The PROMOTE Act of 2017: Issa Good Start

Any­one who knows any­thing about copy­right law in the Unit­ed States knows that the copy­right own­er of a sound record­ing typ­i­cal­ly gets the short end of the record­ing deal in terms of roy­al­ties. Sound record­ings were not grant­ed fed­er­al copy­right pro­tec­tion until 1972.1There was no per­for­mance right for authors of those works until 1995, and, even then, that right was lim­it­ed to dig­i­tal audio trans­mis­sions. 2On the oth­er hand, the musi­cal com­po­si­tion, the under­ly­ing work to the sound record­ing, retains full pub­lic per­for­mance rights.3Due to this, copy­right own­ers of musi­cal com­po­si­tions receive com­pen­sa­tion for all plays: dig­i­tal and ana­log, includ­ing AM/FM radio, inter­net radio, satel­lite radio, stream­ing, sta­di­um plays, and store plays, among oth­ers, while the copy­right own­ers of the sound record­ings receive com­pen­sa­tion for dig­i­tal plays only.

This means that copy­right law has deter­mined that every time the pub­lic is blessed with the per­for­mance of a song, the sole par­ty deserv­ing of roy­al­ties is the author of the under­ly­ing com­po­si­tion, i.e., the song­writer or the pub­lish­er. Fur­ther, this deter­mi­na­tion pro­vides that the author of the mas­ter record­ing, i.e., the per­former or the pro­duc­er, is only deserv­ing of par­tial roy­al­ties that stem from dig­i­tal plays. Essen­tial­ly, for the exact same song, played through the exact same device, only half of the authors of that song are enti­tled to com­pen­sa­tion for their cre­ative efforts.

Due to this unfair result, Con­gress­man Dar­rell Issa (R‑CA) pro­posed the Per­for­mance Roy­al­ty Own­ers of Music Oppor­tu­ni­ty to Earn Act of 2017 (H.R. 1914), also known as the PROMOTE Act. 4 This bill seeks to amend Title 17 (where fed­er­al copy­right law is laid out) to grant own­ers of copy­rights in sound record­ings the “exclu­sive right to pro­hib­it the broad­cast trans­mis­sion of the sound record­ings by means of ter­res­tri­al radio sta­tions, and for oth­er pur­pos­es.” 5 In oth­er words, per­form­ing artists would be allowed to opt out of hav­ing their music played on the radio if they feel they are not being paid an agreed-upon per­for­mance roy­al­ty.

On its face, this bill seems like the right answer. After all, per­form­ing artists are deserv­ing of ana­log per­for­mance rights for their sound record­ings. In Issa’s own words, “air­time pro­vides expo­sure and pro­mo­tion­al val­ue, while … the sta­tus-quo allows radio sta­tions to prof­it on artists’ per­for­mances with­out pro­vid­ing any due com­pen­sa­tion.” 6Back­ing Issa in his efforts is Con­gress­man Ted Deutch (D‑FL), stat­ing that “it should be the artist’s choice whether to offer their music for free in exchange for pro­mo­tion­al play, or to instead opt out of the unpaid use of their music.” 7 Sounds good, right?

Wrong. This bill, as writ­ten, grants a per­for­mance artist the right to refuse air­time of a song and simul­ta­ne­ous­ly pro­hibits the song­writer from col­lect­ing com­pen­sa­tions on that song. The per­form­ing artist is able to uni­lat­er­al­ly pre­vent his or her music from being played on the radio, with­out any regard as to how this affects the song­writer. So, why is this such a big deal? Due to the unique nature of the music pub­lish­ing indus­try, song­writ­ers are gen­er­al­ly an under­priv­i­leged group of authors who need all the help they can get, both finan­cial­ly and in terms of indus­try expo­sure.8

Finan­cial Con­cerns

The stan­dard lan­guage of music pub­lish­ing con­tracts divests many song­writ­ers of their copy­right own­er­ship, par­tic­u­lar­ly when the song­writer is not estab­lished enough to nego­ti­ate bet­ter pro­vi­sions. 9 It is vital for any author to retain copy­right own­er­ship of his or her work because Unit­ed States copy­right law does not bestow rights upon the orig­i­nal cre­ator; it bestows rights sole­ly upon the copy­right own­er. 10In the case of song­writ­ers in the music pub­lish­ing indus­try, many song­writ­ers sign con­tracts with music pub­lish­ers agree­ing to grant some, or even all, copy­right own­er­ship to the music pub­lish­er, for any work cre­at­ed under the con­tract before the musi­cal com­po­si­tion has even been cre­at­ed.11

The three most com­mon types of song­writer con­tracts that deal with copy­right trans­fer­abil­i­ty are an exclu­sive song­writer agree­ment (ESWA), an admin­is­tra­tion agree­ment, and a co-pub­lish­ing agree­ment.12 In an ESWA, the song­writer must trans­fer 100% of his or her copy­right own­er­ship to the pub­lish­er, who expends mon­ey, time, and ener­gy to get the song into the public’s ear. 13 The stan­dard ESWA con­tract grants the song­writer roy­al­ties of 50% of the song’s income, with or with­out an advance against roy­al­ties.14 In an admin­is­tra­tion agree­ment, the song­writer retains 100% of the copy­right own­er­ship, and, for an admin­is­tra­tive fee, the pub­lish­er pro­motes the song.15 The typ­i­cal admin­is­tra­tive fee is 15–20% of the song’s gross income, leav­ing the song­writer with 80–85%.16Last­ly, in a stan­dard co-pub­lish­ing agree­ment, the song­writer trans­fers 50% of his or her copy­right own­er­ship to the pub­lish­er, and the pub­lish­er pro­motes the song for, typ­i­cal­ly, 25% of the gross income. 17 There, the song­writer typ­i­cal­ly receives a total of 75% of most sources of income on a 50/50 per­cent­age basis with a 75/25 split over­all. 18

