FEATURE:
Royalties and Loyalty
PHOTO CREDIT: Janson A./Pexels
Recognising and Compensating Songwriters
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I think that it is a complex issue…
IN THIS PHOTO: Songwriter and artist RAYE at the BRIT Awards on 2nd March, 2024/PHOTO CREDIT: Jeff Spicer/WireImage
and there are no quick fixes. Things are pretty bad for artists when it comes to payment. Think about streaming and how they compensate them. Even if streaming figures are high and it seems like an artist is making a lot of money, that does not necessarily ring true. It is worse for smaller artists who do not get massive streaming numbers. The situation is even worse for songwriters. Responsible for the great music we love, I don’t think the industry values them as much as they should do. We need to start recognising the value and importance of songwriters and paying them fairly. RAYE made this point recently at the BRIT Awards. An accomplished songwriter herself, she knows the struggle songwriters face when it comes to getting adequate payment and recognition. Last year, when Spotify raised their prices there was hope that there would be improvement:
“The price increase comes in the wake of Spotify significantly scaling back its gaping money pit of a podcasting division in June 2023. The company has lost money since its launch, reporting an operating loss of €156m (£133m) for the first quarter of this year and an adjusted operating loss of €112m (£96m) for the second quarter.
Spotify’s stock slumped by 14% on 25 July, the day it published its latest financial results, which fell short of what Wall Street analysts were expecting. In an earnings report just after announcing the price rise, Spotify co-founder and CEO Daniel Ek described the price rises as a “tool in our toolbox”.
A senior record company executive, speaking anonymously, is deeply cynical about the timing of this move given labels have been calling for this for years. “Spotify wanted to make a big move ahead of their stock price tanking – and they thought it would be good press,” they say. “They poorly timed it for their own stock price.”
But Paul Clements, chief executive of the Music Publishers’ Association, views the price rise as generally positive for songwriters. “An increase in subscription fees will help to increase the amount of royalties that flow through to the composers and songwriters we represent,” he says, although “failure to increase subscription pricing for some 15 years has arguably depreciated the value of music per paid user”. For reference, something costing £9.99 in 2001 would cost £17.87 today”.
PHOTO CREDIT: Andrea Piacquadio/Pexels
If you are not in the business and do not know about the ins and outs, it may seem fairly straightforward. There are a lot of levels to consider. Despite that, it is simple when it comes to songwriters: they are not paid nearly as much as they should be. How often do we think about sopngwriters and what they bring to music? So much glory and focus is on the artists. It does seem that songwriters are at the bottom of the pyramid when it comes to payment and acknowledgment. As NME report, RAYE recently made a great observations about songwriteras ansd how they deserve more. Theindustry needs to make changes:
“The British artist – who took home a record-breaking six BRIT awards this month – said that songwriters are left “fighting over scraps of publishing”.
Speaking in an interview with the Daily Star‘s ‘Wired’ column (per MusicNews), the ‘Escapism’ singer said: “For an industry that profits off songs, you got these CEOs and big label execs living in their fat huge Chelsea mansions, living a beautiful life, meanwhile songwriters you are profiting off are broke, can’t afford rent and fighting over scraps of publishing that is sat in bank accounts for two years before they receive a penny, because publishers have kept it in there so they can collect interest and make a whole separate business.”
The artist also broke down the payment model for artists and songwriters, explaining: “Every single song that’s released in the world, there are 100 royalty points.
“The label will take, say, 80 points. The artist, in a good deal, will take maybe 20, 15, or maybe 12 and then producers get four points, but it has to come out of the artist’s points.
“And the songwriter doesn’t even get one point. It’s disgusting, the whole industry is disgusting. That’s one little example of what goes on behind closed doors where there is no accountability.”
RAYE added that the whole situation makes her “very angry”.
At this month’s BRIT awards, RAYE used her Songwriter Of The Year award acceptance speech to call on music executives to allow songwriters to receive royalty payments.
“I think we need to have a conversation,” she said. “I want to normalise giving songwriters master royalty points”.
PHOTO CREDIT: Moose Photos/Pexels
The situation is quite bad at the moment. Like payment for artists, the industry does need to prioritise songwriters and paying royalties. Ensuring that their work is recognised. Billboard recently explained how there is a huge amount of money owed to songwriter from streaming. Despite the fact it is not as easy as the industry correcting things instantly, there needs to be this wake-up call:
“Songwriters and publishers are due nearly $400 million in additional payouts following the Copyright Royalty Board‘s Phonorecord III final determination in August, according to information the Mechanical Licensing Collective (the MLC) released on Friday (Feb. 23).
During the Phono III blanket license period (2021-2022), the MLC reports that digital service providers like Spotify, Amazon Music, YouTube and Pandora underpaid rightsholders by $419.2 million — $281 million from mechanical royalties and $137.8 million from performance royalties. Those underpayments were due to the fact that final rates were higher than the interim rates during the more than four-year royalty dispute between publishers and streamers.
However, the DSPs actually overpaid publishers for mechanical royalties during the Phono III historical unmatched period (2018-2020) to the tune of $28.8 million. That would cut down the total bonus owed to songwriters and publishers to roughly $390.3 million.
PHOTO CREDIT: Pew Nguyen/Pexels
The DSPs were given until Feb. 9 to review and adjust their past payments following the CRB’s final determination, though several did not submit the required adjustment reports by the deadline, according to the MLC, which expects adjustments to increase by another $10 to $15 million once those additional reports come in.
The MLC notes that the amounts are estimates only and subject to change pending its official calculations.
“We are extremely pleased that songwriters and music publishers finally will receive the over $400 million they are owed in mechanical and performance royalties from the 2021-2022 period,” said NMPA president/CEO David Israelite in a statement. “Our appellate win upholding the rate increase we achieved in 2018 will finally net music creators and copyright owners the windfall they should have received years ago. The fact that the majority of this adjustment will be distributed by the MLC in a completely transparent and expedient way is another massive benefit of the Music Modernization Act (MMA) and while we would have preferred it be paid sooner, this is a welcome and critical lift now”.
What RAYE said about CEOs and executives earning a lot of money and living a luxurious life whilst songwriters are struggling for scraps should be a real explosion. An awakening that should get a truly massive and quick reaction. I have said how it is a deeper issue with a lot to consider. What is clear is how there is this gulf. So much profiting from songwriters. There is not overstating how vital songwriters are and how phenomenal their work is. Ensuring that they are paid fairly and not ignored should be…
TOP of the list.