Publishing

Songwriters Organize New Guild to Take Bigger Piece of Streaming Pie

Illustration by Sara Gironi Carnevale

Songwriters are benefiting from a boom in publishing assets, but they’re still regulated into a paltry share of streaming revenue. Now some are organizing for better deals.

In some ways, there has never been a better time to be a songwriter. The creators of pop hits enjoy a visibility they haven't had since before the singer-songwriter era, and companies like Hipgnosis Songs Fund, fueled by capital from outside the music industry, have helped create a thriving market for writer shares. The U.S. publishing business took in $4.08 billion last year, a nearly 10% rise over 2019, according to the National Music Publishers' Association, with the majority of that going to songwriters — whose deals, on average, let them take home 75% of the revenue their songs generate, according to NMPA president/CEO David Israelite.

Many songwriters aren't cheering this windfall, though — in part because it pales in comparison with the money going to the recording business. The Copyright Royalty Board, which is empowered by law to set certain statutory royalties, uses a complex formula that produces a combined (mechanical and performance royalty) publisher payout of about 13% of revenue, which translates to less than one-quarter of 1 cent per stream from most digital services — and that's often divided among several publishers and writers. (And all the major streaming services except Apple Music have appealed the most recent CRB decision in order to lower the publishing royalties they pay.)

The only leverage writers have is with their publishers. Many are now speaking out about contract terms, delayed royalty payments and lack of promised pairings with artists, and organizing to push better terms and changes to the way streaming revenue is divided.

In recent months, writers-led groups like Songwriters of North America and the newly launched 100 Percenters and The Pact have begun educating and empowering fellow creators, calling out the age-old issue of artists taking publishing rights on songs they didn't write and pushing for songwriters to receive a cut of recorded-music revenue.

Hipgnosis CEO Merck Mercuriadis, whose fund invests in publishing rights and would benefit from higher payouts, also plans to join the fight. He says he already has hundreds of songwriters on board for a guild he's planning similar to Hollywood's Writers Guild of America, including Nile Rodgers, Ryan Tedder, Andrew Watt, Ali Tamposi and Tayla Parx.

"There's no secret the songwriter is the worst-paid person in the equation," says Mercuriadis. "No negotiation should ever take place that affects how a songwriter is paid that doesn't have the songwriter represented in the negotiation." He says the guild will operate independently of Hipgnosis, and while it will have its own governance, it cannot structure itself as a union because a 1980s ruling by the National Relations Labor Board categorizes composers and lyricists as "independent contractors."

Songwriters hope a collective voice will give them more leverage. Until now, most have been reluctant to make a public issue of asking for better deals, fearing they may be dropped or blacklisted for speaking up. "Without a union, one of the hardest things we've seen is that songwriters are scared," says multiplatinum-selling songwriter Ross Golan. "We are walking a thin line, and most of those that are doing really well don't want to rock the boat."

"I don’t know whether it’s desperation to recoup or -- I don’t want to call it greed but maybe it is -- but publishers will actually start to get a little aggressive with writers about what counts toward recoupment and they’ll start taking writers’ shares to recoup," adds Michelle Lewis, co-executive director of SONA.

Since July 2020, when Tiffany Red launched The 100 Percenters (the name refers to how much credit songwriters should get for their work), she has been focused on helping release peers from outdated publishing contracts and petitioning labels to provide writers nonrecoupable per diems and points on recordings. "There's a lot of anxiety; it's a bit of a hostile work environment," she says, describing the writers' perceptions of their publishing partners. "There's a lot of trust that has been broken. But the publishing companies I've been working with are listening."

This summer, each of the major publishers — Sony Music Publishing, Universal Music Publishing Group and Warner Chappell — pledged to drop minimum delivery release commitments, which oblige writers to deliver a quota of songs deemed "commercially released" before they can fully recoup on an advance and begin receiving a higher royalty rate. That's a major coup because MDRCs can stretch on for years for a seemingly small minimum, depending on the number of writers per song. (Each receives only a percentage of a song credit against their minimum on a co-write.) Additionally, some publishers like Warner Chappell and BMG are adding executives to help register songs and administer royalties.

These moves signal a shift in the balance of power toward the songwriter that has been building since Kanye West sued Sony Music Publishing-owned EMI Music Publishing in 2019, claiming he was being held to contract terms he had long ago satisfied. (West and EMI settled in February 2020.) The songwriter groups are banding together, and they have more leverage at a time when publishers face competition from venture capitalists and other nontraditional sources lured to publishing's long revenue game.

"We're in a time where publishing companies are open to [negotiating] because so many writers are unhappy and are not making money, even the ones who are working," says attorney Brandie N. Johnson, who recently got Akil "Fresh" King, a 2021 Grammy Award-winning co-writer on Beyoncé's Black Parade, out of a publishing deal he had recouped on months earlier but was tangled in red tape.

"If you are a publisher and you aren't a forward-thinker," says King, "your company will lose out on a lot of writers once people start talking about who's offering the better deals."

“It is absolutely clear that a lot of songwriters have not understood what they’ve signed, what’s in their contract. They think they’re signing a three-year agreement but it really turns into a 10-year contract,” says Willard Ahdritz, founder and chairman of Kobalt Music Group, the indie rights management and publishing company that began shaking up the industry in 2000 with alternative publishing deals. Ahdritz estimates Kobalt has created close to $10 billion in value for songwriters signed with the company. “From day one, we introduced the service contract," he says. "You have full service, but you keep your rights."

Several major publishing company executives contacted by Billboard say they were already evolving contracts and business practices before the recent public chorus of discontent. "We agree that MDRCs have become an archaic practice and only include them upon the request of the songwriter or artist," says Carianne Marshall, co-chair/COO of Warner Chappell.

Of course, no matter how much writers organize, much is still out of their hands. They can't affect what a stream pays or the way fans listen on streaming has amplified hits and squeezed music's middle class. But they can try to make working as a songwriter less of a struggle.

"If a writer isn't happy, it's on us to figure it out," says an executive at a major publisher. "There's not a week that goes by where I don't talk about deals with existing songwriters and say, 'OK, we are going to push you forward to the next contract period and forgo the minimum commitment from now on.' That's something we were doing well before this became a public issue."

This story originally appeared in the Sept. 18, 2021, issue of Billboard.