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President’s Message


Ray Hair – AFM International President

    How Do Musicians Get Paid on Streaming?

    Musicians are entitled to streaming payments in two distinct ways: through statutory licensing for the digital distribution of sound recordings and through collective bargaining where negotiated streaming payment obligations appear in contracts with record labels, film and television producers, and other entertainment industry employers. The Federation has also established payment standards for the streaming of live local engagements, including performances that are captured and archived for later streamed distribution.

    Sound Recordings

    In 1995, the US Congress adopted the Digital Performance Right in Sound Recordings Act (DPRA). At the insistence of AFM and AFTRA (now SAG-AFTRA), DPRA included a compulsory license for noninteractive transmissions of sound recordings and required performers be allocated 50% of proceeds. SoundExchange was created to perform functions made necessary by DRPA.

    DRPA established a system where the rates paid by noninteractive digital music services are set either by negotiation (which never occurs) or by litigation before the US Copyright Royalty Board (CRB). DRPA permits copyright owners (the labels) to negotiate and litigate as a group through an agent. SoundExchange is that agent, negotiating rates with noninteractive webcasters, satellite radio, and music channels on satellite and cable television.

    SoundExchange is also the collective management organization (CMO) that collects the revenue from noninteractive digital services providers (like SiriusXM, Pandora, Music Choice) according to rates set by the CRB. It distributes those collections in accordance with the distribution split established by law—50% to the copyright owner of the sound recording (label), 45% to featured artists, and 5% to nonfeatured artists (session musicians and singers).

    The AFM & SAG-AFTRA Fund is the CMO that distributes noninteractive performance royalties to nonfeatured performers. In 2021, SoundExchange collected and distributed $1 billion in digital performance rights royalties to sound recording copyright owners and featured artists, while the AFM & SAG-AFTRA Fund distributed $60 million to nonfeatured performers. Please visit and for further information.

    There is no statutory compulsory license for interactive streamed transmissions of sound recordings, where users may select what they want to listen to on subscription-based services like Spotify and Apple Music, or on advertiser-based or user-generated content interactive streaming platforms like YouTube. This contrasts with the noninteractive streaming discussed above, which is like an online radio service where you cannot choose what is played next.

    The major and independent labels license their copyrighted content on a catalogue basis to interactive digital services and receive large negotiated advance payments. If the featured artist is also the label and owns the copyright in the recording, a per-stream payment is paid to the featured artist’s label. Otherwise, the featured artist receives the negotiated per-stream payment per their deal with the label (usually next to nothing). Nonfeatured artists—the session musicians and singers—get nothing. The US unions (AFM and SAG-AFTRA), as a result of collective bargaining negotiations with the recording industry, receive 1.1% of the labels’ noninteractive streaming revenue. The AFM’s share is split between the AFM Pension Fund, the Music Performance Trust Fund, and the Sound Recording Special Payments Fund.

    Audiovisual Streaming of Live Television, Motion Picture, and Television Film Programs

    There is no US statutory regulation covering the streaming of audiovisual content embodying the services of musicians, despite the Beijing Treaty on Audio Visual Performances of 2012, which has not been ratified by the US Congress. The entertainment unions are thus left to negotiate with audiovisual content producers (TV networks and film studios) for a share of residual revenue generated by live or filmed television programs and motion pictures that are streamed either on advertiser-supported video-on-demand (AVOD) or subscription-based video-on-demand (SVOD) platforms.

    The AFM’s agreement with network television producers provides for additional residual payments to musicians, if programs initially exhibited on traditional broadcast television are made available in whole or in part on AVOD or SVOD platforms. After the expiration of a 30-day free streaming window, a program or excerpt (clip) posted on an AVOD platform (like YouTube) triggers a payment per musician of 2% of the original program rate per 26 weeks of exhibition. After two 26-week cycles (52 weeks), 1.2% of advertiser revenue from the content is split among the musicians. If a program is released to an SVOD platform (like Disney Plus), 1% of the distributors’ gross receipts from that program is payable to musicians who performed in the program.

