Bill aims to improve royalty payments for songwriters and publishers

Nate Rau Tennessean.com 2/25/14
Federal legislation introduced on Tuesday would help increase royalty payments to songwriters and publishers, likely adding another layer to the ongoing conversation in Congress about broader copyright reform.

The Songwriters Equity Act, introduced by U.S. Rep. Doug Collins, R-Georgia, has the backing of the songwriting and publishing community, including the American Society of Composers, Authors and Publishers, Broadcast Music Inc. and SESAC.

The legislation would allow federal rate courts to consider the fair market value for a composition when establishing digital performance rates. Currently, fair market value is not one of the guidelines that the special federal court considers when it sets royalty rates.

Most publishing licenses are compulsory and therefore regulated by federally determined rates, instead of through free-market negotiation.

But songwriters and publishers have found success negotiating licensing deals for television and film that have resulted in more favorable rates than those paid out when a digital copy of their song is sold. Currently, the rate court doesn’t factor in these licensing fees when it sets digital performance rates, but Collins’ legislation would allow them to do so.

“Fostering the development of intellectual property has been an important part of the Constitution for more than 200 years,” Collins said. “Now we have to make sure we’re doing it on 21st century terms. Songwriters, in one way or another, touch the lives of every American.”

The legislation comes amid increased debate in Congress and conversations in the House Judiciary Committee regarding broad-scale copyright reform. There’s no indication, however, that sweeping copyright reform is imminent.

At a minimum, consideration of the Songwriters Equity Act figures to bring to the forefront the issue of how royalty rates for songwriters and publishers are calculated. The federal Copyright Act allows anyone to seek a compuslory license to reproduce a song in exchange for paying the statutory rate of 9.1 cents per song.

Nashville Songwriters Association International Executive Director Bart Herbison said the legislation contains provisions that would ensure record labels maintain their status quo on payments regardless of what the rate court might decide when factoring in such free-market considerations.

“Passage of the bill is always the desired end product,” said Herbison said. “But just as important is this bill focusing answers to the age-old question of what a respective copyright is worth. At the end of the day for the songwriter music publishing community and the record label community, the victory for both of us is to redefine the total revenue pool.”

U.S. Rep. Marsha Blackburn, R-Brentwood, intends to sign on as a co-sponsor of the legislation. Blackburn called the Songwriters Equity Act “welcome news for our creative community in Tennessee.”

“I applaud Congressman Collins for his leadership on this issue and look forward to working with him on this important effort to ensure fairness for our songwriters,” she said.

Rollout of the legislation was accompanied by effusive statements of support from top executives in the songwriting and publishing industry. ASCAP President and Chairman Paul Williams called the legislation “an important first step toward a more effective and efficient licensing system.”

BMI CEO Michael O’Neill said the industry is “simply asking Congress to take the evidentiary blinders off of the judges who control a significant portion of our writes’ income.”

NSAI, SESAC, the National Music Publishers Association, the Recording Academy and the Future of Music Coalition also gave their endorsements.

“Our goal is to maximize the value of copyrights we represent on behalf of our songwriters and publishers,” SESAC President and COO Pat Collins said. “Passing this important legislation will help sustain that value and safeguard the intellectual property of our creators and copyright proprietors.

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