[This post first appeared on MusicTechPolicy.]
By Chris Castle
I recently co-wrote with the noted international economist Professor Claudio Feijoo a paper for the World Intellectual Property Organization on a new “streaming remuneration” royalty to be paid to all musicians and vocalists by streaming services. Part of our justification for the new royalty is that these creators, especially “non-featured” musicians and vocalists are not paid at all for streaming which is rapidly replacing radio (for which they are paid through SoundExchange). The value that the streaming remuneration would try to capture is not just revenue based (which is how all streaming royalties are derived currently) but also derived from the market valuation conferred on companies like Spotify. Spotify remember is more like YouTube would be than say Google because it is essentially a “pure play” music stock, kind of like Pandora was.
Claudio has done considerable work on trying to capture and express this value, so for today let’s do some rough justice using one of the approaches from the paper. There are more bells and whistles to the calculation than I’m going to give you here, but you’ll get the idea that a stream is assigned a much, much lower value when calculated on the revenue side of loss-making organizations than when calculated on the extraordinary wealth-making side of the public markets valuation of Spotify. And if you want to make a causal connection between low royalties and high market value, who am I to stop you?
The formula is simple: Divide Spotify’s market capitalization by the number of royalty bearing streams in a month and you have a rough idea of how much value each stream confers on the monopoly streamer.
Spotify’s recent market capitalization is $41,056,000,000 give or take an Arsenal in the rounding. A recent number of monthly plays as reported by the MLC is 24,815,407,149.
Divide market capitalization by number of streams. The result is $1.65 per stream in market valuation. According to the last Trichordist streaming price bible, Spotify’s per-stream rate was $0.00348 and for songwriters, even less.
$1.65 versus $0.00348. Where oh where might that delta go? It goes somewhere and it’s not to the people who made them rich. Not a perfect metric, but you get the idea.
You might say how do they sleep at night? The answer? Sleeping very well on much nicer sheets than you, thank you, and for one reason–they do not give a flying hoot about your problems because Daniel Ek doesn’t think you’re working hard enough to make him and all his employees richer.
United States Copyright Royalty Judges
Copyright Royalty Board
Library of Congress
Docket No. 21–CRB–0001–PR
COMMENTS OF HELIENNE LINDVALL, DAVID LOWERY AND BLAKE MORGAN
Helienne Lindvall, David Lowery and Blake Morgan submit these comments responding to the Copyright Royalty Judges’ notice soliciting comments on whether the Judges should adopt the regulations proposed by the National Music Publishers Association, Nashville Songwriters Association International, Sony Music Entertainment, UMG Recordings, Inc. and Warner Music Group Corp. as the so-called “Subpart B” statutory rates and terms relating to the making and distribution of physical or digital phonorecords of nondramatic musical works that, if adopted by the Judges, would apply to every songwriter in the world whose works are exploited under the U.S. compulsory mechanical license (86 FR 33601).
We object to the proposed rates and terms for the following reasons and respectfully suggest constructive alternatives. The gravamen of our objection is that (1) the Subpart B rates have already been frozen since 2006; (2) no evidence has been publicly produced in the Proceeding that justifies or even explains extending the proposed freeze; (3) very large numbers of songwriters of various domiciles around the world do not even know this proceeding is happening and have not appointed any of the parties to act on their behalf or been asked to consent to the purported settlement; (4) physical sales are still a vital part of songwriter revenue; and (5) there are many just alternatives available to the Judges without applying an unjust settlement to the world’s songwriters.
A. Statement of Interests.
By way of background, following are short summaries of the commenters’ respective biographies demonstrating their respective significant interests in the subject matter of this proceeding.
Helienne Lindvall: Ms. Lindvall is an award-winning professional songwriter, musician and columnist based in London, England. She is Chair of the Songwriter Committee & Board Director, Ivors Academy of Music Creators (formerly British Academy of Songwriters, Composers & Authors BASCA) and chairs the esteemed Ivor Novello Awards. She also is the writer behind the Guardian music industry columns Behind the Music and Plugged In and has contributed to a variety of publications and broadcasts discussing songwriters’ rights, copyright, and other music industry issues.
David Lowery: Mr. Lowery is the founder of the musical groups Cracker and Camper Van Beethoven and a lecturer at the University of Georgia Terry College of Business and is based in Athens, Georgia. He has testified before Congress on the topic of fair use policy and is a frequent commentator on copyright policy and artist rights in a variety of outlets, including his blog at TheTrichordist.com. He has been a class representative in two successful class actions by songwriters against music streaming services.
Blake Morgan: Mr. Morgan is a New York-based artist, songwriter, label owner, music publisher, and the leader of the #IRespectMusic campaign which focuses on supporting fair payment for creators across all mediums and platforms including supporting the American Music Fairness Act sponsored by Representatives Deutch and Issa. Mr. Morgan also lectures on artists’ rights at music, business, and law schools across the United States.
Helienne Lindvall, David Lowery and Blake Morgan (collectively, the “Writers”) are independent songwriters who own the copyrights to many of their songs. They previously were amici in Google v. Oracle together with the Songwriters Guild of America. In some instances, they have written songs whose copyrights they have transferred in limited parts and in some cases for limited periods of time to major music publishers. In other cases, their songs are not owned by major music publishers but are administered by one or more of them, in many cases also for limited periods of time. In some instances, these transfers were in perpetuity subject to certain statutory or contractual termination rights. They also have retained the copyrights to many of their songs and are self-administered songwriters with respect to those nondramatic musical works.
We thank the Copyright Royalty Judges for inviting the public to comment on the proposed regulations in the docket referenced above (“Proceeding”) and the purported “settlement” that in large part resulted in the Copyright Royalty Board’s proposed regulations.
B. Objections, Discussion and Solutions
We appreciate this opportunity to make our views known and hope that our suggestions are helpful to the Judges in trying to solve the frozen mechanicals crisis. We also appreciate that the Judges seek to do justice and find a fair result given their appointed role of administering the awesome power of the government to compel songwriters to accept all rates and terms of the statutory license.
1. Lack of Authority to Negotiate for Non-Participants:
As a threshold matter, we think it is important to clarify the source of authority for the purported settlement as set forth in the Motion. Some play a bit fast and loose with who represents whom in a parade of glittering generalities and hasty generalizations. The Writers are not members of the Nashville Songwriters Association International and have not authorized NSAI to negotiate any agreement on their behalf, nor would the Writers ever authorize any lobby shop to do so.
Neither are the Writers members of the National Music Publishers Association, nor have Writers authorized the NMPA to negotiate any agreement on their behalf. The NMPA has many members but we seriously doubt that the NMPA has expressly obtained authority from any of its members to negotiate the purported settlement on their behalf, outside of its board of directors. That authority may give the NMPA employees cover, but is pretty weak sauce as authority for the negotiation of frozen rates to be applied to all the songwriters in the world.
We doubt that any other songwriter (outside of the insiders) or that any copyright owner gave consent either, aside from members of the NMPA Board of Directors authorizing employees of the NMPA to accept (or perhaps even propose) frozen rates on behalf of the board. Neither do we see any evidence that the NMPA or NSAI were appointed a “common agent” by copyright owners to set prices and otherwise negotiate and agree upon the terms and rates under Subpart B. Therefore, we encourage the Judges to inquire further to determine if an appointment was a necessary condition for settlement or if the majority are claiming a kind of misconstrued authority, perhaps with the best of intentions. One person’s negotiation strategy is another’s catastrophe.
We anticipate that the Judges will take that position that the Writers will be “bound” by the purported “settlement” in the Motion among the NMPA (which owns no copyrights), the NSAI (which owns no copyrights), and the major labels (which in theory own no musical work copyrights). We find it astonishing that entities that do not appear to represent, or to have been appointed a common agent of, all the persons to be bound by the settlement, are still able to use the Copyright Royalty Board to bind nonparties to a settlement. This seems at best contrary to American constitutional jurisprudence requiring the consent of the governed and at worst destructive of the ends of government.
If anyone contests our position that the parties to the settlement had no authority to bind strangers to the deal, let them come forward with a common agent appointment, board minutes, board votes, membership votes, court ruling or other evidence of due process to disclose how this purported settlement described in the Motion was actually approved and which copyright owners authorized the NMPA and NSAI to conclude the agreement on their behalf (and, therefore, which did not).
We think that what such disclosure will demonstrate at most is that the respective boards of directors of the two organizations authorized the settlement. Since neither the organizations nor their respective boards were likely authorized to accept a frozen rate by strangers to that deal, the board members may have merely indicated their own company’s intention to be bound by the settlement. They likely had no actual authority to do more.
Even this seems odd. Each NMPA board member who represents a publisher presumably would be agreeing on their own behalf. It is unclear what the NSAI board actually approved, since NSAI owns no copyrights and at least some of the songwriter board members are likely signed to publishers, perhaps some or all of the same publishers who were voting on the NMPA board. Murkiness abounds. So, if anyone says that their board approval resulted in some kind of “consensus” binding on strangers, that may be something of a misdirection that does not consider the obvious and customary limitations of a board’s authority. We respectfully ask the Judges to get to the bottom of exactly how this happened by asking for supplemental briefs or such other means as the Judges deem appropriate.
The Writers are in two different groups that fairly are not represented in the Proceeding. First, Writers are in the very large and global group of songwriters and copyright owners who cannot afford to participate in the Proceeding. As the Judges are likely aware, yours is very rarified air where only the very rich drive the process but all songwriters must bear the burden of the result. Songwriters and copyright owners living outside the United States (and even those living outside of Washington, DC) are essentially prevented from participating at hearings in a far-away capitol although the Judges’ rulings directly affect their works when exploited in America. This is how process becomes punishment.
