This week DOJ lawyers arranged conference calls and fielded questions from Songwriters over the 100% licensing rules. Multiple sources are reporting that when songwriters complained about their pay under the consent decrees the staff lawyers claimed that the consent decrees had nothing to do with it.
I call bullshit. And I’ve got the data to prove it. In fact I explained this to the DOJ lawyers in a letter when they asked for comments earlier this year.
Generally when you hear a recording of a song on the radio, you are listening to separate and distinct copyrights. There is a copyright for the recording and one for the underlying composition (or song). Often times these two copyrights have different owners.
For instance when a film maker decides that they want to use a recording of a song in a film they must obtain licenses. A “master use” license for the recording. And a “sync” license for the underlying composition. There are no DOJ rules or federal compulsory licenses for this kind of use. Each license is negotiated in the free market. My long experience with my own catalogue shows that generally the fee for master use license (recording) is about the same as the fee for the sync license (underlying composition). Sometimes the sync license is a little higher as it is always possible to re-record the song. For my catalogue 2011-2014 it’s about 48% for recording and 52% for the composition.
Now contrast that to the non-interactive streaming (think Pandora not Spotify). Here the consent decree governs the licensing process for the composition. In this case the recordings get about 92% of the revenue and the composition receives about 8%. The only difference is the consent decree!
The consent decrees amount to a federally mandated subsidy from songwriters to monopoly digital services. They are further entrenching and enriching “trusts” at the expense of songwriters. Does that sound like a properly functioning antitrust division?