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For Music Creators, It's Apocalypse Now

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Daryl Friedman
Advocacy
Jun 21, 2017 - 8:14 am

Ah, Sundays. A chance to unwind, relax and read the Sunday paper with a nice cup of coffee.  But last Sunday, when I opened The New York Times Sunday Magazine, I practically did a spit take.

I spend my days as part of The Recording Academy’s Advocacy team, fighting for the rights of music creators, many of whom have been unable to make a living in the era of free online music.  So reading “The Creative Apocalypse That Wasn’t,” was like reading long-form fiction.

Since there were no quotes from actual musicians, songwriters or studio professionals in the story, allow me to make a few points based on the lives of the creators I work for (and actually talk to).

1. Artists are not athletes. The article refers to employment data from the Occupational Employment Statistics, which narrows down to earnings figures for a broad category of Arts, Design, Entertainment, Sports and Media Occupations. Lumping music creators in with visual artists, athletes, filmmakers, writers and actors is not an effective way of examining the reality of annual income data for the majority of music makers.

2. Songwriters and producers don’t tour. Author Steve Johnson points to increased revenue from touring as one primary way that music makers are winning in the new post-Napster economy. But the assumption that live performance is the magic bullet for all music creators is naïve. Plenty of songwriters don’t double as performers, and most music producers work their creative magic within the confines of a studio, not on stage. Americans may be paying more for live concert tickets, but that does little for a large swath of the music community.

3. Artists should teach because they want to. Indeed, economic and technological trends are undermining the livelihoods of creators, particularly in the music arena. The Internet offers dozens of new platforms for delivering content, but the existing music services pay music creators pennies –or fractions thereof – per play, forcing professional music makers to engage in secondary activities to pay the bills. While “The New Making It” may include sideline gigs like giving live or online music lessons, creators should not have to teach because making music no longer results in fair compensation.

Last Sunday was a nice break, both from the work week –and from reality– as I read The New York Times Sunday Magazine.  But now I’m back in my office with my colleagues, continuing the necessary work of fighting for creators’ rights. Another Sunday will come soon enough when I can, again, catch up on The New York Times ... of which I am a paying subscriber.  Gotta support professional journalists, you know.  Wouldn't want them to have to start teaching online writing courses to make a living.

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Photo: Chesnot/Getty Images

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Does Spotify's New "Discovery Mode" Resemble Anti-Creator "Payola?"

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At a time when the music ecosystem is struggling, Spotify is encouraging creators to decrease their already low royalty rate in exchange for additional promotion
Advocacy
Nov 11, 2020 - 4:21 pm

At a time when more are calling for reinventing steaming rates to better artist payout, Spotify is launching a new mode that invokes past concerns with payola infractions within the music community. Spotify's "Discovery Mode" offers creators the opportunity to increase their public visibility in exchange for a diminished royalty rate, which currently fluctuates between $.003 and $.005 per stream reportedly.

Payola, the practice of requiring compensation in return for airplay by broadcasters, decreases the diversity of music included in airplay and provides an unfair barrier of entry for smaller artists. While current antiquated payola legislation does not extend to digital streaming services, Spotify's anti-creator behavior of enticing struggling creators to further reduce their already low royalty rate in order to stay competitive with their music community peers is reminiscent of past payola practices. 

"Spotify's promotional royalty rate is yet another example of how the company avoids paying music creators their fair share," said Daryl Friedman, the Recording Academy’s Chief Advocacy Officer. "It's a predatory tool that can be likened to payola, and it's troubling that Spotify introduced this at a time when music creators are seeing their livelihoods devastated amidst the pandemic. With Spotify payouts already so low, I don't see how this experiment will benefit any musicians who are already struggling to earn a living wage."

The Recording Academy has a history combatting these anti-creator "pay-for-play" practices. In 2007, the Recording Academy penned a letter to then-Federal Communications Chairman (FCC) Chairman Kevin Martin in support of the FCC's pending payola investigations into Big Radio. Without commenting on individual investigations, the Academy urged the FCC to continue oversight to "ensure that future conduct in violation of the payola laws will not occur" and to intervene if any such conduct occurs.

At a time when COVID-19 has resulted in closed venues and canceled tours, causing a tremendous amount of financial distress for the entire music ecosystem, artists and creators need fairer compensation. Yet instead of providing a lifeline, Spotify's flirtation with "pay-for-play" will further damage the financial health of small-time music creators who want to remain competitive on their platform.

