New Legislation Seeks to Modernize Copyright Act to Benefit Songwriters

A member of Congress has introduced legislation this morning aimed at ensuring that the Copyright Royalty Board also consider fair market value when setting songwriter mechanical royalty rates for digital services.

The legislation was introduced by Rep. Doug Collins (R-GA), a member of the House Committee on the Judiciary, carrying the name the Songwriter Equity Act. Its purpose is to update provisions in the Copyright Act to level the playing field for songwriter, composers and publishers to receive fair compensation for the use of their intellectual property.

According to the National Music Publishers' Assn., roughly two-thirds of songwriter incomes is heavily regulated by law or through consent decrees, which has often resulted in songwriters being saddled with well-below market rates instead of receiving fair value.

“This bill is an important step on the road to fairness for the more than 600,000 songwriters and music publishers represented by BMI," BMI Chief Executive Officer Michael O'Neill said in a statment.  "The current environment, where performances of sound recordings are valued at 12 times those of the musical compositions that underlie them, is untenable. Similarly, the rates set for making copies of musical works under Section 115 are artificially depressed and lack a relationship to the marketplace. We are simply asking Congress to take the evidentiary blinders off of the judges who control a significant portion of our writers’ income from public performance and mechanical royalties."

“The Songwriter Equity Act represents an important step to inject fairness into a process that is undeniably stacked against songwriters and publishers, and I applaud Congressmen Collins for his leadership on the issue," NMPA president David Israelite said in a statement.

The legislation is aimed at rejiggering elements of Section 114 that would have an impact on Section 115 of the Copyright Act, which was written back in 1909 to regulate piano rolls and impose a complex compulsory license system.

Although songwriters and publishers would really like to see the compulsory licenses eliminated, they recognize that might be a bridge too far in the current environment, where Congress and the administration are embarking on reviewing whether copyright revision is needed. But while the new legislation would leave a compulsory license in place, it would charge the CRB with also trying to achieve fair market value among the four other considerations it uses when setting rates.

Currently, the CRB only considers four objectives in calculating rates: to maximize availability of song uses; to afford a fair return to the copyright owner and a fair income to the song user that reflect the roles of each; and to minimize the disruptive impact on the structure of the industries involved.

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The legislation would now charge the CRB with also trying to set rates that would replicate the rate levels that would be achieved in a market with a willing seller and willing buyer. Without that final ingredient, songwriter royalty rates levels have stagnated since they were first introduced.

"The Songwriter Equity Act is an important first step toward a more effective and efficient licensing system that will benefit everyone – consumers, music licensees and the songwriters and composers who are the foundation of the rapidly changing music environment," ASCAP president and chairman Paul Williams said in a statement. "But  while technology is creating amazing opportunities for music to reach new audiences, it’s also creating real challenges for songwriters and other creators when it comes to licensing our work, because the rules that govern how we do business haven’t kept pace...By updating the outdated provisions of the Copyright Act in Sections 114(i) and 115, Congress has an opportunity to modernize the music licensing system so that songwriters and composers can thrive alongside the businesses that use our music."

The other thing that the legislation does is to allow other rate proceeding evidence -- such as rates set between Sound Exchange, representing master rights performers, and the record labels -- to be introduced as evidence in ASCAP and BMI rate courts.

"In 1909, Congress set a rate of two cents per copy, and today, more than 100 years later, the rate has increased to only 9.1 cents per song," Israelite said in a statement. "I fear that without the Songwriter Equity Act, songwriting as a profession will give to way songwriting as a hobby, and an important American treasure will be in jeopardy.”

With copyright revision review just beginning -- in a process that could take many years before anything happens, if it even does -- the songwriter/publisher community felt it was important to get legislation out there that addressed the issues of concern to them so that those involved in the review process are aware of these copyright revision elements.

"A lot of good things can come out of this legislation just being introduced," Israelite tells Billboard.

In addition to the Congressman introducing the bill, other speakers expected to talk today were ASCAP chairman and president Paul Williams, BMI CEO Mike O'Neill, The Recording Academy chief advocacy and industry relations officer Daryl Friedman and Israelite.