BMG slams ‘industry consensus that turned a blind eye to a 15-year pay freeze for songwriters’

MBW readers will know that, last week, record labels and music publishers in the US reached an important settlement.

That settlement could – if accepted by the Copyright Royalty Board (CRB) – see mechanical royalties paid to publishers/songwriters in the States for the sale of physical goods and downloads increase from 9.1 cents per track to 12 cents per track.

Happy day.

However, more attentive MBW readers will know that this story isn’t one of simple jubilation.

As we laid out in a lengthy explainer the other week, the subject of songwriter pay for physical sales in the US being stuck at 9.1 cents per track is a complicated one, fraught with accusations of skullduggery from various sides.

(Crucial bit of context: when the  publisher/songwriter mechanical royalty for physical sales or downloads goes up, the record labels essentially have to pay it out of their revenues; if the same was to happen for streaming – a separate issue – then the streaming services, rather than the labels, would be the ones on the hook to pay it over.)

But let’s keep things simple: the record labels (via the RIAA) and the publishers (NMPA) initially submitted a settlement to the CRB during the current process that would have seen the 9.1 cents-per-track rate adhered to for another five years, spanning 2023-2027.

That settlement was then rejected by the CRB, leading to a new round of talks between these sides that ultimately led to the newly-proposed, 12 cents-per-track settlement proposal.

Yet the first settlement could only be rejected because of a handful of independent songwriters and their representatives.

Leading those songwriters was a sole independent artist, George Johnson, who independently litigated against (and continues to litigate against) the original NMPA/RIAA settlement in front of the CRB.

Following the trail that Johnson blazed, his fellow independent songwriters such as David Lowery, Helienne Lindvall, and Blake Morgan, who contributed written objections to the initial settlement via their attorney (and songwriter advocate), Chris Castle.

In addition, independent songwriter groups such as Music Creators North America (MCNA) – which says it represents “hundreds of thousands of songwriters, composers and lyricists” globally – also protested against the initial NMPA/RIAA settlement.

Worth noting: The 9.1 cents NMPA/RIAA settlement was also agreed by a group called the NSAI (Nashville Songwriters Association International, representing its songwriter members).

Now, following the outbreak of industry happiness that has entailed since the announcement of the new, improved settlement, BMG is refusing to join the party. At least, it’s not doing so without a little skepticism.

In fact, BMG has openly talked of its “regret” that it didn’t previously get behind the independent songwriters who stood against the initial 9.1 cents-per-track settlement.

You can read BMG’s full and surprising statement reacting to the new 12 cents-per-track settlement below.

“The entire songwriter community owes a huge debt of thanks to those who fought for this increase in the face of the opposition of major record companies and indifference of music publishers.

“Thanks to them, songwriters will get an effective 32% rate increase on the current 9.1 cents a track mechanical rate for physical products and downloads in the US.

“Without their belief and commitment, the RIAA (representing record companies) and the NMPA (representing music publishers) would not have been forced back to the negotiating table.

“Music companies have a duty to stand up for artists and songwriters. That is why BMG has put fairness at the heart of our agenda ever since we started business in 2008.

“We regret on this occasion that we did not speak out earlier and more robustly against an industry consensus that turned a blind eye to what has been a 15-year pay freeze for songwriters.”

“We regret on this occasion that we did not speak out earlier and more robustly against an industry consensus that turned a blind eye to what has been a 15-year pay freeze for songwriters.

“More broadly, this case again highlighted the dismissive approach of record companies toward songwriters who just a month ago entered a motion designed to exclude the vast majority of songwriters from benefiting from any rate increase.

“Thankfully, they have backed down. They could show further humility by following BMG’s example in abandoning unfair and anachronistic controlled composition deductions which are solely designed to depress songwriter earnings.

“This episode should be a wake-up call for all those in the industry who fail to match fine words about the value of music with a concern for the people who actually create it.”Music Business Worldwide