Independent Music Makes Its Case to Congress
The desire for virtually all of America’s largest media companies to get into the business of music streaming in some capacity or another has potentially created the biggest strain on the music economy, and especially the independent music economy, that the industry has ever seen. Amazon, and now YouTube’s attempt to gain a market advantage against its competitors by paying out rates that are even less than the measly rates streamers like Spotify and Pandora pay out already has now created a fractured situation where some artists are not included on these formats, and YouTube has threatened to lock out all music from independent artists and labels who refuse to sign up for their anemic royalty rates.
There is no economic basis for these streaming services. They are getting into the business because of peer pressure, and because they feel they need to have a music streaming arm to partner with wireless providers such as AT&T and Verizon, and to be viable on mobile devices. Nobody is making any money however, not the artists, not the industry, and not the providers. It is all predicated off of a cheap or free model to entice consumers to the provider’s subscription rolls in order to monetize that presence in the future with cross-promotional opportunities.
READ: Look This Is The Deal With Independent Music Getting Pulled from YouTube
On Wednesday, The United States House of Representatives’ House Judiciary Subcommittee on Courts, Intellectual Property and the Internet took up the issue in an open hearing, specifically taking up the matter of music licensing Under Title 17 Part 2 of the current law. Multiple members of the independent music community came to testify, including Rosanne Cash, daughter of Johnny Cash, who listed her grievances to the hearing in a prepared statement.
Rosanne told the committee:
…To me as a singer/songwriter, a recording artist, and a participant in many other parts of the music business it seems painfully obvious that all creative people deserve fair compensation when their work is used by others For various reasons, that does not seem to be happening in the marketplace today, and we need a realignment
I have been publicly critical about the payment structures streaming services currently offer artists. For example, for an 18 month period, there were nearly 600,000 streams of my songs on a popular subscription site. I was paid $114.00 for those streams. I am not a lawyer or a politician or a policy wonk, and I couldn’t begin to parse the incredibly complex, outdated, pre-”Internet laws regarding licensing and copyrights but I CAN tell you that I see young musicians give up their dreams Every Single Day because they cannot make a living, they cannot survive doing the thing they most love, the thing they just might be on the planet to do.
There are three main points of contention Rosanne laid out to the committee about the current law:
- The lack of a public performance right for terrestrial radio play for sound recording artists.
- Issues concerning how rates are set for compulsory and collective licenses songwriters offer for their work.
- The lack of federal copyright protection for pre-”‘72 sound recordings.
Also testifying today was Darius Van Arman, the co-owner of Secretly Group, an Indiana-based independent label group. Van Arman also serves on the boards of A2IM, SoundExchange and Merlin. A2IM and Merlin are organizations made up of independent labels and artists banded together to attempt to advocate and negotiate globally with bigger institutions over rights. In an editorial posted prior to his Congressional testimony, Van Arman spelled out how independents are currently getting the short end of the stick.
American independent labels want nothing more than a free market with a level playing field. But one thing is standing in our way: market concentration. Big companies are using their power and accumulated resources to take what is not fairly due to them, to the detriment of independent labels, artist creators and songwriting interests. So when Congress reviews the state of music licensing and considers any remedies or revisions to copyright law, it should take great care not to replace our current licensing system with one that is more privately controlled, that leads to more market concentration, or that diminishes the fair and equitable compensation of creators.
Twenty-five years ago, there were six major labels in the recorded music market in the United States. Today, just three companies exist, comprising 65.4% of the recorded music sales market in the United States, based on copyright ownership. These three major recording companies control an even higher percentage of the total market share of U.S. music distribution. Using their concentrated market clout, these large recording companies have become proficient at extracting more than their fair share of copyright-related revenue from the marketplace. They hold up digital services for big, lump-sum payments — whether they are in the form of advances or guarantees — that well exceed what they expect to earn via royalty rates…..
In the end, all the independent sector wants is a free market with a level playing field. We want to compete, to provide the economic growth and job creation that our American economy needs. Is that asking for too much?
Though the copyright-related revenue issues have been a big burden on the music industry for a long time, the Congressional hearing couldn’t be any more timely. YouTube is reportedly days, maybe hours away from launching their new streaming format that would stamp out a large percentage of independent music on the service, making an even more uneven playing field for independents. Music, especially independent music, is on the brink of losing any economic viability it has left, and revisions to Title 17 Part 2 of the current law may be the only way to save it.
June 25, 2014 @ 3:09 pm
Good grief, this is horrible. This is the reason I continue to buy CDs as opposed to utilizing streaming services, even if I’m not overly fond of the artist; they all have a right to be paid for their work regardless of my opinion of them. Any idea when this hearing is supposed to take place? And do we have any idea which side Congress is looking to align itself with?
June 25, 2014 @ 5:19 pm
Whoops. Guess I read too fast. Wednesday, apparently. Sorry about that.
June 25, 2014 @ 3:42 pm
The best long-term solution for this would be for the indy labels to pool money to create their own streaming service. From there, websites such as this one can spread the word, and hopefully the indy groups will end up with a substantial return on investment.
