John Rogers, one of my favorite scriptwriting bloggers, explains the basis for the Writers Guild of America strike. It makes for fascinating reading, especially for anyone involved in trying to make a living from their creative work. I especially like this bit:
One of my favorite jokes, just a lovely piece of writing, is Chris Rock's bit about the time one of Siegfried and Roy's tigers mauled Roy.
"Everybody's mad at the tiger. 'That tiger went crazy!' That tiger didn't go crazy ... that tiger went tiger."
This is how I feel about corporations in general, extended to the Studios in particular. There are those who rail at the AMPTP for being profit-maximizing heartless, soul-less bastards as if that were a bad thing. It's not.
A corporation's job is to make money, and if necessary fuck you in the process. Just like a tiger's job is to eat, and if necessary kill you in the process. I'm okay with that. I like capitalism. A lot. I like tigers. A lot. That doesn't mean I trust corporations not to try to screw me and everyone next to me when negotiating. Nor would I trust a tiger not to attack me in the wild. Nor am I personally offended when they try.
All this to say that the Studios have not been negotiating in good faith, nor probably did they ever intend to. Why? They went tiger.
Obviously, I am 100% for the WGA (when it's Viacom vs. the writers of the Daily Show, who the hell cheers for Viacom?), but I can't help but be a little rueful about the relative bargaining power of their union versus our union. You take your victories where you can find them, of course, but I can't help but feel that if the American Federation of Musicians had ever gotten serious about organizing and fighting for recording artists (not just the session musicians, orchestral musicians, and B'way pit players it primarily represents) -- and, on the flip side, if recording artists had ever recognized the need for solidarity, especially when negotiating with tigers -- we would not all have gotten saddled with recording contracts that look like this this.
A measly 0.3% residual on DVD sales is certainly a raw deal, but when it comes to going tiger, the AMPTP has got nothing on the RIAA:
The Copyright Office sets the statutory rate for mechanical royalties [N.B. "mechanical royalties" are the fee a composer or lyricist gets paid when an album containing their music is sold], increasing every two years according to changes in cost of living as determined by the Consumer Price Index. The rate increases are by authority of the 1976 amendment to the Copyright Act. The first rate increase was in 1981. It was at about this time that the Controlled Composition clause became commonplace in record contracts.
The main purpose of the controlled composition clause is to NOT pay artists the statutory rate and to NOT increase royalties as costs of living increases; basically, to thwart copyright law.
The controlled composition clause limits the amount of mechanical royalties the company is required to pay for records it releases, and holds the artist responsible for the excess. In essence, the record companies are compelling artists to subsidize the payment of mechanical royalties. Here’s how they do it: (all examples assume today’s royalty rate of $.0755).
[N.B. This was written in 2001 -- the statutory rate for mechanicals in 2007 is now a whopping $.091 per song.]
Artist gets 75% of the statutory rate per song = $0.056 per song, not $0.0755
This is based on the minimum statutory rate, so the company calculates the same rate for a 10-minute song as for a 2-minute song. This thwarts the statute, which provides increased rates for songs over 5 minutes.
Artists gets royalties on maximum of 10 songs = $0.56 per album total
Under the statute, an album with 12 songs would earn $.90. Under this clause, the maximum royalties payable would be $0.56. If the maximum is exceeded (by using a cover song or a producer demanding a higher rate), the artist is held responsible for that excess.
Rate is fixed on date master is delivered.
The reduced rate will never increase, thwarting the Copyright Office statutory cost of living increases. Record labels lock in the earliest date possible. Some contracts fix the date at execution of the contract signing, knowing full well that the record won’t hit the shelves for two years.
Not pay royalties on “free goods”
Under the compulsory license provisions of Copyright Act, record labels are required to pay mechanical royalties on all records “made and distributed.” Instead, record labels thwart this law by refusing to pay for so-called “free goods.” This confusing word “free-goods” is not defined as promo albums. Rather, all major labels define “free goods” as 15% of the records they sell. Using this provision, major labels calculate royalties on only 85% of records sold.
Reduced rate applies to all “controlled compositions”
The definition of “controlled composition” casts a wide net. It includes songs written by producers on the album. Customarily, the record company hires these producers without negotiating a reduced mechanical royalty rate. The artist is forced to make up the difference. This is particularly egregious because most artists have no control over producers.
Hold Artist responsible for excess mechanical royalties.
If the total amount paid by the company does exceed the specified maximums, the difference will be deduced from the artist’s royalties. The possibilities of the artist running afoul of all these provisions are endless and, potentially, very expensive for the artist.
The following example illustrates the devastating effect this clause has on royalties:
Example: Artist has agreed to be responsible for any costs of mechanicals over $0.56 (75% of statutory times 10 songs). Artist has no say over what is recorded. She records 15 songs written by the record label’s “affiliated publisher” who charges the full statutory rate of $.075 per song, or $1.13 for the album. The Artist now OWES the record label $0.57 per record. In five years, when the statutory rate increases to [$.091] per song, but the artist’s rate stays the same, the artist will OWE $0.85 per album! Each record sold puts her deeper in the hole, and farther away from ever recouping.
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