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Ne-Yo calls on American legislators to overhaul music licensing laws
By Chris Cooke | Published on Friday 24 April 2015
Ne-Yo has called arguments presented by Spotify and Pandora in defence of the streaming business model “offensive and inaccurate”, while arguing that the current royalty structure in the streaming domain has put “American songwriting on the verge of its own collapse”. Which are dramatic words for sure.
The R&B star has penned a piece for Washington-based Roll Call amidst a flurry of music copyright debates in American political and legal circles, as Pandora pursues more favourable royalty rates through the Copyright Royalty Board and collective licensing rate courts; while artists and labels push for new laws to force AM/FM radio stations to pay royalties to sound recording owners for the first time; and the publishers seek a change in collective licensing rules Stateside so they can force digital services into direct deals away from the aforementioned rates courts, meaning they could demand higher payments.
Noting that streaming services often defend their business models by saying they are turning pirates into ad-revenue-generating and ultimately subscription-paying customers, Ne-Yo writes “as a songwriter, I find this to be an offensive and inaccurate argument”.
Very much pitching at Roll Call’s political audience, the singer goes on: “In most industries, the value of something increases with demand. The more people who want your goods or services, the higher the price you can expect to receive for them in the marketplace. It’s basic fairness. But the music business doesn’t work that way. How much a songwriter gets paid is mostly determined by federal regulations, rather than the free market. This regulatory system was created more than 70 years ago and has not been updated since 2001, before the introduction of the iPod and before streaming music was made popular”.
While supporting an overhaul of American licensing rules, so that music publishers can start direct dealing with streaming services to up their payments, Ne-Yo also references the disparity between the streaming monies earned by labels and publishers, acknowledging that the solution to his concerns is not just the mainly loss making streaming services paying more.
He writes: “Songwriters see the smallest fraction of royalty payouts because we are limited in how we can negotiate. Meanwhile, record labels and recording artists often earn twelve to fourteen times more than songwriters for a stream of the exact same song. As an artist who has experienced both sides of this split, I can personally speak to the nonsensical disparity between these different incomes”.
Calling for US Congress to back an overhaul of licensing rules and a rewrite of the so called consent decrees that govern collective licensing in America, Ne-Yo stresses that this isn’t for his benefit (possibly aware that consumers don’t always respond well to wealthy superstar artists calling for higher royalties – resulting in things like this).
He notes: “I’m fortunate to have the opportunity to earn a living off other revenue streams, such as concert tours and merchandise. But for my fellow songwriters, whose craft is focused on the powerful written word, music licence royalties are their sole source of income”.
Read the full op-ed piece here.