Second, the Writers are in another bucket with some songs still co-published or administered by publishers that may be represented by the NMPA in the settlement—we do not know because individual publishers did not sign the Motion in their own names. None of those publishers have consulted with the Writers about freezing the statutory royalty rates for yet another five years and essentially granting a reduced rate license without our permission. Many co-publishing or administration agreements include a restriction on the publisher that prohibits them from granting licenses at less than the statutory rates—songwriters did not consider negotiating an additional restriction that would prohibit the publisher from lobbying to indirectly reduce the rate through freezing the statutory rate and then bootstrapping that agreement to apply to the world through the CRB. Perhaps the CRB will give songwriters a reason to start negotiating a “no frozen rate lobbying” marketing restriction in future deals.
Respectfully, the Judges should not enable these publishers to do indirectly that which they cannot do directly. We would ask the Judges to inquire further and opine as to whether such marketing restrictions are at work in the purported settlement as to songwriters or publishers administered by any of the settling publishers. Since those publishers are not individually parties to the settlement, we have no way of confirming who is in and who is not.
Regardless, Writers did not authorize anyone to negotiate the frozen rates on their behalf and never would. If the Judges adopt the proposed settlement without a mechanism to obtain consent of those they govern, such a ruling seems to us to fly in the face of all the fundamental building blocks of democracy and in particular American Constitutional democracy. Accordingly, Writers reserve the right to challenge any such decision to freeze mechanicals on a number of grounds including due process, equal protection and 5th Amendment takings.
The parties to the purported settlement would have the Judges believe that because they claim that ‘‘the settlement represents the consensus of buyers and sellers representing the vast majority of the market for ‘mechanical’ rights for Subpart B Configurations” and seem to ask the CRB to accept without question the lack of evidence of the authority to negotiate the settlement in the first place which belies the unelected “consensus.” It must be said that on the one hand, songwriters are not polled to determine what they want in the way of rates, but on the other hand their number or the number of their works are used to justify frozen rates to argue for a “majority” view (when songwriters were never asked if they want the freeze). Such “consensus” is chimerical and is, frankly, an equivocation that defies a common definition of the word “consensus” that we find inapt given the current facts and is closer to Kings X.
The settling parties (presumably the NMPA in this case) would have the Judges apply their private deal to all songwriters throughout the world. It’s easy to get a faux consensus from “the majority” if you do not invite—and even attack or threaten–those with opposing views. It illustrates the “tyranny of the majority” that every American high school civics class discusses in the context of governance–even assuming there was a vote of the affected songwriters which there apparently was not.
Therefore, from the outset the proposed rule is simply not a reasonable basis for setting statutory rates or terms for those not party to the voluntary agreement set forth in the Motion.
But on a more practical note, we think songwriters will ask what can be done to try to fix the mess the parties have created? We offer several concrete solutions.
2. Limit the Settlement to Named Parties to the Agreement or Let Sunlight Shine on the Settlement if Settlement Applies to All Songwriters in the World:
We call the Judges’ attention to the record company parties to the settlement. Note that each of the major labels signed in their own organization names, yet for some reason the publishers did not. Had they signed in their own names, the symmetry between the two might be obvious due to common ownership at the group level.
The Judges could require that the voluntary settlement apply only to those parties who actually agreed it, rather than trade associations that own no copyrights and likely have limited agency at best. The Judges could cabin the rates and terms to those parties who are actually signatories to the settlement, directly or indirectly. The publishers involved could be ordered to step forward for the rationally related purpose of determining who the settlement rate should apply to. This approach would treat the purported settlement more in the nature of a voluntary license among the parties as is permitted under the Copyright Act. This cabined approach seems to be consistent with the Act and the proper role of regulatory agencies like the CRB, not to mention the Constitution.
If the Judges do not wish to take this approach, the Judges may wish to assure that all songwriters who are affected by their ruling are provided with the full picture of what the deal was that induced the purported settlement. This approach recognizes that the proposed regulations do nothing to disclose all consideration that was paid in connection with the settlement. This question has been raised by many interested persons, including Representative Lloyd Doggett in a July 13, 2021 letter to the Librarian of Congress and the Register of Copyrights regarding CRB procedures.
The settlement expressly refers to undisclosed terms that sound very much like other consideration exchanged and also expressly refers to a side deal or “MOU” between the NMPA and the major labels. How can the Judges determine, or expect anyone outside the insider group to agree, that the rates and terms set forth in the proposed regulations are fair and reasonable without knowing the full extent of the consideration exchanged? Therefore, the proposed rule as drafted is simply not a reasonable basis for setting statutory terms or rates for those not party to the voluntary agreement as set forth in the Motion and who are not “in the know” regarding its terms including the terms of the MOU.
3. Opt In for Independents and Co-Published Songwriters:
We perceive the obvious lack of authority to bind non-parties is a fatal flaw of the proposed settlement. If true, lack of authority is likely sufficient good cause for the Judges to reject the settlement without even addressing whether the rates and terms meet the willing buyer-willing seller standard required by Congress.
We recognize that the Judges may wish to avoid an outright rejection of the purported settlement. An agreement among the parties is consistent with the goals of a voluntary negotiation. One remedy might be for the Judges to require the parties to construct an opt-in structure that would only apply to those who affirmatively agree to accept the frozen rate. There clearly are precedents for implementing an opt-in structure that would allow songwriters and copyright owners to accept the settlement or reject it and negotiate their own arms-length rate as true and unrelated willing sellers to a willing buyer. If there really is a “consensus,” an opt-in process would simply confirm it in a legally cognizable manner.
For example, if copyright owner A was party to a co-publishing agreement with publisher X who is represented on the NMPA board, it would be a simple thing to require publisher X to proffer an authorization document permitting the negotiation of the settlement on behalf of copyright owner A. Failing that proffer, publisher X could put the settlement out for opt-in consent by copyright owner A and those in the same class as copyright owner A. An opt-in process seems efficient. Common questions would predominate, the publishers concerned would not be prohibitively numerous, the copyright owners could easily be located based on the billing relationship between them and publisher X and an opt-in structure would no doubt be preferable and less costly than other remedies.
Alternatively, songwriters or copyright owners could be allowed to opt-out of the settlement by a simple notice by their publisher to them requesting an opt-in, or from them to their publisher opting in or out. The Judges would, of course, do well to specify the rules for this process and supervise the administration.
Absent this or similar evidence of authority, there will always be an open question of whether the purported settlement provides a reasonable basis for setting statutory terms or rates which may be answered later down the line in the CRB or other fora.
4. When the Willing Buyer and Willing Seller Are Effectively the Same Legal Person:
It must be said that we sympathize with the position that the Judges are in of trying to divine a free market rate in America where songwriters have not been free in over 100 years. In fact, songwriters in America have not been free for so long we could safely say they have never been free in stark contrast to the U.S. economy generally. Generations of songwriters are held guilty of some long-forgotten and Kafka-esque original sin requiring a degree of government regulation as though songs were hazardous materials. Regulation that protects monopolists like Google and iHeartMedia from the supposed anticompetitive urges of songwriters who we are asked to believe seek out the closed door of the writer room for one reason–collusion.
While this willing buyer-willing seller standard makes good sense in the case of webcasting rates or streaming mechanicals where the parties typically are not and are not likely to be related, it is extraordinarily difficult for the Writers to swallow in the case of the parties to the purported settlement—an ancient conflict of interest that was easily predictable on the face of the “Music Modernization Act.” There is nothing modern about this unitary buyer/seller problem.
The major publishers are, of course, owned at the group level by the same companies that own the major labels. That’s what makes them “major” but that is also what makes them unitary. Assuming arguendo that the major publishers have obtained the consent of their co-publishers or their administration principals, they would be free to enter into any permitted settlement even with their affiliated record company music users. But the Motion is hardly a willing buyer-willing seller scenario—the two are essentially the same legal person, or are “unitary.” Congressman Doggett raised a question about this very issue in his Letter, and we raise it here to the CRB. We think it deserves a detailed reply from the CRB and will be a key legal precedent going forward under the “new” MMA standard. All the more reason why the settlement is more suited to a voluntary license among the parties than a rule that applies to all the world.
The Judges may find the recent report by the UK Parliament’s Digital Culture Media and Sport Committee to be helpful on this point; Ms. Lindvall and the Ivors Academy campaigned for the DCMS Committee’s inquiry.
The DCMS Committee called upon the Government to have the UK’s Competition and Markets Authority investigate competition in the recorded music market, particularly the tied song and sound recording markets, noting that:
“With [independent] music publishers…unanimously calling for the value of the song to have parity with the value of the recording [citation omitted], it is conspicuous that the MPA [the UK counterpart to the NMPA] refused to give a definitive perspective on the debate, particularly given that the publishing arms of the three major music groups are counted amongst their members….Whilst the major music groups dominate music publishing, there is little incentive for their music publishing interests to redress the devaluation of the song relative to the recording.”
Accordingly, we do not believe, as discussed more fully below, that the purported settlement agreement in any way approximates fair or reasonable royalty rates and terms, or rates and terms that would have been negotiated in the marketplace between an arms-length willing buyer and a willing seller, i.e., a non-unitary buyer/seller. Given the position expressed by the DCMS Committee, it’s entirely possible that at least the UK Parliament may wish to resolve the issue in another forum.
We are open to being persuaded otherwise by the Judges, but it appears that the unitary willing buyer-willing seller will establish a critical precedent going forward. Therefore, the proposed rule is simply not a reasonable basis in this great moment for setting statutory terms or rates until the application of this standard to related parties is clearly spelled out by the CRB and reviewed.
5. Vinyl Is a Booming Business:
We ask that the Judges take notice of the multitude of news reports on vinyl sales. Contrary to the vague assertions by NSAI members outside of the Proceeding about unnamed and undisclosed “industry revenue analysis” when defending their decision to “accept” a frozen rate because they believe that physical is a declining configuration, vinyl sales are, if anything, understated due to the severe inability of supply to keep up with demand. (Why a rational commercial actor would allow that mismatch to continue to such an egregious extent and to the detriment of artists and songwriters is a whole other question.)
