David Lowery has become both beloved and notorious over the last year as one of the musicians most critical of the ways musicians are paid in the digital era. The Camper van Beethoven and Cracker singer brings an artist's rage and a quant’s detached rigor to his analysis of the music business.
He’s currently fired up about a federal lawsuit filed in New York in which several record labels have sued Pandora (and before that, Sirius FM) for neglecting to pay royalties for songs recorded before Feb. 15, 1972. Here's how Billboard summarizes the suit: “The labels say both digital music services take advantage of a copyright loophole, since the master recording for copyright wasn't created federally until 1972. ... But the labels claim that their master recordings are protected by individual state copyright laws and therefore deserve royalty payments.”
Lowery thinks the loophole provides a way for Pandora to simply not pay older musicians for their work -- while profiting from it themselves. The case could get bigger and change in strange ways, with broad implications.
And he’s similarly frustrated with the rise of streaming services, which are in part owned by the major labels. “For us, it’s the worst-case scenario,” he says. “The old boss and the new boss have joined hands, they’re singing ‘Kumbaya,’ and they’ve changed the words to, ‘Fuck the songwriters! Fuck the performers!’ "
We spoke to Lowery from a studio in Wisconsin, where he was recording a new Cracker record.
There’s a sort of complicated and technical case in New York right now, involving musicians’ royalties from before 1972: It’s a lawsuit that the general public doesn’t know that much about, but it’s important for musicians, especially for older musicians. Tell us what’s going on.
Back in 1971, there was a series of legislative actions. Before 1972, copyrights for the sound recording weren’t federal, they were [handled at the state level]. So we had some copyright reforms in the ‘70s, which adjusts for technology and things like that. They basically created a federal copyright for sound recordings. And for many, many years people just had assumed — and many of these services had acted as if — the intention of the act was to federalize all sound recordings, not really making a distinction in 1972. But somehow, in the last few years, probably starting in 2009, a few of the digital services have decided that there is no federal copyright for sound recordings created before 1972 -- so they’ve just stopped paying these artists.
That includes a lot of legacy artists, like Otis Redding, Aretha Franklin — the writer and main performer of “Respect.” So you have these services that — not all of them, but some of them — just decided that they weren’t going to pay royalties on this. The general public might look at this and go, "This is just companies, and this is how they work, and they try to save money, and so they’re just doing what they can do."
“They’re just doing what corporations always do.”
They’re just trying to minimize their expenses and stuff like that … But if you really look at this, you’ll see that it's much, much more complicated than that. They’re making a very weird argument, right? Because ultimately, they lose either way.
The digital services, so Pandora, Sirius, Clear Channel, Digital Operations, whatever they may be. It’s not really clear — it's definitely Sirius and Pandora — but it's not really clear which other ones are there. But it’s a strange argument because they lose either way. Because if it's not covered by federal law then it's covered by state law. So if they win, and it's covered by state law and suddenly these very large companies need a license from each individual state, essentially. Which would require them to negotiate with each copyright owner individually. And so there are a lot of people scratching their heads on this one, because why would they pursue a strategy like this? They lose either way. And they could lose really big on this.
So you look at this stuff and like a lot of things that happen with companies that are Wall Street-backed, there’s an incentive to keep the stock price high. And certainly in the case of Pandora — they’re kind of my bête noire, but you know, I feel like they deserve it — but you wonder if a lot of the time these kind of moves, they’re just sort of designed to keep the stock price high in the short-term. And in the long-term they’re creating these enormous liabilities that will just … They’re not only screwing song owners, to me this is one of the most important issues that I’ve come across since I’ve been advocating for artists' rights. Because it ends up not only screwing songwriters but it could create these huge liabilities that ultimately cost pensions, and little old ladies their savings and stuff like that.
You say it could contribute to these digital-music companies collapsing? Because there’s been a lot of speculation that webcasters don’t have the business model that allows them to earn profits. There’s been speculation that they won’t be around along despite the conventional wisdom that they are saving the music business.
Exactly, and that’s kind of what I’m getting at; in a way, this is much bigger than songwriters' rights. They don’t really win either way, in my opinion. I mean, yeah, it's possible that they eke out some kind of financial advantage, but if federal law did not federalize sound recording copyrights, then we revert to state law. And that’s going to be a nightmare for everybody; it's going to be a nightmare for artists, even your old AM/FM radio station.