    The Federation’s agreement with film producers provides for an additional residual payment of 1% of distributors’ gross receipts, shared by musicians pro-rata, if a theatrical or television motion picture is exhibited on a consumer pay (SVOD) streaming platform (like Netflix, Amazon, or Disney Plus) or an AVOD free-to-consumer platform (like IMDB, Peacock, or TUBI).

    Streaming of Local Live Engagements

    The AFM has developed addendums for use with live engagement contracts permitting capture and streaming upon additional payments to each musician, based on local scale as follows: a) 10% overscale for live, noncaptured streaming; b) 20% overscale for capture and internet exhibition for up to 30 days and 30% overscale for capture and internet exhibition for up to three months.

    The Federation has also developed an addendum for use where a local union has a collective bargaining agreement (CBA) with a local theatrical producer. The addendum covers the streaming of locally produced live theatrical productions, providing a 25% additional one-time payment per musician, based on the CBA scale, with a run of show streaming window on the local producer’s website only. Third party licensing is prohibited.

    Who Makes All the Money?

    We’ve shown how musicians are paid by statute for noninteractive streaming of sound recordings and also paid according to provisions contained in Federation collective bargaining agreements and via addendums to local live engagement agreements. But what about the rest of the streaming business? The global entertainment industry generated $2 trillion in 2020 and is expected to reach $2.6 trillion in 2025, rebounding from the pandemic thanks to streaming.

    Next month, we will look at where the money is being made as the industry morphed from a retail sales-based economy to online consumption through the explosion of subscriber-based and user-generated streaming platforms. Musicians and artists who make the music will not receive their fair share of streaming revenue as long as copyright laws do not cover the streaming of interactive, audiovisual, and user-generated content.

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    New Three-Year Deal with Public Television

    I am pleased to report that the Federation has reached an agreement with representatives of public television employers including the Public Broadcasting Service (PBS), WGBH, WETA, WTTW, Austin City Limits, Sesame Workshop, and Thirteen Productions (formerly Educational Broadcasting Corporation) for a successor National Public Television Agreement. This new agreement will be effective upon ratification and will extend for three years from the date of ratification.

    Our recent resolution of the commercial network television agreements formed much of the background for the negotiation of the National Public Television Agreement, which expired in 2019, just prior to the onset of the coronavirus pandemic. We insisted that the producers follow the progressive patterns achieved in the commercial agreements and in agreements concluded by other unions so that musicians would see similar gains in any new agreement.

    We concluded a forward-looking three-year deal that includes an immediate 4% wage increase, an additional 3% wage increase in the second year, another 3% wage increase in the third year, increased Health & Welfare contributions, improved provisions governing new media, and a 4% increase in clip use payments.

    Specific improvements upon ratification include a per-day Health & Welfare contribution increase from $25 to $30 (a 20% increase) with a maximum weekly contribution increase from $125 to $150. In the second year, the per-day Health & Welfare contribution will increase from $30 to $35 (a 16.7% increase) with a maximum weekly contribution increase from $150 to $175. Additionally, in the third year of the agreement, the contribution per-day shall be the higher of either $35 or the then-current per-day rate prescribed in the AFM Television Videotape Agreement.

    In recent years, new media platforms created battleground issues in collective bargaining for commercial television agreements not only for the Federation but for the other guilds as well. In this agreement, the public television employers were brought into alignment with guilds representing writers, directors, and actors. This applies to both programs made for traditional television broadcast and then exhibited on new media platforms as well as for programs that are produced for initial exhibition on new media (web-based internet platforms).

    This agreement will, for the first time, eliminate a signatory public television employer’s option to avoid covering material produced for initial exhibition in new media, subject to certain programming exclusions. And it will require producers to share with musicians the revenue they receive from certain forms of new media exploitations. The producers will be required to share the covered exploitation revenues with musicians at the same rates as commercial television producers under the AFM’s TV Videotape Agreement (1% of distributor’s gross when consumers pay for subscription or per-program views).

    The Federation now has the same made-for-new-media terms and coverage with public television that the other guilds have negotiated in their public television agreements. In future bargaining, new media issues will continue to occupy the attention of all the guilds as well as the Federation.

    Public Television producers agreed to increase their contributions for paid permanent downloads (“download to own” or “electronic sell through”) to the percentages achieved in commercial television, from 1% to 1.5% of 20% of “distributor’s gross” for the first 100,000 units, and from 1.9% to 2.9% of 20% thereafter.

