NEW CAR WITH AN OLD ENGINE

NEW CAR WITH AN OLD ENGINE

I recently got to sit in with some of Music City’s entertainment industry power players for an introductory conversation with the new U.S. Secretary of Commerce, Penny Pritzker.  She’s a music fan, interested in how our broken business works, but also a fan of the 30-something percent of the United States’ total exports that intellectual property represents.  The Commerce Department has redefined our music as an asset and done a “green paper” analyzing problems and asking for input on solutions.

Cary Sherman from the RIAA was first of the group to speak, relaxed and eloquent as always, and after reminded us that the music industry has declined from a $15B business a decade ago to today’s$7B business today, Cary was rightfully proud of the strides the record industry has taken, adapting to the digital universe.  Other record executives were also encouraged and hopeful, referencing their evolution into entertainment companies and expansion into new revenue streams.  I’m with ‘em all the way.  Music has done a better job than most IP industries adapting to digital life, mostly since we were the first endangered, so we’ve had more time. Fans, consumers and songwriters should all want the labels to do well.  I know I made a lot more money when there were thirty labels in town than I do now with ten.

I’m a career songwriter who has seen both my mechanicals and performances royalties decline like a nickel rolling off a table.  And I’m one of the lucky ones who’s still out there generating activity and getting cuts.  Many of my contemporaries, some hall of famers have had to give it up.  No money in it.  So as I listened to everyone discuss their interests from the perspective of their slice of the pie, I did what songwriters do, slipped off into metaphor land.

The music business is a new car.  The Sound Recording copyright is the body style, color, interior, stereo, blue tooth, cup holder part of the vehicle.  During this tough decade plus, because of the miracle of free enterprise, the labels have been able to regroup, rebuild, renegotiate, bargain, and in general re-invent themselves.  After all, the Sound Recording Copyright was largely a business invention, designed to stop unpaid reproduction of the recordings record labels invested in.

But the car’s engine is the SONG.  What makes the car able to go is the words and music my peers and I come up with and can play on piano or guitar.  Seems simple, just pull something from thin air and your emotions and create the motor that drives this music business.  Aren’t cars a whole lot better because of the investment in engineering and redesign that makes their engines more modern, powerful and efficient?  But the music business can’t do that.  We’re a 2014 car with a 1976 engine.

Other than sync rights for film, TV and commercials, the Songwriter / Publisher Copyright is completely handcuffed by consent decrees, rate courts, and Copyright Royalty Boards.  These government constructs tell us how much we are allowed to earn and when we have to take it.  We can’t make the deals the Sound Recording folks can make. It’s interesting to note that in the sync world, the normal split between the song and the sound recording is 50 – 50.  Makes total intuitive sense, doesn’t it.  So, investment in the engine of music, the songwriter and publisher, is stuck in the past, a system that worked okay, (pennies are better than micro-pennies) when physical product sold and there was no piracy or streaming services.  The songwriter / publisher makes between 1/14th and 1/17th of what the Sound Recording makes in digital streaming.

So, as we think about U.S Copyright Law and the music industry moving forward, we need to seriously consider both the cultural and commercial rewards (they go hand in hand,) of spending some time and money on R&D for the ENGINE – the SONG.  In a healthy music ecosystem, there’s plenty of money to go around.  I remember.  Let’s rethink and restructure investment in songwriters and publishers as we’re keeping artists, record labels, and digital entrepreneurs on track for success.  It’s not a zero sum game. Better songs = better music = a healthier music culture and more COMMERCE for a more creative America.

Steve Bogard

 

 

 

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4 Responses to NEW CAR WITH AN OLD ENGINE

  1. It was the Copyright Act of 1909 that wrought this government-entangled mess that still hangs around the Songwriters’ and Publishers’ necks. Anybody remember why that deal worked out like it did (compulsory mechanical licensure after first publication at a 2 cent statutory rate with no indexation for inflation)? That was when everybody knew the song was king, and those who wanted to license songs for piano rolls claimed the songwriters and publishers had an unfair monopoly! The turn of the last century, much as this one, was an era of anti-big business populism. Only this time, technology turned the tables on the Songwriters and Publishers. Is this presenting the Songwriters & Publishers, Artists & Labels with a golden opportunity for copyright reform that is fair and based on free-market forces of supply and demand? Does it make sense to unify the copyright in sound recordings and songs for mechanicals, broadcasting, synchronization, retransmission, and all other inseparable uses – with a new standard split of shares for Writers, Publishers, Artists, and Labels? Would this be adaptable in every territory of the world, identically, to eliminate domicile arbitrage? Would the parties to the copyright treaties that brought us life + 70 see the value of “Unified Copyright?”

    • Steve Bogard says:

      Great thought, Keith, and it has been proffered on numerous occasions over the last decade, including by former Register of Copyrights Mary Beth Peters. The “Unified Copyright” approach especially would work in digital streaming and interactive streaming, since the law already dictates a “blended” rate, where the PROs get their rate court amount first, and the rest is a “mechanical.” The problem, Keith is all the legacy players protecting their own old turf, (labels, publishers, and PROs.) They are acting in good faith but until all the players in the music sector can come up with a unified plan to take to Congress, we’re at a stalemate. There’s a light at the end of the tunnel but there are a lot of “asks” and “gives” to be worked out. Meanwhile the songwriter starves. All that said, great idea!

  2. Ken Hatley says:

    Steve, I sat on a bunch of those round tables with Mary Beth and others in 1995 and again in 2000, and later.

    I said then and I still say, the focus the industry had was on the format of delivery, not the content. I asked one simple question at one of these conferences, are we debating Format, or Content? That is where it got off track in the initial process in the early days of digital. However, this was motivated by the greed of each one of the corporate entities greed. It was much like vultures fighting over a piece of road kill.

  3. Ken Hatley says:

    The question is still the same I am asking, is it format, or is it the work embodied on the format. That seems to have dissipated from the brain cells of many who were there.

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