To the untrained eye, these deals do not pose sig­nif­i­cant issues because only one of them divests the song­writer of 100% copy­right own­er­ship. How­ev­er, co-pub­lish­ing deals are typ­i­cal­ly reserved for song­writ­ers who have the bar­gain­ing pow­er to nego­ti­ate 100% copy­right own­er­ship reten­tion, typ­i­cal­ly gar­nered through the pop­u­lar­i­ty of their pri­or work, or con­tracts with mul­ti­ple pub­lish­ers. 19 Fur­ther, admin­is­tra­tion agree­ments are gen­er­al­ly reserved for artists who have the cap­i­tal to under­take the music pub­lish­ing func­tion them­selves, which begin­ner artists typ­i­cal­ly do not.20 In essence, ama­teur song­writ­ers are com­mon­ly rel­e­gat­ed to the ESWA: to either trans­fer 100% own­er­ship of their rights to their pub­lish­er, or risk not being signed. Thus, song­writ­ers are already get­ting stiffed finan­cial­ly due to the con­tracts many of them feel forced to sign, and the PROMOTE Act will have the unin­tend­ed con­se­quence of strip­ping them of poten­tial­ly lucra­tive vehi­cles for roy­al­ties.

Indus­try Expo­sure Con­cerns

The song­writ­ers who choose not to per­form their own songs strug­gle to suf­fi­cient­ly estab­lish them­selves. The way in which song­writ­ers and their work are per­ceived with­in the indus­try has a direct impact on their abil­i­ty to build their rep­u­ta­tions.21Each pri­or work “serves as an adver­tise­ment for future works and an artist’s rep­u­ta­tion is built upon her entire body of work.”22 Although the song­writ­ers are paid regard­less of whether con­sumers rec­og­nize a song as their work, attri­bu­tion is still an extreme­ly impor­tant tool for build­ing rep­u­ta­tion and indus­try recog­ni­tion, which direct­ly affect a songwriter’s abil­i­ty to secure sub­se­quent song­writ­ing jobs. 23For exam­ple, pur­vey­ors of real­i­ty tele­vi­sion are famil­iar with Kan­di Bur­russ’ role on  The Real House­wives of Atlanta, but are less like­ly aware she was the song­writer for Destiny’s Child’s Bills, Bills, Bills, among many oth­ers.24

A poten­tial rea­son for this lack of song­writer emi­nence is that many cur­rent music-lis­ten­ing vehi­cles do not sup­port prop­er attri­bu­tion. For song­writ­ers, CDs are the ide­al vehi­cle for musi­cal con­sump­tion because they list every sin­gle con­tribut­ing writer on the pack­ag­ing. 25Unfor­tu­nate­ly, while CD sales hit 730 mil­lion in 2000,26 they had dropped to 50 mil­lion in 2016. 27 In CD sales’ place, 208.9 bil­lion songs, or the equiv­a­lent of 139.2 mil­lion album units, were streamed on demand between Jan­u­ary 2016 and July 2016, alone.28Unfor­tu­nate­ly for song­writ­ers, lis­ten­ers stream­ing music are unlike­ly to  encounter song­writ­ing cred­its unless they go out of their way to search for them.29 While lis­ten­ing to a song on iTunes, for exam­ple, the con­sumer sees the names of the per­form­ing artist and the label, the tech­ni­cal attrib­ut­es of the song, and typ­i­cal­ly a list of the oth­er songs the per­form­ing artist has avail­able on iTunes.30There is no men­tion of the song­writer.31

Anoth­er poten­tial rea­son for this lack of song­writer emi­nence is that some per­form­ing artists tend to nego­ti­ate song­writ­ing cred­its on songs to which they were bare­ly a con­trib­u­tor. For exam­ple, Bey­on­cé has said “[y]ou know when I was writ­ing the Destiny’s Child songs, it was a big thing to be that young and tak­ing con­trol.”32 Not only did Bey­on­cé not write a sin­gle Destiny’s Child song by her­self, but almost every song for which Bey­on­cé is giv­en song­writer cred­it also cred­its a full list of actu­al song­writ­ers.33Fur­ther, Bey­on­cé was rec­og­nized as ASCAP’s 2002 Song­writer of the Year for writ­ing Jumpin Jumpin, Sur­vivor, and Inde­pen­dent Women;34 yet, song­writer Cory Rooney, who penned Inde­pen­dent Women with her, plus Jen­nifer Lopez’s I’m Real, Play, and Ain’t It Fun­ny, in addi­tion to sev­er­al oth­er songs that same year, received no recog­ni­tion.35Thus, song­writ­ers can eas­i­ly end up over­shad­owed by a big­ger name claim­ing writ­ing cred­it, becom­ing swift­ly over­looked.36

Per­form­ing artists gen­er­al­ly already have more bar­gain­ing pow­er and expo­sure than most song­writ­ers, and the PROMOTE Act will have the unin­tend­ed con­se­quence of fur­ther deplet­ing a songwriter’s chance of air­time expo­sure. Thus, while it is undis­put­ed that per­form­ing artists deserve roy­al­ties for ana­log plays in addi­tion to dig­i­tal plays for their sound record­ings, there must be a way to do this with­out dis­re­gard­ing hard-work­ing song­writ­ers. Maybe next year Con­gress­man Issa can roll out the PROMOTE Act 2.0.

Author: Becca E. Davis

Managing Editor, GEMALaw Review Georgetown Law, L'18