Bit coins and other crypto currencies? For already financially struggling creatives seeking ways to make money, the answer’s likely, Fuggedahaboutit. But a federal agency, industry advocates say, has at least stepped up to boost how songwriters can mine the latest cyber development driving their industry: online music streaming.
The Copyright Royalty Board of the U.S. Library of Congress recently changed its formula to determine how much revenue streaming companies must share with songwriters and the music publishing companies. By 2022, the regulatory board has determined, the royalty for use of musical works in making and distributing of phono records will be the higher of 15.1 percent of revenue or 26.2 percent of total content cost, as now calculated in Section 385.21 of the CRB Regulations.
The full ruling has not yet been released to the public. But creatives are hailing what they see as a big boost in the money they get paid for their works.
The National Music Publishers’ Association, through its president David Israelite, commented in a statement for news organizations: “The bottom line is this is the best mechanical rate scenario for songwriters in U.S. history, which is critically important as interactive streaming continues to dominate the market.”
The prospective rate changes would affect interactive streaming services, including Spotify, TIDAL and Apple Music. But companies like Pandora, which derive the majority of their revenue from what is classified as “non-interactive streaming service,” which includes advertising-supported products, will see less change driven by recent rulings of the royalty overseer, with offices based in DC’s James Madison Building.
Streaming’s rise and dominance
Still, streaming has become the music business’ sine non qua, a technology has that has revived fan interest and activity while also frustrating creatives to no one.
The Recording Industry Association of America’s 2017 Mid-Year Revenue Statistics has reported that “revenues from streaming music services accounted for 62 percent of the total market for the first half of 2017.”
But who is it lucrative for? Over at the artist-driven Digital News web site — prompted in part by data visualizations posted by informationisbeatiful.net — creatives have been sharing streaming royalty payment information. They have calculated, using $1,472 as a barely acceptable minimum monthly wage, that it would take 200,000 plays on Apple Music or 250,000 plays on Google Play Music for “unsigned” performers to get that sum. They would need 2.4 million plays on YouTube.
That’s a lot of streaming to make a living, even as the technology burgeons and developments like playlists and, yes, music videos rise as newer options.
The combat over streaming compensation opened up yet more fronts early in 2018. That’s when Spotify filed papers with federal regulators that it soon would go public. And the company, which previously had settled for $43 million a class-action lawsuit that had sought $150 million over copyright infringement claims, was hit with yet another bigger claim, seeking $1.6 billion, by Wixen Music Publishing, which represents the works of artists ranging from Neil Young and Tom Petty to the Black Keys and Janis Joplin.
Music Modernization Act of 2017
As NPR has noted, creatives and corporations alike may be hastening to take up various legal redoubts on streaming because the largely dysfunctional U.S. Congress also is forging ahead with plans to legislate in this area.
Rep. Doug Collins (R-Ga.) and Rep. Hakeem Jeffries (D-N.Y.) have introduced the Music Modernization Act, recently referred to the House Judiciary Committee just before Christmas. This bill, with rare bipartisan support, creates four main changes to the music industry.
It would: change Section 115 of the Copyright Act, creating a Mechanical Licensing Collective to grant blanket mechanical licenses; set a willing buyer/willing seller standard, “requiring courts to consider free-market conditions when determining rates;” establish a wheel approach, randomly assigning “from the wheel of district judges for rate setting disputes;” and it would repeal section 114(i) of the Copyright Act, removing evidence limitations for public performance royalties.
More than 20 organizations , including the National Music Publishers’ Association (NMPA), American Society of Composers, Authors, and Publishers (ASCAP), Broadcast Music Inc. (BMI), Nashville Songwriters Association International (NSA), and Songwriters of North America (SONA) have issued statements in support of this bill.
The act, the NMPA has said in statement, “is the best hope for songwriters to achieve fair royalties and payments in the digital age.”
The bill also has gotten push back from the Songwriters Guild of America and the National Association of Broadcasters, with the latter saying in its statement that, “NAB has serious concerns about unrelated provisions in the bill that may unjustifiably increase costs for many music licensees, including local radio and TV broadcasters, who otherwise receive no benefit from the legislation.”