It's High Time Songwriters Got Their Fair Share

I had already started working on this post when very conveniently yesterday morning, Rolling Stone published this article titled 'Hit Songwriters Tell All, from Thieving Artists to Grammy Snubs' to add some additional fuel to the fire for what you're about to read.

The music business has a history of devaluing and under appreciating the creators who contribute at an incredible level toward superstar performing artists' success and the $billions in profits generated every year by the music business.

Whether you're involved in the music business or if you're a consumer of music, I'm sure you'll agree when I say that songs are the foundation of every artist's success.

Without songs that connect at mass with audiences, then performing artists wouldn't exist.

Without performing artists, there is no music business.

Therefore, songwriters are the lifeblood of the music business.

Despite their immense contribution to others’ success, songwriters are rarely rewarded for their creativity and hard work at a level that is anywhere near the value that their craft creates.

The music business has always been incredibly complex from a legal standpoint, and while there are copyright laws in place to protect songwriters, the amount of compensation written into law is small in proportion to the overall pie.

For example, master rights holders (the recorded music), receive the vast majority of music streaming royalties, with 80% of royalties going their way and 20% going to publishing rights holders (the party who controls the song/composition).

Songwriters who are in the higher levels of the music business e.g. they're writing the hit songs that big performing artists record, will almost always be 'published' meaning that the publisher is receiving a substantial chunk of the 20% that does come in from streaming.

If a songwriter is fortunate enough that a song they've written becomes a global radio hit, then their earnings can be substantial, but radio hits are rare and the proportion of income they generate is still tiny compared with the rest of the music business.

It isn't my intention to talk too much further about the problems songwriters face every day in the music business - there are many articles you can read about it - instead, I want to put forward some of my viewpoints on how things could be done differently to improve the situation and specifically how I intend to tackle this head-on in the High Time ecosystem I intend to create.

A Glaring Instance of Songwriters Getting a Bad Deal

Before I talk about my ideas to create a fairer and more equitable world for artists, I want to explain further the ways that songwriters are compensated in the current situation and highlight the areas in the music business where their endeavors contribute massively, but they receive little to no compensation.

Songwriters get paid primarily from these income sources:

• Mechanical royalties - generated from music consumption via streaming, digital downloads, physical record sales etc

• Broadcast royalties - generated every time a song is played on the radio, broadcast on TV or performed live etc

• Synchronization royalties - generated when a song is selected to be synchronized in a movie, film, video game etc

• Sheet music - generated when the musical composition is physically printed and sold.

As discussed, often songwriters have publishers whose primary role is to ensure that all of these royalties get collected, as well as work to help exploit the songwriter's works through placements with artists and in arranging songwriting sessions.

Songwriters also register with a PRO (Performance Rights Organization) which collects certain components of the above income streams that the publisher does not do on behalf of the songwriter.

At first glance it looks like songwriters have a great situation, with multiple ways to generate income, however, as I've already discussed, the issue is that the proportion of income they get from these sources is tiny compared to the value they bring.

I've already spoken about this in the streaming world, so let me put forward another example.

Songwriters, rightly so, get paid a fee for broadcast performances of their compositions.

Live performance is considered a broadcast of the composition and so there is percentage of gross ticket sales that gets put into the pot to get paid to the songwriters.

The amount that gets allocated depends on which country the performance is in and ranges from 3-5%.

The pot gets paid out on a pro-rata basis, meaning that if a performing artist has a set list of 20 songs, the pot gets split 20 ways.

That sounds fair, but not all songs are made equally.

Very often it's one song (or more) that becomes a hit, that causes a performing artist to break through.

The breakthrough results in every income stream growing and in our live example, let's imagine that one huge hit song caused an artist to breakthrough to a point where they are performing in arenas.

The artist has an album out and some of the other songs are successful, but this huge hit song is the song that has driven everything else.

In this instance, let's say that the gross ticket sales were $1m (20,000 attendees) and the publishing pot is 5% of gross tickets - $50k.

With our set list of 20 songs, each song will have earned $500 in performance royalties and a song that is the worst performing statistically in the marketplace (based on streams) is earning the same amount of income as the huge hit song that has performed at say 100x the level.

This system doesn't fairly compensate for the talent and craft of the songwriter that wrote the huge hit song, but that is only part of the story.

The other issue here is that, without this huge hit song, the arena show wouldn't be taking place in the first place and there wouldn't be sponsorship income, merchandise income, and other lucrative income streams like meet and greets, which are almost always treated as face value tickets when it comes to the gross revenue declaration.

These income streams can be substantial and it's not unusual for merchandise sales at arena-level concerts to hit as much as $15 per head - $300,000 in this example.

This is all very nice, only the songwriter isn't benefiting from this or any of the other income streams associated with the show itself.

Our hit-generating songwriter, whose huge hit song was responsible for this arena-level show becoming reality doesn't get a share of any of this additional income.

They simply get the $500 prorated royalty.

This is just one example in the music business, where songwriters are getting an unfair return on their hard work.

There is little to no chance that the existing music business will ever make a major adjustment to the way songwriters get paid because they have no commercial interest in doing so.

Things can change in law, but these changes are traditionally very small and unlikely to make a significant difference.

Paving the Way for a More Equitable Landscape for Songwriters.

With so much money being generated within the music business and with all of the signs being that the golden era is well and truly ahead of us, there has to be more effort toward supporting the songwriters who contribute so deeply to the entire ecosystem.

It is my view that songwriters should be receiving a return from every income stream they are contributing towards generating - in the same way I believe the value gap should be narrowed for artists and rights holders -

- even a small gross percentage of this income being allocated into a fund to be shared with songwriters would be revolutionary to songwriters.

The only way this would be possible is if music companies and everyone involved were prepared to receive a little less.

Unfortunately, this is highly unlikely to ever happen.

To this end, as with may of the things I am working to establish in the reboot of High Time, from day one, I will be creating a fund dedicated to songwriters.

This fund will see a small gross percentage of all income streams inside of the High Time ecosystem allocated to it.

I believe that songwriters are so important to the success of High Time - and in making my big vision a reality: to build the biggest and fairest music company in the world - that even income streams that are not generated directly by the music itself such as membership fees, service income, apparel income etc. will be used to add capital into this fund from every single transaction.

A part of this fund will be used to invest in developing new songwriters, not as advances against their future royalties, but as non-recoupable contributions toward them being able to make songwriting a viable pathway for them to focus their time and energy.

One such contribution would be to provide songwriters with a fee for the time they dedicate into writing sessions; something sorely missing in the existing music business where songwriters are expected to put the work in today, in the hope that there will be a future payoff, with no compensation at all for the precious time they've invested into the session itself.

The rest of the fund will be paid to songwriters based on the performance of their songs in contributing to the success of artists in the High Time ecosystem.

This performance-based component of the fund will see songwriters finally start to generate income from all sources of revenue they contribute to and will be calculated based on the direct contribution into the collective ecosystem e.g. based on streaming, downloads, and physical record sales etc.

In creating this initiative, I believe that songwriters who are part of the High Time ecosystem, will eventually generate more income from this fund than they currently do from the existing system.

This additional income, alongside the existing income streams songwriters currently receive - of which High Time will work to maximize at every level possible - means that songwriters within the ecosystem will be well placed to create the best possible art they can and contribute toward the success of the performance artists we develop.

As the High Time ecosystem establishes itself ahead, I hope that other players within the music business will start to follow suit toward adopting this initiative themselves.

I'd love to hear your thoughts in the comments on both the plight of songwriters in the existing music business and the ideas I've put forward for how High Time plans to improve the landscape for songwriters.