The Internet is transforming the music industry from a sales-of-copies model to a sales-of-access model. Instead of buying CD’s, more and more people are subscribing to digital plans that allow them to listen to music without ever buying a record, CD, cassette, or any other kind of physical copy of it. Naturally, this threatens to turn recording artists, songwriters, and record company employees into paupers, much in the way that Google Books, broad judicial interpretations of “fair use,” and online royalty-free sales of so-called “used” books are hampering the ability of all but a select few book authors to receive a reasonable return on their investments of time and creativity in writing.
Record companies responded to this development by prevailing upon Congress to enact the Digital Performance Rights Act (DPRA), establishing for the first time an exclusive digital performance right for the owners of copyrights in sound recordings. The DPRA allows traditional radio stations (“terrestrial” stations licensed by the FCC, as distinguished from Internet transmitters) to continue to freely broadcast sound recordings without paying royalties to the owners of copyrights in the sound recordings, but Internet services offering pre-programmed or on-demand streaming and/or digital downloads have to pay record companies and recording artists royalties.
This is all very well and good for record companies and recording artists, but it does nothing for those who hold the copyrights in the musical compositions embodied in the recordings. As too often seems to happen, the focus on protecting and advancing the monetary interests of record companies and their “stars” has eclipsed concern about the rights and interests of songwriters and lyricists.
It looks like there could soon be some good news on the horizon, though. OK, it’s good news for music publishers, but some of the benefits might potentially “trickle down” to songwriters, too.
The good news is that the U.S. Department of Justice (DOJ) is considering amending an old consent decree to allow performance rights organizations (ASCAP, BMI, and SESAC) that handle copyrights for songwriters and publishers to bundle digital mechanical licenses along with performance rights licenses. Currently, performance rights organizations are only permitted to license performance rights of musical compositions, such as live concerts, radio and television broadcasts, and the “performance” aspect of Internet streaming. They are not permitted to license the making and distribution of physical or digital copies. If composers and lyricists want to be paid royalties when someone makes or distributes a copy of their compositions, they need to turn to a different agency for licensing of those rights. Making one-stop licensing possible by allowing bundling of these licenses could make things more convenient for songwriters. It would also benefit those songwriters (especially the independents) who mistakenly believe ASCAP, BMI or SESAC licensing gets them all the royalties to which they are legally entitled.
The DOJ is also considering allowing music publishers to withdraw digital rights from the blanket licenses of performance rights organizations. This could give publishers room to negotiate better individual deals with particular music distributors.
Next, the Justice Department is considering requiring a negotiated interim royalty for the songwriter (or publisher) to be set before a digital service can begin streaming the music, and limiting the length of time during which the interim rate could be paid before a final royalty rate would have to be established.
And it is rumored that the Justice Department may require higher levels of transparency and accountability from music publishers and performance rights organizations.
Taken together, these changes could help songwriters (or at least those songwriters with good publishers) get better royalty deals, and could also help them get paid the money to which they are legally entitled but which they too often never receive.
The comment period appears to be closing, so a decision could be coming very soon.