    Although these rates are the same as the new commercial television rates, we believe that the payment provisions in this agreement are more favorable because they place the payroll costs of these exploitation payments (such as the employer’s share of social security contributions) squarely on the employers, instead of deducting them from the exploitation payments themselves.

    Producers also agreed to the same provisions that are applicable to commercial television for exhibition of covered programs on secondary digital channels “diginet” by paying an aggregate sum equal to 2% of “distributor’s gross” to the American Federation of Musicians and Employers’ Pension Fund (AFM-EPF).

    In return for the gains described above, the public television employers demanded unacceptable expansions of their rights—including the ability to obtain fifth and sixth national broadcast releases upon payment of 25% of scale (currently 100%). They wanted us to permit reuse and/or simulcast of programs into radio under a distributers’ gross sharing scheme, which would have resulted in little or no payment, and they wanted to reduce subsequent program broadcast cycle payment percentages (currently 100% of scale) to 50% and lower. To these demands, we maintained a firm and unwavering reply of “no.”

    This successor National Public Television Agreement brings public television employers into a collective bargaining agreement with progressive terms that establish a firm basis for future negotiations. Moreover, its terms align with those that exist in the broader television industries and that have been agreed to by all the relevant guilds.

    I offer my heartfelt thanks to the negotiating committee and staff who worked hard and with great dedication to obtain favorable results. That negotiating committee consisted of Local 802 (New York City) President Tino Gagliardi; Local 47 (Los Angeles, CA) President Stephanie O’Keefe and Vice President Marc Sazer; AFM Executive Officer and Local 257 (Nashville, TN) President Dave Pomeroy; AFM Executive Officer and Local 10-208 (Chicago, IL) President Terryl Jares; Electronic Media Representative Dean Rolando; Local 149 (Toronto, ON) Vice President Rea Beaumont; Local 9-535 (Boston, MA) President Pat Hollenbeck; AFM Executive Officer and Local 161-710 (Washington, DC) President Ed Malaga; Local 77 (Philadelphia, PA) President Ellen Trainer; Local 433 (Austin, TX) President Aaron Lack and Secretary-Treasurer Nicole Bogatz; AFM International Vice President and Local 99 (Portland, OR) President Bruce Fife; AFM Vice President from Canada Alan Willaert; AFM Secretary-Treasurer Jay Blumenthal; AFM Electronic Media Services Division Director Patrick Varriale and Assistant Director John Painting; AFM Director of Symphonic Electronic Media Deborah Newmark; and AFM In-house Counsel Jennifer Garner.

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    Respecting Artists with the American Music Fairness Act

    On February 2, 2022, the House Judiciary Committee, chaired by Jerrold Nadler (D-NY), held a hearing on the American Music Fairness Act (AMFA). Co-sponsored by Ted Deutch (D-FL) and Darrell Issa (R-CA), AMFA is vigorously endorsed and supported by your union.

    Mirroring legislation introduced in previous congresses, AMFA would correct the inequity that has existed for a century that has permitted US radio broadcasters to avoid paying session musicians, singers, and featured artists when their recordings are heard over terrestrial AM/FM radio. AMFA would end the 100-year free ride enjoyed by broadcasters and ensure that terrestrial radio is treated the same as digital radio, when it comes to royalty payment requirements.

    Among artists and advocates invited to testify at the hearing was AFM International Executive Board member and Local 257 (Nashville, TN) President David Pomeroy. “Incredibly, the United States is the only industrialized nation besides North Korea and Iran that does not pay a broadcast performance royalty for sound recordings. That means we not only fail to get paid by US broadcasters, but adding insult to injury, foreign nations refuse to pay us the estimated $200-million-plus they collect each year from playing American music,” he testified. “This huge trade imbalance needs to be addressed so this systemic injustice can finally come to an end.”

    An archived stream of the Judiciary Committee Hearing can be accessed at and the full transcript of Pomeroy’s testimony here.

    Among other witnesses invited to appear before the committee was music industry economist Barry M. Massarsky, a 40-year veteran in the study of music use trends on commercial radio. He’s an expert on the status of the sound recording exemption for US terrestrial radio and the industry’s dependence on it for its revenue.

