Sony Music accused of ‘attacking American songwriters’ with US lobbying effort

Sony’s recorded music operation has come under more fire for allegedly attempting to “reduce the meager amount songwriters are paid from interactive streams”.

The label giant has already been the target of outrage from the National Music Publishers Association in the US.

As MBW noted last week, the NMPA‘s CEO, David Israelite, has accused Sony Music of lobbying against songwriters and publishers as these groups try to secure bigger mechanical royalty rates from interactive streaming services in the US.

Publishers are calling on the US Copyright Royalty Board (CRB) to increase the headline rate that the likes of Sony/ATV, UMPG, Warner/Chappell, Kobalt and others receive from Spotify, Apple Music etc.

The CRB’s decision will ultimately set US mechanical rates for streaming (and ‘cached’ songs) for 2018 through 2022.

Out of this industry dialogue with the CRB has emerged Apple’s recent suggestion that publishers and songwriters should be paid a rate of $910 every million streams.

David Israelite, meanwhile, has accused Sony of “fighting on the side of digital music companies to try to further reduce what little income [songwriters] receive from on-demand streaming”.

He believes Sony is lobbying the CRB to prevent publishers and songwriters being granted the headline rate they are arguing for – behavior he labels “shocking.”

Israelite points out that both Universal Music Group and Warner Music Group have bowed out of contributing to the CRB proceedings, meaning Sony Music is the only major label to remain an active participant.

Sony has countered Israelite’s comments by claiming that it’s pushing the CRB for an increase in the US streaming payout rate for publishers – although the major hasn’t actually revealed any monetary details of its filings.

“Record labels have participated in every rate proceeding for copyright royalty rates,” reads a Sony Music statement on the matter.

“We think it is important to be at the table since we work so closely with songwriters – many of whom are our artists.”

Sony Music statement

“We think it is important to be at the table since we work so closely with songwriters – many of whom are our artists.

“We want the rates to be both fair and flexible so that all new models can thrive and create a healthy future for the overall music industry.

“That is why we have included in our rate proposal an increase to the headline rate.”

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However, now Israelite has been backed up by the Nashville Songwriters Association International (NSAI), which has penned a fierce open letter to Sony Music Entertainment CEO & Chairman Doug Morris (pictured).

The NSAI is the world’s largest not-for-profit songwriters trade association.

Its letter, which you can read in full below, is titled ‘Sony Records Attacks American Songwriters’, and is undersigned by NSAI Exec Director, Bart Herbison (pictured inset).

Herbison doesn’t hold back, including this stinging accusation:

“It appears that Sony does not value the contribution from, nor the relationship with, songwriters as much as other record labels.”

MBW estimated earlier this month that Sony Music was now generating $25m a week from audio and video streaming platforms.

Sony Corp‘s bid to fully acquire Sony/ATV in a $750m deal was last week cleared by EC regulators – a decision which adds an extra frisson to the CRB situation.

Some have speculated that Universal Music Group and Warner Music Group, as full owners of both publishing and recorded music businesses, could easily deal with a bigger chunk of the streaming ‘pie’ moving to songwriters.

Now Sony looks set to take complete ownership of Sony/ATV, will it change its tune?

Dear Mr. Morris,

I write to you today struggling to even accurately convey the astonishment felt by American songwriters when recently learning that Sony Records plans to contest songwriters in the current Copyright Royalty Board (CRB) proceedings – intending to lower the already meager royalties we are receiving.

What’s worse, you are doing so even after the other major and independent labels have decided not to engage in, and be actively hostile, to songwriters in this proceeding. I have to believe that you are aware that the past few years have seen the American songwriting profession devastated.

“I have to believe you are aware that the past few years have seen the American songwriting profession devastated.”

The Nashville Songwriters Association International (NSAI) estimates that the songwriting profession has dwindled some 80% to 90% in terms of the number of songwriters earning their primary income from royalties on current song activity.

It is embarrassingly disingenuous that Sony would attempt to hide behind its claim to “increase the headline rate” when in fact its proposal to the CRB would actually lower the rates songwriters currently receive from digital interactive streaming services.

Warner Brothers, Universal and other record labels have chosen not to attempt to suppress the rates digital interactive services pay to songwriters. Perhaps they understand that ultimately their profits really rest on the great songs we create.

Some artists are also great songwriters. But many songs that earn Sony millions and millions of dollars are written by gifted tunesmiths whose names the public will never know. Those individuals cannot earn money from shares of the artist’s concert revenues, merchandising and other income streams like Sony can.

“It appears that sony does not value the contribution from, nor the relationship with songwriters as much as other record labels.”

Sony is already earning many, many times what songwriters earn from streaming royalties and now you want to reduce the meager amount songwriters are paid from interactive streams.

Why? If there is a reason aside from greed, please let us know. It appears that Sony does not value the contribution from, nor the relationship with, songwriters as much as other record labels.

NSAI has openly supported proposals for new/increased royalties for record labels including a royalty from terrestrial radio stations and legislative remedies for pre-1972 sound recordings that are found in the “Fair Play, Fair Pay Act” currently before Congress.

Our support for record labels in the music ecosystem makes Sony’s position to lower our royalties for interactive streams particularly disturbing and amounts to picking on the little guy.

NSAI asks that you immediately withdraw your rate proposals from the CRB proceedings and participation with respect to setting rates for digital interactive streaming services.

The request you make for lowering our rates makes no sense and amounts to meddling when you consider that the digital services and their subscribers pay the songwriters, not the record labels. If you will not withdraw, we request that you publicly disclose your rate proposals so that everyone can see exactly what Sony Records is seeking to do. If you claim that you are doing what is in our best interest, there should no reason not to make your intentions public.

Somehow it seems the large corporation that is Sony Records does not care about America’s smallest small business, the songwriter, and has forgotten that “It All Begins With a Song.”

Bart Herbison
Executive DirectorMusic Business Worldwide

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