June 25, 2014 @ 5:50 pm
Reminds me of the South Park episode where all the people complain about the big box store dominating the little guy so the whole town supports the little guy who then gets really big and dominates the next round of little guys and so on…
What happens when the independent streaming service starts getting big and then the next gen of indie acts complain and so on, and so on…
June 25, 2014 @ 5:53 pm
The true advantage of the Internet is that, unlike radio and TV, it is an effectively unlimited resource. When the next gen of indie acts comes along, they can found yet another streaming service (or whatever the cutting edge music consumption tool will be by then), and so forth.
June 25, 2014 @ 6:04 pm
Yeah, maybe. But by definition these smaller entities have less resources to continually fight the current big guys.
I honestly don’t know that there is an answer to this problem. We may be just entering a time where there are very few people able to make a living playing and recording music. As many have said on the site there are fewer and fewer opportunities at every level of the industry and that just might be the new reality.
June 25, 2014 @ 4:07 pm
Quite frankly this is a big part of how techology has fucked over the music industry. With so much music available at everybodys finger tips people have completely lost the magic and excitement of recorded music, whether it be on vinyl, cassette, cd, or fucking 8 track tape there used to be a magic in buying an artists album and the pure anticipation of putting it in and listening to it over and over again. This is one of the catch 22’s that makes me almost wish the fucking internet would would go away, I am just as guilty as the next person for indulging in itunes and such, but as a musician I also see first hand the effects of these trends. It’s not as easy to hit the road these days and make a living as there just isn’t that many venues accepting live entertainment, cost being a big reason, but secondly compared to 25 years ago it seems a vast majority of people just don’t give a fuck whether or not they hear a live band when they go out, as it’s just easy enough to pull out their fucking cell phone and watch youtube or download and listen to music or even radio for that sake. Stronger laws need to be put in place to protect our artists and keep that music around for years to come.
June 25, 2014 @ 5:23 pm
I have to agree that many people seem to have lost respect for what music is and should be. Even DJs spinning music for night of dancing at a club basically phone it in and nobody really dances because the DJ is asleep at the wheel and the magic isn’t their because music the music business has lost it’s way. And radio is also phoned in. A DJ used to be a great profession and I have my heroes I look to in the field. But ugh… it’s just so sad.
And frankly the issue that we have to face but I doubt will be able to overcome is people what stuff and by cheap they usually mean free. Nobody know WHAT anything is worth any more artistically because people just don’t pay for it and certainly don’ pay what it is worth.
As for live shows, I am lucky my area has great venues that thrive at least for now. I just saw Carlene Carter at the F&S (she had some great stories) but her show was mainly people older than I was. I don’t often see too many young people at these venues unless their parents bring them. And many venues we do have have to cater to more mainstream acts or they will not make it, which means the indie acts have to play an off night usually to a tiny crowd. (sigh) I don’t know what one can do but buy music and support live performance. But that won’t help the young person trying to get that first record cut.
June 25, 2014 @ 5:32 pm
F&S? Isn’t that in Berkeley? Your suggestion that the audience at the venue consists largely of older people and children, with very few young adults, is interesting considering that Berkeley is a college town.
June 25, 2014 @ 6:03 pm
If you’re talking about Freight and Salvage, it’s definitely an older crowd. I’ve been there a few times. There is a 50% discount for people 30 and under.
June 26, 2014 @ 1:29 pm
Yes it is in Berkeley and I am guessing the college demographic is largely Asian and Indian who don’t really care about our roots music. Maybe they go to other venues but the venues playing great live music and not just a bar with a college band are populated mainly by older folks, those who grew up in the 50s/60s/70s. I am an anomaly and it seems I always have been when t comes to music.
Even Yoshi’s , which gets FAR more mainstream acts still only draws the 40 over crowd usually, Even when they get a popular young act. Maybe it is because young people have no disposable income. Which, funny enough since it seems many young people don’t pay for music I wonder WHAT they are spending their money on? Films that hey talk or iPhone through, clothes… It is a very weird time right now.
June 26, 2014 @ 1:50 pm
UC Berkeley’s student population is about 45% Asian and 30% white. I am sure the vast majority of white students do not care about roots music either.
Also, I would be careful before generalizing that people of Asian descent do not like roots music 🙂
June 25, 2014 @ 6:12 pm
The general apathy of today’s young music listener is palpable . This is why so much more underwritten , generic ear candy gets by on the radio . An apathetic , uninformed listener just accepts what he/she is fed…especially if its free .
June 26, 2014 @ 7:34 am
Totally disagree. The internet makes it possible for independent bands to sell their product directly to consumers without the need for a major label intermediary. For example, I’m into folk metal. I’ve bought three or four albums directly from european folk metal bands who play at tiny metal bars in places like Slovenia for 25-50 people, yet because of sites like Bandcamp, they can sell CD’s or downloads direct to consumers all over the world.
Does anyone think Hank3’s current business model — record in his basement, order a cd and his mom puts it in a box and sends it to you, sells out clubs all over america when he tours — would be viable in a pre-internet world?
