Songwriters: This week, Spotify and Amazon are quite literally taking you to court. A great deal of the business of how much you get paid happens in a room a few blocks from the U.S. Capitol. Every five years a board of three judges sets your royalty rates for mechanical uses – including those in interactive streaming like Spotify and Amazon. Two years ago, in January of 2018, after months of argument, those judges gave you a 44% raise.
After the excitement died down, some of the services – led by Spotify and Amazon – determined that despite their reliance on songwriters, they would not let this decision stand. Even with their billion dollar profits, they decided to appeal this decision, and on Tuesday March 10, these tech giants will again face songwriters and music publishers in the U.S. Court of Appeals for the D.C. Circuit.
When their appeal was announced last year, Spotify in particular rushed to assure songwriters that it wasn’t really trying to discard your raise and instead they wanted to “clarify elements” of the decision and that Spotify indeed did think songwriters “deserved to be paid more.” This is directly contradicted by the case they put on in 2017 which proposed actually cutting songwriters’ old rates. Ultimately, they hope to cut what you are paid by a third.
What’s arguably worse than the backroom attempts to slash songwriters’ royalties through the court system are the hollow PR gimmicks that Spotify is using to distract from what they’re actually doing behind closed doors. Just recently the streaming giant rolled out its beta version of “Songwriter Pages.” While it is always a good thing to give songwriters more credit, this pales in comparison to attacking songwriters in what matters most – valuing their songs.
Even more bold was their “Secret Genius” stunt which sought to honor the creators behind the music with parties and playlists. They even hosted global songwriting camps throughout the year called “Songshops.” What they didn’t advertise was they were actively fighting to devalue the works coming out of those camps.
No one is debating that streaming services like Spotify and Amazon Music are essential to the music marketplace. However what is also essential is that songwriters understand the landscape behind the scenes where true colors come out. Why does this matter so much? Platforms like Spotify provide huge opportunities for artists, but they have also demolished the returns for songwriters from traditional platforms like AM/FM radio. So while one income stream is being reduced, the other isn’t making up for that loss. The music industry is in the midst of a streaming renaissance but songwriters aren’t seeing the spoils. Record labels have the ability to negotiate directly with streaming services and therefore receive many times that of songwriters for streams. Since songwriters are restricted by laws from 1909 and therefore must go to court to argue for raises – this case has seismic implications for creators.
The 2018 decision in this case was a huge step forward, but it hangs in the balance as tech companies with legal budgets that dwarf that of songwriters and publishers fight to hold onto what’s rightfully theirs. While the hard-fought 44% raise was an improvement, in reality we argued and proved with extensive evidence that even that was not nearly representative of the value that songwriters provide tech companies. For instance, songs provide a huge incentive for consumers to buy more than streaming subscriptions; they promote the sales of smart phones, speakers and myriad other apps and products that would not exist without the music that they deliver. Songwriters see none of this revenue.
Complicating matters further, one of the great benefits of the Music Modernization Act (MMA) – a bill signed into law in 2018 – is that it actually improved how these judges calculate your royalties. Prior to the bill’s passing, the complex formula the judges used could not take into account free market negotiations like those available to record labels. The MMA now allows judges to use those real-world deals as benchmarks, which could have very positive implications for songwriters. Therefore this fool’s errand on the part of Spotify and Amazon would only affect rates in the short term before the next rate-setting trial takes place which will use a new, better formula. Spotify and Amazon are betting big on overturning your raise, even though a new raise may be on the horizon.
Since songwriters cannot withhold their music in order to demand a fair market price, we must make our case in court and in the court of public opinion. When the hearing starts on Tuesday, notice who is not there – Apple music – who takes a different approach and treats songwriters more like business partners.
Ultimately these services rely on what you – songwriters – think of them. You need them, but they need you more. When you’re invited to parties, featured on billboards and encouraged to buy in to the hype, remember that millions of dollars are being spent on their lawyers to fight your raise, instead of paying you for your music.
David Israelite is the President & CEO of the National Music Publishers’ Association (NMPA) — the trade association representing U.S. music publishers and songwriters.