When the US Copyright Office’s lengthy “state of copyright law” report was released last month it cited a number of flaws in the creaking infrastructure of our nation’s aging copyright laws. One of the guiding principles used to highlight these flaws was listed as this:
Music creators should be fairly compensated for their contributions.
As the report states, “a number of participants noted a 9 to 1 inequity of rates between sound recordings and musical works for downloads and CDs: when a song is downloaded from iTunes for $1.29, approximately 80 cents is allocated for the sound recording, but only 9.1 cents goes to the musical work.”
If you’re a songwriter this is particularly onerous: songwriters are often only compensated for the underlying “musical work,” and not the recording that’s receiving the lion’s share of the royalty.
To make matters worse, current law prohibits the rate setters (copyright royalty judges) from considering the broader marketplace in their rate decisions for these works. They must make decisions based on a subset of earlier license agreements, and are prohibited from looking at the deals, benchmarks and technologies (can you say “streaming”?) evolving rapidly throughout the industry.
Now this is set to change. Last week a bill was reintroduced from the previous congress to make changes to US Copyright Law in order to
…ensure fairness in the establishment of certain rates and fees under sections 114 and 115.
These two sections of copyright law have caused increasing pain to songwriters, because:
- Section 114 currently prohibits rate courts from looking at rates the recording artist received when setting the songwriter’s royalty rates. With this proposed change, courts can assess rates paid for master recordings when setting songwriter rates.
- Section 115 of currently limits rate setters to consider only “rates and terms under voluntary license agreements.” The new language proposes that rates be set that “most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller,” allowing judges to review economic factors, marketplace data, and usage information … like streaming or digital downloads
Between these two keys–visibility into the balance or imbalance between different rates, and the fact that rates can now be influenced by a wide world of economic factors–we could be looking at a new era of better compensation for songwriters.
And if that’s the case, we may be securing a viable, sustainable future for generations of inspired writers yet to come.