The Flaws of the American Music Industry

For some time, performers a notch below Beyoncé and Taylor Swift have complained about the change in music delivery from CDs to downloads to streaming, today’s dominant system. The progression has chipped away at their already modest royalties. These gripes are legitimate, but even worse off is the nonperforming songwriter, who can’t go on the road and sell signed CDs and merchandise, and who takes home significantly lower royalties.

Desmond Child, the co-writer of Bon Jovi’s “Livin’ on a Prayer,” recently reported that the song had been played 6.5 million times on Pandora over three months, for which he had earned $110. There is also writer and performer Aloe Blacc, whose song “Wake Me Up” by Avicii was the most streamed song in Spotify history and the 13th-most-played song on Pandora since its release in 2013, with more than 168 million streams in the U.S. yet yielded only $12,359 in Pandora domestic royalties, which were split among three songwriters and the publishers.

A musical composition (“the publishing” in music-industry parlance) and its recording (“the master”) receive separate copyrights, with separate licensing systems. There are dramatically different rate-setting mechanisms: Broadcast radio pays royalties for the composition, but nothing for the recording. Digital media—Pandora and satellite radio, for instance pay for both, but nobody pays for recordings made before 1972, which are not protected under federal copyright law.

 It has been 40 years since the last major overhaul to U.S. copyright law. Today’s technologies of music distribution bear no resemblance to those of the 1970s, and songwriters have borne the brunt of the ever-widening disconnect between law and reality.

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