These supply chain problems started well before the pandemic, so please do not allow yourselves to be “gaslighted” into the belief that the problems are caused by the pandemic. Since the whole point of capitalism is for supply to meet demand, we must assume that this situation will be remedied eventually considering the incredibly strong and nearly vertical demand for vinyl, yet that remedy is slow in coming.
While the 2008 coming of Spotify is taken by the press (and Spotify itself) as some sort of celestial arrival of a savior straight out of the Book of Revelation, the data tell a different story about vinyl sales. For whatever reason of consumer taste, the coming of Spotify was also roughly the beginning of the vinyl boom. Respectfully, it does not take an economist to read the newspaper—stories of vinyl’s resilience to cannibalization by streaming abound.
This upward sales trend is reflected in new survey data as well. According to a small survey conducted by Artist Rights Watch of self-selected songwriters during the period June-July 2021, approximately 26% of respondents said that, roughly speaking, their songwriting income from physical sales had increased over the last two years, and 32% said they expect their income from physical sales to increase over the next two years.
These survey results are consistent with the views expressed by Jeff Gold, a music industry veteran, historian and author who has operated the Record Mecca collectibles site for many years. Rolling Stone profiled Mr. Gold as one of the five “top collectors of high-end music memorabilia.” Mr. Gold told us in an interview:
“I think the vinyl boom is being driven by a number of factors. First, nostalgia: people like me love the experience of looking at an album cover, putting a vinyl record on the turntable, and traveling back in time. The Record Collector world I live in has expanded as well, with highly collectible records [selling] for much more than ever.
Second, for younger people I think there is a collectible factor – – they are trying something from a different era, it’s trendy to have a turntable and play vinyl records, and they think maybe this is something they can buy that’ll be worth more later. And that is often the case.
Also, there’s the Record Store Day phenomenon, under pressing records to make instant collectibles. And to some [vinyl records] are merch[andise] for fans of artists who want to own everything connected to that act.
The market for vinyl has dramatically expanded, and the rare vinyl I sell is more desirable than ever. If I had to guess I would think that the collectible record world will continue to expand, but at some point the fad vinyl buying will begin to ebb. Though I’ve been saying that for a long time and there’s no sign of it.”
The Artist Rights Watch small survey and recent commentary supports a phenomenon that we respectfully suggest the Judges should explore further before accepting the alleged “consensus” for the purported settlement as fact—a significant number of songwriters appear to find mechanical royalty income from physical sales to be important to them and likely would not accept the terms of the voluntary agreement. Again, we are not trying to dictate rates and terms to those who find the voluntary agreement to suit their needs; they should have their rates and terms. But we respectfully ask the Judges not to impose those frozen rates on everyone else without their participation and consent as well as evidence. What is good for the goose may be anathema to the gander.
Even if every single one of the current vinyl trends are wrong, even if vinyl stops being a resurgent business and abruptly crashes and burns at some point in the next five years due to supply chain problems or reversals in consumption patterns not currently measurable, even if the NSAI songwriters’ undisclosed sources turn out to be 100% correct, what remains even in the industry-wide and world-wide 1% of revenue projected by the NSAI songwriters is still a significant revenue stream to a large portion of songwriters and even music users. We will believe the users do not care about physical and digital downloads when the first record company president comes forward and declines 15% of annual billing.
These assertions and speculations about the future are a fine example of a judgement based on conditional probabilities that does not consider the effect of prior probabilities. If this sudden crash theory really is part of the majority’s thinking, it does seem that the least they could do is provide the Judges and the public with supporting evidence on the record for their projection (or their guesswork) that so far is entirely absent from the record.
We do not make an emotional appeal, however. Sales levels do not change the fact that songs have value that deserves greater economic analysis and justification than a finger in the wind. As the DCMS Committee observed in their referral to the UK’s competition authorities, there are some unusual forces at work here. The Motion may well provide greater evidence for such a review albeit inadvertently.
In the absence of an economic case put on by any party to the voluntary agreement regarding freezing Subpart B rates, we ask that the Judges take notice of the overwhelming amount of public information available to document the importance of vinyl and the error of the fundamental assumptions of the NSAI songwriters which we assume gave voice to certain NMPA members. We have provided the Judges with a handful of representative articles above.
While the CRB may have other reasons for continuing to impose the existing frozen mechanical rate on the world’s songwriters for another five years, relying on an unnamed “industry revenue analysis” of imaginary dwindling physical sales without inquiring further when there is ample public evidence to the contrary seems to be an unreasonable and arbitrary basis for setting statutory terms or rates. In fact, putting your finger in the air and guessing that vinyl sales will reverse course into a nose-dive in the face of overwhelming facts and data to the contrary seems the very definition of arbitrary.
6. Disclosure Should be Mandatory:
Respectfully, we believe there is a compelling need for the Judges to require the disclosure of both the settlement agreement that established the frozen rates as well as the MOU referenced in the Motion. It appears from the Motion that there was additional consideration beyond putting a finger in the air and deciding to freeze the rates another five years; yet, that additional consideration is described but not disclosed. It seems that no copyright owner (other than insiders) can rationally evaluate the purported settlement without knowing all the facts.
We respectfully call the Judges’ attention to analogous facts in Pandora’s ASCAP and BMI rate court proceedings from 2007. While dated, the story is good background for understanding the problems that can be unleashed from bootstrapping secret deals into law—in the Pandora case, one could say that it led directly to the Music Modernization Act’s provisions requiring random assignment of rate court judges. This quote from Billboard is a succinct description of the problem:
Back in 2007-2010, when ASCAP and BMI rate court judges were involved in litigation between DMX and performance rights societies, the judges examined the direct licensing deals DMX cut with publishers. During that process, judges did not review the advances or any of the other aspects of the deal, and only looked at the reduced per-store royalty rate. Consequently, in the case of BMI, this resulted in the per-store negotiated rate falling from $36.36 to a per-location fee of $18.91, much to the chagrin of the publishers, who stayed a part of the PROs’ blanket licenses. The ASCAP rate court returned a similar finding.
Congressman Doggett also correctly raised this question in his Letter and it is entirely understandable—without disclosure of all consideration, strangers to the settlement are being asked to buy a pig in a poke.
Accordingly, we ask that you compel the disclosure of all documents, payments and other consideration that changed hands or were promised to change hands in the purported settlement. This would include any payments outside the four corners of the Motion but related to the purported settlement. In the absence of that disclosure or binding certification that it does not exist, the proposed rule is simply not a reasonable basis for setting statutory terms or rates until the full terms of the purported settlement are disclosed or the settlement is cabined as a voluntary license among the parties.
7. Raising the Rates:
First and foremost, the problem with the CRB adopting the purported settlement as the law of the land is the appearance of the bootstrapping of a private deal among apparently related parties and the controlled opposition into rates and terms that apply to all songwriters in the world. As Congressman Doggett says in his Letter, these are rates and terms that apply to all songs ever written or that ever may be written. We know you will agree that the rule making authority of the CRB is a serious and solemn example of the awesome power of the government over unrepresented songwriters.
The potential for this bootstrapping is particularly offensive to songwriters who live outside the United States as evidenced by opposition to the frozen mechanicals from a host of international songwriter groups.
We wish to express our desire for a separate and higher rate from the frozen rate accepted by the parties to the purported settlement. We recognize the corner that the CRB has been backed into regarding raising the rates that have been frozen for so long that they have been substantially eroded by inflation without even considering the value of songs to the booming vinyl business. According to the Bureau of Labor Statistics CPI-U calculator (the same index used by the Judges in the recent Web V rate determination), a 9.1¢ rate set in 2006 would be indexed to 12¢ today. We therefore estimate that 9.1¢ in 2006 would have the buying power today of approximately 6¢, less than the 1992 mechanical rate established 29 years ago.
However justified, we are sure that raising the 9.1¢ rate across the board would be met by a great howling and rending of garments by at least some of the parties to the purported settlement. The easy answer to this issue is one raised by Congressman Doggett in his Letter–limiting the settlement rate to the settling parties and setting a higher rate for non-settling parties, i.e., the inverse of the trick referenced above that was played by DMX on the entire industry and the rate courts.
The new minimum statutory rate applied to the non-settling parties could be as simple as a headline rate between a bounded range greater than 9.1¢ and up to 12¢ with the appropriate adjustment for the long-song formula. That headline rate could then be adjusted for inflation and indexed to the CPI-U for the out-years in a similar manner as the Judges applied in Web V. Even these rates are excruciatingly low and demonstrate the deep hole that the government imposed on songwriters between 1909 and 1978 when the rate for generations of songwriters was frozen at 2¢ through two World Wars, the Great Depression, a global pandemic, two post-war booms and a moon walk. Songwriters have been digging out ever since, both in the US and abroad due to America’s long commercial shadow. The Writers fear that a similar freeze has developed with the Subpart B rates and without meaningful consultation. While we cannot reasonably ask the CRB to solve all the world’s mistakes, we can ask that the Judges not repeat them. As Congressman Doggett says, we are concerned that we not misstep.
Alternatively, the CRB could, after consultation with representative parties opposing the frozen rates such as the Songwriters Guild of America, Ivors Academy, ATX Musicians, the Society of Composers and Lyricists, MusicAnswers, the Screen Composers Guild of Canada, Alliance of Latin American Composers & Authors, Asia-Pacific Music Creators Alliance, Pan-African Composers and Songwriters Alliance, Music Creators North America, the Alliance for Women Film Composers and ECSA appoint a representative for independent songwriters to negotiate with both the major labels and the independent labels on rates applicable to and higher than the rates in the settlement. Such a consultation in this or another forum would go a long way toward clearing up the due process and equal protection Constitutional issues hanging like a cloud over the current Proceeding. Obviously, the cost of such negotiation should not be borne by the songwriters or recouped from their royalties.
