Music industry wants cut in songwriter royalties

 

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Posted on 5 Feb 2008 at 10:19

The US record industry's has turned on songwriters in an effort to wrest a greater share of music royalties, and has Apple's tacit backing.

On the same day that representatives of the Record Industry Association of America again attacked "piracy" for denying songwriters and other music creators income that they are entitled to, lawyers for the same organisation file papers at the US Copyright Royalty Board calling for a cut in songwriters's share of royalties from music sales.

Joel Flatow, the RIAA's senior vice president, Artist & Industry Relations, told a Special California State Assembly Meeting On Piracy that a recent study by the Institute for Policy Innovation found that file sharing and CD copying and counterfeiting costs the US economy $12.5 billion in revenue, 71,000 jobs and more than $2 billion in wages.

"When cheap counterfeit copies are sold with impunity, or other forms of piracy occur, everyone is affected: the songwriters who pen the music and lyrics; the background musicians who perform it; the engineers who texture, layer and refine it; the artists who make it soar; and the labels who invest in, market, promote and distribute the music," Flatow told the Assembly State Select Committee on the Preservation of California's Entertainment Industry.

But in the papers filed at the Copyright Royalty Board, the RIAA takes adopts a very different tone. It wants to cut the share of royalties paid to publishers to 8% of the wholesale revenue. Currently the rate is 9 cents per song. Given that songwriters receive around half of the publisher royalty, their income from each sale could fall to less than half of that.

"Record companies are suffering a contraction of their business at a time when music publisher revenues and margins have increased markedly," the court papers say. "While record companies have been forced to drastically cut costs and employees, music publisher catalogues have increased in value due to steadily rising mechanical royalty rates and alternative revenue streams made possible, but not enjoyed, by record companies."

The Digital Media Association (DiMA), which represents online music services and numbers Apple, Amazon and Microsoft among its members, is backing the RIAA's stance.

"Fundamentally, this fragile marketplace is showing signs of promise, but it cannot be saddled with additional, excessive costs," DiMA wrote. "The board should be careful not to impose a royalty that kills the proverbial goose and deprives songwriters and publishers of their golden egg."

DiMA believes that in addition to cutting royalties for CD and digital sales, the Copyright Royalty Board should abolish them for streamed music.

"Digital music services believe that digital performances are like radio and should require a performance license only."

The National Music Publishers Association disagrees and is seeking an increase in royalties, to 12.5 cents per song for CDs and 15 cents for digital recordings.

"The contributions songwriters and music publishers make to the creation of songs, and to the music industry overall, are significant - indeed critical - to the success of the industry," the association's David Israelite, president said. "The NMPA will fight vigorously in the coming weeks to make sure songwriters and music publishers are fairly compensated for their work."

Author: Simon Aughton