Bart Herbison: On The Money

Interview by MATTHEW W. SHEARON

A lot of songwriters ask us questions like, “What is going on in Washington, D.C., or in record company board rooms?” or “How do I get paid from subscription services?” Luckily, just down the street from our office, in the country group Alabama’s former Nashville office, the staff of NSAI (Nashville Songwriters Association International) works earnestly to answer these questions for us and to aid songwriters across the globe. Bart Herbison, NSAI’s Executive Director, took a few minutes out of his morning to chat with us about where NSAI has been and is going.

For those of us who haven’t followed the most recent sessions of Congress and the courts, could you offer a brief summary?

I could tell a two-hour story here, but let me cut to the chase. What began as how to develop a “uni-license” covering both mechanical and performance royalties for subscription services and other new digital uses of music evolved into legislation called SIRA, (the Section 115 Copyright Reform Act). This piece of legislation was difficult to get to because all sides, the computer industry, the record labels, the music industry, songwriters, publishers all had to agree on it. When that legislative effort stalled and marketplace negotiations failed, these issues moved to the jurisdiction of the Copyright Royalty Board. It started off again with the divisions with the record labels and computer companies on one side and songwriters and music publishers on another. However,
during the course of the proceedings the music industry began unprecedented communications and eventually created both a licensing and rate structure for new digital music uses.

Were those conversations taking place in or out of the courtroom?

So during a break in that trial, we still believed that we could still talk to and resolve this before the end of the trial. So last summer, about this time, we started some behind-the-scenes negotiations with the labels. They began to talk to us and with the music publishers and songwriters. We worked the current deal on the table for subscription music.

So what are a couple specifics of this agreement?

Songwriters and music publishers will receive 10.5 percent of the gross revenues of subscription services including the advertising revenue—an important precedent for music copyright holders. There are several different models of subscriptions, everything from tethered downloads to streaming sites. How the consumer uses the music determines how much payment goes through mechanical royalty channels and how much through performing rights societies. It is important to note that the mechanical portion of this agreement is retroactive for seven years effective this past March.

What’s still on the table, what are you working on right now?

There are a couple important legislative initiatives in Washington, D.C. for the music industry. One seeks a royalty for the sound recording owners from broadcasters. The other would ensure that songwriters and composers who write songs for movies and television continue to receive performance royalties when their music is part of a downloaded program or movie. Generally speaking though, this is a very quiet time in terms of Copyright issues in Congress. Songwriters’ issues in Congress are usually about money “coming in.” NSAI is also putting a new focus on money “going out.” For example, we just announced the creation of the first-ever Group Copyright Infringement Insurance plan that will allow more songwriters to afford this necessary coverage. The rates are dramatically lower and elements of the policy were created especially for songwriters. “Frivolous” lawsuits have become numerous and can literally wipe out a songwriter’s career earnings.

We’re also working on ringtones. There was a raise on ringtones for songwriters and publishers from 9.1 to 27 cents, effective March 1st [ed. note, ringtone rates are now set at 27 cents per ringtone]. And for the first time ever, there was a late fee on record labels. An appeal to that is just now beginning in a U.S. district court in New York, so we’ll be working closely with all parties involved to come to a resolution.

Just this October, a version of the performance royalty bill made out of the Senate Judiciary Committee. What’s your feeling about the progress?

Getting the legislation to this point has been a long and complicated process. One of the Nashville Songwriters Association International’s roles in this process has been to establish protections for songwriters within the bill–essentially to ensure that when this royalty is enacted it does not come at the expense of current performance royalties paid to American songwriters.  Those protections remained intact in the version of the legislation that passed the Senate Judiciary Committee. We will continue to work to see that those protections remain intact throughout the rest of the legislative process.

What are you’re guiding principles when you’re neck deep in all these legislative and judicial processes?

We’ve got two guiding philosophies here at NSAI in terms of our legislative work. One is we’ve got to redefine the American royalties system. Music is being stolen now instead of being paid for. People are making millions, if not tens of millions, on our music with ad sales and other things that leave songwriters out. So we’ve got to redefine copyright royalties. The other principle here is “United we stand as an industry, and divided we fall.” There have been too many scenarios with the labels on one side and the publisher and writers on another, or some other subset of that when there’s a legislative whatever.

How are royalty models different in other countries?

Around the world there are other models. For instance, Internet service providers and some other companies make a small percentage headwater payment out to the copyright. Movie theaters in Europe will pay big  royalties for your songs in movies that play in the theater. In Canada, there is a proposal to essentially add a dollar a month on everyone’s cable bill. Why would you do that? Because then they could create a legal site in Canada where you can go to download all the music you want for free legally. And with movies, why would you do that? Because it would generate $27 billion royalties its first year, if that model were moved to America. Those things are all just in the discussion phases in America. So there are probably seven or eight new royalty streams that we’re trying to secure for songwriters.

And let’s say you were able to take all those band-aids off of the royalties and copyright system tomorrow, where do you start making changes?

Well, that’s actually pretty easy to me. You have to follow a song, whether it’s digital or out here in the terrestrial world still, on a truck with a bar code. And we have to get a fair, measured payment from everybody that accesses that music along the way. And on the Internet, even more than that, everybody that transmits the music. We’re up to three billion illegal downloads per month worldwide. Now, that’s not all music. It’s copyrighted material. But a substantial portion of it is music. And the argument for years has been that the Internet service providers say, “We just send it through our system, we don’t have any liability for it,” and we say, “You do.”

From your point-of-view, is piracy still a conversation we need to be having or will the free market work things out?

We still need to have it… in fact we need to raise the volume! I do believe that the marketplace will see some movement on this issue. We can put a huge dent in Internet piracy if we can finally conclude precisely how the music industry, government and the Internet Service Providers can punish and remove the accounts of illegal downloaders. We’ve taken some measured steps. Last year, there was a piece of legislation in Congress that shifted a lot of this authority over piracy and the burden of prosecution to the federal government–no one in the music industry wants to sue our own customers. It was a start, but the penalty portion still needs work. We need some teeth in that law where the FBI send you a Copyright infringement notice, where federal prosecutors make examples of this activity. If someone downloads hundreds of songs illegally, and they are warned multiple times about possible prosecution, but still insist on continuing the activity, then there must be repercussions, and serious ones.