Copyright and music
A brief history
David Byrne has recently become the latest artist to raise the question how ill, or well, the current state of copyright laws and licensing fees bodes for the future of music. On the one hand, extensions to copyright, especially in the United States, have locked up a good deal of older music, the rights to which don’t all belong to their originators, while on the other hand, streaming services pay only a tiny fraction of a penny for the play of a song, and even well-known artists are seeing, at best, a trickle. As the music biz moves from a download model to a streaming one, it’s increasingly clear that — except for a few mega-stars and older artists with large catalogs —there’s very little money to be made for recorded music. This puts, as Byrne notes, enormous pressure on up-and-coming artists.
But how did we get here? Music, unlike other forms of copyrightable material, has a very complex system of rights. There are at least four layers of copyright in a recorded song: 1) The composition itself, and its potential publication in the form of sheet music (once a profitable business), known as publishing rights; 2) An actual artist’s performance of any given composition, including all the acts of interpretation and any variations on the composition; 3) The physical embodiment, if any, of this performance, known as mechanical rights; and 4) The right to broadcast or transmit a given recorded performance, which itself is treated differently for land-based media and satellite services. All of these, of course, were once separate domains: the sheet-music industry/print, the recording studio, the record company or “label,” and radio stations — but all are now funneled into a single, complex system that for most users ends invisibly in a hand-held device such as a smartphone or tablet.
The music industry has always followed the money, with artists scrambling along behind them. In the era before recording, sheet music sales in the millions of copies were possible, and could make a composer wealthy. When commercial recordings were first released in the 1890's, additional monies flowed in from the sales of cylinders and discs, but it was still the sheet music that earned the composer the greatest income, as any “cover” versions of a song still paid publishing royalties. When broadcast radio music rose in popularity in the 1920's, it posed a problem — one could think of radio as the first ‘streaming’ media — how to be paid for something so ephemeral that it was tossed into the airwaves, enjoyed, and then vanished? This led to the establishment of Broadcast Music International (BMI) and a fixed royalty rate for each airplay; the rate per play was small — mere pennies — but since thousands of of plays on hundreds of stations were possible for a hit, by the 1950's, the money from record sales and radio play outstripped that from the publishing rights — leading, among other regrettable developments, to Pat Boone’s cover versions of Little Richard’s songs. Since Little Richard, in many cases, had had to split composition royalties with others (many of whom had nothing to do with the song — DJ’s such as Alan Freed often got a composer credit as an incentive), he got only whatever his label paid per each record sold, plus the on-air royalties for his recordings. Pat Boone didn’t get any composition royalties at all, but he got a per-unit royalty on every disc for the mechanical rights, plus the full broadcast royalty, with more plays on more major market stations, often making more on a song than Little Richard.
New artists faced an uphill struggle. When getting their first big record deal, they were often induced to sign away publication rights for a flat fee, which siphoned off a large source of revenue; their label considered the signing amount as an “advance” to be repaid from royalties, and their management firms took a chunk out of whatever was left, as well as a hefty percentage of concert and endorsement reevenue. The industry also found all kinds of smaller ways to deduct money from the royalties due to performers — well into to the twenty-first century, for instance, a “breakage fee” of 10% was assessed, a hold-over from the days when a certain number of 78's would break during shipment, and all the little perks — limo rides, meals, hotel rooms — that had at first seemed free were deducted from the amount owed the artist. With all that, plus overhead, many artists were told that their first album actually lost the label money, and a new disc that shipped fewer than 150,000 units was deemed a failure.
But of course all this sounds antiquated today. There isn’t really much of a “music industry” left, except for top-grossing megastars, and the big new “label deal” is surely a thing of the past. Some artists, and a few boutique labels, still make a modest amount from beautifully-designed CD’s and LP’s, sold at concerts or directly online, but the major labels and markets of today are a sort of numbers game, even more skewed to mass sales than in the days when there was a physical “unit” to be sold. With major services such as Spotify paying a mere $0.007 per play, and satellite services such as SIRIUS paying even less, it’s hard to imagine that the new acts of today will ever be able to count on any substantial revenue, beyond what they make touring, from their music.
