You Know What’s Not Funny- One Trillion Streams and One Billion Dollars In Unpaid Royalties For Comedians
First they came for the songwriter’s money, next they came for the comedians.
There are over one trillion streams and over $1 billion in royalties that should have been generated and paid to comedians (and other spoken word performers) from broadcasts and streams of comedy recordings on Spotify, Amazon, Apple Music, YouTube, SiriusXM, Pandora, and others that were simply never paid.
These royalties are for the second, separate copyright for the non-musical recorded words called “literary works”.
For example, Arista Records hired Whitney Houston to sing the song “I Will Always Love You.” Arista Records owns the sound recording, but Dolly Parton wrote the lyrics and the melody (aka the “musical composition”). Each time the Arista Records’ recording streams on Spotify, Apple Music, Amazon Music, plays in a YouTube video, or is broadcast on digital radio like SiriusXM and/or Pandora, there are two separate and distinct licenses, two separate and distinct royalty payments, and two separate and distinct pipelines to pay the money. One royalty is paid to Arista for the recording, and a second, separate royalty is paid to Dolly for her “musical composition.”
The exact same principle holds true when there is a sound recording of non-musical spoken words like a comedy routine. For example, in 1972 George Carlin recorded the comedy routine “Seven Words You Can Never Say on Television” for his album “Class Clown” released on Atlantic Records. Atlantic owned the sound recording, but George Carlin wrote the words that were recorded. Just like Dolly Parton, every time the Atlantic Records’ sound recording of George Carlin streams on Spotify, Apple Music, Amazon Music, or plays in a YouTube video, or is broadcast on digital radio like SiriusXM and/or Pandora, there are two separate and distinct licenses, two separate and distinct royalty payments, and two separate and distinct pipelines to pay the money. In this case, one royalty is paid to Atlantic for the recording and a second separate royalty is paid to George for his words.
As George Carlin’s words are not music, they are called a “literary work.” Just a different name for the type of copyright when it’s not a song. But, despite copyright law requiring those that want to use George’s words to get a license and then make a royalty payment for the use of his words, George, and his estate, never got paid a cent, or in the case of streaming, a fraction of a cent, from the hundreds of millions of past and ongoing streams and broadcasts occurring around the globe of the recordings of his words. And neither have most of the world’s other comedians.
Over the past 12 months I have talked with or contacted Warner, Sony, Universal, Nettwerk, BMG, Comedy Central, 800 Pound Gorilla, Comedy Dynamics, Spotify, Apple, YouTube, SiriusXM, Pandora, and others regarding over four thousand comedic sound recordings across 400 albums from Word Collections’ represented comedy literary works, created and owned by legends and luminaries, asking for royalty payments and proof of licensing. With the record labels, I have provided: copies of their own sound recording agreements that state they must pay royalties; proof of unlicensed and infringing uses; copies of their own royalty statements showing no payments; and proof of the countries in which they authorized the exploitation of the recordings.
With SiriusXM and Pandora, I have provided copies of their own public Security and Exchange Commission filings as well as SoundExchange statements proving they broadcast the recordings of the unlicensed literary works and that there has been no royalty payment for the use of the underlying literary works.
For both the labels and SiriusXM/Pandora, knowing they just got caught breaching contracts and/or infringing on copyright, and worried about the precedent, cost, and exposure it will mean to them, they either don’t respond or try to invent a legal theory or loophole to defend their actions, mitigate their liability, and avoid making payments.
As an example, I had two recent conversations with Sony and Warner with both stating (and I kid you not) that despite them distributing the recordings to Spotify, Apple Music, Amazon Music, YouTube, etc., and making money off the recordings from streams around the world, they do not have to pay royalties to artists or comedians from the streams; they can keep all the money and pay the artist and comedian nothing. One of them went on to blame Spotify, Apple, and the other streaming services. Comedy Central (owned by Viacom), hired a big name outside attorney to try to mitigate the damage due to their entire roster of releases being comedy (which means it appears none of the comedians that helped build Comedy Central are getting paid what the should be). Nettwerk Records and Comedy Dynamics went silent suggesting they are using the tried-and-true strategy of “what are you going to do about it,” and Universal, after not paying, said they would get back us. BMG has not responded one way or another.
SiriusXM and its subsidiary Pandora (SiriusXM bought Pandora) are no different. Despite Pandora writing into its many still public documents filed with the US Securities and Exchange Commission between 2012–2017 that they were unlicensed for the literary works, creating significant risk for the company (found in the Pandora Content, Copyrights and Royalties paragraph), they too went silent and then hired an outside attorney to try to mitigate their damages.
As per usual, their business model is fire first, aim second and wait to get caught. Once caught, it’s simply about using whatever strategy they can to pay out as little money as possible to the creators that give them their value despite the law and their contractual royalty obligations. This unfortunately is just the way things work now. It’s more obscene than Gilbert Gottfried’s telling of the infamous Aristocrats joke. For me, it’s about right and wrong, humanity, legacies, bullies, how a person should get properly paid and how the world should work.
Word Collections continues to grow. More clients and rights are being assigned. As they do, the collective weight and liability of what the labels, SiriusXM, Pandora and others are doing gets increased exponentially. It may take weeks, months, or years, but this issue will not go away. As I did for songwriters, music publishers and recording artists, I will pursue it without hesitation and will do so endlessly. Water on stone made the Grand Canyon.
In addition, as they shuffle their feet and throw out tired and bizarre theories it allows more information to be gathered. As one example, we are now reviewing many of our comedian clients’ sound recording agreements not only regarding what literary work royalties should have been paid that have not, but also to understand if the sound recording royalty should have been paid at a higher rate as seen in the B.T. Productions v. Aftermath Records lawsuit (The 9th U.S. Circuit Court of Appeals held that record labels’ agreements with digital distributors are licenses, as opposed to sales, which gives the recording artist bigger royalty payments).
The wanton disregard these companies have for the artists who created the comedic routines, monologues, and songs will stop. For them the liability is potentially billions of dollars in infringement damages and true-ups for improper accountings, missing payments, and legal precedents that will impact them globally with the press and media pick up to amplify this message via some of the most important cultural icons to ever walk this planet.
The creators, artists, and comedians I am privileged to represent will get paid. This is not a matter of “if” but “when”.
Jeff Price is the Founder and former CEO of TuneCore and Audiam.
