In 2005, when David Israelite was recruited to leave a key post at the U.S. Department of Justice to run the National Music Publishers’ Association, he was reluctant for a good reason: He had never heard of the industry organization.
“When the headhunter reached out, I told him I wasn’t interested because I didn’t know what the NMPA was,” recalls Israelite, who had run the DOJ’s Intellectual Property Task Force. “Thankfully, he was patient with me and told me more about the industry and the association — and what I saw was incredible potential.”
The NMPA, which marks its centennial in 2017, represents more than 500 members of the $2.5 billion U.S. music publishing industry. It has been on the front lines of some of the most important legislative and legal battles of the digital age.
Upon his arrival in 2005 as president/CEO of the NMPA, Israelite oversaw the association’s move from its longtime base in New York to Washington, D.C., so it could focus on lobbying, and litigating, on behalf of publishers. On Capitol Hill, the NMPA has become a counterweight to technology companies, as well as the RIAA, which represents record labels.
Israelite, a boyish-looking 48 — who lives in Northwest D.C. with his wife and two young daughters and is a serious poker player — also has led the organization to a remarkable string of successes in court. His first major victory came in 2007, when he negotiated a record $130 million settlement for publishers from Bertelsmann for its ties to copyright infringement by Napster.
All told, the NMPA, under Israelite has collected more than $575 million in legal judgments and settlements — a -powerful way of underlining the value of song copyrights. In March 2016, the NMPA negotiated a settlement with Spotify to distribute royalties for songs whose owners had not been identified. Last December, it struck a similar agreement for YouTube.
Israelite, leading a staff of 12, also has taken steps to spotlight creators. In 2007, the NMPA launched a program to award gold and platinum certification to songwriters. It also hosts occasional Washington, D.C., music showcases that remind legislators who actually writes the hits they hear on the radio. “When you see songwriters,” says Israelite, “it explains the issues better than I ever could.”
The NMPA has drawn the support of major songwriting artists including Sting and Bon Jovi, who received the organization’s icon award at its annual meetings in 2016 and 2014, respectively, and Aerosmith’s Steven Tyler, who walked the halls of Congress with Israelite (and celebrated his birthday at a Washington, D.C. event for the association).
“For 100 years, the NMPA has been the one constant in the publishing business — I was at the first board meeting,” quips Martin Bandier, chairman/CEO, Sony/ATV Music Publishing. “The organization is one of the most important protectors that publishers and writers have; there’s no ‘S’ in ‘NMPA,’ but it does a great job of representing songwriters, too.”
The NMPA still faces serious challenges, including an accelerating transition to online listening and a copyright-reform process that tech firms would like to see reduce the power of labels and publishers alike. The arrival of President Donald Trump and a new Congress brings a degree of uncertainty to the world of politics.
During a visit to New York, over tea at the Carlyle, Israelite described how far the NMPA has come in its first 100 years — and where it needs to go from here.
Happy 100th anniversary. What would be an appropriate gift?
How about a change in copyright law? It would be nice, after 100 years, for songwriters to get the freedom to set their prices in a marketplace.
How has music publishing changed since you began running the NMPA?
When I started, in 2005, the NMPA had no presence in Washington, D.C. Back then, in D.C., the RIAA was the music business — there was no understanding that publishers had separate concerns. I was hired to change that.
Did you know about music publishing then?
I was a big music fan — and a terrible guitar player who quit my high school band — but I knew nothing about publishing. I was hired for my experience in Washington. After I started, I was told that in a few weeks there would be a House Judiciary Committee hearing on Section 115 [the statutory mechanical license in copyright law]. I knew nothing about the topic, so I treated it like a bar review class: I crammed. Twelve years later, I’m still learning.
Was it difficult to be an outsider?
It was a tremendous benefit. There’s so much wrong with music publishing that people don’t see because it’s all they’ve known. For example, 75 percent of the revenue of songwriters and publishers is regulated — mechanical and public performance royalties — and I came in asking why the government was setting prices.[Mechanical royalties, paid for use of a composition in a recording, are subject to a statutory license, while most performance royalties, paid when a composition is performed or broadcast, are collected by ASCAP and BMI, which operate under DOJ consent decrees.]
