The Enduring Controversy Over Digital Royalties in Music

SAMUEL WINIKOFF–The debate over licensing music in the Digital Age came to the forefront of industry news last year, thrusting the industry’s arcane system into the mainstream media. Various artists, songwriters, and industry players have entered the discourse, advancing their sentiments into what has become a growing conversation over the viability of a music-licensing regime that has struggled to adapt to a constantly evolving digital landscape. Most notably, the only platinum-selling artist of 2014, Taylor Swift, has removed her entire catalog from the online music-streaming service, Spotify. Scott Borchetta, CEO for Swift’s record label, Big Machine Label Group, has been an outspoken advocate against free streaming services, citing concerns about the exceedingly low royalties paid to artists.

Recording artists and songwriters have taken to the internet to criticize the current statutory regime, expressing their dismay over royalty rates and fear for their futures in the music industry. Digital Music News, a popular industry blog, featured an article from a Grammy-nominated artist who shared his complete 2014 digital royalty statements—the total, $35. Spotify CEO, Daniel Ek, shot back at artists, claiming that piracy, not the digital services, is the real enemy of the music industry. “Piracy doesn’t pay artists a penny,” Ek said, “Spotify has paid more than two billion dollars to labels, publishers and collecting societies for distribution to songwriters and recording artists.”

But an attempt to lay blame may be moot; internet-based platforms for music are not going away. Fans continue to move away from the “analog” world in favor of digital services that provide millions of songs at the click of a mouse. According to data just released from Edison Research, more American teenagers listen to Spotify, Pandora, and other streaming music services than traditional, FM broadcast radio. Similarly, the RIAA’s mid-year 2014 shipment and revenue statistics data report showed that the total value of digitally distributed formats accounted for 71% of the overall market by value as compared to approximately 9% ten years ago.

Relief for artists, however, may be on the horizon: significant and substantive dialogues about digital royalties took place in Congress and through a comprehensive policy study conducted by the Copyright Office. In 2013, Chairman Bob Goodlatte of the U.S. House of Representatives Judiciary Committee announced a “comprehensive series” of hearings on U.S. copyright law; and in 2014, the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property, and the Internet has conducted a series of copyright review hearings to address a variety of contemporary issues, including music licensing and the scope of fair use.

In response to Congress’s comprehensive review of copyright law, the Copyright Office conducted its own examination of copyright law and policy as it relates to the digital age. The Office solicited written comments and held a series of public roundtables to obtain the views of stakeholders and the public on music licensing issues. These evaluations are the first significant steps to advance copyright reform since 1998, when Congress passed the Digital Millennium Copyright Act (‘‘DMCA’’).

The last overall revision of the Copyright Act took place in 1976 following a 15-year review process. 1998’s DMCA was the next major Congressional undertaking to address emerging issues of the digital age. To put that date into perspective, in 1998: Google was first incorporated; Apple launched the very first iMac; and the American public tuned in to watch President Clinton deny his affair with Monica Lewinsky. Congress could not have possibly foreseen the flood of new technologies or the ways that consumers would engage with music and other creative digital media in 2015.

 

The recent steps taken by Congress and the Copyright Office, coupled with an escalating public discourse, may actually propel comprehensive copyright reform—the first in over 30 years. The realities of the digital age have made too large of an impact on our society for Congress to ignore. Let’s just hope that these conversations lead to concrete change and can actually be accomplished in less than 15 years.

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