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'We're on Life Support': Is Streaming Music the Final Note for Professional Songwriters? - Pacific Standard
Operating without a union, songwriters are still paid through royalty structures created in the days of player pianos and Tin Pan Alley. And in the streaming era, that's a losing formula.

Welcome to State of the Unions Week, where we look at the past, present, and future of organized labor in America.

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In 2013, Andre Lindal, having finally climbed to the pinnacle of pop songwriter success, surveyed his works and despaired.

The dubstep-tinged heart-throbber he had written for Justin Bieber, "As Long as You Love Me," was a smash hit, reaching No. 3 on Billboard's Top 40 rankings. The music video, essentially a short film starring actor Michael Madsen, had garnered over 34 million plays on YouTube in its first year. Pandora users had listened to the track more than 38 million times.

Streaming numbers were Lindal's friend that year, at least until he got paid. When he did, he found that the 34 million YouTube views had earned him $218, and the 38 million Pandora streams had netted him only $278. Dismayed, he sidelined his decade-long songwriting career and started a firm that develops artists as musicians and brands, which he called "a necessity, given what the songwriter income is."

"You can't be a songwriter without having a spare job," Lindal, 41, tells me, sounding downhearted as he rummages around his Los Angeles home—a home that Lindal can only afford thanks to his other jobs on the marketing and management side of the music industry. "It's awesome to be working with great people. But it stinks that you're not going to be able to get paid for what you do. You can only be a fan for so long."

While "As Long as You Love Me" is a tribute to the fortifying powers of unconditional love, many of its lyrics could double as a description of the plight of the songwriter during our digital streaming era, most especially for those who aren't writing for mega-stars like Bieber: "We could be starving, we could be homeless, we could be broke," goes the driving refrain, perhaps winking at RIAA sales certification categories, "I'll be your platinum, I'll be your silver, I'll be your gold."

That Napster and the Internet swept a highly profitable music industry off its feet is a story that's been told countless times, with pay structures thrown into chaos and artists often left with smaller profits. After Taylor Swift (who isn't exactly lacking for profits) pulled her catalogue from Spotify in 2014, she famously said to Time: "I think there should be an inherent value placed on art. I didn't see that happening, perception-wise, when I put my music on Spotify."

However, the streaming era has been even more hazardous for pure songwriters—the people who write the lyrics and compositions for performing artists—in the music industry. While artists are capable of making money through touring and merchandising, songwriter income is limited to royalties received from music sales, radio plays, and streams.

Songwriters have been guaranteed some payment for their work since federal copyright legislation was passed early in the 20th century. However, although the music industry has changed dramatically since then, these royalty rates have remained largely unchanged since 1941, when a Department of Justice-issued consent decree put the federal government in charge of setting the rates. "The songwriter who's not the artist depends on those meager royalties still set under government constructs from 1909 and 1941," says Bart Herbison, the executive director of the Nashville Songwriters Association International, an advocacy group for songwriters. "While the whole system needs attention, we're on life support, the songwriters. And we need the most immediate attention. We need some thumper paddles."

But thumper paddles are tough to come by without bargaining power—which itself remains elusive for songwriters given that, unlike most other members of the music industry, they never successfully unionized. "Somehow songwriters and film composers missed out on unionization," says entertainment lawyer and University of California–Los Angeles professor Don Franzen. "It's kind of bizarre because just about everything else in the music business is unionized. Players have AFofM [the American Federation of Musicians], performers and singers have SAG-AFTRA. Everybody's unionized, except the songwriters."

And so, Lindal and his unionless colleagues get paid $0.005 per stream.

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Most entertainment industry unions, including the ones mentioned by Franzen, were founded in the 1930s, when social and legal support for labor organizing was relatively strong. The most prominent songwriter trade organization, the Songwriters Guild of America (formerly known as the Songwriters Protective Association), has also existed since the early '30s, but it never blossomed into a full union with a collective bargaining agreement.