I was shocked that people weren’t fighting harder to get out of that. There wasn’t a focus on changing the rules; no one talked about getting free-market rates for songwriters. But the value of songs was being undermined by the way we were regulated, and that became crystal clear when I saw how the digital music services split money among various players. So it became a cause for me that we had to break out of the chains that were keeping our value down.
Some of those regulations were arguably necessary at a time when it would have been impossible for publishers to individually negotiate with every performer who wanted to record a given composition — let alone every venue or broadcaster that wanted to play it.
That’s now ridiculous. There’s no question that the market will figure this out. Publishers don’t have an interest in keeping their songs from being played — they want to make money! And there are ways to have efficiency and market pricing. While licensing efficiency is important, it’s a secondary concern to the value of the songs. Many licensees want to flip that — to make the pricing a secondary concern as long as it’s efficient. But show me another business where the government regulates property for the efficiency of the end user.
You’ve suggested that songwriters should get half of what digital services pay out for the use of recorded songs, and it’s now closer to 10 to 15 percent. Is that realistic?
That might be the most controversial thing I’ve advocated for. In my view, songs are as valuable as recordings. But it doesn’t matter what I think. If you just put us on a level playing field, I’ll accept whatever the market says.
During the past decade, star songwriters like Max Martin have become household names. How has that changed your job?
It makes it easier. The profile of the writers helps raise the profile of the issues about how they’re compensated. With legislators, you see this moment of enlightenment when they’re watching Desmond Child sing “Livin’ on a Prayer” [which he wrote with members of Bon Jovi] or Linda Perry sing “Beautiful” [which she wrote for Christina Aguilera]. I’ve had them all come to D.C., and that has been incredibly -helpful. I feel strongly that songwriters should be our key messengers.
You’ve had songwriters come speak to members of Congress and play NMPA showcases. Any especially memorable moments?
One example: when Steven Tyler agreed to walk the halls of Congress before putting on a show. Having people pour out of their offices to meet him really showed the power of creators.
I’m also really proud of our Gold and Platinum program. When I started, there was no recognition of the songwriters of a gold or platinum song. So I came up with the idea of a partnership with the RIAA and its Gold and Platinum program. It’s important to songwriters, because there aren’t many other ways of recognizing them.
The NMPA has made news with some high-profile copyright settlements. Has litigation become as important as lobbying?
The way I would look at lobbying is that you’re in a war and both sides have dug in. You don’t see a lot of progress, but if you abandon your position, the other side will run over your ground.
Copyright law changes very slowly because of all the interests involved, so I see lobbying as necessary, but not a good enough justification for why we need a trade association.
The litigation also has a real financial benefit to the industry. It’s a reason for members to pay dues to the NMPA — you can get more back in settlements and judgments than you pay in dues, by a significant factor. With the YouTube settlement we just announced about $575 million in judgments and settlements during my 12 years, and we’ve spent less than $40 million in legal costs to achieve that. And I should mention that we’ve never lost a case. I remind my members that just because we’ve batted a thousand, don’t expect that we always will. But so far, we have.
What are the top issues you’re dealing with, and how important are the “safe harbor” provisions of the Digital Millennium Copyright Act, which protect online services from infringement lawsuits based on material uploaded by users?
The safe harbor provisions in the DMCA are so out of balance, in favor of those using the music over those making music, that companies take the position that they don’t have to pay for music.
I think our next big fight is with Facebook. Music is a significant part of that platform and it currently doesn’t license or pay songwriters. I think that will change. Being business partners isn’t only smarter, it’s the right thing to do — and I think they want to do the right thing.
With the Trump administration and a new Congress taking power in D.C., how do you feel about the copyright reform process that’s now beginning under Congressman Bob Goodlatte [R-Va.], chairman of the House Judiciary Committee?
If you look at the history of copyright law, every reform process strengthened copyright. For the first time, in this copyright-reform effort, there’s the potential to see copyright weakened.
But the people running the process, especially Chairman Goodlatte, have said that this is not going to be an assault on copyright. I also think we’re in an environment where it’s easy to block things but hard to pass things. I don’t think the technology business could pass copyright-weakening legislation over our objections, but I also don’t think we can pass legislation over theirs. So that balances things.
Where do you see the NMPA when it reaches 110 years?
If we do our job well, you’ll see growth, driven by partnerships with digital companies. The value of songs will be determined more by market forces, and when that happens it will be a healthy industry.
This article originally appeared in the Jan. 28 issue of Billboard.