The Songwriter Equity Act, introduced in the U.S. House of Representatives in February, is picking up momentum with three Senators introducing their version for the Senate.
Senators Lamar Alexander and Bob Corker (both R-Tenn.) and Orrin Hatch (R-Utah) have introduced legislation that charges the Copyright Royalty Board with trying to achieve fair market value when setting songwriter publishing rates on digital music services, in addition to the four other considerations it already uses.
Since Rep. Doug Collins (R-Ga.) introduced the bill on Feb. 25 of this year, it picked up 16 co-sponsors in the House and has been referred to the subcommittee on courts, intellectual Property and the internet.
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. The new legislation aims to charge the CRB with replicating the rate levels that would be achieved in a market with a willing seller and a willing buyer.
“Today’s announcement is vital to a songwriters’ livelihood and woefully needed," National Music Publishers' Assn. President and CEO David Israelite said in a statement. He noted that songwriter royalties when a song is downloaded from iTunes or streamed from Spotify is dictated by the Copyright Royalty Board.
"Roughly two-thirds of a songwriter’s income is heavily regulated by law or through outdated government oversight," which results in devalued intellectual property rights, Israelite stated.
He pointed out that while a mechanical royalty rate of two cents a song was set in 1909, today that rate has only increased to 9.1 cents, while eggs that would have cost 14 cents in 1909 now cost $3 at the grocery today.
That demonstrates "the standard rates of inflation seem to somehow not apply to songwriters," Israelite said. "We must inject fairness into an outdated process that is undeniably stacked against songwriters and publishers, ensuring they are rightly compensated for their work.”
Neil Portnow, president and CEO of the Recording Academy also came out praising the Senators for introducing the legislation, “The Senate’s introduction of the Songwriter Equity Act brings us an important step closer to our mission of ‘Fair market pay for all music creators across all platforms,'" he said in a statement. Portnow added that the proposed legislation would "help establish a level playing field for all music makers.”
However, the National Assn. of Broadcasters put out a statement opposing the legislation. The proposed legislation could impose "new costs on broadcasters that jeopardize the future of our free locally-focused service," NAB executive VP of communications Dennis Wharton said in a statement. "While this legislation raises important issues about the changes confronting the songwriter community, NAB objects to changes in law that would deal with the financial imbalance between songwriters and artists by subjecting free broadcast radio stations to new fees."
Like the companion legislation in the House, the legislation would also remove a provision that narrowed the scope of evidence the Federal rate courts like the CRB and those overseeing ASCAP and BMI may examine when asked to set songwriter compensation. For example, if the legislation is passed, those courts would be able to introduced rates for master recordings set between Sound Exchange and digital music service providers.
ASCAP President and Chairman Paul Williams commended the Senators for introducing the legislation, adding, "The time has come to modernize the music licensing system in a way that allows [songwriters] to thrive alongside the businesses that revolve around their music."