Therefore, absent such a ruling by the Judges, the proposed rule is simply not a fair or reasonable basis for setting statutory terms or rates until there are truly representative bodies negotiating on behalf of songwriters and independent copyright owners.
Thank you again for this opportunity to express our views on the proposed rule. We respectfully hope that our comment has provided the Judges with some additional insight into how the proposed rule affects independent songwriters and publishers both in America and around the world, particularly since none of us can afford to participate in the rate setting proceeding itself. We greatly appreciate the Judges’ willingness to avoid process becoming punishment.
Christian L. Castle
Christian L. Castle, Attorneys
9600 Great Hills Trail, Suite 150W
Austin, Texas 78759
July 26, 2021
 We focus in this comment almost entirely on the Subpart B rates applicable to physical carriers under 37 C.F.R. §385.11(a). We note, however, that there is some apprehension among songwriters that the “music bundle” rate in 37 C.F.R. § 385.11(c) could be twisted in a way to drag Non-Fungible Tokens into the frozen rates. We doubt that Congress intended to include NFTs in the statutory rates since they did not exist even at the time of the Title I amendment to Section 115. It would certainly add insult to injury for large sums to change hands for NFTs but songwriters be reduced to their usual meagre gruel in compensation while everyone else enriches themselves from the songs. Clarity on this point would be appreciated.
 See The Scope of Fair Use: Hearing before the Subcomm. on the Courts, Intellectual Property and the Internet of the H. Comm. on the Judiciary, 113th Cong. (Jan. 28, 2014) (statement of David Lowery)
 See #IRespectMusic campaign, available at https://www.irespectmusic.org.
 See Reps. Issa, Deutch Introduce Bill to Ensure Artists Receive Fair Pay for FM/AM Radio Airplay (June 21, 2021) available at https://issa.house.gov/media/press-releases/reps-issa-deutch-introduce-bill-ensure-artists-receive-fair-pay-fmam-radio.
 Google LLC v. Oracle America, Inc., 593 U.S. ___ (2021), Brief of Amici Curiae Helienne Lindvall, David Lowery, Blake Morgan and the Songwriters Guild of America in support of Respondent (2021) available at https://www.supremecourt.gov/DocketPDF/18/18-956/133298/20200218155210566_18-956%20bsac%20Helienne%20Lindvall%20et%20al–PDFA.pdf.
 Motion To Adopt Settlement Of Statutory Royalty Rates and Terms For Subpart B Configurations, Docket No. 21-CRB-0001-PR (2023-2027) hereafter the “Motion.”
 We invite the Judges to take notice of the relationships at the board level between the NMPA and the NSAI which is beyond the scope of the comment, but we think the Judges may find very relevant for discussions of negotiating authority and the scope of designation of a common agent.
 It must be noted that the NMPA board and the NSAI board share members from time to time.
 We are mindful of the result of the WTO arbitration over the Fairness in Music Licensing Act that found the United States liable for damages in violating the TRIPS Agreement. See WT/DS160/12 (Jan. 15, 2001) available at https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S006.aspx?Query=(@Symbol=%20wt/ds160/*)%20and%20(@Title=%20((arbitration%20under%20article%2021.3)%20and%20((award%20of%20the%20arbitrator)%20or%20(report%20of%20the%20arbitrator))))&Language=ENGLISH&Context=FomerScriptedSearch&languageUIChanged=true#,
 See, e.g., United States v. Arthrex, Inc., 594 U.S. ____ (2021).
 Motion at 4.
 Paul Resnikoff, AMLC Board Member Accuses NMPA President David Israelite of Tortious Business Interference and Collusion, Digital Music News (Nov. 28, 2018) available at https://www.digitalmusicnews.com/2018/11/28/amlc-nmpa-president-david-israelite-collusion/
 Thomas Jefferson, First Inaugural Address (1801) (“All too will bear in mind this sacred principle, that though the will of the majority is in all cases to prevail, that will, to be rightful, must be reasonable; that the minority possess their equal rights, which equal laws must protect, and to violate would be oppression.”)(emphasis added); James Madison, Federalist Papers 10 and 51. John Locke, Second Treatise of Government (1689) at par. 95 (“[N]o one can be put out of [his property], and subjected to the political power of another, without his own consent.”)
 The tradition of concern with the familiar “tyranny of the majority” sounds in discussions of representative government, the concern being that the majority that gives a representative quorum in a body also could lead to disastrous consequences for the minority. This is particularly true when the governed have rules imposed on them that they had no part in crafting by persons they had no part in electing. Washington expressed it well and highlights the very point before this Court today: “To be fearful of vesting Congress, constituted as that body is, with ample authorities for national purposes, appears to me the very climax of popular absurdity and madness. Could Congress exert them for the detriment of the public without injuring themselves in an equal or greater proportion? Are not their interests inseparably connected with those of their constituents? By the rotation of appointment must they not mingle frequently with the mass of citizens? Is it not rather to be apprehended, if they were possessed of the power before described, that the individual members would be induced to use them, on many occasions, very timidly and inefficaciously for fear of losing their popularity and future election?” George Washington, “To John Jay,” August 15, 1786, The Papers of George Washington, “Confederation Series,” Vol. 4 (1976) at 212–13 (emphasis added). If the truth is as we apprehend it, that a dedicated group of essentially unelected likeminded people known for extracting vengeance from anyone who dares question them got in a private room at a private meeting and decided the fate of the world’s songwriters was their unelected remit, then this is not even a vote fulfilling the tyranny of the majority because there was no vote and there was no majority—just tyranny. de Tocqueville admonishes that “[t]he despotism of faction is not less to be dreaded than the despotism of an individual.” Alexis de Tocqueville, Democracy in America, Vol. 2, Ch. XIV (1840) at 289.
 This is particularly relevant in the case of a songwriter who has entered one of the various publishing, co-publishing or administration agreements commonly in use in the music business. If publisher X intends to be bound by the settlement, yet does not act under its own name in the settlement, songwriters “signed” to publisher X have no way of knowing if they are to be bound. While certain relationships can be inferred, it seems that there should be clarity regarding the parties to such a watershed agreement.
 Letter from Hon. Lloyd Doggett to Librarian of Congress Dr. Carla Hayden and Register of Copyrights Shira Perlmutter (July 13, 2021), available at https://thetrichordist.files.wordpress.com/2021/07/letter-library-of-congress-register-of-copyrights-7.13.21.pdf hereafter “Letter”.
 “Concurrent with the settlement, the Joint Record Company Participants and NMPA have separately entered into a memorandum of understanding addressing certain negotiated licensing processes and late fee waivers.” Motion at 3.
 The “MOU” description and “late fee waiver” reference brings to mind another late fee “MOU” being the NMPA Late Fee Program available at http://www.nmpalatefeesettlement.com/mou2/index.php. If this MOU is a version of that MOU, it could be a substantial sum. (“The Record Companies have represented there is approximately $275 million in “pending and unmatched” accrued royalties (the “P&U Royalties”) that have not been distributed to the music publishers. In exchange for waivers of certain late fees through 2012, the Record Companies must comply with the provisions of the MOU, including paying participating music publishers and foreign societies their respective market share of accrued P&U Royalties.” Available at http://www.nmpalatefeesettlement.com/group_1/summary.pdf)
 17 U.S.C. §§ 115(b)(1) and (3).
 It is worth noting that we have been unable to find any reference to the unitary buyer/seller in any of the public comments or legislative history regarding the Music Modernization Act. In fact, the NMPA’s “pitch sheet” entitled Music Modernization Act (MMA): Bringing Songwriters into the Digital Age (Dec. 28, 2017) states that the new MMA rate standard establishes “[r]ates based on what a willing buyer and a willing seller would agree to reflect market negotiations” in contrast to the 801(b) standard that resulted in “below-market rates.”
 Digital Culture Media and Sport Committee, Economics of Music Streaming (Second Report of Session 2021-22), UK Parliament (July 15, 2021) available at https://committees.parliament.uk/publications/6739/documents/71977/default/.
