Last week, a handful of Nashville songwriters ventured to Washington, DC to advocate for changes in the structure of compensation under copyright law.  The Songwriter Equity Act, introduced in both the House and Senate, aims to change the mechanics by which the government calculates songwriter pay. Currently, under U.S. Copyright law, the government relies on, what critics call an “aged system” to determine how much writers are entitled to under the law. Songwriters complain that the current fee of 9.1¢ for the sale of a recorded songs . . . is pitifully low and makes it hard to earn a living.” Similarly, for some songwriters, royalties from a song on the radio is set by a consent decree established during World War II.

Integral to the setting of these rates is the Copyright Regulatory Board (“CRB”). At present, the CRB considers four objectives in calculating rates: maximize the availability of song uses, afford a fair return to the copyright owner and fair income to the song user that reflects the roles of each, and to minimize the disruptive impact on the structure of the industries involved. The Songwriter Equity Act would change the guiding principles for the CRB, buy asking it to replicate the rate levels achieved in a market with a willing seller and buyer, what songwriters have called “fair market value.” The Act would also remove a provision in the current law that restrict evidence the court can consider in determining that amount.

Not surprisingly, while groups like ASCAP and BMI support the legislation, groups representing royalty payers like the National Association of Broadcasters and the Digital Media Association, have expressed disapproval with the proposed legislation and changes to structure of US Copyright Law. Paramount in their complaints is that the proposed changes will “stifle innovation,” forcing streaming services in particular, like Pandora and Spotify, to bear the brunt of these changes. As the legislation has only been introduced in the House and Senate, it faces an uphill battle to eventual passage – one that many Nashville songwriters will undoubtedly be focused on.

Rebecca Loegering

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One Response to What’s it Worth? The Songwriter Equity Act Proposes an Answer

  1. Doruk Onvural says:

    Seems to me the best way to gauge fair market value is to allow for the parties involved to negotiate outside the restraint of compulsory licenses and consent decrees. Digital music providers claim they can’t bear the increased cost that would accompany changes, songwriters claim they can’t keep their lights on and put food on the table with the current system — eventually something has got to give.