Earlier this month, Amazon, Google, SiriusXM and Spotify challenged the Copyright Royalty Board’s decision to increase the compulsory mechanical rates paid to songwriters by 44% over the next five years. The streamers have come under fierce criticism for the move, which they claim is over the complexities of the CRB’s rules but is widely assumed to be an attempt to obtain a more favorable rate. Over the weekend, news broke — via a leaked private email from Advanced Alternative Media CEO Mark Beaven — that Spotify is considering holding Town Halls for songwriters in Los Angeles and Nashville to discuss the matter. (Spotify declined comment but sources close to the situation tell Variety that such meetings are in the works.) Beaven, who called his initial email “overstated and overly dramatic” and noted that it was never intended to be seen by anyone but the addressees, has revised the letter. It appears in full below.
Dear Songwriter Family and Friends,
I am sure you are aware of Amazon, Google, SiriusXM/Pandora and Spotify’s legal challenging of the Copyright Royalty Board’s rate increase for songwriters, which would raise rates 44% incrementally over the next five years.
Songwriters are a grassroots community and as such have little organized structure to combat bad actors and events in the community. That is why songwriters fell so far behind with streaming services: Labels, with their greater leverage, got there first in licensing their content and songwriters got squeezed. We are still fighting our way back to the balance they should enjoy.
As you may know, the songwriting and publishing communities, with the adept leadership of the NMPA, achieved the CRB increase — it’s not where we wished to end up based upon where things started; but, it’s an excellent and meaningful step forward in both compensation and respect for songwriters.
These four streaming services wish to challenge and take back that increase. Remember, as history, Spotify started their negotiating position with the rate court with the premise that songwriters would get less rather than more. Yet songwriters are put forth as a key feature in Spotify’s consumer-facing Secret Genius campaigns and the awards — while the company attempts to claw back significant earnings from them.
For the music industry to be healthy for all, songwriting needs to be a viable business, one with a measure of middle class. Hits make money — for songwriters, nothing else really does at this moment, and only those regularly writing hits can sustain themselves. If, say, a sizable hit generates $1-2 million for its songwriters over its one-to-one-and-a-half year life, these days there is generally not just one one writer — it’s often up to eight and even more — and most successful songwriters have a publisher and team, which get a good percent. Then there are taxes to consider, along with living expenses and other basics — and songwriters are often based in Los Angeles, New York or London, some of the most expensive cities in the world. The money just doesn’t go that far — even with a smash hit.
And most songwriters don’t have hits, or have them infrequently at best. And, without more songwriters feeling they can at least make a living, we find ourselves with fewer songwriters coming in — and mathematically fewer good and great ones. Without a steady influx of the best possible songs, how will music fare against the many other options for spare-time engagement?
Spotify is getting pushback from songwriters, publishers and their supporters — but, let me be clear: It’s not that Spotify is a not a friend, or isn’t otherwise adding value for songwriters. We just have some major issues of contention.
While this dialog is in process, Spotify is campaigning to put a friendly face on things. They are exploring holding “Town Halls” for songwriters in both Los Angeles and Nashville. It is a good idea. Based upon what is found in their published writings on the matter thus far, Spotify’s press team is adept at positioning their story, and many in the songwriting community have questioned their take on the CRB appeal (see Spotify’s blog post on it, and the NMPA’s response). Discussion and debate is healthy — but if there are to be such Town Halls, there needs to be a voice in the room representing songwriters that is familiar with all the issues and their voluminous details.
To that end, we suggest that NMPA CEO and chairman, David Israelite (or a designate), be involved in these Town Halls, as well — along with interested parties such as Songwriters of North America, Nashville Songwriters Association International and the press, along with any of the entities challenging the increase. If Spotify doesn’t agree to this, songwriters should strongly consider not attending and respectfully advising Spotify they will not do so until there is an open forum. If such a gathering is to be genuine, it should be truly a forum for all voices and opinions in the matter.
Spotify made a lot of money with its public listing — and, well done. But, their existence is based on offering access and curation to works created by songwriters.
Streaming services are not villains; they are businesses. As such, they must recognize songwriters as essential to their business and ensure they are healthy and able to create. Both parties need each other and must find a better way forward.
Thank you in advance for standing up for songwriters and yourself. This isn’t the first challenge and it won’t be the last. A united front holds firm into the future, and ensures our best music.
I wish you well.
Mark Beaven is founder and Co-CEO of Advanced Alternative Media, Inc., a 37-year-old management company representing profile songwriters, producers, mixers, artists and executives.