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Hello, Spotify! Goodbye, songwriters?

by Darby Maloney | The Frame

Kay Hanley (left) and Michelle Lewis are the founders of the advocacy group, Songwriters of North America. Shelley Peiken/SONA

When you write a song that streams on Spotify or Apple Music or another service millions of times, how much do you get paid? Not enough to by a vente latte at Starbucks. But perhaps just enough to possibly start a revolution. 

Michelle Lewis and Kay Hanley, who between them have decades in the songwriting business, have become outspoken advocates in the era of streaming. They founded Songwriters of Northern America, an advocacy organization dedicated to songwriters' rights. And borrowing a page out of the "Schoolhouse Rock" handbook, they hope to educate the public on the plight of songwriters through an animated video and catchy tune.

As the lyrics in the song go: "0.00208 of a penny’s what a songwriter makes every time a composition gets played.”

https://www.youtube.com/watch?v=OllDCF_llHc

The Frame's John Horn spoke with the duo about why the Digital Millennium Copyright Act of 1998 no longer works in an era of music streaming services and what can be done about it.

Interview Highlights

Michelle Lewis and Kay Hanley:

Your song "Wings" [performed by the band Little Mix] was streamed on Spotify several million times. Not that long ago, you got a royalty check for those streams. How much did that add up to?

LEWIS: I'd say by the end of the year, for the year that it played the most, it was worth about $4.78.

When you see that check or those pennies, what is your reaction?

LEWIS: What the ... What's going on? I was going to say a bad word, but I won't. 

What was going on? What happened to the money and how did you educate yourself about what was happening?

LEWIS: That was the catalyst that started me down the wormhole of how songwriters get paid for streaming services, specifically Spotify, Pandora and Apple Music. The way we get paid is not very well, really. A stream is for one person, whereas on radio it goes out to multiple people. They came up with a formula for what a stream is worth in the Digital Millennium Copyright Act introduced in 1998, which, I will remind you, was before the iPod. It determined what digital replications would be worth.

Kay, before there were iPods and streaming services, a song like this would have been sold as an album or as a single and you, the songwriter, would have gotten a bigger slice of the pie?

HANLEY: The pie would have been smaller and so our piece would have been larger. I started out as a songwriter and artist in the late '80s and I have always made a living from radio play, album sales and touring. Now it seems like two of those pieces of the equation have been lopped off of what the songwriter's take is. With touring you can still do really well, but a songwriter doesn't do much of that.

You both now work in TV. How is the payment that you receive for writing a song for a Disney Channel show different from what you get from a streaming service?

LEWIS: The synch fees that are agreed upon with say, Disney Channel or Nickelodeon, are done in a free market negotiation. And then the licenses are based on numbers of viewers and stuff like that. It's like terrestrial radio where you take how many people you think are listening and that's how it works out. So in TV, we're actually in a healthy marketplace.

There are three ways a writer can make money off of his/her composition: one is the publishing copyright, which is the song's words and melodies as they're written down; then there's the so-called mechanical license, which is what someone pays to record that composition; and the third way is the performance license – if the song is played on a radio station or a restaurant. How has the evolution of digital media changed that formula? What has gone away?

LEWIS: People don't really buy physical products anymore. What we haven't been able to control now is the scarcity of the supply. If it's digital it can be replicated anytime, anywhere, and it's free.

If you want to write a song and Lady Gaga wants to record it, she doesn't necessarily pay you an upfront fee does she?

HANLEY: No. Basically we depend on the replication, the performance of that and the mechanical rate through sales. But there's no upfront.

So you're really relying on these royalties. As streaming services take off and album sales go away, that royalty basically vanishes. Michelle you realized that the world is changing, but rather than curse the darkness you decided to light a candle. That brings us to Songwriters of North America. Tell us how SONA came together and what you hope it can do going forward?

LEWIS: Kay and I write all the music for this TV show on Disney Junior called "Doc McStuffins." When we're writing for that, we're in a bubble, and when we come out of the "Doc" bubble between seasons, we look around and see what's going on. During one of these hiatus points, we emerged and saw our own statements for the things that were not "Doc" related. That's when we had our What-the-bleep? moment. We talked to some attorneys and people who worked at [the American Society of Composers, Authors and Publishers], and other songwriters, and we realized that, in Los Angeles in particular, there wasn't a community rallying around this particular issue. Because we hadn't rallied around it publicly, it had gotten away from us.

So you can't unionize. Let's say you have a chance to change the way in which composers are paid. What would be the top two or three priorities for you? What would you go after first that is in the most need for change?

HANLEY: Right now our main target is going after the digital service providers like YouTube, Google, Spotify and Pandora. We're really looking for fair rates in streaming. 

LEWIS: But that's two pronged. Fair rates in the streaming would come from subscriptions where people are actually paying to listen to music. Spotify has a paid tier, YouTube is coming out with YouTube Red, and there's Apple Music of course. It's getting more people to subscribe and pay and maybe use a Netflix model of windowing where you have prime users who can get first-day releases. 

So what can the record companies do in all of this? And what can an artist do?

LEWIS: Streaming services of the world will say they're paying out billions of dollars in revenues and yes, 70 percent of their revenues go toward content providers — the sound recording owners. Four percent of that 70 goes to songwriters and to publishers, and 96 goes to the labels.

HANLEY: It was a money grab, but a legal one. This should not be surprising to us, but in everyone's perfect world, we would all act in the collective's best interest. But we don't live in that perfect world. Artists and songwriters have always been at odds with who is going to get the money, and the label usually has historically won. I think we're just trying to flip that now.

 

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