Thursday, December 10, 2015

Nashville underdog takes royalty fight to Washington

Written by Nate Rau — George Johnson is the unlikely underdog in an important ruling that will put to rest nearly two years of fierce legal proceedings that have pitted music industry titans on opposite sides of the divisive issue of royalties.

A decision in the coming weeks by the Copyright Royalty Board, an obscure government panel of retired judges, will deeply impact the bottom line for record labels, artists, broadcasters and popular Internet music services.

In one corner are the well-financed nonprofit and advocacy groups led by SoundExchange representing the artists and record labels. In the other corner are the mega corporations that provide some of the most popular music services such as Pandora, SiriusXM and iHeartMedia.

And in his own corner, standing toe to toe with the world’s music industry leaders, is Johnson, a little-known Nashville singer-songwriter, whose Ayn Rand-inspired world view has provided a colorful wrinkle to the dry and complicated rate-setting process.

Johnson trusts none of the stakeholders, and believes independent artists and mom-and-pop record labels are being squeezed out of an industry that has devalued music to the point that carving out a living is nearly impossible.

Johnson is not an attorney by trade, but research for his legal filings in the Copyright Royalty Board’s hearing has been detailed, voluminous and artfully done. He’s earned the admiration of lawyers representing the very organizations that Johnson rails against.

The first chart in his 8-inch-thick binder of research is a graphic showing how the value of music royalties has declined over the years. In 1909 the federal government put the value of a mechanical royalty for a song at 2 cents. Factoring inflation, Johnson said a mechanical royalty should be worth 52 cents today.

By comparison, artists and record labels want the Copyright Royalty Board to set the rate for non-interactive music services at $.0025 cents per stream. Rate proposals from the service providers range between $.0005 and .0016 per stream. Johnson says artists and labels should be paid an unprecedented licensing fee of between 10 cents and $1 for each song the services wish to use, in addition to the statutory per-stream royalty.

This binder is full of Nashville singer-songwriter George Johnson’s exhibits for his royalties case with the Copyright Royalty Board in Washington.

That proposal isn’t likely to get traction with the Copyright Royalty Board, but Johnson has still decided to fight the good fight, representing himself in hearings where the nonprofit industry groups and corporations have hired million-dollar attorneys. His goal is to point out how the copyright system is unfair for independent creators and to rally other Nashville songwriters and artists to the cause. Johnson is the only artist representing himself in the rate-setting hearing.

“I’d like to get paid for my songs, that’s all I’m trying to do, is carve out a little niche in the corner of the music industry and make a living,” Johnson said.

A cartoonist turned songwriter

Johnson is a firebrand, who fills a peaceful coffee shop with a booming voice when he talks about the U.S. music copyright system. He believes the performance rights organizations, ASCAP and BMI, and the trade organizations such as RIAA are geared to help the corporate interests of international companies that own the big three record labels: Universal Music Group, Warner Music Group and Sony Music.

Raised in West Virginia, Johnson, 48, has spent his entire career at creative pursuits. First he worked in Hollywood as a cartoonist who pitched his cartoon ideas to major studios. He sold one of his shows, “Shake and Flick,” about a homicidal flea wreaking havoc on a poor unwitting dog, to Hanna Barbera, but the cartoon was dropped after its initial episode.

Johnson always had been a musician, so after his tries in Hollywood, he moved to Nashville and began pursuing a career as a singer-songwriter in the mid-1990s. He’s produced two albums of quirky, ornate songs backed by legendary Memphis musicians — “George Johnson featuring the Jordanaires and the Memphis Horns” and George Johnson featuring the Jordanaires "Still Pissed at Yoko.”

His work has not led to commercial success, a reality Johnson says is compounded by the nation’s copyright laws.

“Unless you’re Adele, or Taylor Swift, or the top point-one percent, the rest of us are shrugging under the corporate interests of foreign countries and a system that does not care about you,” Johnson said.

Johnson's fix for music copyright

Johnson’s filings with the Copyright Royalty Board and his arguments in front of the three-judge panel have earned praise from attorneys for SoundExchange and others, according to transcripts for the case.

Johnson said the panel of three retired judges has been amazing to work with, and yet, the heart of his vision for how to fix music copyright is to abolish government oversight.

Johnson is a libertarian purist who believes the free market, and only the free market, should decide royalty rates.

He says the government should not be in the business of setting royalty rates, and that copyright owners should be free to negotiate with service providers. Johnson believes the federal government should eliminate the consent decrees that govern ASCAP and BMI as well. The Department of Justice is in the midst of reviewing those consent decrees for the first time in many years, an exercise that publishers and songwriters hope leads to drastic changes to the laws that determine how they are paid.

“Obama could get rid of the consent decree, start with that,” Johnson said, when asked how he would fix the country’s music copyright system. “Congress could pass a law to get rid of the Copyright Royalty Board, as nice as they are. And if we did that, we’d be on the road to a free market.”

Entertainment attorneys respond

Music copyright experts have been impressed by Johnson's thorough preparation for the hearing and his brash proposal for overhauling the copyright system, something even Johnson concedes is probably not going to occur.

Loren Mulraine, a professor in Belmont University’s school of law and an entertainment and intellectual property attorney at Bone McAllester Norton, commended Johnson for taking his fight to the Copyright Royalty Board.

“The amount of time and energy and effort and expertise it takes essentially takes you away from doing your craft,” Mulraine said. “In order for him to really be successful in pulling this material together, he’s not writing any songs most likely. That’s why most artists and songwriters will let SoundExchange or the PROs (performance rights organizations) represent them.”

Michael Johnson (no relation to George Johnson), an entertainment attorney at the firm Kay Griffin, said Johnson’s proposal is intriguing philosophically. But he said it would be functionally impossible for artists and labels all over the country to negotiate their own rate with the Pandoras and iHeartMedias of the world. (George Johnson said he would like an opt-in system where creators could decide whether to negotiate their own rates or opt-in to the rates negotiated by SoundExchange.)

“In a perfect world, copyright licenses would be negotiated in an entirely free market system,” Michael Johnson said. “However, that could become very expensive for both artists and consumers because licensees would be required to negotiate license terms on a case-by-case basis.”

With the Copyright Royalty Board’s decision set to come no later than Dec. 16, George Johnson is already looking ahead to embarking on another David vs. Goliath legal battle. Next year, he intends to participate on his own behalf in the rate-setting hearing for how much songwriters and music publishers are paid by the webcasting services.

Johnson said he wished more in Nashville’s creative community would join him in taking the fight to the powers that be in Washington, D.C.

“I encourage every songwriter to get into it in January,” Johnson said. "We need to come together and wake up because the government and the (international music companies) are taking away our ability to make a living.”

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