|
|
RIAA Claims Royalty Imbalanceby George Ziemann -- December 8, 2006 Not satisfied with suing music fans and skimming from the artists, the RIAA has now aimed its legal guns at songwriters. According to the Hollywood Reporter (via Radio & Records), "The music industry has undergone such fundamental changes, the RIAA contends, that it's time for the government to step in." Yes, the same government that stepped in to help Iraq and New Orleans. What does the RIAA want the government do? Cut the songwriter/publisher royalties. Why? The organization's Jonathan Lamy explained it to the Washington Post:
As usual, the RIAA has quoted statistics which are meaningless in the context of the discussion. I don't believe I've seen "royalty revenue" broken out on any of the record labels' financial statements. So they're comparing overall revenue. There is a logic problem that also comes up here. The royalty rate has increased by 2 cents per song since 1998 (more on this later). According to the RIAA's own numbers, the number of units shipped to retailers dropped 26 percent from 1998 to 2005. And this allowed the publishers to increase their earnings by 54 percent? I'd love to see the math wherein one of these factors has something to do with the other. The R&R version also contains this priceless gem: "Record industry executives said there was nothing strange about seeking a rate change that would pay less to the people who write the music." I'm sure that the idea of paying the people they rely on less than previously agreed upon is definitely not strange to a record exec. But they've never tried to legally make such a change to the statutory royalty rate. The compulsory mechanical royalty rate started in 1906. In the simplest terms, if you sell a tangible copy of a song (a recording, sheet music, player piano roll), you are obligated by law to pay the publisher the compulsory rate for each copy. In turn, the publisher gives the songwriter half (yes, there are exceptions). In 1906, the rate was 2 cents. The publisher got a penny, the songwriter got a penny. The value of the recording industry sales were less than $10 million. By 1976, the recording industry become a $3 billion dollar business. The compulsory royalty rate was raised to 2.75 cents, the first increase in 70 years. From there, a schedule was established (last visited in 1981) to keep the royalty rate on a very slow growth path. It has now grown to a whopping 9.1 cents per copy. So the songwriter still gets less than a nickle for every sale. If they get that. From Songwriter Universe:
The actual math starts to become irrelevant when you consider who the biggest music publishers are -- EMI, BMG, Sony and Warner. I'm betting that Universal is getting a sizeable cut of that market, too. This reveals the artifice in Jonathan Lamy's comparison between different economic fates of the labels ("The RIAA's clients") and the music publishers because THEY ARE THE SAME COMPANIES! This is designed to screw the songwriters. They already don't even make a nickle and it's too much. |
RIAA's 'Royalty Imbalance' is Fabricatedby George Ziemann -- December 13, 2006 I have previously discussed (above) the RIAA's proposal to reduce songwriter royalties. Today's exercise is to illustrate the gap between the RIAA and reality. The pertinent quote:
Common sense says this shouldn't be so, but the royalty rates have increased. On the other hand, in August, the president of the Songwriters Guild tried to tell EFF that half of the songwriters have lost their jobs in the last five years. So let's see if we can estimate how much the industry's expense for songwriters has changed and see which one is closest to the truth. And instead of picking two years, as the RIAA did, lets look at the last decade. Since mechanical royalties are based on how many copies you make, not sell, for once the RIAA's "units shipped" statistics are useful. You have to make them before you can ship them.
The RIAA likes to believe that the average album/CD has 10 songs on it. I've got 1142 songs in my iTunes collection from 106 albums. This is closer to 11 songs but we know that the RIAA finds ways around paying full songwriter royalties, so we'll go with 10 songs per album. Plus, it's easy math.
And we can't forget about the singles market.
Even the vinyl singles had two songs. CD and cassette singles sometimes had more.
Now we add those two totals together and factor in downloads, which only count for one song each.
Last step is to multiply the total number of songs by the royalty rate in place that year.
|