Spotify & Other Streaming Giants Are Fighting Songwriter Royalty Increases…Still

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Recording Academy Champions The HITS Act, Which Supports Independent Music Makers’ Recovery

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The Help Independent Tracks Succeed Act lets creators fully expense production costs for new music up-front to stimulate reopening of the music economy
Advocacy
Jul 31, 2020 - 7:00 am

Today, the Recording Academy joined Rep. Linda T. Sánchez (D-Calif.) and Rep. Ron Estes (R-Kansas) to announce the Help Independent Tracks Succeed (HITS) Act, which allows an individual to fully expense for tax purposes the cost of new studio recordings on their taxes, up to $150,000, within the same year of production.

Music creators are among the American workers hardest hit by the coronavirus pandemic. Tours are cancelled, venues, bars, and restaurants are shuttered, and recording studios remain closed. As independent artists and producers look for a new path forward, the HITS Act creates a foothold for recovery. Without it, the costs of making new music may be prohibitive to creators following months of lost income.

"The Recording Academy is proud to have worked alongside Reps. Sánchez and Estes to develop the key provisions in the HITS Act," said Harvey Mason jr., Chair and Interim President/CEO of the Recording Academy. "The HITS Act will make a meaningful impact and help ease the financial burden for thousands of independent creators getting back on track, eager to share their creativity with the world. It will inspire new music and create opportunities for many of the vulnerable professionals in our community to persevere during these uncertain times."

Currently, individual recording artists and record producers are required to amortize production expenses for tax purposes over the economic life of a sound recording, typically 3-4 years. The HITS Act allows artists and producers to choose to deduct 100 percent of their production expenses for records created in the United States in the year such expenses are incurred, in the same manner that qualified film and television production expenses are allowed to be expensed. Expenses can include studio equipment, studio rental fees, staff costs, electricity, studio musicians, and much more.

"We are living through tough times and nothing helps you escape like turning on your favorite album," said Rep. Sánchez. "Similar to many families and workers across the country, the coronavirus has also had an enormous impact on music makers. Gigs have been canceled, studios shuttered, and creative writing sessions postponed. I'm proud to introduce the HITS Act with Rep. Estes. Our bill will provide small, independent creators with a bit of help getting back to work, making the music we turn to in good times and bad."

"Music is a powerful language that connects people of varying generations, backgrounds and experiences," said Rep. Estes. "The men and women who make music — either through writing, singing, playing or producing — deserve to have the same tax benefits as artists in the film, television and live theater industries. The HITS Act is sound legislation that supports our creative communities throughout the United States and encourages music makers of all sizes and notoriety."

Many music creators watched their incomes disappear as the pandemic ushered in a new normal of closures and cancellations. The median income for a professional musician is less than $25,000 a year, and independent music professionals will be among the last to return to work as the nation gradually reopens. As the only organization representing all music creators, the Recording Academy will continue to support government assistance that will help music creators navigate their way through this unprecedented time and subsequent recovery period.

Academy Endorses New Legislation To Support Creators, Venues & Small Music Businesses

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Harvey Mason jr.

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Recording Academy's Harvey Mason jr. Testifies On AM-FM Act & Stimulus

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The music industry membership organization's Chair & Interim CEO took the (virtual) stand today on behalf of music makers
Nate Hertweck
Advocacy
May 27, 2020 - 3:54 pm

With so many people and professions affected by the coronavirus crisis, now is the time for music industry leaders to speak up and advocate for their community. With this in mind, Recording Academy Chair & Interim CEO Harvey Mason jr. testified today in front of the Senate Judiciary Intellectual Property Subcommittee on the scope of music rights in sound recordings, the dire need for the United States to catch up with other free countries by passing the Ask Musicians for Music (AM-FM) Act, and the importance of supporting music creators in the next phase of COVID-19 relief stimulus.

"Any future relief package should get people back to work, not give industries unfair advantages," said Mason jr. "Unfortunately, musicians will not be able to get back to live performances soon, so the next stimulus should ensure they get paid fairly for their music that has been a lifeline for our fellow citizens. As the Section 512 study showed last week, there are many ways Congress can do more to help the music community, such as including the AM-FM Act in the next COVID-19 bill."

The AM-FM Act, a bipartisan and bicameral bill introduced by Sen. Marsha Blackburn (R-Tenn.) and House Judiciary Chairman Jerry Nadler (D-N.Y.), would establish a performance right for sound recordings broadcast by terrestrial radio, ending a decades-long loophole that has enabled AM/FM radio broadcasters to use the music of hard-working performers and producers without obtaining any form of permission or paying any compensation. Under the AM-FM Act, artists, producers, and copyright owners would be able to negotiate fair market rates with broadcasters in exchange for permission for it to be aired.