Another funny thing: We are one of the only democracies in the modern world that doesn’t pay royalties to performers on terrestrial radio. We’re one of six countries in the world, and the only modern democracy, that doesn’t pay performers royalties for getting played on the radio. I’m a songwriter, too, so I get royalties as a songwriter, but I don’t necessarily get royalties as a performer for terrestrial radio. Anyway, to me, this is just corporate sleaziness. It’s, “We’re going to fight this case that we're going to lose, to basically save 6 or 10 percent of our expenses, and stick our shareholders, possibly, with these huge liabilities down the road.” Because if they create the situation by which they do not have the copyrights for thousands of songs that they’re streaming, theoretically, they could be charged $150,000 in damages each time it plays one of these songs. So that’s the story that goes all the way down in the weeds of what is going on.
You’re saying this could be a real time bomb.
Let's go back to the artists for a second. I think a lot of consumers might look at this and say, "Well, the Beatles and the Stones don’t need more royalties, and Otis Redding is dead. Why does this matter? Who’s really going to suffer if just songs from before 1972 don’t produce royalties for the artists?"
Well, yeah, that’s what Chris Harrison from Pandora said. I think he said something like that, "These people never expected to get royalties." I mean, really? Plenty of those artists are not rich, you know? I just saw Wanda Jackson play —she’s almost 80 and she’s out touring. And she made these iconic rock 'n' roll recordings.
Some of the first rockabilly records.
I mean, if Pandora is going to stream these things and if Sirius is going to broadcast these things, why shouldn’t they get paid? We’re America, we’re a fair country. We're not a country like China, where we just go, "Here’s a politically well-connected elite, we’re just going to hand them the rights to something that somebody created." Just so the politically well-connected can get richer. It’s really funny to me — look, I’m not really a lefty or liberal, I’m basically a little right of center in my politics — and it's just funny to see consumers sort of rallying around the rights of corporations and against the rights of individuals.
Well, that is what’s happening.
It is! It would have been like the students in the late ‘60s and early ‘70s protesting for the war. Or for the defense contractors … You know what I mean? "We still need that rice from the Mekong Delta. We need cheap rice from the Mekong Delta, let’s protest against these draft dodgers." On behalf of … I don’t know—
Dow Chemical or something.
That’s literally what the public is doing now. I’ve said this before, and I don’t think people quite get it.
The Internet has become cargo cult. People worship the Internet like a cargo cult. It’s this thing that they have that brings them free stuff, and they think it's magic. It’s beyond rational thought and reason, right? And they have no sense that behind all that free stuff are the drowned ships and sailors. They don’t want to hear that behind the way you get this free stuff, some really actually fucked-up things have happened to individuals and their individual rights.
And that there are people getting rich off this stuff. Look, people used to go crazy and you’d always hear people talk about how the record labels were so bad to artists back in the ‘50s. They paid them really minimal royalties and stuff like that. But look, these guys are even worse. It’s way, way worse.
Well, let's extend that a little bit. Since the last time we spoke, it seems like there’s been a dozen new streaming services launched. And streaming is now discussed as the savior of the record industry. We have a new Amazon service, Google has announced one, and Beats service was bought by Apple. There’s surely going to be others by the end of the month. Do these new services seem to be, from an artist’s point of view, an improvement? Or do we just not know?
Well, it’s going to depend on what kind of artist you are. First of all, let's just take that face-value statement, that streaming will save the music industry. Well, it will if the music business is the kind of music business that’s basically just built around Top 40 songs.
If you don’t want to ever have Captain Beefheart and Miles Davis and — one of my favorite bands — the gloom-stoner, doom-metal band Sleep. If you don’t ever expect to have those kind of bands anymore. And the reason is because streaming flattens and commoditizes the spin. So you just have one price for every spin of a song across the entire spectrum, whether it’s some kind of avant-garde classical work or whether it’s a Miley Cyrus song. So that will work if you have lots and lots of spins. But it won’t work if you have just a few spins. So what that will do is push out — and you already see that happening — it will push out any sort of niche or, you know …
Any specialty genres.
