US antitrust officials decline to change agreements on songwriting royalties

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in iPod + iTunes + AppleTV
On Thursday, the U.S. Justice Department's antitrust division said it won't be seeking any changes to agreements on songwriter royalties, maintaining the status quo for streaming services like Pandora and Apple Music.




The announcement comes at the end of a two-year investigation by the Department, Bloomberg reported. Specifically the agency was looking into consent decrees with Broadcast Music Inc., and the American Society of Composers, Authors and Publishers, better known as ASCAP. The two organizations sought the review after legal conflicts with Pandora over royalty payments.

Publishers, such as Sony/ATV, wanted agreements changed to be able to "partially withdraw" from ASCAP and BMI, giving them the freedom to negotiate performance licenses directly with streaming services. Pandora was opposed to this, since such arrangements might have substantially driven up royalties, risking the viability of its business. At the same time, musicians, distributors, and publishers alike have often complained about how marginal streaming share can be -- frequently it's only supplemental income for artists, despite the streaming market surpassing CD and download sales.

Both ASCAP and BMI are unhappy with the investigation's result, and promising to challenge it in court. Sony/ATV CEO Martin Bandier described the Department's decision as "misguided," suggesting that both courts and the U.S. Congress will have to deal with the problem.

The ruling stands to benefit not just Pandora but rivals like Spotify and Apple Music, which already sacrifice the bulk of their revenues in royalty payments. Recently Apple proposed an alternate system that would have sharply impacted competitors offering free ad-based listening.

Comments

  • Reply 1 of 8
    NemWanNemWan Posts: 112member
    Nothing to do with streaming, but whenever the topic of songwriting royalties comes up I remember a legendary case of abuse: Gene Roddenberry wrote never-used and completely terrible lyrics to the Star Trek theme, and thereby granted himself half the royalties otherwise owed to composer Alexander Courage.
    dysamoria
  • Reply 2 of 8
    badmonkbadmonk Posts: 754member
    probably the biggest AI news of the week...bad for artists (again) and good for Pandora, neutral for Apple and Sony.
    dysamoria
  • Reply 3 of 8
    SpamSandwichSpamSandwich Posts: 30,734member
    Is this the reason for the big jump for AAPL this morning? Wow.
  • Reply 4 of 8
    gatorguygatorguy Posts: 20,030member
    Is this the reason for the big jump for AAPL this morning? Wow.
    At least a couple of big techs seem to be up nicely today for whatever reason. 
  • Reply 5 of 8
    SpamSandwichSpamSandwich Posts: 30,734member
    gatorguy said:
    Is this the reason for the big jump for AAPL this morning? Wow.
    At least a couple of big techs seem to be up nicely today for whatever reason. 
    So, just another irrational sector bump? Sheep behavior.
  • Reply 6 of 8
    gatorguygatorguy Posts: 20,030member
    gatorguy said:
    Is this the reason for the big jump for AAPL this morning? Wow.
    At least a couple of big techs seem to be up nicely today for whatever reason. 
    So, just another irrational sector bump? Sheep behavior.
    I try to stick with investing in what I know. The stock market movements make no sense to me for the most part.
  • Reply 7 of 8
    SpamSandwichSpamSandwich Posts: 30,734member
    gatorguy said:
    So, just another irrational sector bump? Sheep behavior.
    I try to stick with investing in what I know. The stock market movements make no sense to me for the most part.
    Don't get me wrong, I'm just pleased to see AAPL heading up again, instead of remaining stagnant for close to a year.
  • Reply 8 of 8
    zoetmbzoetmb Posts: 2,398member
    NemWan said:
    Nothing to do with streaming, but whenever the topic of songwriting royalties comes up I remember a legendary case of abuse: Gene Roddenberry wrote never-used and completely terrible lyrics to the Star Trek theme, and thereby granted himself half the royalties otherwise owed to composer Alexander Courage.
    According to SNOPES:
    Pressured by Roddenberry, Courage had made a "handshake deal" a couple of years earlier that gave Roddenberry the option of composing lyrics for Courage's Star Trek music (and Courage signed a contract — unknowingly, he later claimed — to that effect). Roddenberry exercised that option, writing lyrics for the main theme and then asserting his right to half the performance royalties as a co-composer. It made no difference that the lyrics were not intended to be used in the show itself and had not been recorded or released. As the lyricist, Roddenberry was entitled to an equal share of the royalties, whether or not the lyrics were ever used. 

    Courage protested in vain that although the arrangement may have been legal, it was unethical: Roddenberry's lyrics added nothing to the value of the music and were created for no reason other than to usurp half the composer's performance royalties. An unsympathetic Roddenberry proclaimed, "Hey, I have to get some money somewhere. I'm sure not going to get it out of the profits of Star Trek."  

    Roddenberry's financial gain was Star Trek's creative loss. After scoring a couple of first-season episodes, Courage declined to perform any further musical work for the series. 
    May have been unfair, but Courage did sign a contract.   Also, Courage probably didn't have his own publisher, otherwise he could have controlled the credit.  It's no one's fault but your own if you don't know what you're signing.   In those days, there were a lot of "buy-outs", so it's unlikely that Courage would have gotten residuals anyway.   But where he did get screwed is on the half of royalties he didn't get for soundtrack albums, etc.  But I bet he still wound up with far more money than he ever thought possible from a show that was not expected to succeed.  And he also probably got money for the inclusion of that theme at the end of some of the Star Trek movies. 
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