With One Voice - January 2023
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Welcome to the International Council of Music Creators (CIAM)'s newsletter.
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Save the Date - CIAM Forum: Making TikTok Work for You
Creators, colleagues and friends are invited to the CIAM Forum Making TikTok Work for You. The forum will take place via Zoom on Monday, January 23rd at 16:00 CET.
The 2-hour forum will focus on how music creators can navigate TikTok and get the most out of the platform. A Q&A session will take place as well.
Keynote speakers are TikTok Head of Music Publishing, Licensing & Partnerships Jordan Lowy and GEMA General Counsel Tobias Holzmüller.
Click here to register for the event.
Show Me the Money
After successfully protesting to the US Copyright Royalty Board earlier this year that a proposed frozen mechanical rate (at 2006 levels) for the use of musical compositions in physical product and full downloads proposed by the US National Music Publishers Association (NMPA) should be rejected, the coalition group Music Creators North America (MCNA), led by the US-based Songwriters Guild of America and the Society of Composers & Lyricists, have filed similar protests regarding new proposed streaming rates for the same period, 2023-2027.
Earlier this year, after asserting that it had built a substantial war chest with which to fight the billion dollar streaming services for fair market value streaming rates, NMPA announced it was seeking a preliminary royalty plan that would increase streaming payments to the highest of 20 percent of revenue, $0.0015 per play, 40 percent of the compensation forwarded to record labels/master-recording owners (the latter amount is referred to as TCC, or ‘total content cost’), or $1.50 per subscriber, calculated on a monthly basis.
Shortly after entering into negotiations with the streaming services, however, NMPA and the major publishers shocked the independent music creator community by announcing it had quickly agreed to jointly propose a new streaming royalty formula — which NMPA touts will set the ‘highest royalty rate in the history of streaming anywhere’ — that would escalate from 15.1% of revenue in 2023 to just 15.35% by 2027, the final year of the term. Meanwhile, for the stand-alone portable subscription offerings — like Spotify — the total content cost (TCC) component of the rate formula will be set at only 26.2% of what’s paid to labels for the entire term, or $1.10 per subscriber, whichever is lower.
The comments filed by MCNA assert:
[The proposal] appears to represent little more than a ‘give-back’ arrangement, negotiated between parties with potentially significant conflicts of interest, that could easily negate most if not all the substantial streaming royalty rate gains established but not yet implemented pursuant to the [prior streaming] proceedings for 2018-2022. The [new] ‘privately negotiated’ settlement proposal --which provides for a microscopic, phased-in rise in streaming rates of 1.66 percent in the aggregate over a five-year period in fact represents ‘growth’ so far below the current, near double-digit rate of inflation that by 2027, its adoption might effectively result in a streaming royalty rate in adjusted dollars that falls below the rates in effect prior to the 2018-2022 Phonorecord III adjustment.
If the parties to the proposed settlement believe that is not the case, owing to the hoped-for effects of other ancillary aspects of the settlement, they should be made to explain in detail how and why those speculative, “trickle-down” mechanisms (which do not include cost of living 'COLA' adjustments) stand a likely or even reasonable chance of preventing the slow motion, inflationary evisceration of the [US] mechanical streaming rate over the next five years.
For more read the latest from the Copyright Royalty Board here.
Why Songwriters and Composers need a Real Increase in Streaming Royalties
Recently, Billboard, the US based music industry publication calculated what proposed rates for streaming services for the next 5 years would mean for music creators whose works are streamed in the US.
“Billboard worked out a rough calculation of what the incremental rate increases could mean for songwriter income. It estimated that 1 million on-demand streams in the US could generate $1,380 in publishing royalties, rising to $1,389 in 2024, $1,393.53 in 2025, $1,398 in 2026 and $1,403 in 2027. Not a massive increase, but an increase nonetheless.”[1]
Assuming the numbers above are correct, here is a simple tally of the real revenue one million streams and ten million streams would put in the pockets of music creators in the last year (2027) of the proposed deal.
We assume a 50/50 typical publisher/songwriter split.
One million streams: Total writers share = $701.50 US (half the $1,403.00 quoted above)
- A cowritten song with two songwriters, each would receive $350.75 US
Ten million streams :Total writers share = $7,015.00 US
- A cowritten song with two songwriters, each would receive $3,507.50 US
In order for a songwriter to reach the current US poverty level of annual income of $13,590.00US (for an individual), a songwriter on a cowritten and published song would need almost 40 million streams, a staggering number.[2]
Since inflation is around 10% annually in many places around the world, the proposed increase is considerably worse than “not massive”.
In fact, it would amount to a substantial real world decrease from the already dismal revenues from streaming services music creators receive now.
[1] https://www.synchtank.com/blog/the-fifth-wheel-just-how-financially-secure-is-music-publishing/
[2] For reference, approximately 80% of all tracks on Spotify have been played less than 5,000 times. https://www.musicbusinessworldwide.com/over-75-of-artists-on-spotify-have-fewer-than-50-monthly-listeners/
Meanwhile in Asia-Pacific
On November 4th, 2022, APMA (Asia/Pacific Music Creators Alliance) Executive Committee meeting was held in Seoul, Korea. It was both a physical and Zoom hybrid meeting led by APMA Chair Myung Sun Yoon. ExCo members were joined by CIAM Vice Chair Arrien Molema to share updates with APMA. Below are some of the key agendas that were covered by the meeting.
Demand for the amendment of Copyright Act in Asia/Pacific region
A questionnaire was circulated by APMA Secretariat, compiled from requests from three sister societies - MCSC (China), MACA (Macau), and MOSCAP (Mongolia). All were united in their request for APMA to assist in promoting public awareness regarding copyright, and reaching out to respective governments to make changes. It was a salient moment for attendees to reconfirm the role of APMA as a positive and influential force for creators in the region.
International Music Creators’ Seminar
APMA ExCo attendees briefly discussed the ‘International Music Creators’ Seminar’ held on the same day. Hong Ihk Pyo, Chair of Cultural Sports and Tourism of National Assembly, Benjamin Ng, CISAC AP Regional Director, and KOMCA Chair Chu Ga Yeoul addressed the assembly, touching on topics such as ‘Copyright Buyout’ and ‘Private Copying Levy’. Myung Sun Yoon, APMA Chair, gave the keynote speech.
Registration of non-profit organization and fundraiser
APMA recently registered as a non-profit organization in order to raise donations from across the music industry. APMA’s mission is to support music creators in all sectors.
CMO establishment and operation support
Several countries in AP region do not have fully established CMO systems due to the pandemic and financial difficulties. APMA will provide training regarding licensing, operation etc to support those who are in need of help.