John Seabrooke NewYorker.com 2/08/16
For many songwriters, the wake-up call comes when they have their first streaming hit. For Michelle Lewis, an indie-rock singer-songwriter who now writes primarily for other artists, it was the song “Wings,” which she co-wrote for the British girl group Little Mix. Lewis and her writing partner, Kay Hanley, the former lead singer of the band Letters to Cleo, had been busy working on a Disney show (children’s TV relies heavily on alt-rock music), and at first she didn’t realize how popular the song had become.
“We were emerging from this bubble,” she told me, “and I realized, ‘I have this hit. This is going to be good! Nearly three million streams on Spotify!’ And then my check came, and it was for seventeen dollars and seventy-two cents. That’s when I was, like, ‘What the fuck?’ So I called Kay.”
“And I said, ‘What the fuck?’ ” Hanley recalled.
“And then we started reading and talking to our friends and fellow-songwriters,” Lewis said. Eventually, they found their way to Dina LaPolt, a music lawyer in Los Angeles, who specializes in copyright and songwriter issues.
Lewis: “And Dina said to us, ‘Where the fuck have you bitches been?’ ”
Hanley: “She literally said that.”
LaPolt told them that unless streaming rates were changed and the music-licensing system were overhauled for the digital age, the profession of songwriting was on its way to extinction. And they were on their own, she added, because, while everyone loves a songwriter, members of the profession have no actual bargaining power, whether via a union or another powerful institution, and so, when the money in the industry dries up, they’re in serious trouble.
“Our jaws were on the floor at the end of talking to her,” Lewis said. “And then it was, like, ‘We have to tell our friends.’ ”
If streaming is the future of music, songwriters may soon be back to where they started. Stephen Foster, America’s first professional songwriter, was also the first to die broke. His songs, which include “Oh! Susanna,” “Camptown Races,” “Old Folks at Home” (a.k.a. “Swanee River”), “My Old Kentucky Home,” and “Jeanie With the Light Brown Hair,” made lots of money for other people—music publishers, music-sheet sellers, minstrel-show promoters, concert-hall owners, and star performers. But not very much of that money reached the chronically impecunious Foster, who died, in 1864, in New York City, at the age of thirty-seven, with three pennies in his pocket, some Civil War scrip, and a scrap of paper on which the songwriter had written “Dear friends and gentle hearts.” His best-known melody, “Beautiful Dreamer,” came out only after his death.
Over the next century and a half, American songwriters’ prospects improved dramatically, largely thanks to the Copyright Act of 1909 and subsequent government intervention. Under the regime that emerged in the first half of the twentieth century, composers own the “publishing” rights to their songs—the copyright on the song’s words and melody, as they exist on paper. Most songwriters assign part of these rights to a music publisher in exchange for an advance and for marketing services. If the music publisher succeeds in getting a song recorded, the songwriter then grants the backers of the recording—a record label, generally—what’s known as a “mechanical license.” (The word “mechanical” derives from the days when player-piano rolls were the primary commodity of the nascent record business.) With each copy of the record sold, the owners of the master recording, as the audio copyright is known, pay a mechanical royalty to the owners of the song’s publishing rights. Today, that royalty rate works out to about nine cents per copy.
Songwriters also earn performance royalties when a record is played in a large commercial venue, such as a restaurant or a theater. With the spread of broadcast radio, in the nineteen-twenties and thirties, performance royalties became a significant part of a songwriter’s potential income. Generally, when a song plays on the radio, the station pays the publishing-rights holders a fixed rate that represents a percentage of the station’s advertising revenues. The owners of master recordings, on the other hand, don’t make anything from radio play, nor do the performers. The reasoning behind this bizarre arrangement, which apart from the U.S. exists only in Iran, North Korea, and China, is that the promotional value of radio play is recompense enough; the labels and performers can make up the difference with record and ticket sales.
In 1941 the Justice Department issued what’s known as the Consent Decree, which allowed performing-rights organizations (P.R.O.s, or collecting societies) to process the licensing fees for large numbers of songwriters, collectively, for obvious reasons of efficiency. In return for an exemption from what would normally be treated as an antitrust issue—private owners banding together to set prices—the music publishers agreed to let a federal court set the royalty rates, if the parties disagree on them. The Consent Decree also mandated compulsory licensing, requiring songwriters to make their entire catalogues available to whomever pays the licensing fee. Accordingly, songwriting is now the most heavily regulated of the creative arts. Seventy per cent of a songwriter’s income comes from rates set by the government, rather than by the songwriters and publishers, on the free market.
