Shortchanging Covers
On February 5, 2015, the US Copyright Office released a comprehensive set of recommendations on how to revise copyright law called “Copyright and the Music Marketplace”. These revisions, if they were to become law, could affect every corner of the music industry. One of the most significant changes could come from the short three-paragraph section in the 245-page report that addresses the licensing of cover recordings.
In the report, a recommendation is made to require a voluntary license from publishers in order to post a cover recording on an interactive streaming or download site. As the report states:
“…the dissemination of [cover] recordings for interactive new media uses, as well as in the form of downloads, would be subject to the publisher’s ability to opt out of the compulsory regime. Thus, a publisher’s choice to negotiate interactive streaming and Digital Phono-record Delivery (DPD) rights for its catalog of songs would include the ability to authorize the dissemination of cover recordings by those means.”1
This means that if a musician covers Ed Sheeran and posts it on Spotify or even iTunes, Sheeran, or more likely his publisher, could decide to take it down. This poses a problem for the multitude of musicians that develop fanbases and in some cases make a living from cover recordings.
Though under-documented and rarely analyzed, the covers industry has grown into a significant segment of the music business. Artists like Boyce Avenue, Lindsey Stirling, and Karmin have developed legions of loyal fans after posting their covers of songs on platforms such as YouTube, Spotify, iTunes, and SoundCloud.
In the past, there has been a varied response to cover songs on these platforms. In the early days of YouTube, covers would be taken down, as they were technically violating copyright law. Later, the use of content ID systems and better advertising revenues led publishers to monetize cover videos on YouTube instead of taking them down. Still, like Prince, some writers prefer to take down any covers of their songs.
Spotify and iTunes, however, have a much different and more legitimate way of handling cover music. Songs cannot be posted on these sites without obtaining a mechanical license for the cover recording. Unlike the negotiated licenses that are used for sync and sample licensing, the mechanical license is compulsory, meaning that as long as the composition has been previously recorded and released, anyone else may also do so as long as they pay mechanical royalties. The original artist or songwriter may not stop another artist from covering their song.
The ability to freely sell cover recordings has been widely taken advantage of on Spotify and iTunes. On Spotify there are currently 137 different recordings of “Little Red Corvette” by Prince. Of those recordings, only 9 are by Prince. On YouTube, instead, one would be hard-pressed to find a Prince cover as his publishing company is very quick to take them down immediately.
With 128 covers of “Little Red Corvette”, there is clearly high saturation and competition in the cover marketplace. That being said, for those that do it well, covers can be the launchpad for a very lucrative career. Boyce Avenue, one of the earliest and most successful cover artists to come out of YouTube, has racked up an amount of plays on their Spotify page that is comparable to an up-and-coming pop artist. Their cover of Adele’s “Someone Like You” boasts 11,478,137 plays. By Spotify’s own calculations, rates are as high as $0.0084 per stream2, which would mean a payment of $96,416.35 going to the copyright owners. Most of that goes to the owners of the sound recording, Boyce Avenue, while a portion of it goes to the songwriters.
For Boyce Avenue, this song is only one of over 100 covers on their Spotify page. Most, if not all, of these covers are also available for purchase on iTunes and Amazon. With all of those covers bringing in revenue, it is easy to see how $100,000 from a single recording can turn into a multi-million dollar business. (For an artist like Prince, with over 100 covers of just one song, the mechanical royalty payments for those streams and sales will certainly add up, especially when one includes touring revenue and more sales of the original song.)
It should be obvious, then, that this new amendment in copyright law will create a dramatic ripple effect for musicians whose entire career is based on cover songs. Should songwriters and publishers decide that they do not want covers of their songs appearing on Spotify, iTunes, and the like, they could decimate the careers of thousands of other musicians.
With the revenue streams shown above, one might wonder why a songwriter or publisher would wish to take their compositions off of these services. After all, why would one want to deny oneself a passive income stream that is bringing in thousands of dollars? For some, like Prince, it is not a financial decision, but a matter of principle. Prince has always been very private and controlling of his material, not wanting others to alter the songs that he worked so hard to perfect.
Others feel like revolting against the perceived low payout rates of streaming sites such as Spotify. Instead of pulling down just her catalog, Taylor Swift could ask to pull down her catalogue plus any covers of those songs that are available on the service—a powerful stand, but one that that would invariably affect the income of dozens of cover musicians. There is also the looming threat of a mass boycott of streaming services by groups of songwriters, an instance of which was given on February 16, 2015, when more than one hundred Swedish songwriters published an open letter calling for transparency and reform in Spotify’s payment methods.4 If collective actions by songwriters curtailed the supply of songs to new services, a poverty of musical offerings would further hinder the business of covers.
In short, this potential amendment to copyright law will hurt an ebullient business. It will give more control to songwriters and their compositions at the expense of new creative talent and its livelihood. The monopolization of copyright that it implies surely has to be addressed.
By Dan Servantes
1. “Copyright and the Music Marketplace – Executive Summary”. US Copyright Office. February 5, 2015. http://copyright.gov/docs/musiclicensingstudy/copyright-and-the-music-marketplace.pdf
2. “How is Spotify contributing to the music business?” Spotify. December 3, 2013. http://www.spotifyartists.com/spotify-explained/
3. Gardner, Eriq. “Why Taylor Swift May Soon Be Able to Stop Cover Songs on Spotify Too”. The Hollywood Reporter. February 5, 2015. http://www.hollywoodreporter.com/thr-esq/why-taylor-swift-may-soon-770698
4. Schneider, Mark. “Swedish Songwriters Push for Fair Share of Streaming Music Revenues in Open Letter.” Billboard. February 17, 2015. http://www.billboard.com/biz/articles/news/digital-and-mobile/6473049/swedish-songwriters-push-for-fair-share-of-streaming