If there’s a future for independent music — and there is — it’s in direct-to-consumer sales and live perfomances.
June 25, 2014 @ 6:16 pm
I use a streaming service and I pay for the premium version. And it IS cheap. $9.99/month. That’s cheap. I would gladly pay twice or three times that much for what I get. But I don’t know how many people would.
I also purchase CD’s. But I use the streaming service to give a record a few listens to determine whether or not I want to make the purchase. Because quite honestly, I don’t need the clutter around for a CD I only listen to every once in a blue moon or one that only has a couple of songs I like.
The main problem is that music has been devalued. It’s really complex issue with many moving parts. The business model of the industry did not keep up with the changes in consumption in a way that it would be profitable for both artist and industry. itunes valued a song at $0.99 (sure they’ve gone up to $1.29, but still). That is basically the same price as “cassingle” (casette single) 25 years ago. 2 songs for $1.99. Yeah, I understand that there is not the cost involved in reproducing digitally as there is with manufacturing CD’s. But even CD’s have not substantially increased in price since their introduction.
Then the industry got into bad deals with the streaming services that basically screwed over their artists. Maybe they felt they didn’t have a choice. Or maybe they didn’t fully understand where it would all end up.
I don’t know, it’s all speculation on my part, but whatever it is, the music industry as a whole is not in good shape these days and that’s sad.
June 26, 2014 @ 1:30 am
I know I mentioned this on another post but Vince Gill said something about artists be sorely mistreated and under valued and his example was you could by an app that makes fart sounds for the same price as one of his songs. So I agree with you on that point for sure.
June 26, 2014 @ 8:42 am
There’s obviously a problem, part of it being greedy corporations (both record companies and corporate radio, and now streaming services)… but also apathy on the part of the consumers. With instant gratification through the Internet these days, whole generations now expect to get entertainment for next to nothing. Using my old man voice, there was a time when you expected to spend money to ‘own’ an album of music from your favorite artist. Now you pick up your iPhone, hit your YouTube app and pick a video of the song. Or, you pick a streaming app and listen to all kinds of stuff without commercials and without paying a penny, or at most a few pennies a day.
Streaming does have a place for the music lover, especially those that understand that the artist needs to be compensated. I stream to discover new music, and if it resonates with me, I buy the CD. I keep a running list of songs I hear that interest me, and every so often I go on a buying binge of these new artists, picking up CDs. Some of my favorite albums of the last 10-12 years were discovered this way. I think it’s also important to support live music, and buy CDs at the show. More money to the artist, and not the retail supplier. I’ve helped support local and regional bands, both by going to their shows, buying their CDs, shirts, stickers, etc., and by chipping in on their Kickstarter campaigns. You know things are tough when bands that have been around for some time have to resort to asking fans to spend money up front so they can produce a new album…
June 28, 2014 @ 5:38 am
Yes! I was talking about this with my husband, who’s in a band (in addition to a day job). There is so much to this. I was asking, “what’s next?” Are fewer people going to be making music? He brought up kickstarter, and said he thinks we’re going to see a lot more bands doing kickstarter campaigns to make albums. And they’re probably going to be touring more, and longer in between releases.
As many have brought up, tech/the internet is a blessing in that you can have your music be heard around the world. As a fan, you can discover more music…but the curse! That’s been discussed heavily here.
And, yes, WE can help our favorite independent artists by going to shows and buying merch, buying the albums, volunteering to drive your friends somewhere and insisting on picking the music and turning them on to some great stuff…
This whole thing is so interesting to me, and there’s so much to it. I don’t think anyone has the answers, including the industry or the artists.
June 28, 2014 @ 4:01 pm
I know Trig has expressed his disdain for crowd funding on this site in the past. But Amanda Palmer makes a compelling case for how it can work.
Think of it what you will, but it’s an interesting watch.
https://www.youtube.com/watch?v=xMj_P_6H69g
June 27, 2014 @ 2:27 pm
Online music streaming is awesome. I love it. My personal choice is Spotify. I still buy plenty of CDs and music tracks/albums via iTunes, but as a music consumer there is nothing bad about streaming music online for free – or a premium charge.
I agree there needs to be some fixes in the payout structure, and there just might be some big changes down the road for online music services, but for music discovery there is nothing better than a good streaming platform.
I have fond memories of reading my music magazines and spending hours at the record store, but now it’s about hearing about a band, or a song, and dialing it up on my laptop right away – to enjoy!
And I have enjoyed a lot of music, new and old, because of the ability to search Spotify (or YouTube, etc…).
I’m in no way knocking Roseanne Cash’s argument, but I have to be honest and say I love music streaming.
July 5, 2014 @ 2:36 pm
There may be a 3rd option that supports both independent musicians and music lovers. Remember the old jukeboxes? Mix that with micropayments!
Musicians join a coop where they post their music. Each time someone clicks on it, they get a partial payment like a jukebox (maybe a penny). Money comes either from a general subscription to the coop or separate accounts.
That is a little too complex for the net we have now, but not for the future.
That’s part of the art and media revolution coming out of Dallas.