“Radio is the only business in America that can use someone else’s intellectual property without permission or compensation. Fixing this copyright anomaly should be a priority of the Senate Judiciary Committee," Mason jr. said.

This blind spot in American policy also underscores the glaring discrepancy between the U.S. and other countries around the world, including the U.K. and Canada, who pay performance rights royalties to the musicians and artists' whose music is played on terrestrial radio.

"The United States of America: the one country in the world that should be a leader in free market transactions, a leader in protecting intellectual property, and a leader in assuring fair pay for one’s work. Yet sadly, we are the one country that does not recognize a performance right for sound recordings," said Mason jr.

With millions of music makers living in uncertainty,  Congress holds a valuable opportunity in its hands to ensure they receive fair support alongside other small business and finally institute the long-overdue performance rights for sound recordings that would pay creators what they deserve for their work.

Ironically, the National Association of Broadcasters (NAB) has continued to fight against the AM-FM Act and performance rights for sound recordings even though the broadcasters themselves enjoy the very same rights to permission and compensation they are denying creators. Mason jr. explained:

"Just two weeks ago the NAB CEO, Gordon Smith, told his members: 'We don’t know how long this pandemic will last, or what the lasting effects of it might be on our economy. But there is one thing I do know… broadcasters endure.' I wish I could tell our members the same thing. In this crisis, many workers are sadly not getting paid because their work is not needed at this time. But on radio, musicians are not getting paid while their work is needed more than ever. The current crisis has shone a bright spotlight on this injustice. And the time to fix it is now."

During the hearing, Mason jr. discussed how local radio provides entertainment for the general public, which is primarily due to the efforts of music creators. For non-music content serving as “entertainment” on terrestrial radio, Mason jr. reminded the panel that stations pay those entities a fee to broadcast that content on their airwaves, specifically sporting events. Mason jr. stated that he is open to having future discussions with the NAB about these issues and requested Congressional involvement in those negotiations.  

The AM-FM Act is finally getting its due consideration by the Senate Judiciary Committee and would be a critical victory for artists’ rights. You can help to advance the bill by contacting your lawmakers and ask for their support.

Take Action To Help Music Creators In Need Of COVID-19 Relief

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Big Radio Aims To Take Small Business Aid Under New Stimulus Bill

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Believe it or not, Big Radio could use funds and protections for small businesses to increase their staggering corporate wealth
Nate Hertweck
Advocacy
May 20, 2020 - 3:54 pm

Big Radio is trying to enrich their organizations by draining federal stimulus funds meant for struggling small businesses that are trying to survive during this unprecedented and unpredictable pandemic.  

On May 15, the House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. While the $3 trillion stimulus bill includes multiple creator-friendly provisions – such as another round of direct payments and extending the Federal Pandemic Unemployment Compensation (FPUC) benefit of $600 through the end of the year – the bill would offer major radio stations direct financial assistance.

"There is a difference between supporting vital local news outlets and billion dollar broadcast conglomerates, especially given that these enormous [terrestrial] radio conglomerates refuse to compensate recording artists for using their music."

Under the legislation, Big Radio and broadcasting companies would be eligible for Paycheck Protection Program loans, which were originally intended to keep small businesses afloat during this tough economic time. Rather than saving funds to help your favorite mom-and-pop restaurant keep their lights on, Big Radio will instead take the limited federal relief money and increase their staggering corporate wealth if this bill is enacted into law.

While many believe that this House-passed legislation is ‘dead on arrival’ in the Senate, the worry remains that the upper chamber could adopt a similar negotiating proposal to aid Big Radio.

Along with A2iM, the Future of Music Coalition, and SoundExchange, the Recording Academy released a statement condemning this provision in the HEROES Act, stating, “there is a difference between supporting vital local news outlets and billion dollar broadcast conglomerates, especially given that these enormous radio conglomerates refuse to compensate recording artists for using their music, in contrast with satellite radio and streaming services that do pay.”

The statement concludes with the sober recommendation: "With so many people in need at this time, let's keep the focus where it should be: small businesses and workers, not on big broadcasters."

Instead of bailing out Big Radio, Congress should focus on passing relief for the true small businesses—including the smallest of small: artists, songwriters, producers, and creators struggling with the pandemic.  One such step would be passing the AM-FM Act, a bipartisan and bicameral bill that would require radio stations to ask permission and negotiate a fair market rate before playing a creator’s music. You can add your voice to the chorus of support for the AM-FM Act by contacting your Members of Congress today and urging them to support this necessary legislation. 

Take Action To Help Music Creators In Need Of COVID-19 Relief