 Tina Benitez-Eves, Vinyl Record Sales up 108.2% in First Half of 2021, American Songwriter (July 16, 2021) (“For the past 15 years, vinyl record sales have seen consecutive growth, despite the continued uptick of digital consumption in the U.S. and drop in sales and backup in production due to the pandemic.”) available at https://americansongwriter.com/vinyl-record-sales-up-108-2-in-first-half-of-2021/; Sarah Whitten, Music Fans Pushed Sales of Vinyl Albums Higher, Outpacing CDs, Even As Pandemic Sidelined Stadium Tours, CNBC (July 14, 2021) (“Music consumption in the first half of the year has remained robust even without the sold-out stadium tours, according to a new report. While on-demand audio streaming is up 15%, consumers are also looking to own more tangible collectibles like vinyl albums, which continue to surpass CD sales. In the first six months of 2021, 19.2 million vinyl albums were sold, outpacing CD volume of 18.9 million, according to MRC Data, an analytics firm that specializes in collecting data from the entertainment and music industries.”) available at https://www.msn.com/en-us/entertainment/news/music-fans-pushed-sales-of-vinyl-albums-higher-outpacing-cds-even-as-pandemic-sidelined-stadium-tours/ar-AAM6S31; Ed Christman, Audio Streams Up 15%, Vinyl Sales Double in First Half of 2021, Billboard (July 15, 2021) (“Vinyl sales, which have grown for the past decade, more than doubled between January and June, up 108.2% to 19.2 million from 9.2 million in the first six months of last year. Even CD sales, which have been steadily and precipitously declining, posted a modest 2.2% gain, to 18.9 million units. The only serious loss was in digital sales: Album downloads fell 26.8%, to 12.92 million, while track sales dropped 20.3%, to 101.8 million. But physical sales rose so much that, for the first time in years, total album sales rose, by 12.6% to 51.26 million.”) available at https://www.msn.com/en-us/music/news/audio-streams-up-15-vinyl-sales-double-in-first-half-of-2021/ar-AAM9Sk7); Sam Willings, Sainsbury’s Supermarket Will Stop Selling CDs, Sale of Vinyl Records Will Continue (July 13, 2021) (“A spokesperson for the British Phonographic Industry (BPI) told the BBC that “The CD has proved exceptionally successful for nearly 40 years and remains a format of choice for many music fans who value sound quality, convenience and collectability.” They continued: “Although demand has been following a long-term trend as consumers increasingly transition to streaming, resilient demand is likely to continue for many years, enhanced by special editions and other collectable releases.”) available at https://www.musictech.net/news/sainsburys-supermarket-will-stop-selling-cds-sale-of-vinyl-records-to-continue/; Andre Paine, Record Store Day set to deliver another summer boost for vinyl sales, Music Week (July 15, 2021)(“ Participating shops will be expecting queues from the early hours as fans and record collectors seek out rare and exclusive vinyl titles being released especially for the day.”) available at https://www.musicweek.com/labels/read/record-store-day-set-to-deliver-another-summer-boost-for-vinyl-sales/083710; Sage Anderson, Barnes & Noble ‘Vinyl Weekend’ Launches With Grateful Dead, Fleetwood Mac Exclusives, Rolling Stone (July 15, 2021)(“Barnes & Noble may be known for their cozy bookstores and massive collective of great reads across all genres, but the retailer has also just announced the return of their fan-favorite “Vinyl Weekend,” which offers dozens of limited-edition records and exclusive in-store and online specials.”) available at https://www.rollingstone.com/product-recommendations/lifestyle/barnes-and-noble-vinyl-turntable-sale-1197904/.
 L.B. Cantrell, NSAI Songwriters Respond to Criticism of Decision not to Challenge Physical Mechanical Rates, Music Row (June 2, 2021)(“Based on industry revenue analysis, it is anticipated that physical mechanical royalties will amount to less than 1% of the total mechanical royalty revenue in the United States during 2023-2028, the rate period this CRB proceeding covers.”) available at https://musicrow.com/2021/06/nsai-songwriters-respond-to-criticism-of-decision-not-to-challenge-physical-royalty-rates/.
 Erin Osman, “It’s a Total Nightmare”: Problems at Direct Shot Distributing Has Made New Vinyl and CDs Scarce, Billboard (Dec. 18, 2019) (“Since April, record stores and labels have been plagued by a distribution bottleneck that began when Warner Music Group moved its physical product to Direct Shot Distributing (DSD). The change made DSD, which also has contracts with Universal and Sony, one of the largest distributors of physical music in the country. The problem became apparent on April 13 — Record Store Day, the busiest and most profitable day of the year for many retailers — when some stores didn’t receive the exclusive releases they had ordered. Since then, the problem has gotten worse.”), available at https://www.billboard.com/articles/business/8546794/direct-shot-distributing-problems-vinyl-cds-physical-product.
 Allison Hussey, A Major Music Distributor Has Stifled Vinyl Sales for Record Stores and Indie Distributors, Sources Say, Pitchfork (Dec. 19, 2019) available at https://pitchfork.com/thepitch/a-major-music-distributor-has-stifled-vinyl-sales-for-record-stores-and-indie-labels-sources-say/.
 David Rowan, Daniel Ek: Europe’s Greatest Digital Influencer Tops Wired 100, Wired (May 16, 2014) available at https://www.wired.co.uk/article/wired-100-daniel-ek.
 “Thriving on scorn from the establishment since 2015”, http://www.artistrightswatch.com
 Artist Rights Watch, Songwriter Mechanical Royalty Income Questionnaire June-July 2021 to be made available at http://www.artistrightswatch.com and results available from the commenters (N=54).
 See, e.g., https://recordstoreday.com
 See, e.g., Artist Rights Watch Podcast Episode 1 “Frozen Mechanicals” available at https://podcasts.apple.com/us/podcast/the-artist-rights-watch/id1574250584; The Trichordist.com “frozen mechanicals” category https://thetrichordist.com/category/frozen-mechanicals/
 We are likewise unaware of any provision of the Copyright Act or regulations promulgated there under that provides for a sales-based determination of any particular rate. Such an argument appears to be exactly what underlies the NMPA and NSAI acquiescence to frozen rates but it simply is not the law that the fewer phonorecords sold the lower the royalty rate that the CRB may set.
 U.S. Bureau of Labor Statistics, CPI Inflation Calculator available at https://www.bls.gov/data/inflation_calculator.htm.
 The minimum statutory royalty rate in effect during the 1992-93 period was 6.25¢. U.S. Copyright Office, Mechanical License Royalty Rates (Sept. 2018) available at https://www.copyright.gov/licensing/m200a.pdf.
 Respectfully, the Congress missed an opportunity to strike a blow for fairness in the Copyright Act of 1976 when it failed to index the 2¢ rate retroactively and instead treated a 70-year wage and price control as thought there were nothing to see here. Had Congress indexed the rate retroactively and then increased the rate prospectively based on value and indexed to inflation, songwriters would be exponentially better off. When songwriters complain to the CRB that they struggle to make a living, it is this decades long dark hole of the 2¢ rate freeze that is a major contributing factor and apparently punishment for some long-forgotten original sin. While the CRB is not tasked to fix all the songwriters’ financial woes, an argument could be made that it is at least partly responsible for fixing the ones cause by the government or at least not making it any worse by taking actions such as freezing mechanical royalty rates for twenty years.
Gwendolyn Seale, Esq.
Chief Copyright Royalty Judge Jesse M. Feder
Copyright Royalty Judge David R. Strickler
Copyright Royalty Judge Steve Ruwe
U.S. Copyright Royalty Board
101 Independence Ave SE / P.O. Box 70977
Washington, DC 20024-0977
July 26, 2021
IN RE DETERMINATION OF ROYALTY RATES AND TERMS FOR MAKING AND DISTRIBUTING PHONORECORDS, DOCKET NUMBER 21-CRB-0001-PR (2023-2027)
I am a music lawyer in Austin, Texas, and represent songwriters throughout the state of Texas. Over the last two months, I have spent a considerable amount of time educating songwriters about the proposed settlement (“Proposed Settlement”) presented by the three major labels, the National Music Publishers Association (NMPA) and Nashville Songwriters International (NSAI) (collectively “Settlement Parties”) to freeze the statutory mechanical rate in connection with physical products and digital downloads through 2027.
The feedback I received was straightforward and foreseeable: songwriters do not wish to see this rate frozen for yet another five years. As someone who works with songwriters far removed from the major music industry hubs, like Los Angeles, Nashville and New York, and from the place where the rules are made, Washington, D.C., you quickly recognize that a significant education gap exists, and many songwriters do not comprehend basic copyright and music publishing concepts. Naturally, if songwriters do not grasp music publishing basics, they do not know about this Phonorecords IV proceeding, or government rate-settings in general.
We must remember those songwriters as this rate-setting progresses – as they too are copyright owners who are entitled to due process and transparency. There would be no music publishing business without them.
Thank you for the opportunity to comment in this proceeding and please note that the views I am expressing here are not made on behalf of any client or the State Bar of Texas.
I. Private Party Settlements Between Willing Buyers and Willing Sellers Representing Different Sides of the Same Corporate Coin Do Not Reflect an Effectively Competitive Market.
With the passage of the Music Modernization Act in 2018, the Copyright Royalty Board (CRB) was instructed in future Section 115 rate-setting proceedings, like this Phonorecords IV proceeding, to “establish rates and terms that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller.” Pub. L. No. 115-264, § 102(a)(3), 132 Stat. at 3680. In establishing such rates and terms, the Copyright Royalty Judges (“CRJs”) are to base their decision on “economic, competitive and programming information presented by the parties.” 17 U.S.C. § 115(c)(1)(F).
While Phonorecords IV is the first proceeding by which this “willing buyer/willing seller” standard will be applied in the Section 115 context, this standard and the aforementioned language have been the basis for Section 114 rate-settings which provide instructive precedent. Both the CRB and D.C. Circuit in prior Section 114 proceedings understood that proposed rates are to reflect an effectively competitive market. “Legislative history supports the conclusion that
§ 114 directs the Judges to set rates that reflect the workings of a hypothetical effectively competitive market.” 81 FR 26316, 26334. And the CRB “can and should determine whether the proffered rates reflect a sufficiently competitive market, i.e., an ‘effectively competitive’ market.” SoundExchange, Inc. v. Copyright Royalty Bd., 438 U.S. App. D.C. 332, 346, 904 F.3d 41, 55 (2018). Thus, the CRB should examine whether the mechanical rate freeze proffered by the Settlement Parties reflects an effectively competitive market.
While there has been much discourse and disagreement regarding the true meaning of the “willing buyer/willing seller” standard in prior CRB rate proceedings, this Phonorecords IV proceeding has presented a novel conundrum that the CRJs must inspect: what happens when the willing buyer and willing seller are effectively the same parties at the corporate level?