Regulation helped to insure that songwriters avoided Stephen Foster’s fate and were paid fairly for their work. Today, the system supports perhaps a million American songwriters. (The estimate is based on the memberships of the two largest collecting societies, ASCAP and B.M.I., and a guess about the much smaller SESAC, which doesn’t publish its numbers.) It offers a decent living for many in the trade, and the prospect of extraordinary wealth for a few. Indeed, the amount of money that a hit song can earn for its composers is staggering. Court papers in a recent infringement dispute involving Pharrell Williams, Robin Thicke, and the estate of Marvin Gaye have revealed that the song “Blurred Lines” earned almost seventeen million dollars in under two years, mainly from radio play, with Thicke and Williams each getting more than five million dollars. And a long-running suit launched by the family of Randy California, the former front man of the band Spirit, whose 1968 song “Taurus” is alleged to sound a lot like “Stairway to Heaven,” calculated that the Led Zeppelin song, which was released in 1971, had earned half a billion dollars by 2008. Since copyrights last for up to seventy years, depending on when the song was released, the rights to a couple of hit songs can support an entire family for several generations.
The remarkable worldwide popularity of American music is often ascribed, rightly, to the talent and diversity of the country’s artists and musicians. But it also happened because of a system that inspired and allowed songwriters to devote themselves full time to their craft. (Of the top ten most-downloaded songs in the U.S. in 2015, according to Nielsen, only one, Fetty Wap’s “Trap Queen,” was written solely by the artist.) The system not only rewarded proven talents; it also let promising novices secure advances against future earnings, affording them the time to learn their craft gradually, until they too had a hit and could begin nurturing the next generation of talent.
But as the music business began to be slowly and agonizingly stretched across the rack of the digital age, the songwriter’s comfortable spot amid music’s royalty flow started slipping away. The steep decline in album sales—the result of a shift from brick-and-mortar distribution to digital retail, and now to streaming—has dealt a blow to songwriters’ mechanical-royalty income. (In the album era, even a throwaway track on a best-selling LP earned as much for a songwriter as the hits that made people purchase the album in the first place.) And, as Lewis’s experience demonstrates, the performance-royalty rates that songwriters command from streaming services such as Pandora, Spotify, YouTube, Amazon Prime, and Apple Music are in most cases far lower than the ones they get for terrestrial-radio plays—the entire royalty payout, remember. Typically, under terms that the record labels worked out with the streaming services (and somehow persuaded the federal rate courts to sign off on), when a song is streamed, sixty per cent of the income goes to the owners of the sound recording, thirty per cent goes to the service itself, and ten per cent goes to songwriters and publishers. When a song is streamed on an Internet radio site—Pandora is by far the largest—the holders of publishing copyrights receive a thousandth of a cent per stream.
Why are streams worth so much less than radio spins? The standard reason given is because a stream is generally a one-to-one transaction, whereas a spin goes out to thousands or even millions of people at a time. But if millions of people hear your song on YouTube, and you still haven’t received a check, you begin to sense that something is amiss. Also, why is the value of the publishing copyright worth so much less, relative to the sound-recording copyright, in the streaming world? There appears to have been a digital land grab by the record labels, who own most of the master recordings for the U.S. catalogue. Having lost out, historically, on income derived from performance royalties and sound recording for terrestrial radio, they were careful, in the digital era, to guarantee themselves income, and in some cases equity interest, from streaming.
Kara DioGuardi, a longtime songwriter known for her turn as a judge on “American Idol,” told me recently, “I’ll be at a party and I’ll hear a friend’s song, and then I’ll realize it’s being streamed. And I’ll think, ‘Wow, that sucks,’ because I know the songwriters aren’t getting paid what they deserve.” For songwriters, there are both big, sweeping rationales and smaller, more nuanced reasons to hate streaming services. Perhaps the greatest outrage, apart from the primal sense that the services are picking their pockets, is directed at the corporations benefitting most from streaming music—Google, Amazon, Apple. These companies, which are among the wealthiest on earth, use music to draw traffic to their sites and keep people within their ecosystems, but for them, the business end of music is hardly more than a rounding error. In 2015, for example, the global music-copyright industry brought in twenty-five billion dollars, barely more than a tenth of Apple’s revenues for the year. What makes the situation positively Kafkaesque is that under the terms of the Consent Decree, which was created in part to prevent songwriters from monopolizing the market, composers are now often compelled to license their songs to these monopolistic behemoths at absurdly low rates.