Specialty genres. Because people might have gone into the stores and gone, "Well, all the albums are between $9.99 and $17.99, they sort of all hover around $12.99, or whatever. It’s always been that way.” Well, yes and no, because something like a Miley Cyrus song might get spun a whole bunch — you might play that record a whole bunch until you’re sick of it whereas an Art Blakey record you might play four times a year. Those, in effect, were more expensive, and when you look at the normal, real, non-magical unicorn part of the economy, niche products cost a lot more than mass-market products.
Maybe we could look at food: Fast food costs less, going to the farmer's market costs more. But people have decided, increasingly, that it’s worth paying a little more for healthier, fresher, local, whatever food. What you’re saying, I think, that the economic structure of streaming means that everybody’s —
Everything is the same price.
Well, there’s no incentive to make anything besides mass-market —
The most mass-market stuff, exactly. It's as if all T-shirts — my analogy is like it's as if the government mandated that all T-shirts were going to cost $3. We would all be wearing semi-ironic, American flag T-shirts from Wal-Mart because nobody would make anything else. Because it has to appeal to the mass market. And yeah, you may not see it right now, but I don’t know what you’ll see 20 years from now. Maybe other systems will come up to fix it but I don’t think it bodes very well for anything other than the most mass-market kind of music.
Anyway, since when does the federal government basically step in and say, “You entire class of people who do this one thing -- people who write poetry to music -- this one class of Americans who write songs. We’re going to make it so that your songs have to appear on these services. You can’t really get out. You have to sell these songs on your services.” It’s a weird thing we’ve done as a country.
You’re unusual in some ways in your sentiments. A lot of the people fighting for artists’ rights are on the political left. Your argument, I think, is that what we have now is a kind of unpleasant combination of the marketplace and government regulation — kind of a worst of both worlds?
Yeah, it’s like some sort of corporate socialism, yeah. We basically mandate that individuals give their songs to these companies. I really feel like this is a simple problem to fix. There should just be an opt-out. You should just be able to serve notice with the copyright office that six months in advance, as of 2015, I’m the owner of these songs, I am opting out of all of these services.
And why can’t musicians opt out so easily?
There’s no way for songwriters really to opt out. There have been a couple of people who have pulled these really weird tricks where essentially their songs are not really published so therefore, they’re sort of not public and then they forgo performance fees but that’s really complicated, how they did that.
Performers, if you own your own recording, you can opt out of streaming services which are on-demand, but you can’t opt out of webcasting services which are not quite on-demand. You can opt out of Spotify but not Pandora. You can opt out of Spotify on the on-demand side, but you can’t opt out on the — you know how they have a Pandora-like radio service too? Your songs will still be played in there.
As a performer, you have this really narrow place where you can opt out. But as a songwriter that’s not possible anywhere.
Right. And if you have a deal with the label it’s even more complicated …
Yeah, because the label will just put your stuff in there. But I want to tell you this. I know for a fact that one of the heads of one of the major labels is freaking out on streaming and realizing that what his/her underlings told them about what was going to happen with streaming is not in fact true. And they are very pissed off about that. I can’t disclose my source, but they’re one of the major labels. They completely have buyer’s remorse right now. In fact, you could describe them as being in emergency management mode right now over what they’re going to do about streaming because of the streaming revenues. Because streaming is clearly cutting their sales but it’s not making up the difference in revenues. So even for the record labels — I mean, it’s terrible for artists, but even the record labels are realizing they have fucked themselves; at least one of the major labels has realized that they fucked themselves.
Which, actually, I take some delight in. I can’t help it. They got into this.
Because the deals are opaque, we’ve had to speculate, and I guess we still have to speculate on what the deals between the streaming services and the labels were. That isn’t public so we don’t know what kind of sweetheart deals were made between them. We do know that the artists have been largely left out of the process.
Let’s look at it this way. Say we own an apartment together, and we’re going to split whatever money we make off this apartment when we rent it out to somebody. But I go out to this renter and I say, “I tell you what, instead of you giving me $1,500 a month for this little studio apartment, we’ll charge you $750 rent but you basically give me $8,000 per year personally off the book and I’ll give you this cheap rent under the table.”
And then you’re splitting with me just that $750 and keeping the eight grand for myself. That’s what happened when the record labels traded equity for lower royalty rates. And I don’t know how long it’ll take, but there will be a class action eventually over that, but it may be too late.
