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Streaming Predominates, Do We Get Our Fair Share?

by Deborah Newmark, AFM Symphonic Services Division Director of Symphonic Electronic Media

Streaming is everywhere. It is on your smartphone, Apple watch, laptop, and any other device that connects to the Internet—including Wi-Fi in your car. Never has our recorded music been so readily available worldwide. While technologies continue to advance, making it easier to bring our music to the listener, artist compensation is not yet equitable to the billions being generated by the relevant industries. Advances have been made, both on the negotiated front as well as in Congress through the Digital Millennium Copyright Act (DMCA) and the Digital Performance Right in Sound Recording (DPRA), but there is still a long way to go to ensure musicians get their fair share.

What has already been accomplished?

Congress enacted the DPRA in 1995. Under DPRA, there are three categories of digital transmission: nonsubscription broadcast transmissions, which were exempted from any performance right; noninteractive Internet and satellite transmissions, which are subject to a statutory license; and on-demand interactive Internet transmissions, which are subject to the full exclusive right.

This amendment to the Copyright Act established a long-sought public performance right in sound recordings applicable to digital transmissions. The passage of the DPRA enabled US performers and owners of the copyright of recordings (usually record companies)—for the first time in the decades-long struggle between the broadcasting and recording industries—to collect a royalty when a recording that they owned, or on which they played or sang, “aired” in a digital format. 

Noninteractive streaming services must pay a compulsory, statutory license for the right to use our product. These include companies like Pandora, Sirius XM satellite radio, terrestrial radio stations that stream broadcasts, and others where the end user does not get to choose what they listen to (i.e., noninteractive). They pay royalties based on rates set by a copyright arbitration panel, which vary and are not always favorable to us. Royalties are paid into SoundExchange, which is a US collective for copyright holders (typically record labels and in the symphonic world, most often orchestra employers), as well as featured artists.

The orchestra employer has taken on the role as copyright holder for many of the recordings created in the past 10 years, at a time when our media agreements shifted to a model where the orchestra has to retain ownership and copyright. For the purpose of featured versus nonfeatured shares, the musicians of the orchestra are deemed the featured artists, along with any soloists and/or conductors. Symphonic featured artists and nonsymphonic, nonfeatured artist royalties are distributed through the AFM & SAG-AFTRA Fund.

How do we fare with interactive streaming services?

Apple Music, Pandora Premium, Amazon Music, Spotify, and Tidal are examples of interactive streaming services. These services provide choices for the listener through subscription-based systems. Featured artists are paid in accordance with royalty agreements made with the record labels. In addition, payments are made to AFM-EP Fund, the Sound Recording Special Payments Fund, and the Music Performance Trust Fund, based on existing terms in the AFM’s Sound Recording Labor Agreement.

What are the roadblocks to achieving fair compensation?

In the symphonic community, while we do receive upfront payments for the creation of the recorded product, the back end suffers. This is an integral part of the financial structure of our agreement. Primarily it suffers due to the fact that the symphonic employers, as owners of the copyright, often fail to enter into robust licensing agreements that will benefit both the musicians and the institution. The Integrated Media Agreement (IMA) provides for a 60/40 split of back-end revenue (60% to the musicians) derived from the exploitation of product on the Internet (and in other formats). If the employer doesn’t succeed in making the best deal possible, musicians suffer the loss of potential revenue.

A prime example of this, as a great, untapped resource, are fees paid to copyright holders from Internet videos where ad-supported streaming proliferates—like on YouTube. According to Robert Kyncl, the company’s chief business officer, YouTube paid $1 billion in revenue to the recording industry in 2016. Where is our share?

How is this revenue calculated?

CPM, RPM, and eCPM determine revenue. CPM is the cost per 1,000 ad impressions for the advertiser to pay when their ad is showcased. RPM is the revenue per 1,000 views. YouTube takes a 45% cut of ad revenue generated by a channel from total RPMs. eCPM is a formula for earnings/monetized playbacks x 1,000. YouTube analytics help explain how YouTube pays the copyright holder on advertisements once they reach 10,000 lifetime views. The IMA considers this back-end revenue, which is shared with the musicians and the employer.

In what other areas is the AFM at the forefront of seeking fair compensation?

The AFM is a member of the MusicFIRST Coalition that is working on getting legislation passed in Congress that will ultimately improve the working lives of musicians. Two pieces of legislation have recently been introduced.

