Cracker’s David Lowery Speaks on Artists’ Rights in the Digital Age

To protect their income, artists need to take an active interest in the law, understand their rights and register with organizations that look out for their rights and royalties, says David C. Lowery, who recently filed a $150 million class-action lawsuit against Spotify USA Inc.

“You have a copyright the moment you record something into your iPhone. But that and $5 will get you a bus ticket,” says Lowery, a founding member of Cracker and Camper Van Beethoven.

Lowery spoke with Reverb about many of the issues recording artists need to consider and the steps they need to take to get paid for their songwriting, recording and performing efforts.

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The Lawsuit

The lawsuit alleges that Spotify has deliberately infringed artists' mechanical licenses by unlawfully reproducing and distributing copyrighted music to its 75 million users, and that Spotify has failed to identify and locate the owners of those compositions for payment or to notify them of its intent to reproduce and distribute those songs.

The suit also alleges that Spotify has admitted its failures to obtain licenses for the music by having created a reserve fund of millions of dollars to pay those artists. According to Billboard, that fund is between $17 million and $25 million.

“The existence of this fund reflects Spotify’s practice and pattern of copyright infringement, wherein Spotify reproduces and/or distributes the Works without first obtaining appropriate authorization or license,” according to the lawsuit.

In a press release, Spotify said that when it comes to publishing and songwriting royalties, especially in the United States, the data necessary to confirm the appropriate rightsholder is often missing, wrong or incomplete.

“When one of our listeners in the U.S. streams a track for which the rightsholder is not immediately clear, we set aside the royalties we owe until we are able to confirm the identity of the rightsholder. When we confirm the rightsholder, we pay those royalties as soon as possible,” Spotify said.

“And it is a complex problem – we are committed to solving it, but it is going to take significant time and effort,” Spotify said. “In the meantime, we have been working closely with our partners and friends in the industry, especially the National Music Publishers Association, to find the best way to correctly pay the royalties we have set aside to the right publishers and songwriters. But we want to do better than that – we want to fix the global problem of bad publishing data once and for all, and that’s why we’re making this commitment today.”

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Know Your Rights

The first steps toward protecting your rights as an artist, Lowery says, are to register your works with the Copyright Office, understand what royalties you are entitled to and how to collect them.

“A lot of songwriters leave royalties on the table,” Lowery says. “When you are a songwriter and you get paid on the sale of a CD, there’s only one royalty. It’s called the mechanical royalty,” Lowery explains. “When you’re paid from a streaming service, there are two kinds of royalties to the songwriter. There’s a performance royalty, but there’s also the streaming-mechanical royalty, which is actually a little bit bigger than the performance royalty.”

Artists also should consider registering with digital distribution and monitoring companies, such as Audiam, Kobalt, TuneCore and others, which can help musicians and other rights-holders place their music on digital distribution platforms and secure payments for the use of their music.

Featured performers and sidemen also are entitled to compensation, he adds. “When songs get played on webcasting, satellite and non-interactive digital, the performer gets a royalty,” Lowery says. “The way you get that is to sign up at SoundExchange as a performer. So even if you didn’t write the song, but you made a recording of it, you have royalties there. A lot of people are surprised. It’s a bigger check than you’d think. There’s close to a billion dollars per year that is being paid out that way,” Lowery says. “Half of that goes to whoever owns the recording, which might be the label, but it might be you personally if you’re an independent artist. The other half of it goes directly to the performer," he says, and SoundExchange keeps 5%.

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Go PRO

By registering their works with the copyright office, artists have many more remedies available to them and are more likely to receive compensation for their efforts than those who do not register, Lowery says. He also suggests joining a Performance Right Organization, such as ASCAP, BMI or SESAC.

PROs are like unions for songwriters, he says, and offer the first step in documenting the fact that an artist has created and owns a work. PROs also offer databases for music distributors and buyers to find and pay artists.

“Registering goes a long way towards getting you paid down the road,” Lowery says. “There are damages associated with infringements, and you can get lawyers to help you out on a contingency basis [when you are registered]. Suddenly everyone is running to help you when you have your works registered.”

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Streaming and Fixed Recording Costs

When considering overall revenue, including songwriting and performer income, streaming isn’t necessarily bad for an artist’s catalog as it offers incremental income, Lowery explains. However, the factors that go into that decision are different for different kinds of artists and bands.

For bands signed to a label, decisions regarding what recordings are distributed via streaming services typically are made by the record labels and stipulated in artists’ contracts, Lowery explains, whereas independent artist have more control.

“There’s a lot of stuff that I have that is independent and that I control. The stuff that I control is generally the stuff that doesn’t benefit from streaming,” Lowery says, due to the fixed costs related to recording an album.

The fixed costs of recording a Radiohead album vs. Radiohead vocalist Thom York’s side projects and solo efforts, for example, are not substantially different, Lowery explains. But whereas the band projects likely will generate revenue from singles and hits, the more experimental records will not, given that they will generate fewer spins and that streaming services pay a flat rate per spin to everybody.

“If you’re a niche artist or a maybe a low-selling sub-genre artist – a progressive-ambient-Swedish-metal band – with each spin you have to carry so much more of the fixed cost of recording,” Lowery says. For them, those economics don’t necessarily work, as streaming can cost them album sales.

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