US rights-holders welcome Songwriter Equity Act
Songwriters and publishers have applauded the March 4 initiative by a bi-partisan group of members of US Congress to introduce the Songwriter Equity Act that would “allow songwriters to receive compensation based on the fair market value of their songs.” The bill – which was first proposed in May 2014 – aims at modernising sections 114 and 115 of the US Copyright Act. and, according to their sponsors, “would amend federal law to allow songwriters to receive market-based compensation and would remove government price controls.”
It was proposed by US Senators Orrin Hatch (R-Utah), himself a songwriter, Lamar Alexander (R-Tenn), Bob Corker, (R-Tenn), and Sheldon Whitehouse (D-RI), alongside US Representatives Doug Collins (R-Ga.) of the House Judiciary Committee and Hakeem Jeffries (R-NY).
Senator Hatch commented, “The music business is among the toughest and most competitive industries, and our songwriters and composers should not have to accept below-market rates for their work. Ensuring that they are able to receive the fair market value for their songs is the right thing to do.”
For the National Music Publishers’ Association (NMPA), the Songwriter Equity Act “addresses two significant inequities under current copyright law that prevent songwriters and music publishers from receiving compensation that reflects the fair market value of their work.”
“Three-quarters of a songwriter’s income is regulated by the federal government,” said David Israelite, president and CEO of the NMPA. “While most property rights are valued in a free
market, songwriters have suffered under a system that devalues their work and takes away their most basic property rights.
Created before the existence of recorded music to regulate player piano rolls, Section 115 of the Copyright Act established in 1909 a complex compulsory license system, with rates set by Congress. According to the NMPA, this system “prohibits songwriters and music publishers from negotiating for the use of their songs, forcing well-below market rates instead of fair value.” In 1909, the rate set by Congress was of 2 cents per copy, while in 2014, the rate established by the Copyright Royalty Board was 9.1 cents.
Section 114(i) of the Copyright Act imposes a price control for public performances of songwriter composition and was initially enacted by Congress to protect songwriters and ensure that their compensation was not unfairly diminished. For the NMPA, “the effect of the provision has, in fact, been the exact opposite.”
The Songwriter Equity Act proposes two main solutions: 1) Directing the Copyright Royalty Board to set compensation for music downloads and CDs according to their fair market value, which is the rate a willing buyer would pay a willing seller; and, 2) removing the statutory prohibition that prevents the federal rate court from considering certain evidence, such as the performing artist’s level of compensation, when setting the songwriter royalty rate for a public performance of a composition.
Israelite said, “As the recent Copyright Office report on music licensing recommended, if songwriters’ royalties must be regulated, they should at least be based on fair market value. I am grateful for members of the Senate and House who are standing up for creators and ensuring that songwriters’ work is valued properly, considering the value they bring to our lives and the businesses they fuel.”
Since its first introduction in May 2014, the bill has gained support from such organisations as the Nashville Songwriters Association International (NSAI) and the country’s three main PROs, ASCAP, BMI and SESAC.
ASCAP president and chairman Paul Williams called the proposals contained in the Act as “simple and reasonable changes” that are “vital to ensuring that next generation American songwriters are able to make a living creating the music we all love.”
Williams also welcomed the bipartisan approach on this bill and commented: “The Songwriter Equity Act represents an important first step toward updating an outdated music licensing system that treats songwriters differently than other copyright owners and prevents us from earning a fair market royalty rate when our music is streamed or downloaded online. We look forward to working with policymakers to reform the broader regulatory framework, including ASCAP’s outdated consent decree with the DOJ, so that music licensing better reflects the way people listen to music today.”
Meanwhile, BMI president/CEO Michael O’Neill called the bill “critical.” He added, “Through the Songwriter Equity Act, songwriters will no longer be disadvantaged by the fact that courts cannot legally consider all relevant benchmark deals — key evidence in determining fair market rates.
Source: Music Week
