Musician’s Streaming Income: Growing and Glaring Disparity

April 2, 2019

Ray Hair  -  AFM International President

Below are my remarks from a rally hosted by Local 47 (Los Angeles, CA) immediately prior to our negotiations with the Alliance of Motion Picture and TV Producers toward a successor film agreement.

Good morning, brothers and sisters. I’m proud to be here with my colleagues from the AFM International Executive Board, AFM staff, Local 47 (Los Angeles, CA) officers and staff, members of our sister union SAG-AFTRA, the good folks from the LA County Federation of Labor, but most importantly, great musicians, members of the American Federation of Musicians of the United States and Canada—the oldest and largest labor union in the world representing professional musicians.

From the first day that a sound recording, a talking motion picture, or a wireless broadcast flickered to life, people who fell in love with records, movies, and radio and television broadcasting also fell in love with the musicians who made the music. We recorded first on phonographs and gramophones, we performed accompanying silent films, then we recorded the talkies, then in Technicolor, Cinemascope, 3D, THX, and IMAX. We were heard on nickelodeons, jukeboxes, 33 rpm long-playing records, 8-track tapes, cassettes, and compact discs. We were broadcast on TV in Walt Disney’s wonderful world of color, on cable and satellite TV, from Hollywood to Dollywood, from Austin to Atlanta, New York to Chicago, Dallas-Fort Worth to LA, and worldwide. Now, nearly 150 years after Edison invented the phonograph, in this new paradigm of the convergence of production and distribution, we are heard through the economy and efficiency of streaming.

The game—capital vs. labor—has radically changed. One thing, though, has not changed. Despite the trend away from traditional, old media and the acceleration toward the new streaming media of satellite radio, Pandora, Spotify, Netflix, Amazon, Hulu, and YouTube, whether interactive or noninteractive, people who love media know that musicians are the heart and the soul of the movies, and all media production. We always have been and we always will be.

From its beginnings, the AFM grappled with technology as we still do today—by striving to maintain a level of control over what we do as musicians, by attempting to retain a measure of ownership over what we’ve created, and by seeking participation in the revenue streams that continue to enrich those who exploit our music long after we create it.

From the early days of electronic media, we negotiated constructive agreements with the record companies, radio networks, and film industry. We obtained the first residual payments in those industries—additional payments for musicians who recorded program transcriptions for use in radio to permit performances that were performed live in the east to be re-broadcast in the west on a delayed basis.

We negotiated the first use fees in the history of organized labor with the film industry in the 1930s and we negotiated the first royalties on record sales with the labels in the 1940s. In television, we negotiated replay residual patterns when programs were taped and rerun in the summer or during later seasons. Those “old media” residuals evolved through decades of negotiations and worked very well for musicians in the United States and Canada.

Our agreements and our negotiated residual structure made it possible to make a living as a musician in media production. But the business is changing faster than the speed of light. And the collective bargaining process is behind the curve in adjusting to those changes.

In the 21st century, we live in a time of convergence, the intersection of content production and distribution, where new technology has blurred the lines between linear broadcasting and new media. The rapid surge of innovation has produced a new techno-economic paradigm, disrupting existing business models, bargaining relationships, and workplace attitudes.

As streaming media consumption grows throughout the world, we see new potential, and new problems. More and more, streaming platforms have become the central nervous systems for businesses and consumers, rallying digital markets toward phenomenal growth.

The economy of streaming media is booming, but those of us who make and create the music—featured and nonfeatured alike, instrumentalists, singers, composers, copyists, and arrangers—are not receiving our fair share of the pie. Digital revenue in the entertainment and media industry worldwide totaled $616 billion in 2013. That figure is expected to top $1 trillion this year. How much of that good money will musicians get, compared to what the companies and everyone else in the industry will get?

As streaming consumption has grown, studios have agreed to pay residuals to actors, writers, directors, and others, when films are made for streaming. But musicians have been uniquely excluded. This is not fair and it jeopardizes the ability of musicians to earn a living wage in the industry.

Let’s look at the movie studios’ 2018 box office. With more than $12 billion in domestic revenue and more than $40 billion worldwide, the industry achieved another record-breaking performance in 2018. It’s the fifth time in the past seven years that the domestic box office saw an increase over the previous year’s totals. Disney saw the leading share: more than $7 billion in box office revenue for the year. Warner saw more than $5 billion, Paramount and Universal saw $2 billion each, and experts say 2019 will be even better.

So I want to ask everybody up the food chain—our studio bargaining partners and Netflix, Amazon, Hulu, and I’ll include Google and YouTube (there’s another $130 billion last year in ad revenue where creators get practically nothing)—how rich do you have to be before you can afford to treat musicians fairly?

There is a growing and glaring disparity between those of us who create music and those who exploit us. Why is it we make all the music, while somebody else makes all the money?

These are critical issues affecting the livelihood of professional musicians everywhere. We must adapt our contracts to changes in technology to ensure that we maintain good jobs and a rightful place in the future of the media industry. We are seeking a productive dialogue during the next few days with film and TV producers as we work to reach a fair resolution of these issues.

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