Songwriter Eddie Schwartz Sees Signs of a Turning Point to a Better and More Balanced Digital Future
According to the European Commission, copyrights today generate more than one billion euros of revenue each year and the industries involved have generated more than five million jobs. But the staggering development of the digital economy has raised questions about its sustainability as technology makes sharing and access easier than ever before.
The manner in which current copyright law can adapt to boost the potential of this industry even further was the central topic of the ALAI Congress held in Bonn, Germany on 18-19 June. A prestigious roster of government officials, copyright law experts and renowned international creators gathered to share views and discuss the development of creators’ rights. The event was organised by the International Literary and Artistic Association (ALAI), an independent society dedicated to studying and discussing the legal protection of creators.
Day one was dedicated to examining the legal models that are currently in place to ensure remuneration for the use of creative works. Following opening speeches by ALAI President Victor Nabhan; WIPO Copyright Law Division Director Michele Woods; former ALAI Vice-President and former President of German ALAI group Adolf Dietz; and ALAI Deutschland President Reto Hilty, the agenda moved into a discussion on the exclusive and statutory remuneration rights currently in place. The afternoon sessions focussed on the future potential evolution of the German Copyright Act of 1965 and asked how contract law mechanisms might be developed to improve economic protection of creators and performers.
On day two, the spotlight turned to the business models currently in use in the digital environment with special attention paid to the challenges they present for creators. German Federal Ministry of Justice and Consumer Protection State Secretary Stefanie Hubig delivered the keynote speech before handing the floor over for discussions that encompassed music flat rates, micro licensing, open access for scientific publishing and the challenges facing the legislature and courts.
Fittingly, the voice of the creator brought the event to a close with a lively panel on the participation of creators and performers in this digital evolution of rights. Speaking as a creator, as well as on behalf of CISAC and the International Council of Music Authors (CIAM), songwriter Eddie Schwartz delivered an insightful speech into the challenges facing current and new music creators today.
Mr Schwartz explained how in Nashville, also known as “Music City USA”, where he has lived and worked for the last 18 years, 80% of the professional music creator community has disappeared. The reason, he believes, is due to the steep drop in creator revenue over the past few years.
If in the past a song of mine had sold a million copies, I would have received about $45,000 US in mechanical royalties and be awarded a platinum record. Today, a major music service pays me an average of $0.000035 per stream, or about $35 for a million streams. That’s the kind of “monetisation” that creators are actually experiencing.
He also challenged the assumption that “free” music streamed from the Internet could not support a revenue stream. Via a quick calculation on the million streams that currently earns him $35, Mr Schwartz explained how each is associated with an internet account that (assuming they are unique) generates more than $600 million in ISP fees alone.
On top of that, there are also device and mobile access fees, monthly subscriber and download fees, advertising and data mining revenues, and a whole dark portfolio of other hidden fees, advances, equity stakes, and so on. Music is part of a huge value chain generating billions of dollars annually and consumers and creators alike are paying hugely.
Nonetheless, Mr Schwartz was cautiously optimistic about the future as he saw a turning point on the horizon for creators. He highlighted three trends that pointed to an improved outlook for the digital economy.
Firstly, the hidden world of contract negotiation between streaming companies and major labels is beginning to become more transparent as evidenced by the recent revelations regarding Sony Records’ 2011 agreement with Spotify.
How do you know if you are receiving 50% if you can never know what 100% is? What we don’t know will indeed hurt us, and transparency must and is coming to the music value chain, and that is a crucial first step if creators are ever to be fairly compensated.
Secondly, safe harbor legislation intended to protect the so-called “dumb pipes” that deliver Internet traffic is beginning to be questioned. Creators are now calling for updates and reforms of this legislation, which in essence is currently protecting the rich and powerful from the digitally disenfranchised.
Today this legislation is abused by major multinational entities because it allows them to amass huge profits while providing access to our creative works for virtually nothing.
Finally, Mr Schwartz highlighted the grass-roots movement towards ethical practices that is visible especially in younger consumers. They are, he believes, a generation that understands the importance of fairness and transparency in the products and services they purchase and who are willing to make choices that support these beliefs.
They care about sustainability and ethical behavior, whether at WalMart, or MacDonald’s or garment workers in Bangladesh, and most assuredly for the music creators whose work they love and want to support.
In closing, Mr Schwartz thanked the global creator community for its support and highlighted the new non-governmental initiative called Fair Trade Music, which is working towards a fair, transparent and sustainable music ecosystem from consumer to creator and everyone in between.