Caging Songwriters in the Compulsory Licensing Framework: A Battle of Fairness and Equity

Authors

• Maria Kaganis

Document Type

Note

Abstract

(Excerpt)

Imagine it is November 2023, and you log onto Spotify to stream your favorite music. As you do, you notice you now have access to up to fifteen hours of the most popular audiobooks. You really enjoy the addition of audiobooks to Spotify and have used the new feature for months. Come March of 2024, however, you get an email stating that Spotify will be introducing a . . . music-audiobook bundle as part of your current subscription? Is that not what you already had? Shrugging it off, you move on and continue enjoying your music, audiobooks, and podcasts like any other day. Unfortunately, the songwriters behind the music you stream cannot shrug off this change so easily.

For songwriters, Spotify’s reclassification of its Premium plan as a bundled music-audiobook subscription risks undercutting royalty payouts for their works. In the current music copyright and licensing system, streaming platforms may classify certain products as bundles, which significantly reduces royalty payouts. Songwriters already severely lack bargaining power to negotiate rates for their works, so they are left with no choice but to accept the reduction of royalty payouts with no opportunity to challenge it. The looming effect of this scheme has triggered pushback from multiple entities such as the Mechanical Licensing Collective (“MLC”) and the National Music Publishers’ Association (“NMPA”), rattling the conventions of the compulsory licensing scheme currently in place.

This Note argues that there is a severe lack of fairness and equity for songwriters—including their lack of negotiating power and the holes in the statutory rate process—despite protections from recent legislative safeguards such as the Music Modernization Act of 2018 (“MMA”) and the Phonorecords IV Settlement of 2022 (“Phonorecords IV”). Part I provides a brief walk-through of the history of copyright legislation over the decades, various entities that emerged as a result of such legislation, and statistics demonstrating the position of the current legal framework, all of which includes, in relevant part, the MMA, Phonorecords IV, and Section 115 of the Copyright Act. Part II describes how the reclassification of Spotify’s subscription plans as bundles interacts with U.S. copyright law and the resulting backlash of its effects on songwriters. Part III critiques the current proposals to change copyright law as a result of the Spotify bundle’s effects, which also includes a breakdown of the current disparity of royalty payouts, the economic effects of the current proposals, and why songwriters deserve better royalty rates. Lastly, Part IV offers a proposal. Specifically, this Note proposes a solution to establish a government-regulated entity similar to European entities that represent songwriters, which would push for more nuanced market-responsive, fair, and efficient regulation on behalf of songwriters.