If you’ve been following the status of the American Federation of Musicians and Employers’ Pension Fund (AFM-EPF), you know it has been facing severe funding problems since the Great Recession, despite earning relatively good investment returns since then and receiving a significant contribution increase. As detailed more below, however, these have not been enough to “right the ship.” As a result, the trustees are preparing for a critical and declining certification in the spring and an application to the Treasury Department under the 2014 federal law known as “MPRA” for approval to reduce benefits to the extent necessary to remain solvent for the next 30 years.Continue reading
In recent years, the rise of streaming as the preferred model of digital distribution and consumption has radically transformed the media marketplace. Worldwide, digital revenues and audiences have accelerated toward both advertiser-supported and subscription-based consumption models, benefiting digital service providers, copyright owners and producers, and other stakeholders. If current trends hold, the number of paid music subscribers worldwide will rise from more than 149 million today to 200 million by the end of this year.
The Federation’s negotiations with its bargaining partners, whether on an industry-wide, single-, or multi-employer basis, are a never-ending process. Other than contracts with touring producers such as the Broadway League, most of our negotiations seek improvements in compensation and working conditions when musicians are engaged to perform electronic media services either streamed or broadcast live, or captured for analog and digital distribution.
The Federation’s recently concluded Sound Recording Labor Agreement (SRLA) has brought new life to both the Sound Recording Special Payments Fund (SPF) and the Music Performance Trust Fund (MPTF), which are important residual components of that agreement. As music consumption transitioned to streaming, both funds experienced declining revenue due to the precipitous drop in royalties from physical recorded product (CDs, etc.) and digital downloads, which had been the sole sources of revenue for the funds.
I am pleased to report that agreement has been reached with the recording industry for a successor Sound Recording Labor Agreement (SRLA). When ratified, the agreement will extend three years, from February 1, 2017 to January 31, 2020.
Besides significant gains in upfront payments—including yearly 3% wage increases, and improvements in pension contributions, health & welfare payments, and cartage payments—the agreement provides for significant additional payments to the Sound Recording Special Payments Fund (SPF), the Music Performance Trust Fund (MPTF), and AFM & Employers’ Pension Fund (AFM-EPF) driven by the companies’ digital streaming revenue.
I am delighted to announce two important changes to Federation staff—one in our Symphonic Services Division (SSD) located in our headquarters office in Times Square, filling a vacancy left by the election of former Director Jay Blumenthal to the position of AFM Secretary-Treasurer, and another in our Electronic Media Services Division (EMSD) at the Federation’s West Coast Office in Hollywood. The staffing changes have resulted in the addition of two of the best minds and finest lawyers to be found in the field of union-side labor relations. They are Rochelle Skolnick and Russell Naymark.
Below, in the fifth and final part of our series, we examine the growth of streaming and the potential to drive new money to MPTF, SPF, and AFM-EPW.
Revenue from Music Streaming Continues to Grow
From the early 2000s to date, with consumption racing toward streaming and away from physical sales and analog broadcasting, royalty collections from streaming have grown from a trickle to a flood. SoundExchange, the US collective for record labels and featured artists, is now the biggest rights management organization in the world. SoundExchange has collected and distributed more than $3 billion since 2003 and will top $1 billion this year. In 2016, the AFM & SAG-AFTRA Fund will distribute to musicians and vocalists more than $50 million derived primarily from streaming royalties paid by satellite radio and webcasters like Pandora and SiriusXM.