The Hodgepodge: Updates and Changes with Songwriting Royalties

Doug Morris, Sony CEO

There’s been a few updates over the past week with respect to songwriting royalties. I haven’t really dug into them yet to offer much commentary on the updates, but I do offer my initial thoughts at the end of the post. I’m sure there will be a follow-up post to these changes as I better understand them.

100 Percent Licensing

Last month, I somewhat broke down the new proposal at the Department of Justice called 100 Percent Licensing. Essentially, 100 Percent Licensing was proposed to give each songwriter or publisher who worked on a song 100% licensing control for the song. Before, if two people worked on a song, Person A essentially had licensing power over the part of the song he or she contributed (a verse, chorus, or melody), and Person B had licensing power over his or her own contribution. And together, Person A and B would have to come into an agreement for the whole song to be included on a service like Pandora. However, what 100 Percent Licensing proposes is that Person A or Person B can have full control over the song and be able to deal the song with Pandora without the other person’s permission.

The DOJ ruled last week in favor of what they call “Full Works Licensing.” The DOJ wrote in a statement:

“We discovered that there was significant disagreement in the industry about what rights must be conveyed by the blanket licenses (as well as other categories of licenses) that the consent decrees require ASCAP and BMI to offer,” the DoJ writes. “Some argued that, in order to effectuate the purpose of the consent decrees, the blanket license must grant licensees (also called ‘users’) the right to publicly perform all songs in the ASCAP and BMI repertories. Others believe that the blanket licenses offered by ASCAP and BMI instead confer only rights to the fractional interests in songs owned by ASCAP’s and BMI’s members and that music users must obtain separate licenses to the remaining fractional interests before playing the songs.”

The DOJ ultimately came to the conclusion, “We think the evidence favors the full-work side.” Performance Rights Organizations like BMI and ASCAP and others like David Israelite, president and CEO of the National Music Publishers’ Association have spoken out against the ruling. Israelite calls the ruling “a massive blow to America’s songwriters.”

“The interpretation that the consent decrees demand that all works must be licensed on a 100% basis is both unprecedented and disastrous to the songwriting community,” he said. “The decision represents a misunderstanding of copyright law and directly violates the legal guidance given by the Register of Copyright. The defiance displayed by these career antitrust lawyers in ignoring the legal opinion of the Register of Copyright is shocking.”

BMI and ASCAP issued a joint statement proclaiming that the ruling “will cause unnecessary chaos in the marketplace and place unfair financial burdens and creative constraints on songwriters and composers.”

It appears that the new ruling won’t go into effect for another year, giving the organizations and stakeholders time to figure out how to conduct business within the scope of the new full works licensing. The full statement from the Department of Justice can be found here.

NSAI Calls Out Sony

Another big movement within songwriting and streaming is Sony blocking and contesting songwriters during the recent proceedings with Copyright Royalty Board. As songwriters and publishers fight for larger payouts from streaming, Sony has been contesting them, siding with digital streaming services. In fact, Sony is the only major label stepping in and opposing the publishers and songwriters on the matter.

In an open letter to Sony CEO Doug Morris, Nashville Songwriters’ Association International (NSAI) Executive Director Bart Herbison asks Morris and Sony to step out of the proceedings.

It is embarrassingly disingenuous that Sony would attempt to hide behind its claim to “increase the headline rate” when in fact its proposal to the CRB would actually lower the rates songwriters currently receive from digital interactive streaming services. Warner Brothers, Universal and other record labels have chosen not to attempt to suppress the rates digital interactive services pay to songwriters.

The big argument is that labels like Sony and Universal can benefit financially from an artists’ tour and merchandise sales while a songwriter only receives royalty payments from his or her song. David Israelite has also been vocal about Sony’s involvement.

With one major change from Full Works Licensing and a possible change in the works with CRB, we could in fact see a shift in the way the music industry conducts itself. If songwriting royalties are diminished through streaming, then chances are that we’ll be subjected to far more committee songs written for popular appeal. That’s essentially what we see on country radio today as it is, but moves like this could further marginalize the solo or independent songwriter, and could detract potential songwriters.

While a service like Spotify or Apple Music have playlists for “Americana” or “Independent Folk” for music fans to explore away from the mainstream, these are still playlists that need to be sought out and aren’t necessarily advertised. And if a label like Sony is getting in bed with streaming services to favor the labels, then they could easily “encourage” Spotify to advertise a playlist of Sony artists on Spotify’s main page or within Apple Music’s suggested playlists. The labels have money and that money allows them to wield their power for personal gain. And working to have streaming services give the labels more money, not the songwriters, only intensifies that power cycle.

Upcoming/Recent Country and American Releases

  • Tomorrow’s a big day for releases in country music:
    • Cody Jinks‘ I’m Not the Devil
    • Kelsey Waldon‘s I’ve Got a Way
    • Justin Moore‘s Kinda Don’t Care
  • BJ Barham of American Aquarium will release a solo album called Rockingham next week on August 19.
  • John Paul White will release Beulah on the 19th.
  • Lydia Loveless will release a new album on the 19th called Real.
  • And Dolly Parton will also release her new album on the 19th called Pure & Simple.

Throwback Thursday Song

“Diggin Up Bones” by Randy Travis 30 years ago this week, Randy Travis’ debut album Storms of Life hit Number 1 on Billboard’s Country Albums chart. So this week’s throwback song is a number one hit for Travis from that album.

Non Country Suggestion of the Week

Gov’t Mule The Tel-Star Sessions Rock band Gov’t Mule recently released an archival album called The Tel-Star Sessions, which include early and never-before-heard recordings from the band. Gov’t Mule is set to go on tour with Blackberry Smoke with the first show tonight in Portland, ME.

Tweet of the Week

When I saw that “Fix” was number 1 on the Airplay charts, I went to Twitter seeking out tweets complaining about the song. When my search for “Chris Lane Fix Sucks” had no results, I complained on Twitter, and our friend Cobra from Hope For Country Music fixed the search problem.

Two iTunes Review for Chris Lane

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Both of these reviews were left under Chris Lane’s new album Girl Problems. Whether it’s the whole album or simply “Fix,” both reviews apply.