Congress has had a loud voice in setting the price of music since it first got involved with the tinkling player piano, once a fixture of American life from cultivated front parlors to the raucous saloons of the Old West, in 1909. Composers and performers complained that the “evil” player piano, which used perforated rolls of paper applied to tiny spokes on a metal drum to “play” the piano keys, was stealing their music. Congress mandated a compensation scheme to settle the lawsuit.
Nobody any longer cares about player pianos, found mostly in museums, but the price-fixing formula, though a full century out of date, still applies.
Those vinyl records the size of a pepperoni pizza have come and gone, and even the days of the compact disc that replaced vinyl are numbered. Billboard magazine, which charts the music industry, reports that sales of digital albums now exceed sales of the plastic discs. The trend is clear.
One purveyor of digital online music, Pandora, has 70 million subscribers, and Spotify, its main rival, just announced that it has enrolled 10 million subscribers. Yet neither company has turned their expanding customer rolls into a profitable business model. Spotify sends 70 percent of its revenue in royalties to the recording companies; Pandora, 53 percent. This is not the result of free-market negotiations with the composers and musicians, but of rules written by Congress.
Sens. Bob Corker and Lamar Alexander of Tennessee, both Republicans, have introduced the Songwriter Equity Act, which would change things, but not for the better. Raising the price of digital streaming would be the wrong technology call. The higher rates would be passed on to consumers, whose cash would further pad the pockets of music executives in Nashville, Hollywood and New York. What’s good for Nashville is not necessarily good for everywhere else.
The Songwriter Equity Act tells “copyright royalty judges” to set royalties at higher levels that would be “comparable” to those “under voluntary license agreements.” If these words, which sound innocent enough, actually mean what they say, there would be no need to have a federal magistrate involved. The artists and publishers could let the market decide what a song is worth, and to whom. Songwriters, who deal with the imagination and the warmth of words, want cold law to decide their work is worth more.
Instead of Congress deciding how much a song is worth, genuine equity would enable the public to decide how they want their tunes delivered. They could vote with their wallets.