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.