The Fair Play Fair Pay Act (H.R 1836). The bill introduced March 30, 2017 by Jerrold Nadler, (D-NY), Marsha Blackburn (R-TN), John Conyers (D-MI), Darrell Issa (R-CA), Ted Deutch (D-FL), and Tom Rooney (R-FL) aims to ensure that all forms of radio, regardless of technology or platform used, would pay a fair market rate for music performances. The legislation also aims to restore fairness for artists whose songs were written before 1972 and end satellite radio’s special “grandfathered” below-market rate.

The PROMOTE Act: The Performance Royalty Owners of Music Opportunity to Earn Act of 2017 (PROMOTE Act) was introduced in the House of Representatives by Representative Darrell Issa (R-CA) to attempt to right a decades-old wrong. This effort was spearheaded by the AFM as part of the MusicFIRST coalition. Coalition Executive Director Chris Israel says, “The US is the only developed country where music creators have no say when it comes to traditional AM/FM radio stations playing and profiting from their hard work, but without receiving a dime. Congressman Issa’s PROMOTE Act addresses this glaring inequity by empowering music creators to seek fair compensation when their works are played on terrestrial radio.”

As you can see, these are complex issues in an ever-changing marketplace. The AFM has been and will continue to be at the forefront of finding ways to ensure fair compensation for our members. Successes thus far achieved show that when we stay vigilant in fighting for the rights of musicians and we remain united and support one another we can accomplish a great deal.

wage chart

Use of the Comparative Analysis Feature of the AFM’s Online Wage Charts to Prepare for Negotiations

by Laurence Hofmann, AFM Symphonic Services Division Contract Administrator, Communications & Data Coordinator

Gathering facts and understanding the desires of each member of the bargaining unit are two essential components of preparation for collective bargaining negotiations. Negotiators may wish to integrate a variety of data from the AFM’s wagechart.afm.org website.

The AFM’s dynamic and interactive database is designed to filter the huge amount of data collected in the wage charts of player conference orchestras. In the July 2016 International Musician, I wrote an article that detailed the features and capabilities of the database hosted at wagechart.afm.org. The wage chart, specifically the “Comparative Analysis” section of the website, is a useful tool to organize schematic and graphic reports about an orchestra’s historical data, as well as orchestra status among peer orchestras. This article will illustrate how effectively the wage chart website and its sections can be utilized in negotiations.

The data contained on the website is complex and not always uniform across player conferences. Data is collected from collective bargaining agreements (CBAs), as well as furnished by the union and the employer. When management refuses to deliver financial information, it may be drawn from the nonprofit employer’s tax returns (IRS Form 990), which are public records. Finally, this data needs to be complemented by analysis of the socio-economic and cultural environment for bargaining.

The “Historical Review” feature of the comparative analysis may be used to visualize the historical growth of the orchestra and to highlight peaks (and valleys). Events that provoked those changes should be investigated by the negotiators: the resuming of an orchestra’s stature after a strike/lockout, a new management, renewed abilities to engage funding and to apply for grants, or successful ticket and subscription sales due to talented musicians or effective marketing. Other questions of interest about the socio-economic and cultural impact on the orchestra’s growth might concern the citizens’ consumption of culture, their preference for outdoor activities, their general level of education, the main industry in the region, and more.

By comparing an orchestra with its peers, negotiators can both identify and bolster realistic bargaining positions. Peer orchestras can be found by using the “Filter by Criteria” feature and applying one or more of the five filter criteria (season length, musicians currently employed, orchestra budget, minimum annual salary, minimum weekly salary) and by indicating a range of desired values for each filter. To extend comparisons among Regional Orchestra Players Association (ROPA), International Conference of Symphony and Opera Musicians (ICSOM), and even Organization of Canadian Symphony Musicians (OCSM) orchestras, some allowances may need to be made to allow for differing structures (e.g., season length determined by number of services vs. number of weeks).

Given all these premises, the historical review search should be followed first by a comparative one using a combination of three criteria: “orchestra size in terms of employed musicians,” “season length in terms of services guaranteed per season,” and “orchestra budget.” Then, to narrow the search further, it is best to use the five criteria all together. The scheme resulting from the search is enriched by additional items like: CBA expiration date (to understand if other orchestras may be negotiating as well), employer contribution to health care, pension fund, endowments, funds (city, state, regional, and federal funds and the proportion between public and private funds and investments), percentage of expenses dedicated to the musicians’ salary and benefits, and pertinent costs (to consider the impact of wage increases in the orchestra overall budget). The data about last season’s gains/deficits could be added to this scheme by consulting the wage charts for each individual orchestra in the “orchestras” section of the website.