    Massarsky’s written and oral testimony effectively rebutted claims by the National Association of Broadcasters that AMFA would jeopardize the “mutually beneficial relationship between performers and radio—free airplay for free promotion—that serves the public interest.” He also debunked allegations that payment of sound recording royalties would be “financially unsustainable for broadcasters and would lead to less music airplay.”

    US radio stations generated $10 billion in advertising revenue in 2020 and will reach $12.7 billion in 2022, according to BIA Advisory Services, a recognized authority for market research in the US radio broadcast industry.

    Summarized here are four conclusions submitted by Massarsky in sworn testimony before Chairman Nadler and Judiciary Committee members:

    1)         “It is clear and irrefutable that music formatted radio programming generates the lion’s share of station revenue for the terrestrial radio marketplace. Broadcast radio consistently depends on sound recordings to generate local advertising revenue. Eighty percent of overall revenues are sourced from radio stations that provide music as its staple programming format [Source: BIA Kelsey]. Music stations naturally and unsurprisingly promote the fact that they are a source of music, making that fact central to how they market themselves to their listening audience.”

    2)         “It is also clear that the huge majority of that revenue is generated by established “hit” recordings—recordings that already have a demonstrated value to audiences (and therefore broadcasters)—and not by exposing audiences to new recordings or artists. Historically, many broadcasters have argued that they deserve a special exemption from paying sound recording royalties due to the so-called “promotional value” of radio. Specifically, they argue that radio promotes new artists and songs unfamiliar to a record buying audience and therefore helps sell records for the benefit of the entire music industry ecosystem. That premise is largely false. The music industry is no longer a sales-based economy but rather a subscription/rental business through the explosion of digital streaming services such as Spotify, Apple, Amazon, and Pandora.”

    3)         “Radio stations rely upon time-tested, non-current sound recordings to draw audience attention. Radio doesn’t focus on new music; rather, the majority of airplay is dedicated to established hits. (And new music is chosen based in significant part on success on streaming platforms.) Nearly 53% of all airplay is gold—i.e., established hits—and therefore not of any promotional value to the music business. Only 36% of airplay is deemed current (as tracked by Nielsen Music’s Broadcast Data Service).”

    4)         “To the extent someone argues that radio stations “deserve” a special exemption from paying sound recording performance royalties due to promotional value, that argument is based on a false premise. This is a clear and unfair paradox in the law, which radically subsidizes broadcasters for their chief input (music) for the programming associated with the majority of their revenue. Utilizing Nielsen BDS, and crossing formats for samplings of per song time, I learned that an average song length was three minutes and 21 seconds and there were 12 songs on average played on an hour of broadcast time. On a 60-minute clock basis, that amounts to 67% of time. Only 4.2% of the stations’ operating costs relate to this 67% chief input value. (Those costs are for the licensing of the musical works and are solely relatable to agreements on the composition or work side of the copyright as represented by ASCAP, BMI, SESAC and GMR.)”

    Amen, Mr. Massarsky. What an illuminating view of the dependence by American broadcasters upon the unlimited and royalty-free use of recordings by session musicians, singers, and featured artists. From this analysis, we can see that of the industry’s $10 billion in income in 2020, $6.7 billion was directly attributable to music, at a cost of only $4.2 million, and paid exclusively to the songwriters and publishers without a single cent to those who made the music.

    The broadcasters will fight tooth and nail to retain this unfair business model—one that depends on our talent to reap billions in profits by paying nothing for it. The American Federation of Musicians and its coalition partners will continue to ask US lawmakers to do the right thing and enact the American Music Fairness Act so that musicians, singers, and featured artists can receive royalties when their recordings are heard on terrestrial radio.

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    American Rescue Plan Act to Provide Special Financial Assistance for AFM-EP Fund

    Early last year, after an all-out lobbying effort by US labor unions, the Federation, and the AFM-EP Fund to mobilize rank-and-file union members and Fund participants, together with concerted action by a host of others, Congress passed and President Biden signed into law the American Rescue Plan Act of 2021 (ARPA). ARPA provides desperately needed relief to multiemployer defined benefit plans facing financial distress, like the AFM-EP Fund.