On one side of the Proposed Settlement sits the three major record labels (Sony Music Entertainment, Warner Music Group and Universal Music Group), who are to pay these mechanical royalties to music publishers and songwriters. On the other side of the proposed settlement sits the NMPA and NSAI. The NMPA’s board is comprised of representatives of the publishing company corporate affiliates of the three major labels on the other side of the negotiating table.1 Further, these major publishing company board members appear to have greater voting power than other NMPA board members on account of their gross annual revenue.2 It is also worth noting that the NSAI represents only fragment of the songwriter community, and that two of the three songwriters who penned the “SONGWRITERS REFUTE FALSE CLAIMS REGARDING COPYRIGHT ROYALTY BOARD” letter3
2 “NMPA shall have two classes of voting members: executive members and general members. A member shall be an executive member if its Gross Revenue is equal to or in excess of One hundred million dollars in the prior calendar year. A member shall be a general member if its Gross Revenue is less than One hundred million dollars in the prior calendar year.” “Each executive and general member shall be entitled to one vote for each one-hundred thousand dollars of gross revenue of such member (including its affiliates) with respect to any matter to be voted on by members; provided that (i) each member shall have at least one vote, and (ii) with respect to a particular calendar year, each executive member shall have no more votes than the number of votes held by the General Member with the greatest number of votes for such year.” NMPA Inc. 2018 IRS 990, Schedule O, at 27.
(presumably published in response to negative press on account of this proposed freeze) sit on NMPA boards, one on the board of NMPA Inc., and the other on the board of the NMPA SONGS Foundation.4
How these organizations wish to conduct their business is wholly up to them, as is how they choose to represent their members. Nonetheless, when I see a phrase in a motion reflecting the intentions of a group of parties riddled with conflicts of interest, “the settlement represents the consensus of buyers and sellers representing the vast majority of the market for `mechanical’ rights for [the 37 CFR 385] Subpart B Configurations”5 – I believe it is important to acknowledge that there are countless millions of copyright owners that these parties do not represent. While the Proposed Settlement may represent the “consensus” of the wealthy major music publishing companies and their record label counterparts, in no manner does this settlement speak for the consensus of songwriters and independent publishers, who lack the overwhelming resources needed to participate in this proceeding and whose views were not solicited.
In sum, none of these factors lead me to believe that this Proposed Settlement reflects an “effectively competitive market.”
II. The Dire Need for Transparency.
In addition to the proposed settlement, the Settlement Parties (less the NSAI) also referenced a separate Memorandum of Understanding (“MOU”):
“Concurrent with the settlement, the Joint Record Company Participants and NMPA have separately entered into a memorandum of understanding addressing certain negotiated licensing processes and late fee waivers.”6
If this “Memorandum of Understanding” is irrelevant to the proposed settlement, why would it be referenced in the motion to adopt the settlement? Setting aside the broadly drafted “certain negotiated licensing processes,” the phrase “late fee waivers” is exceptionally concerning. I interpret this language to mean that money is changing hands as consideration for this proposed rate freeze – but ultimately, I cannot know this with certainty since neither the Proposed Settlement nor the MOU have been published.
As songwriters worldwide may be bound to the decisions rendered in this Phonorecords IV, it is of the utmost importance for the CRB to work to afford songwriters with complete transparency. In a letter dated July 13, 2021,7 Representative Lloyd Doggett (TX-35) asked,
“May the CRB disclose (or compel the settlement participants to disclose) the unredacted actual settlement agreements referenced in the Motion, including the MOU?”
5 Motion at 4, available at https://app.crb.gov/document/download/25288.
7 July 13, 2021 Letter from Representative Lloyd Doggett, available at https://thetrichordist.com/2021/07/18/letter- from-congressman-lloyd-doggett-about-frozen-mechanicals-to-librarian-of-congress-and-register-of-copyrights/.
I would also like to know the answer to this question. Further, in the event the CRB does not reject this Proposed Settlement, it should publish both the actual, unredacted proposed settlement, along with the MOU, not merely the regulations giving effect to the settlement. If songwriters and independent music publishers worldwide are to be bound to these terms, they deserve to have the opportunity to review and to be able to provide meaningful comment on these actual documents at a minimum.
III. Songwriters and Independent Music Publishers Should Not Face a Rate Freeze In The Midst of a Vinyl Resurgence, During a Worldwide Pandemic.
With the constant consumption of music via the streaming services, many do not realize the degree of revenue generated from the sale of physical products (vinyl, CDs) and digital downloads in the United States. Notwithstanding the devastating pandemic which forced the majority of musicians to pivot, and resulted in at the very least the temporary shutdown of a significant amount of businesses, revenue from the physical music sales amounted to $1.13 billion dollars in 2020.8 Additionally, vinyl record sales increased by more than 28% from 2019 to 2020.9 Further, physical and downloads accounted for 15% of worldwide revenue for U.S. recorded music in 2020.10 Just within the last couple of months, Taylor Swift broke the modern- era weekly vinyl album sales record.11 Record Store Day Drop #1 sparked 1.3 million vinyl album sales during the week ending June 17, 2021, with 942,000 records sold at independent record stores — resulting in the largest weekly vinyl sales at the indie sector in MRC Data history.12 Those Record Store Day figures represent over $1.1 million dollars in mechanical royalties generated within a weekly period (assuming 10 tracks per album at the current statutory rate of 9.1 cents) – which I believe is economically significant for songwriters.
Given the vinyl resurgence, mechanical royalties from physical product sales are a crucial revenue stream for all songwriters, and particularly for independent songwriters who have struggled financially on account of COVID-19 and do not have the resources to compete for the streaming numbers generated by top artists signed with major labels. The effects of COVID-19 are properly taken into account when approximating a free market agreement because of what
U.S. Treasury Secretary Janet Yellen described as “long-term scarring”13 which is projected to exceed the period of the Phonorecords IV rate setting. For context, the mechanical royalty “rate” pertaining to streams on Spotify Premium during April 2020 amounted to $0.00059 per
8 Year-End 2020 RIAA Revenue Statistics, available at https://www.riaa.com/wp-content/uploads/2021/02/2020- Year-End-Music-Industry-Revenue-Report.pdf .
11 Keith Caulfield, Taylor Swift’s ‘Evermore’ Breaks Modern-Era Record for Biggest Vinyl Album Sales Week, BILLBOARD (May 31, 2021), available at https://www.billboard.com/articles/news/9580407/taylor-swift- evermore-record-breaking-vinyl-album-sales-week/ .
12 Keith Caulfield, Record Store Day 2021’s First Drop Sparks 1.3 Million in U.S. Vinyl Album Sales, BILLBOARD (June 22, 2021), available at https://www.billboard.com/articles/business/chart-beat/9590304/record-store-day-2021- first-drop-sets-record.
13 David Lawder, Andrea Shalal, ‘Act Big’ Now To Save Economy, Worry About Debt Later, Yellen Says In Treasury Testimony, Reuters (Jan. 19, 2021), available at https://www.reuters.com/article/us-usa-biden-yellen- idUSKBN29O1WX.
stream (according to the Audiam U.S. Mechanical rate calculator14). The “rate” for the ad- supported tier of Spotify was even lower.
Not only is the music industry experiencing a vinyl resurgence, but also, even CD sales are seeing a boost. According to a July 14, 2021, report from Billboard:
“Vinyl sales, which have grown for the past decade, more than doubled between January and June, up 108.2% to 19.2 million from 9.2 million in the first six months of last year. Even CD sales, which have been steadily and precipitously declining, posted a modest 2.2% gain, to 18.9 million units.”15
IV. What’s Changed Since 2014? The Willing Buyer/Willing Seller Standard was Supposed to Result in Fairer Rates.
Every person reviewing the comments in this proceeding should go back and review the Copyright Office’s 2015 “Copyright and the Music Marketplace Study.”16 Copyright owners and their representatives within the study shared a common judgement: the then-current 801(b)(1) four-factor test standard resulted in deflated rates — however, this quagmire could be remedied by the adoption of the “willing buyer/willing seller standard.”17 According to the NMPA and Harry Fox Agency’s joint comment in 2014:
“Continued application of the 801(b) standard will ensure that the statutory royalty rate is held artificially low, and that songwriters and music publishers will continue to be treated unfairly in the marketplace.”18
Phonorecords IV is the first proceeding in the Section 115 context by which this “willing buyer/willing seller” standard is to be applied. If the Proposed Settlement is accepted by the CRJs, songwriters and music publishers are no better off than they were under the former 801(b)(1) standard; the statutory rate will continue to be held artificially low through 2027, and songwriters and music publishers will continue to endure unfair treatment in the marketplace.
Proposing a freeze for the Subpart B rates during the first Section 115 proceeding applying the “willing buyer/willing seller” standard produces a disastrous ripple-effect with respect to other current and future rate-settings. In the current Phonorecords III remand, Pandora not only has used the Proposed Settlement to make the case that the streaming mechanicals rate in the 2012 settlement was a “good benchmark,” but also used this argument to rationalize the 2012 rate being too high.19
14 Audiam Spotify U.S. Mechanical Rate Calculator, available at https://resources.audiam.com/rates/ .
15 Ed Christman, Audio Streams Up 15%, Vinyl Sales Double in First Half of 2021, BILLBOARD (July 14, 2021), available at https://www.billboard.com/articles/business/9600940/streams-vinyl-cd-sales-genres-midyear-2021- analysis/ .
16 See generally, Copyright and the Music Marketplace (February 2015), available at https://www.copyright.gov/policy/musiclicensingstudy/copyright-and-the-music-marketplace.pdf. 17 Id. at 82-83.
18 NMPA & HFA First Notice Comments at 15-16, available at https://www.copyright.gov/policy/musiclicensingstudy/comments/Docket2014_3/NMPA_HFA_MLS_2014.pdf. 19 Testimony of Michael Katz at 65-66, available at https://app.crb.gov/document/download/23858 .
Equally perplexing upon retrospect is commentary from the NSAI. After stating the organization’s support of eliminating Section 115 entirely (which as an aside, I agree with), the NSAI stated:
“We favor a willing buyer-willing seller free marketplace approach to determining mechanical royalty rates. We believe the underlying work is more valuable that the present 9.1 [sic] rate established by the Copyright Royalty Board.”20
It does not sit well when the organization representing songwriters is party to a settlement proposing extending the freeze at 9.1 cents, seven years after advocating for a “willing buyer/willing seller” rate-setting standard because songs were more valuable than the 9.1 cent rate.