A proposal that not only reflects the aspirations of the bargaining unit but is also supported by data available on the wagechart.afm.org website will have a greater likelihood of success. We all work together towards a successful negotiation. The “Comparative Analysis” is a go-to instrument to better understand the symphonic world. It will be continuously adjusted to the needs of users. This is why your suggestions, personal experiences, and comments are always welcome.

I conclude with a note from Local 9-535 (Boston, MA) President Pat Hollenbeck:

There is a Benjamin Disraeli quote apropos to this subject: “As a general rule, the most successful man in life is the man who has the best information.” Harvard Professor William Eisen has a mantra that he repeats over and over to his students: “You can never have enough information.” The vast information collated [at wagechart.afm.org] gives us all the tools we need to enter orchestra negotiations with a deep understanding of the marketplace. The filter tools and the historical review permit us to drill down into very specific details tailored to fit every negotiation. It would be impossible for us to collect all the data that we have at our fingertips, instantly, 24-7, and it has proven to be an invaluable resource. We would be lost without it.

Equal Pay Is Top Issue for Working Women

A poll conducted by the website InHerSight.com showed that, for the majority of women in the workplace, correcting the gender pay gap is their number one priority. Among concerns listed by the 500 respondents 31.5% deemed correcting the pay gap as their top priority. Other concerns included establishing more flexible work hours (28%), promoting more women to senior leadership (14%), increased parental leave benefits (11%), and better training and responsiveness related to sexual harassment (4.5%).


Strategies for Effective Negotiating Teams

Strategies for Effective Negotiating Teams

by Barbara Owens, AFM International Representative Midwest Territory, and Negotiator

Strategies for Effective Negotiating TeamsBeing part of a negotiating team is time-consuming, challenging, exhausting, and rewarding. When the interpersonal dynamics work (both on our side and on management’s), the energy created as the team begins to reach agreement can be a tremendous catalyst for bringing the negotiations to completion.

A negotiating team is made up of diverse individuals coming together with the common goal of negotiating an agreement. It’s the responsibility of the group, and its leader(s), to bring out the best in each team member. In the orchestra world, we are already used to being a part of the group in our “day job” (playing in the orchestra), so it is familiar energy to be working within the group setting. Just as musicians each have a unique way of articulating a musical phrase, each negotiating team member has a unique way of expressing themselves. By listening and employing nonjudgmental feedback, we can use our familiarity with our colleagues to our advantage, even if we do not agree with them all the time.

Every team member brings unique strengths to the table. If you are a team leader—committee chair, sub-committee expert, or union leader—you have an additional opportunity to manage the strengths of individual team members and create an environment that supports effective communication and problem solving.

Listening is a critical part of what we do as musicians and also what we do as negotiating team members. In negotiations, people hearing the same information will often have different interpretations and memory retention. If you played the “telephone game” as a child, you will remember the confusion when the story was passed from one person to another, and then finally revealed at the end. Not only was the final story often completely different than the initial telling, but frequently, there were forgotten or even new details.

Your mind and imagination have a tendency to fill in the gaps when you hear information that is not clearly understood. It is critical that your team clarify every confusing detail in real-time, as the negotiations move along, both internally and with management, if necessary. Saving questions for late in the negotiations causes confusion, and may erode any goodwill that has been established between musicians and management.

Ultimately, an agreement is achieved through successful teamwork on both sides and across the table. Although we may naturally revert to our traditional musician/management roles at the conclusion of the negotiations, the lessons we learn from negotiation teamwork can establish a framework of effective communication and cooperation for the life of the agreement.

Top 10 Reasons to Record AFM

In summary, and with apologies to David Letterman, the EMSD staff have compiled the Top 10 most important reasons why you should record under AFM agreements:

1Standard wages—You are guaranteed to receive at least the minimum standards for your services.

 Doubling and overdubs—In addition to the wage payments, the employer is required to make payments for your doubling and overdub services.

 Foreign use—If you perform services in the production of a show produced under most of the AFM’s television agreements, aside from the payment due to you for your original services, if the program is broadcast overseas, you will receive additional payments.

DVD payments—If the program is released into the DVD format, you will be entitled to additional payments that will continue to accrue based on the gross receipts.

Pension fund contribution—The employer is required to make a pension fund contribution on your behalf, which puts your session work into the system.

Health and welfare fund contribution—The employer is required to make a health and welfare contribution, either to the health plan of your local (if it has one), or directly to you.