    ARPA allows eligible multi-employer plans to obtain direct financial assistance from the federal government in the form of a grant that does not have to be repaid. The law appropriates assets from the general fund of the US Treasury to pay for the program.

    The assistance is intended to provide pension plans with the funding they need to be able to pay benefits through 2051, with no reductions to participants’ benefits. In addition, plans that receive the assistance will not be eligible to reduce benefits under the Multiemployer Pension Reform Act (MPRA). At the same time, plans receiving financial assistance under ARPA cannot reduce employer contribution rates and cannot increase benefits unless the increase is fully paid for with new contributions (which is already the general rule for plans with the funding status of the AFM-EP Fund).

    The Pension Benefit Guaranty Corporation (PBGC), which is the federal agency charged with the responsibility of overseeing pension plans, is administering the program. It is accepting program applications from plans seeking ARPA assistance in order of priority status established by the law. Because the AFM-EP Fund is not projected to be insolvent for many years, we are not in a priority group, although we expect to be permitted to file our program application about a year from now.

    According to the law as adopted, there is no limit on the amount of money available to provide relief to eligible plans, so any delay should not adversely affect the Fund. Dozens of plans have already applied, and the PBGC has said that it is processing applications more quickly than anticipated.

    We will not know how much financial assistance the AFM-EP Fund will receive until we prepare and submit our ARPA application. The amount of financial assistance is based on the plan’s financial status on the last day of the calendar quarter immediately preceding the application date. However, we anticipate a substantial amount of assistance that will protect the Fund from insolvency for years to come.

    The PBGC issued interim regulations last summer regarding the application process and the amount of assistance that plans can receive. Numerous stakeholders submitted comments regarding the regulations, including the AFM-EP Fund. In general, we urged the PBGC to revise its methodology for calculating the amount of the financial assistance to increase the amount the Fund would receive. Among other points, we suggested that a broader range of investments be permitted for funds received from the program, which we believed would better fulfill the Congressional intent to save these plans.

    The PBGC has said that it anticipates issuing final regulations soon (and may have done so by the time you read this). We hope the agency adopts at least some of the changes that we and others have proposed in order to ensure that ARPA assistance achieves the goal Congress intended—to bring financial stability to troubled pension plans that are so vitally important to so many people.

    Not only does ARPA provide a lifeline for pension plans, it has also saved the PBGC itself, which was previously projected to run out of money in 2026 because of the imminent insolvency facing a few enormous plans. This would have been a disaster, because plans facing insolvency in the event PBGC went broke would have been left with almost none of the guaranteed benefit payments that the PBGC is supposed to provide. Now that these plans will receive financial assistance direct from the US Treasury under ARPA, PBGC’s balance sheet has been restored and it is projected to remain solvent for more than 30 years.

    There are many large pension plans, like the AFM-EP Fund, as well as dozens of smaller ones that provide significant financial support to the communities they serve. The collapse of those plans would have caused great financial harm to those communities. All of your Trustees are grateful and proud of the grassroots political organizing and the determination of AFM-EP Fund participants and union members to push for the adoption of the American Rescue Plan Act, which now stands to improve the lives of tens of millions of workers and preserve the dignity of retirees.

    Looking ahead in the new year, Fund Trustees are working together to develop informational, educational communications for participants, in order to promote better understanding of the Fund and the benefits available.

    102nd AFM Convention Rescheduled for 2023

    Due to continuing pandemic uncertainty, COVID-related protocols and governmental restrictions, and challenges of COVID-related international travel, the AFM International Executive Board has determined that holding the 102nd Convention in June 2022 in Las Vegas is impossible and has rescheduled it for June 2023. Further details will be forthcoming.

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    Federation Agreements Provide Stability in a World of Pandemic Unpredictability

    As I compose this month’s column, I’ve received notice from the American Arbitration Association (AAA) that musicians employed under the Federation’s Motion Picture Film and Television Film Agreements have ratified a one-year extension to those agreements, extending all provisions of the existing agreements together with a 3% increase in wages.

    That extension preserves and protects the significant progress in key areas made two years ago in our negotiations with the producers. This occurred immediately prior to the onset of the coronavirus pandemic and the havoc it wreaked upon the livelihood of professional musicians.

