Anyone who knows anything about copyright law in the United States knows that the copyright owner of a sound recording typically gets the short end of the recording deal in terms of royalties. Sound recordings were not granted federal copyright protection until 1972.1There was no performance right for authors of those works until 1995, and, even then, that right was limited to digital audio transmissions. 2On the other hand, the musical composition, the underlying work to the sound recording, retains full public performance rights.3Due to this, copyright owners of musical compositions receive compensation for all plays: digital and analog, including AM/FM radio, internet radio, satellite radio, streaming, stadium plays, and store plays, among others, while the copyright owners of the sound recordings receive compensation for digital plays only.
This means that copyright law has determined that every time the public is blessed with the performance of a song, the sole party deserving of royalties is the author of the underlying composition, i.e., the songwriter or the publisher. Further, this determination provides that the author of the master recording, i.e., the performer or the producer, is only deserving of partial royalties that stem from digital plays. Essentially, for the exact same song, played through the exact same device, only half of the authors of that song are entitled to compensation for their creative efforts.
Due to this unfair result, Congressman Darrell Issa (R-CA) proposed the Performance Royalty Owners of Music Opportunity to Earn Act of 2017 (H.R. 1914), also known as the PROMOTE Act. 4 This bill seeks to amend Title 17 (where federal copyright law is laid out) to grant owners of copyrights in sound recordings the “exclusive right to prohibit the broadcast transmission of the sound recordings by means of terrestrial radio stations, and for other purposes.” 5 In other words, performing artists would be allowed to opt out of having their music played on the radio if they feel they are not being paid an agreed-upon performance royalty.
On its face, this bill seems like the right answer. After all, performing artists are deserving of analog performance rights for their sound recordings. In Issa’s own words, “airtime provides exposure and promotional value, while … the status-quo allows radio stations to profit on artists’ performances without providing any due compensation.” 6Backing Issa in his efforts is Congressman Ted Deutch (D-FL), stating that “it should be the artist’s choice whether to offer their music for free in exchange for promotional play, or to instead opt out of the unpaid use of their music.” 7 Sounds good, right?
Wrong. This bill, as written, grants a performance artist the right to refuse airtime of a song and simultaneously prohibits the songwriter from collecting compensations on that song. The performing artist is able to unilaterally prevent his or her music from being played on the radio, without any regard as to how this affects the songwriter. So, why is this such a big deal? Due to the unique nature of the music publishing industry, songwriters are generally an underprivileged group of authors who need all the help they can get, both financially and in terms of industry exposure.8
The standard language of music publishing contracts divests many songwriters of their copyright ownership, particularly when the songwriter is not established enough to negotiate better provisions. 9 It is vital for any author to retain copyright ownership of his or her work because United States copyright law does not bestow rights upon the original creator; it bestows rights solely upon the copyright owner. 10In the case of songwriters in the music publishing industry, many songwriters sign contracts with music publishers agreeing to grant some, or even all, copyright ownership to the music publisher, for any work created under the contract before the musical composition has even been created.11
The three most common types of songwriter contracts that deal with copyright transferability are an exclusive songwriter agreement (ESWA), an administration agreement, and a co-publishing agreement.12 In an ESWA, the songwriter must transfer 100% of his or her copyright ownership to the publisher, who expends money, time, and energy to get the song into the public’s ear. 13 The standard ESWA contract grants the songwriter royalties of 50% of the song’s income, with or without an advance against royalties.14 In an administration agreement, the songwriter retains 100% of the copyright ownership, and, for an administrative fee, the publisher promotes the song.15 The typical administrative fee is 15–20% of the song’s gross income, leaving the songwriter with 80–85%.16Lastly, in a standard co-publishing agreement, the songwriter transfers 50% of his or her copyright ownership to the publisher, and the publisher promotes the song for, typically, 25% of the gross income. 17 There, the songwriter typically receives a total of 75% of most sources of income on a 50/50 percentage basis with a 75/25 split overall. 18
To the untrained eye, these deals do not pose significant issues because only one of them divests the songwriter of 100% copyright ownership. However, co-publishing deals are typically reserved for songwriters who have the bargaining power to negotiate 100% copyright ownership retention, typically garnered through the popularity of their prior work, or contracts with multiple publishers. 19 Further, administration agreements are generally reserved for artists who have the capital to undertake the music publishing function themselves, which beginner artists typically do not.20 In essence, amateur songwriters are commonly relegated to the ESWA: to either transfer 100% ownership of their rights to their publisher, or risk not being signed. Thus, songwriters are already getting stiffed financially due to the contracts many of them feel forced to sign, and the PROMOTE Act will have the unintended consequence of stripping them of potentially lucrative vehicles for royalties.
Industry Exposure Concerns
The songwriters who choose not to perform their own songs struggle to sufficiently establish themselves. The way in which songwriters and their work are perceived within the industry has a direct impact on their ability to build their reputations.21Each prior work “serves as an advertisement for future works and an artist’s reputation is built upon her entire body of work.”22 Although the songwriters are paid regardless of whether consumers recognize a song as their work, attribution is still an extremely important tool for building reputation and industry recognition, which directly affect a songwriter’s ability to secure subsequent songwriting jobs. 23For example, purveyors of reality television are familiar with Kandi Burruss’ role on The Real Housewives of Atlanta, but are less likely aware she was the songwriter for Destiny’s Child’s Bills, Bills, Bills, among many others.24
A potential reason for this lack of songwriter eminence is that many current music-listening vehicles do not support proper attribution. For songwriters, CDs are the ideal vehicle for musical consumption because they list every single contributing writer on the packaging. 25Unfortunately, while CD sales hit 730 million in 2000,26 they had dropped to 50 million in 2016. 27 In CD sales’ place, 208.9 billion songs, or the equivalent of 139.2 million album units, were streamed on demand between January 2016 and July 2016, alone.28Unfortunately for songwriters, listeners streaming music are unlikely to encounter songwriting credits unless they go out of their way to search for them.29 While listening to a song on iTunes, for example, the consumer sees the names of the performing artist and the label, the technical attributes of the song, and typically a list of the other songs the performing artist has available on iTunes.30There is no mention of the songwriter.31
Another potential reason for this lack of songwriter eminence is that some performing artists tend to negotiate songwriting credits on songs to which they were barely a contributor. For example, Beyoncé has said “[y]ou know when I was writing the Destiny’s Child songs, it was a big thing to be that young and taking control.”32 Not only did Beyoncé not write a single Destiny’s Child song by herself, but almost every song for which Beyoncé is given songwriter credit also credits a full list of actual songwriters.33Further, Beyoncé was recognized as ASCAP’s 2002 Songwriter of the Year for writing Jumpin Jumpin, Survivor, and Independent Women;34 yet, songwriter Cory Rooney, who penned Independent Women with her, plus Jennifer Lopez’s I’m Real, Play, and Ain’t It Funny, in addition to several other songs that same year, received no recognition.35Thus, songwriters can easily end up overshadowed by a bigger name claiming writing credit, becoming swiftly overlooked.36
Performing artists generally already have more bargaining power and exposure than most songwriters, and the PROMOTE Act will have the unintended consequence of further depleting a songwriter’s chance of airtime exposure. Thus, while it is undisputed that performing artists deserve royalties for analog plays in addition to digital plays for their sound recordings, there must be a way to do this without disregarding hard-working songwriters. Maybe next year Congressman Issa can roll out the PROMOTE Act 2.0.