Several of the founding members of the Songwriters Guild were music legends—Ira Gershwin and Oscar Hammerstein II were early board members— but they never truly consolidated the collection of industry heft into a unified power. Many believe the Songwriters Guild never developed into a full union because its original membership was primarily composed of already-successful songwriters, many from privileged backgrounds. "It was just a clique, and they didn't see any need [for collective bargaining]. It was a social club," says Kevin Odegard, the former executive director of the National Academy of Songwriters. "They were rich enough. Once you got to a certain echelon as a standards writer or as a hit songwriter, you didn't need a union." (The Songwriters Guild did not respond to repeated requests for comment.) Because the music industry was so profitable at the time, many smaller-time composers were able to weather the lack of representation, though there are numerous examples of songwriters—especially black songwriters—not getting their due.

The guild's power was further restrained, according to Odegard, because of its "tithing" reputation: Many songwriters felt the group engaged in exploitative practices. To wit: Songwriters Guild took, and indeed continues to take, a cut of all royalties that its members earn, without offering benefits traditionally provided by unions, such as health insurance or a collective bargaining agreement. "They become your sub-publisher they take a piece of every penny that you make as a songwriter. Publishing, mechanicals, performance, everything," Odegard says. "They call themselves a guild, but that's not a guild. That's a scheme to me."

Andre Lindal.

Andre Lindal.

At first, songwriter and composers working in the film industry were similarly uninterested in labor organizing. In the early 20th century, film composers were mostly privileged and successful men without the need for labor protections offered by a union. Many had already established themselves as classical composers in Europe. "The people who were film composers in those days. It was people like Max Steiner, and Erich Korngold," says Franzen, the UCLA professor. "Back in the '30s and '40s, they were usually paid as studio employees, so they actually would have qualified to create a union as employees."

A songwriter receives royalty payments in one of two principal forms: "mechanical," for each physical or digital copy made of a song; and "performance," for each time a song is played for an audience, say on radio or in a shopping mall.

At the start of the 20th century, songwriters sought (often unsuccessfully) to legally secure their right to royalties from music purchases—which at the time consisted mostly of sheet music sales. This informed the passage of the Copyright Act of 1909, which guaranteed royalty payments to composers and lyricists for each copy of their songs produced. "They're called mechanical royalties because they also governed player piano rolls," Herbison says, in addition to sales from the extremely nascent recording industry. "And those rules are still largely intact. So if you get a song on CD or [a download] on a digital subscription service, [the songwriter] gets a mechanical royalty. Edison had just recorded sound. How do we expect that to be applicable now?"

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Over the next decade, as recorded music grew in popularity, a group of Tin Pan alley composers banded together to form the American Society of Composers, Authors and Publishers, which—through the Supreme Court's 1917 decision—established the songwriter's right to be paid a performance royalty whenever a recording was played in public.

Initially, this performance right applied primarily to music that was played in bars and restaurants, but, with the expansion of broadcasting, began to apply to radio stations as well. ASCAP, along with rival performance rights organizations (PROs) that formed soon after, Broadcast Music, Inc. and SESAC, served as performance royalty clearinghouses for songwriters, and, in more limited cases, for performers. "If you are a bar or a restaurant, the last thing you want to do is chase down 10,000 [composers or music publishers], right? You just want to play what music you want to play," says Stuart Rosen, BMI's general counsel. "So you deal with a few organizations, and you get their blanket licenses covering all the works they represent, and you've covered your bases."

The PROs, while recognized as a necessary middleman for a functioning recorded music industry, ran afoul of antitrust law. By agreeing to set prices under the auspices an organization like BMI, the owners of the publishing rights for different songs were essentially engaging in collusion, as understood by the courts.

In order for the PROs to continue to operate without facing antitrust prosecution, in 1941 the Department of Justice issued consent decrees that allowed the organizations to continue their joint royalty collection practices. However, the tradeoff was that, if there were to be a dispute over royalty rates, a federal judge would set the rates. Thus, since 1941, the rate that songwriters have been paid for most usage of their work has been government set. "These are some of the country's oldest consent decrees," Rosen says. "They were made before color TV, much less digital music services."