Special payments fund—If you perform services on a session(s) for a sound recording, you are guaranteed to receive payments from the Sound Recording Special Payments Fund for the next five years.

Secondary markets fund—Under the Basic Theatrical Motion Picture or Television Film Labor Agreements you will qualify for distributions from the Film Musicians Secondary Markets Fund, should the film be released to outlets such as pay cable TV or the home video market.

 Reuse—Under the Commercial Announcements Agreement you will receive periodic reuse payments for any new cycles the commercial(s) enter into.

And the number one reason to record AFM:

 New use—If you perform services under an AFM agreement and your product is licensed for use in another medium, such as a theatrical motion picture, television film, or commercial announcement, you will be entitled to additional payments as if you had performed the work under that agreement.

New York Creates Fast Food Wage Board

New York State Governor Andrew Cuomo has created a Fast Food Wage Board to investigate and make recommendations on an increase in the minimum wage for the fast food industry. The board is set to hold four public hearings in June before it issues its recommendations this summer. The recommendations will be subject to approval of Cuomo’s labor commissioner and cannot be blocked by legislature.

According to the Associated Press, the New York State Restaurant Association is critical of the panel. Association President and CEO Melissa Fleischut says Friday that she believes Cuomo has already decided to increase the minimum wage for fast-food workers and that the wage board process is just a formality.

“The minimum wage is supposed to be a wage that allows people who work full-time to earn a decent living and provide for their family—but for too many fast-food workers, that is simply not the case,” says Cuomo. “We must raise the minimum wage to restore that promise of opportunity and help people across the state move beyond poverty. With this Wage Board, New York is stepping up for fast food workers, and we are going to challenge every state in the nation to follow our lead in doing what is right and what is fair.”

Do We Have Money for You? Check the New Films and Claimed Payments

by Kim Roberts Hedgpeth, Fund Administrator, Film Musicians Secondary Markets Fund

The Film Musicians Secondary Markets Fund (FMSMF) works to serve the film, television and music communities. To this end, the FMSMF is pleased to provide ongoing updates to the International Musician.

“New” films: The FMSMF received residuals for 137 “new” titles during the first seven months of the FMSMF 2014 fiscal year (from April 1 to October 31). Most of these newly reported titles were films and TV shows first released in 2012, 2013, or 2014, although a number of titles were older films and series that generated secondary market receipts and residuals for the first time.

Forty-four of the new titles were theatrical films—from big budget features such as Frozen, Captain Phillips, and Secret Life of Walter Mitty, to smaller films such as Nebraska, The Best Man Holiday, and At Middleton, which generated both critical recognition and secondary markets sales. Ninety new TV titles reporting for the first time included the 2013-14 seasons of Walking Dead, American Horror Story (Coven), Nashville, Sleepy Hollow, and Smash. In most cases, a full season of a series’ individual episodes is reported as one title, although there were 11 individual episodes of two PBS series reported as individual titles. New media is now emerging, with the first two seasons of Netflix’s House of Cards reporting residuals to musicians for the first time. Of course, additional new titles will remit secondary market residuals earned by musicians during the remainder of the fiscal year, which ends March 31, 2015.

Residuals paid to the FMSMF between April 1, 2015 and March 31, 2015 will be paid out in the July 1, 2015 distribution. A list of new titles for fiscal year 2014-15 can be found at the FMSMF website, www.fmsmf.org/filmtitles/newfilms.html, which our staff updates throughout the year. Please check our website at www.fmsmf.org to view both the list of new titles, as well as a list of all titles reporting so far during this fiscal year.

Unclaimed residuals: Thank you for helping to spread the word! During the first seven months of the FMSMF’s fiscal year, we distributed more than $900,000 of unclaimed secondary market residuals to musicians and beneficiaries who had not been previously found. This year, we’ve added to our existing efforts to find musicians and beneficiaries who may have unclaimed residuals. We’ve put our message encouraging musicians to check our unclaimed list into trade publications, added it to communications with AFM locals, and reached out to venues. We’re making progress, but still need your help. Please check our unclaimed residuals list at www.fmsmf.org/unclaimedchecks to see if you, or fellow AFM members, have residuals waiting.

As a reminder about AFM-covered sound recordings: if a covered sound recording is used in an AFM-covered theatrical or TV motion picture, the musicians who worked on that recording may be entitled to secondary market residuals. If you work on a sound recording session, make sure your B-4 form is complete and filed with the union. One day that recording may generate secondary market residuals for you.

From the staff at the FMSMF—best wishes for a happy, healthy, and prosperous New Year!