US publishers push for music industry unity at NMPA AGM

US publishers push for music industry unity at NMPA AGM

Industry unity, fair rates for songwriters, reforming the consent decrees and putting an end to the safe harbour system were among the topics discussed during the densely packed 99th annual meeting of the National Music Publishers Association. 

The event, which took place June 8 at the Marriott Marquis in Times Square in New York, was held in a larger room than last year to accommodate the increasing number of people who attend what has become a fixture in the agenda of the US music industry. Representatives from such organisations as the RIAA, A2IM, the Recording Academy, ASCAP, BMI, SESAC, Global Music Rights, SoundExchange, the MMF, among others, were present at the meeting. 
 
David Israelite, president and CEO of the NMPA, started his state of the industry address by revealing that the US publishing and songwriting industry was worth more than $2,5bn, up the previous year ($2.1bn in 2014 and $2.206bn in 2013), "but growth is not where it should be," he added. Of this sum, 57% came from performance rights, 20% from syncs, 18% from mechanical and 6% from "others" in particular lyrics. "When we talk about of future our number one challenge is getting fair value for the songs," said Israelite. 

He noted that performance rights were growing but were challenged by the consent decrees that rule RPOs ASCAP and BMI. The industry has been involved in the past two years in the review process started by the Department of Justice. As an example of how things could improve for publishers and songwriters, Israelite mentioned Pandora, a company that had for long challenged in court royalty rates paid to compositions. "Their business model needed to change so they voluntarily doubled what they paid to our industry," said Israelite. "What does that tell you: That our rates do not represent the true value of music.” 

Israelite also stressed the need for the industry to be united in order to grow the overall business, rather than fight each side, which he called the "One Music" strategy. For its part, Israelite said publishers supported without conditions or reservation the Fair Play Fair Pay, which called for performance rights for sound recordings or copyright to apply to pre-1972 sound recordings, as well as higher rates for sound recordings paid by satellite digital services. "We have done our part," said Israelite. 

The recorded music industry was also asked to do its part, especially as the new Copyright Royalty Board's rate proceedings were underway to determine the mechanical rights paid online (procedure known as section 115). Israelite revealed that five hours before the AGM, the NMPA and Universal and Warner have decided to settle with the NMPA on the CRB proceedings, while indie labels' organisation A2IM have decided not to go to the CRB because "they care more about their relations with publishers," said Israelite, who added: "They recognise that we should not be fighting about dividing the pie, but instead growing the pie.” 

Jay Rosenthal, a partner at Washington, DC-based law firm Mitchell Silberberg & Knupp, and former General Legal Counsel for the NMPA, tells Music week that this decision means that Universal and Warner “are not going to participate in the CRB proceeding, and the rates that are in place for physical product, digital downloads and ringtones will just roll forward. In exchange, the publishers will also push forward the late fee program for them – if they adhere to the terms of the late fee program, then the labels get a waiver of the late fee. Now Sony apparently did not join – so they still might litigate the CRB.” 

During the AGM, Israelite invited artist manager Irving Azoff (The Eagles, Christina Aguilera, Fleetwood Mac...) to join him on stage for a keynote Q&A. Azoff who recently published an open letter to YouTube about the use of safe harbours, added his voice to that of the industry to demand changes. He reiterated his pledge to see the safe harbours in the 1998's DMCA legislation come to an end and for YouTube to compensate fairly publishers and songwriters. "The DMCA is simply out of date," said Azoff, stating that YouTube and SoundCloud "should play by the same rules as their competitors," and that like Spotify and Apple, they should get licenses before they start business. I just believe that songwriters and artists should have fair compensation and control and the DMCA prevents that.” 

Azoff also said he was against the 100% licensing rule currently promoted by the Department of Justice that would allow anybody owning only a fraction of a song to be able to license 100% of the track. Azoff said that he found "deplorable" that the DoJ could considered that consent decrees should still apply. "If they go to 100% licensing, that would create havoc for songwriters," said Azoff. "I the long run, we have to do what's right for creators."  Azoff said that DOJ's plan could still be derailed if it went forward. He said that the music industry may be "a tiny industry" it has the attention of the media and could win "in the court of public opinion" to prevent fractional licensing to work. “There is a surge coming from artists. We cannot lose in the court of public opinion,” said Azoff. 

Azoff also made a call for the whole industry to pull together with a united front to achieve goals. "Look around you and at the sorry state of where we are as an industry," he said. "But look at big picture and look at the fight that we are fighting for cents and leaving dollars on the table. I do not think we can rely on government to change us that much. The power comes from the artists. Wake them up and make some noise, there is a momentum that can help everybody.”  

During the event, the lawyer John Eastman received the NMPA Lifetime Achievement Award from his son Lee, while Pat Collins, President of rights society SESAC, was presented with the Industry Legacy Award. In addition, Congressman Hakeem Jeffries, from Brooklyn, received the NMPA President's Award, in recognition of his support for the cause of songwriters. Last year, Jeffries was co-sponsor of the Songwriters Equity Act, a bill designed to address some of the issues related to rates setting for songwriters. In his acceptance speech, Jeffries reminded the audience that the founding fathers had written in the Constitution an article that gives Congress power to create a robust intellectual property system designed to promote the progress of science and useful arts.  “

They thought that the creative community should have to right to live from the proceeds of their works," said Jeffries. "That was why I sponsored the Songwriters Equity Act. We believe that songwriters have to be compensated." He admitted that there were "some hurdles in front of us." He invited the music community to show its unity and activate "the untapped power of the music industry.” 

Closing the event on a high, the NMPA honoured British songwriter and performer Sting. He was bestowed with the Songwriter Icon Award presented to him by Martin Bandier, the Chairman and CEO of Sony/ATV. "Sting stands for all that's great with songwriting," said Bandier. In his acceptance remarks, Sting noted that he was fortunate to have lived in an era when "songwriters were fairly compensated for our labour." He added that it was important for young songwriters to be able to make a living from their craft. "Songwriting is too important. We can't let it die out," he concluded before performing and acoustic version of Message in A Bottle (he also performed Next To You with The Last Bandoleros).

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