As for the more nuanced reasons, some streams are worse than others. Spotify’s free, ad-supported platform has been the source of much complaint, as has YouTube’s. Spotify’s total revenues from its ad-supported tier in the first half of 2015 were a paltry hundred and sixty-two million dollars, sixty million less than the revenues from the sales of vinyl albums and EPs over the same period. Revenues from the company’s paid tier are usually marginally better than from its ad-supported one, but it’s still having issues with publishing royalties there. It appears that while the company was assiduous about getting the licenses for the audio-recording copyrights from the labels, it was less thorough about obtaining all of the necessary mechanical-publishing licenses, partly because the metadata needed to identify the rights holders is missing from many song files. Spotify is holding about seventeen million dollars in royalties in a segregated account until these copyright holders can be identified (publishers say that the number should be closer to twenty-five million), and is in the process of building a database that will make it easier to identify them.
In late 2015, David Lowery, the frontman of Cracker and Camper van Beethoven, and a persistent industry gadfly, filed a class-action lawsuit against Spotify, charging the company with willfully infringing the mechanical rights to a number of his songs, and those of others, and seeking up to a hundred and fifty million dollars in damages. According to TechDirt’s breakdown of the suit, Lowery is arguing that Spotify is failing to obtain the necessary mechanical licenses for many of the compositions in its database, including some of his; the case may hinge, among other issues, on whether the company properly complied with technical requirements for situations in which it didn’t know who the copyright holders were. (A second lawsuit was filed by the singer-songwriter Melissa Ferrick in early January.)
Certainly the missing names did not slow co-founder Daniel Ek’s quest to license all the world’s music. However, it’s not entirely clear whether Spotify even needs a mechanical license to stream music. A stream isn’t a copy in the same way that a download is—in many ways, it is more like a performance. The Copyright Act of 1976 is too dated to provide much useful statutory guidance.
Amid all of the anger and uncertainty, last year LaPolt, the copyright lawyer, brought together Lewis, Hanley, and some hundred other songwriters, and inspired them to found an education and advocacy organization, Songwriters of North America (SONA), that seeks major reforms in the song-licensing system, to better suit the digital era. There are already a few legislative initiatives under way, nationally—among them the Songwriter Equity Act, a bill first introduced by Doug Collins, a Republican from Georgia, and Hakeem Jeffries, a Democrat from New York, and then in the Senate by, among others, Orrin Hatch, who is himself a prolific songwriter. (Copyright issues make for strange political bedfellows.) It would amend two sections of the Copyright Act of 1976, to raise the rate songwriters get from streaming services. Another effort, the Fair Pay, Fair Play Act—which would require terrestrial-radio companies to begin paying royalties to audio-recording-rights holders, as well as to songwriters, alongside some reforms to the digital-music industry—was introduced in the House of Representatives in 2015.
In LaPolt’s view, the best hope for real change is a major revision of the Copyright Act of 1976. Bob Goodlatte, a Republican congressman from Virginia and a techie, has made copyright reform a signature issue of his tenure as chairman, for the past two years, of the House Judiciary Committee, holding twenty subcommittee hearings on the issue, and inviting a number of songwriters, including Rosanne Cash and Sheryl Crow, to appear. LaPolt thinks it is unlikely that Goodlatte would leave the chairmanship (in 2017) without at least trying to effect significant reform.
Songwriters have never really had to organize before, but they’re learning, Lewis said. “It’s because we’ve been doing fine. As long as the checks showed up it was, like, ‘This has nothing to do with me.’ But about two years ago people started saying, ‘Hey, who moved our cheese?’ ” Even now, she added, some writers are loath to complain, because “the psychology is, ‘I can’t believe they’re paying me to do this at all, and I’d better not rock the boat or they’ll find out about my scam!’ ”
Savan Kotecha, whose “Love Me Like You Do,” was recently nominated for a Grammy, told me that songwriters are increasingly aware of the stakes. “It affects how you plan for the future and whether you invest in new talent, because in the streaming world you won’t necessarily see any return on your investment. For now, terrestrial radio is holding out. But radio could go away, because everyone has phones. And once streaming gets into cars in a big way, it’s over.”
Indeed, music listeners continue to embrace streaming. On-demand streaming-service usage rose ninety-three per cent in 2015, with three hundred and seventeen billion songs streamed, in all. Adding YouTube and other unpaid services pushes the total into the trillions. Meanwhile, album sales, the longtime mainstay of the business, continued their decline, in spite of the record-breaking success of Adele’s “25”, which accounted for three per cent of the entire U.S. album market in 2015, according to Billboard. For a songwriter, taking a stand against streaming can seem like taking a stand against your own future.
Performers are facing many of the same challenges, but they, at least, have the option of going on tour. Without royalties, songwriters will have only dear friends and gentle hearts to support them. That didn’t work out so well for Stephen Foster.