V. Rates Should not be Frozen Just Because Certain Settlement Parties Deem a Format is Not Worth the Fight.
It is evident that trade organizations representing the publishers and songwriters in this proceeding and prior proceedings have not wished to advocate for an increased mechanical rate for physical products, as they prefer to concentrate on categories that they believe to be economically significant, such as the interactive streaming categories.21 This lack of advocacy was not intended to demonstrate that rate freeze at 9.1 cents reflected the appropriate value of mechanical royalties for physical products, but instead that physical medium revenue was not going to make much of an economic difference within the next five years.22 It is understandable that the NMPA and NSAI have concentrated their efforts on the abysmal streaming services and I applaud the organizations for such efforts. The NSAI also reechoed these sentiments in early June, 2021:
“Based on industry revenue analysis, it is anticipated that physical mechanical royalties will amount to less than 1% of the total mechanical royalty revenue in the United States during 2023-2028, the rate period this CRB proceeding covers. History and experience told us not to create a powerful opponent when there is a strong possibility of losing with little to gain. So, we decided to focus on the digital streaming services and streaming rates during the next trial. While 1% of revenue is meaningful, waging war was not worth the risk, especially since the rate may have been lowered!”23
To date, I have not seen this industry revenue analysis claiming that physical mechanical royalties will amount to less than 1% of the total U.S. mechanical royalty revenue over the next five years. Even if this is the consensus of various industry experts, the figure is simply a prediction. And as the data in Section III shows, the physical format has become increasingly
20 NSAI Reply Comments at 7, available at https://www.copyright.gov/policy/musiclicensingstudy/comments/Docket2014_3/extension_comments/Nashville_S ongwriters_Association_International_NSAI.pdf.
21 See Phonorecords III Open Session, available at https://app.crb.gov/document/download/13897 at 3583-88; https://www.nashvillesongwriters.com/songwriters-refute-false-claims-regarding-copyright-royalty-board .
22 See https://app.crb.gov/document/download/13897 at 3583–88.
popular and provides a meaningful revenue stream for songwriters and publishers — despite prior economic predictions from industry leaders.
In sum, songwriters should not face a continued rate freeze for Subpart B configurations due to trade organizations deeming that these formats are not worth the fight.
VI. May the CRJs Determine this Proposed Settlement Applies only to the Settlement Participants?
Given the volume of songwriters who are self-published (or self-administered, as the Mechanical Licensing Collective calls it), and the number of independent music publishers who are not NMPA members and have no ties to the major publishers, the question becomes, what recourse do they have when private parties with endless resources decide to convene with their major label counterparts and propose a mechanical rate freeze? May the CRB determine that this frozen rate only applies to the Settlement Parties, but hold that a higher rate will apply to everyone else?
This is the first time I have commented on a CRB rate-proceeding — I was in high school during Phonorecords I and was completing law school when Phonorecords III commenced. This Phonorecords IV proceeding has taught me a lot, and has also raised a lot of questions in my mind about the process of rate-proceedings in general. Ultimately, a settlement to freeze the mechanical rate for the physical format, forged by parties who are one and the same at the corporate level during a vinyl boom in midst of a worldwide pandemic neither reflects an effectively competitive market nor is in the interest of songwriters. Making this situation all the worse is the fact that some of these Settlement Parties advocated for the repeal of the prior rate- setting standard in favor of this “willing buyer/willing seller” standard because they contended the former resulted in deflated rates and the latter would bequeath songwriters with higher rates. If this is truly the end result of CRB rate-proceedings, a process must be established by which copyright owners without the financial resources will have the ability to not only participate in such proceedings, but also have their own independent advocacy arm which can represent their interests. Because as it stands, I do not see the interests of songwriters being adequately represented in Phonorecords IV.
[This post first appeared on MusicTech.Solutions]
By Chris Castle
If you’ve been following the heated controversy around the frozen mechanicals crisis, you’ll know that the Copyright Royalty Board has received a proposal from the NMPA, NSAI and the major labels to freeze the statutory rate for songwriter mechanical royalties on physical (like CDs and vinyl) and permanent downloads (like iTunes) for another five years. That proposal mentions a settlement to establish the frozen rates (which extends the rates that were first frozen in 2006 for another 5 years) and a memorandum of understanding between the NMPA and the major labels for something, we’re not quite sure what.
There’s quite a bit of material about the problem that was posted on the Trichordist, so you can check there to read up on the background. You can also subscribe to the Artist Rights Watch podcast and listen to our first episode about frozen mechanicals. This post today assumes you already know the background and are ready to file your comment.
Filing comments with the CRB is not quite as simple as filing comments with the Copyright Office and it takes a bit of time–comments close on July 26, so do not leave setting up your account until July 26, or even July 25. I would do it today. You can set up your account before you file your comments so that the account part is all ready to go.
Here are some steps you will probably go through to set up your account:
- Go to app.crb.gov. Look for “Register for an account” (the one in small print at the bottom of the list)
2. “Register for an account” will take you to a sign up page. Scroll down to “User Information”. You only need to complete the required fields with a red star (so ignore the bar number, etc.)
There is a pull down menu under “Register as” with a few different roles listed. The one you want is “Commenter”
3. The CRB will then authenticate your account and send you an email confirmation. That part goes pretty quickly. However, once your account is authenticated, make sure you log on. You should be taken to a dashboard, but the question is whether your dashboard looks like this:
Note that the dashboard does not have a button to “File a comment”. If this is what you see when you log into your account, you are not done. Contact the CRB support people firstname.lastname@example.org and tell them that your account has not been activated to comment.
4. Your account should look like this:
The comment you want to file is for Phonorecords IV. You can ignore the other dockets. It took me several trips to the support desk to get the correct filing tabs on my account, hopefully you won’t have that problem. But–just in case, don’t be running around crazy on July 26 trying to file the comment you slaved over because you left the account to the last minute.
Blake Morgan helped to launch the American Music Fairness Act on June 24 in Washington along with Dionne Warwick, Sam Moore, a host of other artists and the bill’s sponsors Rep. Ted Deutch and Rep. Darrell Issa. We asked Blake about his impressions.
Chris Castle: I see you were back in Washington supporting new legislation to create a performance right for artists on terrestrial radio, how did that feel? Getting the band back together?
Blake Morgan: You know, it felt great. There’s a new spirit in the air, a new energy to this fight. Everyone at the launch event could feel it. It was aspirational. How can one not feel that way for something called the American Music Fairness Act?
Any particular insights from the event?
Perhaps the one at the top of the list is that everyone was so happy––to see each other, to band together, to renew our vows to each other so to speak. To recommit ourselves in a new way to securing fair payment for artists on terrestrial radio. It was emotional. The fight for justice always is, and let’s make no mistake: this is a fight for basic fairness and justice. There’s an unmistakable excitement about the new bill, and our job––together––is to turn that excitement into volition, then into momentum, and finally into victory.
There was a quote in the recent Supreme Court ruling against the NCAA that jumped out at me: “Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate.” That’s not exactly analogous to broadcast radio, but it’s close, don’t you think?
Absolutely. Nothing could be more American than being paid fairly for one’s work. Nothing should be more American than being paid for one’s work. When it comes to music, where else in the American economy are working people told they won’t be paid for their work because instead, they’re going to receive “exposure.” That’s what AM/FM radio does. What’s more, broadcast radio can take our music without our permission, broadcast it, sell advertising around it, profit from it, and not pay the artists anything for it! As Sam Moore said at the bill’s launch event at The Capitol, “Pay us! Be nice!”
You were an active supporter of the CLASSICS Act that required pre-72 recordings be given equal treatment on digital performances. I was pleased that Rep. Deutch and Rep. Issa invited several generations of artists to the American Music Fairness Act event, will the pre-72 artists also be protected by AMFA?
Definitely, that’s such an important part of what this bill does. My godmother was Lesley Gore, the iconic 60’s hitmaker who sang the classics “It’s My Party” and “You Don’t Own Me,” among others. She died in 2015, after having never been paid one damn dime for those hits being played on AM or FM radio. AMFA may be too late for her, but I’m committed to making sure we get this passed in time for other iconic hitmakers and legends who have helped weave the very fabric of this country with their music. Who could possibly look any of those artists in the eye and tell them they shouldn’t be paid fairly. For shame.
What can the #irespectmusic community do to support the legislation?
We can do what we do best––bring music makers and music lovers together, tell people to stop wringing their hands and start rolling up their sleeves, and get active in supporting AMFA. We’re going to set up mechanisms in the coming weeks to make our voices heard with congressional members, with broadcasters (an increasing amount of which support this legislation, in fact), and with those who haven’t yet joined the push. We’re going to work hard, we’re going to work smart, and we’re going to pull ourselves closer and closer to victory with this in mind: it always seems impossible until it’s done.
[Editor Charlie sez: Our great allies Ted Deutch and Darrell Issa are introducing a law to guarantee the key object of the #IRespectMusic campaign–artist pay for radio play!]
Reps. Deutch and Issa will be joined by legendary artists Dionne Warwick, Sam Moore, and others to introduce legislation to ensure music creators are fairly compensated when their songs are played on AM/FM radio
(Washington) On Thursday, June 24 at 1:15 pm ET, Rep. Ted Deutch (D-FL) and Rep. Darrell Issa (R-CA) are hosting a national press event alongside artist-advocates like Dionne Warwick and Sam Moore to introduce the American Music Fairness Act.
Members of the press can register here. This event will be live-streamed here.
After COVID-19 disrupted artists’ financial stability, it is more important than ever that legislation is passed to ensure music creators are compensated when their music plays on FM/AM radio stations. The American Music Fairness Act will require that performing artists are paid for the use of their songs on FM/AM radio — just like they already do on digital streaming services.