Similar organizations exist for the mass collection of mechanical royalties and digital performance royalties. The Harry Fox Agency, a for-profit organization started by the National Music Publishers Association in 1927 (they sold it off in 2015), collects mechanical rights, and—to avoid antitrust claims—uses rates set by the federal government's Copyright Royalty Board. The board also sets rates for performance royalties from cable TV, satellite radio, and Internet radio like Pandora. These rates are collected by SoundExchange, a non-profit PRO set up by the Recording Industry Association of America in 2000 in a belated attempt to keep up with changing technologies of music use.

Employees work at the Spotify headquarters in Stockholm, Sweden, on February 16th, 2015.

Employees work at the Spotify headquarters in Stockholm, Sweden, on February 16th, 2015.

"One thread to keep in mind again is songwriters used to be able to rely on a steady stream of sheet music sales, and then it was album sales, and then it was download sales. As those have dried up, there is more interest by songwriters to make sure that the value of what's contributed to the services is captured in the remaining rights that are invoked," Rosen says. As the technologies of music distribution change, the legal vestiges of earlier methods have remained. For example, player pianos disappeared, but mechanical royalties continued to be collected for record sales, and eventually digital downloads.

Similarly, an individual user streaming a song on Spotify doesn't present a clear analogy to a song played played in a crowded store or on a mass-market radio station, but performance royalties are still collected for streams. The performance royalty rates paid by Spotify, YouTube, and other "interactive" streaming services are actually the only form of songwriter royalty pay rates that aren't set by the government. Still, likely a ripple effect of the government-dictated rates paid for other formats, and a general under-valuation of the songwriter, the free-market rates remain low. "This is the future market, and it's $280 for a hit song?" Lindal, who wrote the Justin Bieber song, laments. "That doesn't make much sense."

This history of the changing technologies of music distribution has left us with a labyrinth of legal distinctions that govern songwriter pay rates, each royalty type with its own organization, or group of organizations, representing the songwriters. As a result, BMI, ASCAP, SoundExchange, Harry Fox, the NSAI—all of these organizations act as songwriter pseudo-unions: They act on behalf of songwriters, but only in pursuit of highly specific, disparate concerns. Unlike unions, they are unable to incentivize change with work stoppages, or secure health-care benefits for songwriters. The voices of these many advocacy groups have different perspectives on what will fix songwriter pay, and little incentive or ability to work together in search of a joint solution.

Many in the music industry complain that the government rates paid to songwriters are artificially low because rates were based on previous, government-approved deals, which Herbison characterized an "antiquated standard of evidence." Such deals, according to BMI's Rosen, often take on an "echo-chamber quality." Herbison says the Songwriter Equity Act, an Orrin Hatch (R-Utah) sponsored bill that has been unsuccessfully introduced to Congress multiple times, would reduce the federal government's role in setting rates. A new, similar bill, the Music Modernization Act, was introduced to Congress at the end of 2017. "Get the government out of this!" Herbison says. "The market will find the right price."

The Copyright Royalty Board received a spate of positive coverage when it announced in January that it would be raising mechanical rates paid by streaming services over the next five years; however, the actual changes are complex and loophole ridden, and early analysis suggests they may only lead a meager increase in payouts.

Others say that, for songwriting to become a sustainable profession again, streaming services like Spotify simply need to begin paying songwriters more. "We want these services to succeed. They're new customers," Rosen says, "But when you're building businesses on the back of creative work, [you have to pay] the fair market value is for use of our clients' music." Still others are skeptical of Spotify's ability to pay much more. The service lost $601 million in 2016, albeit while continuing to grow. That year, Tidal—which pays slightly higher royalties than Spotify and YouTube—also reported a loss of $44 million. "I personally think Spotify is paying all that you could ask them to pay," Franzen says. "The bottleneck, in my view, is at the level of the label."

Still, if there's any hope for songwriting to continue as a profession, a solution needs to be found somewhere."The music industry has evolved into some sort of splintered, dysfunctional creature, and there are many different facets represented by many different groups," Herbison says, discussing the lack of a songwriter's union. "So I pose the question this way: Instead of one group, can the groups come together with one voice?"

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