But wouldn't they only be getting royalties if their work was used? What happens if nobody is using their work by the time they retire? What kind of retirement planning is that. Besides, pensions are becoming rare. I'll never see a dime from a pension. I'll manage anyways.
Royalties are earnings you get for music placements from the past. I'll give an example quite common for my company:
Let's suppose I place a song on a network program like Saturday Night Live. When the program is broadcast, the songwriter receives a performance royalty from BMI or ASCAP (whichever performing rights society he/she is a member of). BMI and ASCAP are both private non-profit societies who collect performance royalties from the broadcasters and pay them to the songwriters and publishers. Songwriters cannot set their own performance royalty rates. They must accept what BMI or ASCAP pay them.
As programs are broadcast over and over, first when they are new, and then in syndication, every time that program is broadcast, the songwriter receives royalties.
A songwriter who specializes in music for television or films (actually much more common than songwriters who write in the pop field) will have built up a nice resume of programs and movies in which his/her music has been used by the time they are ready to retire. They continue to receive royalties every time their music is aired.
Without the long term royalties, there simply isn't enough money being paid to make a living. Most of them still have a day job when they start out, and it takes many years before they can move to doing music full time. But they do this because of the long term benefits. It's like building a business. Over time your royalty checks become higher and higher as you write more music and have more of your music placed.
The problem is that they don't receive any royalties when the program or movie is downloaded from the internet. And as fewer people watch shows live and now watch them online or download them, the songwriters will receive less and less royalties. There needs to be an adjustment to the system to allow for them to get a percentage of the profit made from downloads. Otherwise there is no incentive for any songwriter to write for television of film.
What happens if a use is not listed in those rules? If there's no applicable law, then wouldn't they get to negotiate the rate themselves? If the law doesn't provide a rate for the particular use, how exactly does anybody have a right to use it without the writer's permission?
Good point. Unfortunately for them, companies like iTunes simply assume there are no royalties to be paid because there is no law stating that there are. If the status quo continues and there is no legislation passed by congress, you can bet there will be some major lawsuits and then it will be decided by the courts.
I'll give you an example of this with regard to the record companies. The link I posted above was a link to the statutory mechanical royalty rate. That is simply the royalty a record company (or anyone else that sells a recording) must pay to a songwriter for each copy of each song that is sold. The current rate is 9.1 cents. So to clarify, if a record company sells an album with 10 songs on it, they must pay 91 cents in royalties to the various songwriters or songwriters. When record companies began selling online downloads, since the price they charged was less than what they charged for a compact disc, they took it upon themselves to stop paying 9.1 cents and lower the rate. It took a number of lawsuits before the Copyright Tribunal finally stepped in and decided to set a special rate for online downloads.
I know that nobody likes government involvement in these matters, but the alternative is chaos. It would be far too messy to have to negotiate every time music is used or a CD is sold. Music publishers, record companies, and television/film production companies would have to have huge amounts of staff and lawyers to handle each and every small thing that they do. It is simply not a system that can work. There must be a set of standard rates for these things, which there are. And like anything else, there are some parties who will always think the rate is too low while others will always say it is too high. And both sides will lobby congress for what they want.
I can tell you that in general, the royalty rates for music use in the United States are much lower than those in Europe and other industrialized countries.
Edit: I suppose the problem is that the particular use here, selling the TV show, doesn't provide royalties as good as public performance royalties? If so, go ahead and fix the system. But wouldn't it make more sense to change the royalties paid on a digital download instead of trying to get digital downloads reclassified as a public performance, which they are not?
Good point. The problem is that songwriters who write for television have traditionally been required to sign away all of their rights except for performance rights. So anything not classified as peformance royalties would go to the publisher, not them.
The problem is that we are talking about a major change in a system that has been around for about 50 years. It would be like if we decided to stop paying social security to older people even though they paid into the fund their entire lives. These songwriters signed over the works to publishers under a system that paid them royalties on the back end, and now that back end is disappearing.