This bipartisan bill is a response to the Local Radio Freedom Act championed by the National Association of Broadcasters.
WHAT: A national press event announcing the American Music Fairness Act
· Rep. Ted Deutch (D-FL)
· Rep. Darrell Issa (R-CA)
· Dionne Warwick
· Sam Moore
· Additional artist-advocates
WHEN: Thursday, June 24, 1:15pm ET
WHERE: House Triangle, United States Capitol, Washington, DC
|Against Frozen Mechanicals||Supporting Frozen Mechanicals|
|Songwriters Guild of America||National Music Publishers Association|
|Society of Composers and Lyricists||Nashville Songwriters Association International|
|Alliance for Women Film Composers|
|Songwriters Association of Canada|
|Screen Composers Guild of Canada|
|Music Creators North America|
|Alliance of Latin American Composers & Authors|
|Asia-Pacific Music Creators Alliance|
|European Composers and Songwriters Alliance|
|Pan African Composers and Songwriters Alliance|
|North Music Group|
Complete Music Update in the UK picked up the story on the songwriter coalition letters to the Copyright Royalty Board that we have previously posted on Trichordist so you can read them in full. Read it here: Songwriter groups urge US Copyright Royalty Board to open submissions on proposed new mechanical royalty rate on discs and downloads. CMU makes this important point:
While the publishers and songwriters are generally of one mind when it comes to the streaming mechanical rates, plenty of organisations representing songwriters in the US and beyond are not happy with what the NMPA and NSAI are proposing regarding the rate for discs and downloads.
That is right on because you don’t have to be against the streaming royalty to be against frozen mechanicals on physical and downloads. Why? What David said:
It also looks like the songwriters coalition and the beginnings of press may have done the trick! Today the NMPA filed their motion to ask the CRB to adopt the frozen mechanicals. Which raises the question of if a willing buyer and a willing seller are the same person, does that equal a free market?
Filing the motion isn’t the end of the story or even the end of the beginning because they failed miserably to take into account the dissatisfaction with the whole idea of a frozen mechanical. AND the motion contains this sentence:
Concurrent with the settlement, the Joint Record Company Participants and NMPA have separately entered into a memorandum of understanding addressing certain negotiated licensing processes and late fee waivers.
That sounds like there’s a separate deal on the actual money. The motion doesn’t attach either the settlement or the side deal (which may be where the money is) just the draft changes to the royalty regulations that freezes the mechanical for the rubes. That kind of defeats the purpose of having a motion for public comment on a deal that the public doesn’t see. (And maybe not even the judges.)
Billboard also covered the songwriter coalition letters to CRB in Songwriter Groups Want Their Voices Heard on CRB Royalty Rate ASAP.
Everyone should appreciate the coalition for apparently prompting the motion (which was expected to have been filed back on May 18 according to the CRB letter). It remains to be seen if the motion is worth commenting on or is just more secret sauce. Maybe the CRB can get the right information on file so that songwriters know what’s going on and know what they are getting bound to.
[Editor T says this is a letter from a coalition of US and international songwriter groups to the Copyright Royalty Board about the frozen mechanical issue. If you want to write your own comment to the Copyright Royalty Board about frozen mechanicals, send your comment to email@example.com]
May 17, 2021
Via Electronic Delivery
Chief Copyright Royalty Judge Jesse M. Feder
Copyright Royalty Judge David R. Strickler
Copyright Royalty Judge Steve Ruwe
US Copyright Royalty Board
101 Independence Ave SE / P.O. Box 70977
Washington, DC 20024-0977
To Your Honors:
As a US-led coalition representing hundreds of thousands of songwriters and composers from across the United States and around the world, we are writing today to express our deep concerns over the “Notice of Settlement in Principle” recently filed by parties to the proceedings before the Copyright Royalty Board concerning its Determination of Royalty Rates and Terms for Making and Distributing Phonorecords (Phonorecords IV) (Docket No. 21–CRB–0001–PR<(2023–2027)). For reasons explained below, several highly conflicted parties to this proceeding have apparently agreed to propose a rolling forward to the year 2027 of the current US statutory mechanical royalty rate for the use of musical compositions in the manufacture and sale of physical phonorecords (such as CDs and vinyl records). This proposal (and related industry agreements yet to be disclosed by the parties— see, https://app.crb.gov/document/download/23825) should neither be acted upon nor accepted by the CRB without the opportunity for public comment, especially by members of the broad community of music creators for whom it is financially unfeasible to participate in these proceedings as interested parties. It is our livelihoods that are at stake, and we respectfully ask to be heard even though we lack the economic means to appear formally as parties. If procedures are already in place to accommodate this request, we look forward receiving the CRB’s instructions as to how to proceed.
The current U.S statutory mechanical rate for physical phonorecords is 9.1 cents per musical composition for each copy manufactured and distributed. That rate has been in effect since January 1, 2006. It represents the high-water mark for US mechanical royalty rates applicable to physical products, a rate first established in 1909 at 2 cents. That 2-cent royalty rate, in one of the most damaging and egregious acts in music industry history, remained unchanged for an astonishing period of sixty-nine years, until 1978. Nevertheless, the recording industry now seeks to repeat that history by freezing the 9.1 cent rate for an era that will have exceeded twenty years by the end of the Phonorecords IV statutory rate setting period.
Inflation has already devalued the 9.1 cent rate by approximately one third. By 2027, 9.1 cents may be worth less than half of what it was in 2006. How can the US music publishing industry’s trade association, and a single music creator organization (which represents at most only a tiny sliver of the music creator community) have agreed to such a proposal?
The answer to that question is an easy one to surmise. The three major record companies who negotiated the deal on one side of the table have the same corporate parents as the most powerful members of the music publishing community ostensibly sitting on the other side of the table. Songwriter, composer and independent music publisher interests in these “negotiations” were given little if any consideration, and the proposed settlement was clearly framed without any meaningful consultation with the wider independent music creator and music publishing communities, both domestically and internationally.
How on earth can these parties be relied upon to present a carefully reasoned, arms-length “Settlement in Principle” proposal to the CRB under such circumstances, fraught as they are with conflicts of interest, without at least an opportunity for public comment? Further, how can these parties be relied upon in the future to argue persuasively that mechanical royalty rates applicable to on-demand digital distribution need to be increased as a matter of economic fairness (which they most certainly should be), when they refuse to seriously conduct negotiations on rates applicable to the physical product the distribution of which is still controlled by record companies (who not so incidentally also receive the lion’s share of music industry revenue generated by digital distribution of music)?
The ugly precedent of frozen mechanical royalty rates on physical product has, in fact, already served as the basis for freezing permanent digital download royalty rates since 2006. Is this the transparency and level playing field the community of songwriters and composers have been promised by Congress through legislation enacted pursuant to Article I, Section 8 of the Constitution?
The trade association for the US music publishing industry is supported by the dues of its music publisher members, the costs of which are often in large part passed along to the music creators affiliated with such publishers. It is thus mainly the songwriter and composer community that pays for the activities of that publisher trade association, a reality that has existed since that organization’s inception. Still, the genuine voice of those songwriters and composers is neither being sought nor heard. Further in that regard, we wish to make it emphatically clear that regardless of how the music publishing industry and its affiliated trade associations may present themselves, they do not speak for the interests of music creators, and regularly adopt positions that are in conflict with the welfare of songwriters and composers. Their voice is not synonymous with ours.
Unfortunately, the music creator community lacks the independent financial resources –in the age of continuing undervaluation of rights, rampant digital piracy and pandemic-related losses–to rectify these inequities by expending millions more dollars to achieve full participation in CRB legal and rate-setting proceedings. Clearly, such an inequitable situation is antithetical to sound Governmental oversight in pursuit of honest and equitable policies and results.
In the interests of justice and fairness, we respectfully implore the CRB to adopt and publicize a period and opportunity for public comment on the record in these and other proceedings,especially in regard to so-called proposed “industry settlements” in which creators and other interested parties have had no opportunity to meaningfully participate prior to their presentation to the CRB for consideration, modification or rejection. In the present case, hundreds of millions of dollars of our future royalties remain at stake, even in a diminished market for traditional, mechanical uses of music. To preclude our ability to comment on proposals that ultimately impact our incomes, our careers, and our families, simply isn’t fair.
Finally, we request that this letter be made a part of the public record of the Phonorecords IV
proceedings. We extend our sincere thanks for your attention to this very difficult conundrum
for music creators, and further note that your consideration is very much appreciated.
President, Songwriters Guild of America
President, Society of Composers and Lyricists
Officer, Music Creators North America Co-Chair, Music Creators North America
List of Supporting Organizations
Songwriters Guild of America (SGA), https://www.songwritersguild.com/site/index.php
Society of Composers & Lyricists (SCL), https://thescl.com
Alliance for Women Film Composers (AWFC). https://theawfc.com
Songwriters Association of Canada (SAC), http://www.songwriters.ca
Screen Composers Guild of Canada (SCGC), https://screencomposers.ca
Music Creators North America (MCNA), https://www.musiccreatorsna.org
Music Answers (M.A.), https://www.musicanswers.org
Alliance of Latin American Composers & Authors (ALCAMusica), https://www.alcamusica.org
Asia-Pacific Music Creators Alliance (APMA), https://apmaciam.wixsite.com/home/news
European Composers and Songwriters Alliance (ECSA), https://composeralliance.org
Pan-African Composers and Songwriters Alliance (PACSA), http://www.pacsa.org
cc: Ms. Carla Hayden, US Librarian of Congress
Ms. Shira Perlmutter, US Register of Copyrights
Mr. Alfons Karabuda, President, International Music Council
Mr. Eddie Schwartz, President, MCNA and International Council of Music Creators (CIAM)
The MCNA Board of Directors
The Members of the US Senate and House Sub-Committees on Intellectual Property
Charles J. Sanders, Esq.