Who’s Looking Out After Your Financial Interests?

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As a good friend at one of the performing rights organizations (PROs – ASCAP, BMI and SESAC) mentioned this week, there is a great deal at stake over the next 18 months when it comes to music royalties. I believe that now, more than ever, as composers and songwriters it is incumbent upon all of us to get involved and take an active role in shaping the financial future of our industry.

One of the most central issues is the determination about whether Internet transmissions of music – including public downloads and streams – contain a performing right and therefore should pay a license fee to the performing rights organizations. Of special interest to composers is the download of films and television episodes – millions of these downloads have been sold by iTunes, and composers have not received a nickel in performance royalties for these downloads of films and television episodes.

Some believe ASCAP has “bet the farm” in going to rate court and openly asking the court to declare there is a performing right in Internet transmissions of music including streams and downloads (see Film Music Weekly March 5, 2007). The precedent set if the judge rules against ASCAP could be very dangerous for composers especially, and I suspect that’s why in behind-the-scenes discussions with high ranking officials at the PROs, they’ve put aside many of their rivalries and are supporting each other on this issue. Perhaps finally they’ll see the benefits of working together to preserve the interests of copyright holders rather than using their rivalries as excuses for some of the negative changes we’ve seen at the PROs in recent years. Most recently, the US Register of Copyrights has gone on the record opposing ASCAP’s claim – not such good news for ASCAP or composers.

While composers don’t like to get involved in performance royalty matters, I would suggest there’s a good reason for all composers to get involved now. If performance royalties are not preserved for Internet downloads, composers could face significantly declining royalty income – especially from television – over the next 5-10 years as viewers move to a digital download model. And the legal precedents that are being established now are something we all may have to live with for a long time.

How to get involved? Call your PRO and ask them what they’re doing to preserve performance royalties on Internet downloads. Ask them how they’re balancing the interests of writers, who will benefit if these transactions include performance royalties, against the interests of publishers who have an interest in keeping them “mechanical royalties only” transactions. Consider running for the board or volunteering at industry associations who are involved with these issues. A great organization that has been very involved in this is the Nashville Songwriters Association International (NSAI). Bart Herbison, NSAI’s Executive Director, has been spending a lot of time in Washington working on behalf of the interests of songwriters, and I think it’s fair to ask why more composer organizations aren’t taking an active interest and getting involved in these matters on behalf of their members.

Simply put, it’s not enough to sit back and hope the PROs will “handle this.” The PROs are heavily influenced by very powerful music publishers and broadcasters, and in some cases the interests of publishers and writers are in opposition. The publishers and broadcasters are not our agents, they are our employers, and will look out after their own interests exclusively just like any other business does.

What’s more, don’t forget that in the case of composers, since much of our work is done under work-for-hire contracts, we aren’t copyright owners for much of the music we write. Never forget that under work-for-hire agreements, we receive writer’s performance royalties only because the copyright owners choose to grant them back to us.

When you hear the PROs talk about protecting the interests of “copyright owners,” that usually means publishers, not writers. That’s an important distinction to understand when, as now, the interests of publishers and writers are not the same in many cases.

So who’s looking after the business interests of those who write music? We should be. And if we don’t start soon, decisions and precedents will be made without sufficient input from writers, and the results that we have to live with for years to come may not be something we’re happy with. The alternative? Get involved, learn about the issues, and make your voice heard loudly and clearly. Don’t expect others to take care of your interests any more than you would expect others to take care of writing your music! We are all small business owners in this industry, and only we can truly look out after our own interests.