    The film agreement extensions with its economic improvements and the Pamphlet B and Short Engagement Tours extension, with its newly-bargained Health and Safety Handbook covering musicians performing in touring theatrical musicals, are positive outcomes in a largely negative environment endured over the better part of two years by musicians, whose lives and employment relationships were (and continue to be) disrupted by the pandemic.

    These extension agreements, together with those implemented with the sound recording and commercial announcements industries (while negotiations for successor agreements are in process), temporarily postpone conflicts, which may naturally arise between industry representatives, employees, and the Federation in preparation for and during the bargaining process. The agreements also bind the employers to their existing relationships with the Federation and prevent any unilateral change in terms and conditions of employment.

    With the Omicron variant surge putting the world on edge, there is a certain degree of safety amid the uncertainly at the start of 2022 with new Federation agreements and written extensions of existing agreements on hand, as we once again face the unknown effects of the pandemic and its unpredictable behavior, including the severity of the new variants and how vaccines perform against them.

    When the pandemic shook the symphonic, electronic media, and live entertainment sectors in March 2020, the Federation sought to engage with its bargaining partners to develop work rule flexibility and help maintain relationships between employers, musician-employees (even with temporary work reductions), and consumers. Together with our bargaining best practice workplace safety protocols, we helped minimize short-term employment loss.

    By the end of 2021, symphonic sector employment levels had recovered to 80% of prepandemic levels and they are projected to rise to 100% by the end of 2022. Employment in the electronic media sector had similarly recovered during 2021 and are also expected to return to full prepandemic levels by the close of 2022.

    The touring theatrical musical sector had 22 covered shows on the road in March 2020, when the pandemic halted all live entertainment. Touring employment has risen to practically 100% of prepandemic levels as of January 2022, with 21 touring musical productions. The tours are expected to sustain that level of employment, absent another coronavirus surge that could sicken company employees and disrupt attendance, ticket sales, and routing.

    It needs to be said here, pointedly, that the rise in return-to-work musical employment cannot mitigate the permanent damage inflicted by the pandemic by way of the deep and devastating job losses, interruption to the evolution of our musicality, and all the other adverse economic circumstances suffered by professional musicians over the past two years.

    No one knows how long it will be before we can clearly see the total extent of damage the virus has wrought upon our artistic connections with other musicians and with our audiences. All of this has affected our personal musical trajectory and our ability to perform at the highest level, which surely affects how and whether we reach our potential as musicians.

    Even where musicians continued working amid the shutdown—particularly in the film industry—the nature of our jobs certainly changed. In the early going during the crisis, the Federation temporarily allowed film and TV film sessions to be paid at the single session rate, when musicians were hired to record tracks singly, at home (to be combined with other tracks for a soundtrack). This was done in consideration of pandemic-driven, governmental restrictions on in-person group recordings.

    New technology and confusing work rules were thrust upon recording musicians who had to adapt to the performance of their craft virtually, a distinct difference from what they were accustomed to do in-person. Suddenly, they had to be recording engineers and musicians rolled into one. The Federation’s flexibility allowed the content to be produced. But when governmental restrictions were relaxed and studios reopened for business, some producers continued to instruct musicians to record at home, alone, without proper payment, despite the Federation’s notice to producers that conditional remote recording flexibility had ended.

    Undoubtedly, the producer’s use of technology to record single musicians remotely to track string, brass, and wind sections, which was normally and regularly done in-person, changed the nature of the work. Moreover, some efficiency- and profit-driven producers continued that change, failing to return to the prepandemic status quo as required. As a result, the Federation is now collecting hundreds of thousands of dollars in delinquent payments owed musicians who recorded alone and were paid improperly by producers.

    The remote recording situation in the film industry is an obvious example of a group of employers that attempted to turn a temporary workplace solution into a permanent one. The situation was favorable to producers but adverse for musicians because it would have resulted in permanent post-pandemic job loss.

    Looking ahead to the first quarter of 2022 and beyond, if successive pandemic waves disrupt production in the live entertainment sector, and if tour producers request to meet and discuss pandemic-related work rule relief, care must be taken that the temporary measures considered do not become precedent for permanent regressive change in how our valuable work is performed.

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