One of the largest tensions between record labels and music publishers is how to divide the money produced by interactive streaming. Interactive streaming revenue now produces the overwhelming majority of record label revenue, and it is also a significant revenue source for the more diversified music publishing industry. While both labels and music publishers can agree that giant technology companies like Spotify, Amazon and Apple should pay more for music, the reality is that whatever that amount ultimately is, there will be tension on how it should be divided.
In the last Copyright Royalty Board proceeding, which sets the rates that giant digital streaming companies pay music publishers and songwriters, the NMPA fought for and won the largest rate increase in history – a 44% increase. We spent tens of millions of dollars to achieve that victory. That effort was supported, and largely funded, by the major publishers. And, that victory was so important that Mr. Mercuriadis himself has used this very rate increase as the justification as to why his investments in songs has been financially wise. Songs are a good investment today largely because of the work both major and independent publishers have done to increase their value.
There are many more examples. Supported by major publishers, NMPA fought to ensure music publishers and songwriters were paid for music videos by major record labels. When labels resisted compensating the songwriters, the major publishers led the way. The landmark music video agreements NMPA negotiated enabled songwriters to receive a percentage of the revenue generated from music videos and critically, it allowed creators to receive retroactive payments for past music videos.
The majors were also key proponents of the Music Modernization Act (MMA) and were able to use their market leverage to bring reluctant tech giants to the table. Over years, they consistently held that streaming can only succeed if songwriters are paid properly and if unmatched money is put in the hands of the copyright owners, not hidden by those who claim they don’t know who to pay. This resulted in over $424 million being turned over to the Mechanical Licensing Collective (MLC) earlier this year.
Major publishers have also been critical when it comes to remaking the social media, fitness, livestreaming and gaming space to compensate songwriters appropriately. Just in the past few years, from Facebook to Peloton to TikTok, Triller and Snap, even when record labels have had deals with new tech companies, the major publishers fought for and won fair compensation for all songwriters. Not just for them, but for their independent counterparts. Many of these deals included large compensatory settlements.
In addition to being patently untrue, false attacks that target those of us on the same side are harmful to the cause. Dividing publishers with antagonistic accusations, when we must work in tandem to grow songwriters’ status within the music hierarchy, is counterproductive. History proves that we are most powerful when we advocate as one and rely on each other’s strengths. I’ve watched the value gap between record labels and publishers in records go from around 12:1 to 3.8:1 today, which still is not close enough, but is a testament to what we can achieve when united.
We have so much left to accomplish. And to do that, we need all music publishers working together towards our common goal.
David Israelite is the President & CEO of the National Music Publishers' Association (NMPA). NMPA is the trade association representing American music publishers and their songwriting partners.