Songwriters Guild of America

SGA Says US Copyright System Must Be Accessible to Songwriters, Composers & Lyricists

Feb. 14, 2023

The SGA this week issued a letter to the Copyright Royalty Board -- but this was no lover letter. The missive addressed the inequality inherent in the process that determines how songwriters, composers and lyricists will be paid. Essentially, the letter pointed out that only the most wealthy in the music business (labels, publishers, streaming services) are invited to the CRB process while the creators are locked out. Check out the letter, written by SGA Outside Counsel Charlie Sanders, below.

In 2022, the National Music Publisher Association (NMPA) announced its view that the U.S. Copyright Royalty Board (CRB) music royalty rate setting system is “broken.”1 The American and global independent songwriter and composer community is in total agreement, but for far different reasons than those troubling NMPA. The CRB is currently not serving one of the one of the key focuses of the U.S. Copyright Office – in the words of the Register in the USCO’s 2022- 2026 Strategic Plan - to “ensur[e] that the copyright system is accessible to all, welcoming diversity and ultimately enriching the cultural landscape.”2

Instead, today’s CRB mainly serves the needs and desires of the wealthiest and often interrelated corporate companies, instead of the creators, in Section 115 proceedings. For that reason, today’s CRB system needs reform for Section 115 proceedings.

SGA Outside Counsel, Charlie Sanders, had this to say in his letter on behalf of the SGA:

"...tens, if not hundreds of, millions of dollars in royalties were denied to songwriters and composers, to the benefit of the large conglomerates that had the money to participate in the Section 115 proceedings. Similar inequities afflict the parties to voluntary streaming agreements as well..."

In fact, participation in CRB royalty rate setting proceedings for compositions has become so prohibitively expensive that only the largest music-related conglomerates, their trade associations, and their own affiliated and controlled “creator” organizations can afford to participate. Thousands of independent songwriters, composers, and lyricists, that are directly impacted by the CRB decisions, are left out of the process. As Members of Congress have frequently been made aware over the past two or more decades by our independent music creator advocacy groups, the financial health of the U.S. songwriter and composer community has been devastated in the digital age, even as many of these large music conglomerates have thrived through unchecked consolidation. In fact, it is estimated that since 1999, the number of persons able to earn a living from music creation in America has declined by over 75%.3

While this situation appears quite troubling to the CRB judges, based upon their comments in recent rulings (including overt acknowledgements that conflicts of interest among the corporate participants are often “inherent”)4, those same judges have asserted that their hands are tied by flaws in the U.S. Copyright Act that prevent them from giving weight to proposals made by affected, non-participant creators in rate-setting proceedings. As the judges lamented in a recent proceeding in which they believed to be bound to approve a deeply flawed “voluntary” deal “negotiated” by the vertically integrated, corporate participants in the proceeding:

The Judges recognize that several comments proposed alternative rates that they prefer, as well as alternative methods for addressing inflation adjustments. The Judges also recognize that some [of those non-participant] comments take issue with existing procedures for participation in rate proceedings before the Judges. However, [the proposed voluntary settlement] is what is before the Judges for consideration, not alternative rates or proposals for alternative procedures…

As a result, tens if not hundreds of millions of dollars in royalties were denied to songwriters and composers, to the benefit of the large conglomerates that had the money to participate in the Section 115 proceedings. Similar inequities afflict the parties to voluntary streaming agreements as well, due to vertical integration and private investment dealings between the major music companies and digital music distribution platforms.

What can and should be done about this blatantly inequitable and exclusionary process? The fixes are simple:

1. First, the CRB should be directed to hold at least one public hearing for all affected non- participants to a proceeding concerning any proposed, voluntary settlements submitted to the CRB in Section 115 proceedings for approval at which statements may be made and questions asked by such affected non-participants, with the record held open for written comments for at least a sixty-day period.
2. Second, the CRB should be empowered to adjust and approve such amended agreement in Section 115 proceedings based upon comments from any affected person or group, whether or not a party to the proceeding, untying the hands of the CRB to exercise its best judgement in taking reasonable steps to negate the inequities produced by inherent conflicts of interest.

Those amendments to Chapter 8 of the U.S. Copyright Act would at least represent some initial steps toward equitable reform of a system pertaining to Section 115 royalties about which everyone seems to agree on one thing: it’s broken.

1 https://www.globenewswire.com/news-release/2022/07/06/2475474/0/en/Reservoir-Commends-U-S-Copyright-Royalty-Board-Phonorecords- III-Ruling.html
2 https://www.copyright.gov/reports/strategic-plan/USCO-strategic2022-2026.pdf
3 https://www.dizzyjam.com/blog/less-than-5-percent-of-musicians-make-a-living/
4 “Conflicts are inherent if not inevitable in the composition of the negotiating parties. Vertical integration linking music publishers and record labels raises a warning flag…. While corporate relationships alone do not suffice as probative evidence of wrongdoing, they do provide smoke; the Judges must therefore assure themselves that there is no fire.”