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Business News Digital Labels & Publishers Legal
Songwriters and artists call on US court to uphold Copyright Royalty Board’s streaming rate increase
By Chris Cooke | Published on Wednesday 20 November 2019
Organisations representing songwriters and artists in the US have submitted an amicus brief to the DC Circuit Court Of Appeals urging them to uphold the most recent Copyright Royalty Board ruling on the compulsory licence covering mechanical rights Stateside. The rate increase for songwriters in that ruling, the organisations say, is not only “deserved” but also “critical” for many songwriters struggling to stay afloat in the streaming age.
The compulsory licence means that a company exploiting the mechanical rights in any one song does not need specific permission from any songwriter or publisher that has a stake in that song. They just have to pay the rights owners royalties at a rate set by the CRB.
Earlier this year, after a long review, the CRB confirmed it was increasing the rate to be paid by streaming services, so that – ultimately – those services would have to allocate 15.1% instead of 10.5% of their revenues to the song rights.
This would bring the rate due under the US compulsory licence more or less in line with the rate music publishers have negotiated on the open market in countries where there is no compulsory licence to interfere in the deal making process.
It’s also a total rate. A stream exploits both the performing and mechanical rights in a song, which are often licensed separately. Although the compulsory licence only covers mechanical rights, any monies paid for performing rights – usually via collecting societies like BMI and ASCAP – are basically deducted from the 15.1% figure.
The increase was, unsurprisingly, welcomed by songwriters and publishers. But then most of the streaming firms, with the notable exception of Apple, announced that they were appealing the CRB ruling. Spotify has subsequently insisted that it doesn’t oppose the rate increase in principle, but has issues with some other technicalities in the revised compulsory licence. Songwriters and publishers, in the main, have not been impressed by such claims.
Those unimpressed include the Songwriters Of North America organisation and the recently formed Music Artists Coalition. Arguing that songwriters are already unusually disadvantaged by the mere existence of the compulsory licence, they say that the rate rise on digital income is desperately needed by the songwriting community. And especially those songwriters who are not also artists, who cannot rely on other revenues like touring and merch.
“For over a century, songwriters have been subject to a compulsory license, now embodied in section 115 of the Copyright Act, that determines the price to be paid for reproduction and distribution of the musical works they create”, the two groups say in their court submission. “There is no comparable example of a profession where the government sets the price for one’s labours”.
It goes on: “After carefully weighing all of the evidence, the [judges that form the Copyright Royalty Board] determined that songwriters should be paid more, and increased the rate for interactive streaming under section 115. Songwriters deserved that raise. Indeed, for some, the added income will be a critical factor in their ability to continue in their careers as professional songwriters”.
In an accompanying press statement SONA and MAC members expanded on why they felt the CRB rate rise was “critical” for allowing many songwriters to stay in business.
Among them SONA board member Shelly Peiken, who said: “If I were trying to make it as a songwriter today dependent on digital royalties, I wouldn’t be able to sustain a livelihood the way I once did from the income of physical sales. Without sharing in master royalties, merchandising or touring revenue, most songwriters now have to consider holding down a second job. I sincerely hope the DC Circuit Court Of Appeals reaffirms the CRJs’ decision and takes the industry in the direction it desperately needs to go. Songwriters are counting on it”.
