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Publishers Sell Out Songwritersby George Ziemann -- September 24, 2008 The headline at Wired says, Songwriters Submit Royalty Agreement to Copyright Royalty Board. What actually happened was the completion of a long-term plan to sacrifice songwriter royalties for the benefit of the RIAA. The Wired article, which reads like an RIAA press release, says, "The move comes as part of music publishers' drive to start collecting mechanical royalties for compositions played online after giving online radio a free pass while business models developed." While I can't speak for BMI, it's pretty safe to say that ASCAP has never given anything "a free pass while business models developed." Historically, the publishers are always first in line to get paid from new ways to hear music, whether it be restaurants, player pianos, karaoke, live bands, LPs, CDs, radio, television, whatever. They've always been first in line because there was no line. Other than the physical products (LPs, CDs, cassette, etc.), the record labels (RIAA) have never been paid performance royalties. Such a thing did not exist in America. In fact, when this all started, the RIAA was still paying radio for airplay. When webcasting appeared, the publishers did nothing, for the first time in history. If they were giving anyone's business model a chance to develop, it was the RIAA, who was busy trying to get the webcasters to buy into paying performance royalties to the labels and artists, another historical first for the United States. So here's the new deal, as far as I can tell, which seems to divide the webcasters into two groups. First of all, we have things like Pandora which the RIAA is simply going to put out of business for being too popular and not making enough money. The songwriters aren't going to get a damn thing from them. The second group meets some "streaming limited" criteria (Napster, Rhapsody) and will pay 10.5 percent of their revenue for mechanical royalties. The Sell-OutThe songwriters will get paid whatever is left over after the RIAA takes their share. If the RIAA takes it all, well, too bad. Every one of the people mentioned in the Wired article will crow about how great this is, how important the songwriters are and how much they deserve to be paid, blah, blah, blah. But when it comes right down to it, they made a deal that promises the songwriters nothing but the possibility of table scraps. But only if the big dogs don't eat it all. If this had proceeded in the usual fashion, the songwriters would have had their share determined first. Let's say it was only 2 percent of revenue. The RIAA would had to come in after the fact with their unprecedented performance royalty, which would have been tacked on top, but the songwriters would have been paid first. So even if the big dogs ate all the steak, there would at least be some kibble in the songwriters' dish. The music business is big on tradition. American tradition is that the songwriters get paid first. The publishers broke that tradition. They held back for 5 years to allow the RIAA to get their royalties established. If the publishers had acted first, the RIAA wouldn't have been able to get the initial webcasting royalties paid to the labels as high as they are. The other thing to consider is that making a bad deal like this hurts the publishers as well as the songwriters. The publisher collects the royalties and is obligated to pay the songwriters half of it. So making a deal that is not the in the songwriters' best interest is also not in the publishers' best interest. So why did they? The entire 5-year span of this story, that's my number one question. Not only have they sold out the songwriters; they have sold themselves out. That's the part I don't understand. |
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