Feb. 14, 2023 -- The SGA this week issued a
letter to the Copyright Royalty Board -- but this was no lover letter.
The missive addressed the inequality inherent in the process that
determines how songwriters, composers and lyricists will be paid.
Essentially, the letter pointed out that only the most wealthy in the
music business (labels, publishers, streaming services) are invited to
the CRB process while the creators are locked out. Check out the letter,
written by SGA Outside Counsel Charlie Sanders, below.
In 2022, the National Music
Publisher Association (NMPA) announced its view that the U.S. Copyright
Royalty Board (CRB) music royalty rate setting system is “broken.”1 The
American and global independent songwriter and composer community is in
total agreement, but for far different reasons than those troubling
NMPA. The CRB is currently not serving one of the one of the key focuses
of the U.S. Copyright Office – in the words of the Register in the
USCO’s 2022- 2026 Strategic Plan - to “ensur[e] that the copyright
system is accessible to all, welcoming diversity and ultimately
enriching the cultural landscape.”2
Instead, today’s CRB mainly serves the needs and desires of the
wealthiest and often interrelated corporate companies, instead of the
creators, in Section 115 proceedings. For that reason, today’s CRB
system needs reform for Section 115 proceedings.
SGA Outside Counsel
Charlie Sanders
SGA Outside Counsel, Charlie Sanders, had this to say in his letter on behalf of the SGA:
"...tens,
if not hundreds, of millions of dollars in royalties were denied to
songwriters and composers, to the benefit of the large conglomerates
that had the money to participate in the Section 115 proceedings.
Similar inequities afflict the parties to voluntary streaming agreements
as well...
...In fact, it is estimated
that since 1999, the number of persons able to earn a living from music
creation in America has declined by over 75%."
Participation in CRB
royalty rate setting proceedings for compositions has become so
prohibitively expensive that only the largest music-related
conglomerates, their trade associations, and their own affiliated and
controlled “creator” organizations can afford to participate. Thousands
of independent songwriters, composers, and lyricists, that are directly
impacted by the CRB decisions, are left out of the process.
As Members
of Congress have frequently been made aware over the past two or more
decades by our independent music creator advocacy groups, the financial
health of the U.S. songwriter and composer community has been devastated
in the digital age, even as many of these large music conglomerates
have thrived through unchecked consolidation. In fact, it is estimated
that since 1999, the number of persons able to earn a living from music
creation in America has declined by over 75%.
While this
situation appears quite troubling to the CRB judges, based upon their
comments in recent rulings (including overt acknowledgements that
conflicts of interest among the corporate participants are often
“inherent”), those same judges have asserted that their hands are tied
by flaws in the U.S. Copyright Act that prevent them from giving weight
to proposals made by affected, non-participant creators in rate-setting
proceedings. As the judges lamented in a recent proceeding in which they
believed to be bound to approve a deeply flawed “voluntary” deal
“negotiated” by the vertically integrated, corporate participants in the
proceeding:
The Judges recognize that several comments proposed alternative rates that they prefer, as well as alternative methods for addressing inflation adjustments. The Judges also recognize that some [of those non-participant] comments take issue with existing procedures for participation in rate proceedings before the Judges. However, [the proposed voluntary settlement] is what is before the Judges for consideration, not alternative rates or proposals for alternative procedures…
As a result, tens if not
hundreds of millions of dollars in royalties were denied to songwriters
and composers, to the benefit of the large conglomerates that had the
money to participate in the Section 115 proceedings. Similar inequities
afflict the parties to voluntary streaming agreements as well, due to
vertical integration and private investment dealings between the major
music companies and digital music distribution platforms.
What can be done about this blatantly inequitable and exclusionary process? The fixes are simple:
Those amendments to Chapter 8 of the U.S. Copyright Act would at least represent some initial steps toward equitable reform of a system pertaining to Section 115 royalties about which everyone seems to agree on one thing: it’s broken.
