For over 100 years, the federal government has capped songwriter royalties at a rate far below what the market would dictate, but some in Congress are hoping to end that restriction.
Currently, copyright law makes a distinction between recording artists and songwriters when a song is purchased online or on a CD. While the former are free to negotiate any royalty rate that the market will bear, the latter have a statutory rate imposed on them by judges on the Copyright Royalty Board (CRB).
Moreover, the law actually prohibits the CRB from considering the royalties a performer earns for a song when determining rates for songwriters, which may go part of the way toward explaining why the Board has only increased the rate by 7 cents in over a century—from 2 cents in 1909 to 9.1 cents today.
Lacking any guide to the actual value of songwriters’ contributions, the rate increases approved by the CRB judges failed even to keep pace with inflation. According to the Bureau of Labor Statistics, a 2-cent royalty in 1913 (the earliest year for which the BLS calculates relative price levels) would be worth 47 inflation-adjusted cents in 2015.
Recently, though, a bipartisan effort has gotten underway in Congress, buoyed by the support of the U.S. Copyright Office, to address that inequity with legislation called the Songwriter Equity Act (SEA). Republican Rep. Doug Collins, the leader sponsor of the SEA in the House, recently sat down with The Daily Caller News Foundation to discuss the issue. (RELATED: Royalty Reform Must Put Equity for Musicians and Songwriters First)
“I’ve got a lot of songwriters saying, ‘government is keeping me from earning a living’,” Collins said. “Our bill just says, ‘we let you use any evidence you can to negotiate a fair-market value for your product’.”
Specifically, the SEA would update Sections 114 and 115 of the Copyright Act, requiring copyright judges to consider all relevant information when setting songwriter royalties, with the goal of arriving at rates that represent, as closely as possible, those that would have prevailed in a free marketplace.
“There is nothing in here that isn’t as conservative as the day is long,” Collins told TheDCNF. “It’s all about government getting out of the way.” (RELATED: Government Should Extricate Itself From the Music Business)
Collins explained that the original intent behind the law was to prevent a monopoly in the player piano industry, but the approach has become anachronistic with technological evolution. A performer, for instance, can withdraw their recordings from a digital download service if they are unhappy with the royalties (as Taylor Swift famously did last year), but songwriters do not have the same ability, and would not be able to use it as negotiating leverage if they did.
“The separation we’re trying to create is not to take anything away from the performers,” Collins was quick to clarify. “When songwriters sell to TV or movies,” he noted, “they can negotiate their rate on a fair market value, and what we find is that it’s basically on parity with the others when they do that.”
Bart Herbison, Executive Director of the (national) Nashville Songwriters Association, told The DCNF that because of legal restrictions, record labels make 12 or even 14 times more than songwriters do from selling songs directly to consumers. The royalties paid for songs used on TV and in movies, in contrast, are generally split 50-50. (RELATED: Congress Considers Ending Royalty Exemption for Radio)
Songwriters “aren’t asking for anything like that” when it comes to regular song sales, Herbison said. He does believe that the SEA would lead to a “more equitable” arrangement, but said he could not predict whether that would result from higher overall licensing fees, or from a more even split among the various copyright owners.
An underlying concern for both Herbison and Collins is the health of what Herbison termed the “middle class of the songwriting industry,” composed of the non-performing songwriters behind many top hits.
“In 1997, there were between 3,000 and 4,000 publishing deals for songwriters,” Herbison said. “Today there are between 300 and 400.”
“Some artists do write their songs, and that’s great, but a lot of them don’t,” he added, pointing out that, “There’s no Elvis, Frank Sinatra, or Madonna if there are no songwriters.”
“People may think this is about making millions more for these millionaires,” Collins observed, but in reality many songwriters who do not perform their own songs struggle to make a living under the current system.
“Even if some songwriters are doing well,” though, he asked, “why should the government be dictating a bad business model? Let’s get government out of a situation they don’t need to be in.”
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