking part in the proceedings, opposed the 12-cent proposal and hopes the CRB will too. He said the deal was unfair to songwriters like him, who struggle to profit from their work.
“Everyone makes money off songwriters, except songwriters.”
The Copyright Royalty Board did not respond to a request for comment.
The 12 cent proposal
Under federal law, the three CRB judges set mechanical royalty rates every five years through an adversarial process pitting different parts of the music industry against each other. While the filing fee to participate is $150, legal fees, expert witness fees, discovery and other fees can add up quickly.
Johnson’s opposition to the CRB’s original proposal, which would have kept the rate at 9.1 cents, prompted the board to reject it, a move that many lawyers considered surprising.
The rejection led to the 12-cent compromise proposal by the National Music Publishers’ Association Inc., Nashville Songwriters Association International, and record company participants.
Johnson’s continued opposition is unlikely to prevent the CRB from adopting the 12-cent rate, according to attorneys who participated in or followed the proceedings.
“I think it’s significant that he opposed it, but if everyone agrees, I don’t think that would stop them from passing it if they think the increase to 12 cents makes the settlement reasonable,” said Jacqueline Charlesworth, Founder and Director. at Charlesworth Law and former General Counsel and Associate Registry of US Copyright Office copyrights.
Although Johnson is the only songwriter to participate and oppose the settlement, others agree with his position that the rate should be higher. However, the high cost of participating in CRB procedures is an obstacle.
“The real problem here, in my opinion, is that songwriters cannot afford to participate meaningfully in these proceedings on their own,” said Charlesworth, who said the cost can run into millions of dollars for each participant. “It is a problem of access to justice.
“If inclusiveness and the widest possible exposure to ideas and suggestions is the idea of government oversight before decisions are made, it makes no sense to set the bar so high financially,” said Charles Sanders, adjunct professor at the Steinhardt School of NYU. Culture, Education and Human Development who serves as an external advisor for the Songwriters Guild of America.
In the absence of opposition from several participants, the chances that the CRB will adopt the new proposal are even greater.
“I think there’s almost a 100 per cent chance they’ll pass something along these lines,” said attorney Chris Castle, founder of Christian Castle Attorneys, who added that the council was biased in favor of the settlements. voluntary and negotiated.
“Justice too expensive is justice denied,” Carnes said. “And that’s exactly what we’re dealing with because we’ve been left out of this. And because we’ve been left out of this, we can never make enough money to come back.
Focus on streaming services
Although some are unhappy with the settlement, David Israelite, president of the NMPA, thinks it is reasonable.
“We were initially prepared to settle for less than that,” he said, adding that it was a strategic decision, in the face of opposition from record companies, to accept a higher increase. low physical royalties to ensure a bigger win over streaming pricing. . If “we fight over physical product pricing, it would distract us from streaming pricing, which we believe is nine times higher today.”
Israelite said the strategy of not waging a war “on two fronts” was successful. On July 1, the CRB reinstated an increase in streaming royalties, gradually pushing the rate for the years 2018 through 2022 to 15.1% of streaming revenue, from the previous rate of 10.5%. A process to set streaming prices for 2023-2027 is expected to begin later this year.
Israelite called the decision a victory for songwriters and music publishers. “Streaming revenue is by far the biggest revenue stream we have,” he said.
Nevertheless, lawyers and many songwriters are happy with the 12 cent proposal and optimistic about future rate-setting proceedings before the CRB.
Castle said the procedure demonstrates two things. “The first is that the industry can come together and come to an agreement,” he said.
“The other thing it shows is that going forward we need to have more people involved in these negotiations.”