Is it your sense that the streaming services will survive? There’s some worry that most of them haven’t turned a profit and that they don’t have a working business model.
I think they’ll survive but they’ll be part of Apple, part of Google, part of Amazon. They’ll be part of other services that make money in other ways. I think the same sense for the webcasters too as well. I just don’t see how they can really get the ship righted. They'll need to charge more for their services.
On the other hand, I’m not necessarily against the streaming services. I think something like Spotify is useful and it’s kind of a good deal under certain circumstances. If I put my sound recording of “Low,” and if it was only behind the paywall, the premium-paying wall, I would get more than a penny and a half per spin. So for that song, I think having it on Spotify makes a lot of sense -- if it was behind the paywall. It’s just that I don’t want my entire catalog, the entire album, for free on the service.
And you don’t have a choice right now as to whether you do?
We don’t have a choice. There are technicalities and there are ways certain artists can remove their recordings but you have to not have a record deal and frankly, I was part of the first wave of indie musicians in the 1980s. We had our own label — Pitch Tent Records. We are one of the pioneers of indie rock. And, you know, I’ve had this happen before in my 30-year career of being an independent and being on my own label and a major label. Because sometimes frankly it’s like “I don’t want to do the promotion on my own record."
There’s an advantage to being on a label sometimes. It’s just really interesting to me. I don’t really see labels totally going away. Some people say, “Well, the labels will figure it out, they’ll figure out when it makes sense for artists.” Some people on the record side of the business are like, “Well, when we aggregate all these rights together we’ll know the best way to exploit these recordings and these copyrights.” I don’t necessarily see that happening and that’s why I just feel like there should be a right for artists to opt out of these services.
We’ve spoken a little about the government. We’ve spoken a little about these big corporations — Google, Amazon — who either own streaming services or webcasters or whatever. Let’s bring it together for a second. Part of what we’re describing is a kind of monopoly capital. We do have part of the federal government that’s supposed to be on the lookout for monopoly behavior -- the Department of Justice.
And they are. They’re very vigilant on that. They’ve put the songwriters under monopoly supervision since 1941! They completely have monopoly backwards.
I’m gonna do something that breaks the law right now. I’m a songwriter who has my own publishing company. I think all songwriters should hold out for 10 percent of revenue from Pandora. I urge all songwriters to hold out for 10 percent of revenue from Pandora. I have just violated the consent decree. I am in contempt of court. Someone arrest me!
Because the DOJ doesn’t let songwriters do that. We’re under anti-trust supervision. But look at the companies that we’re [supposedly] colluding against -- against Pandora which is 77 percent of the market for streaming. We might collude against Google and YouTube, right? There’s nobody close to them on online video. Let’s see, Spotify is [huge] as far as streaming goes.
Basically, the federal government has monopoly backwards. So you have the monopolies getting together on Capitol Hill and calling for Congress to not only keep the consent decree, but to expand it. It’s pretty crazy. It’d be funny if it wasn’t Kafka-esque.
Since Reagan, the Department of Justice has focused on what they see as defending consumers, keeping prices low -- and they’ve gone pretty easy on big corporations, music and technology corporations included. Do you think the DOJ, for instance, will start paying attention to the effect Amazon and Google are having on the making of culture?
I think they will once somebody sues them and it goes to the Supreme Court. This is a thing I am very seriously considering. I think the consent decree acts as what’s called a writ of attainder. Because essentially, as soon as I write my first song, I’m guilty. There’s no court proceedings. I’m under Department of Justice supervision. There’s no court proceeding. There’s no legislation. My rights are limited by extrajudicial, extra-legislative [rules] … Our Founding Fathers were very, very, very much against this thing. I think the point is that somebody has to sue the Department of Justice for violation of our constitutional rights, and then they’ll stop.
I think it’ll have to go to court. If you look at it, if a judge really looks at it, they’ll go — essentially the way the consent decree works is that it’s a court case that’s been open since 1941. It hasn’t been closed. And as soon as I wrote a song, I’m part of that court case. I demonstrated the limitation of my rights by showing how I’m in contempt of court by saying I think songwriters should hold out for 10 percent for Pandora.
When did I ever get a hearing, right? I never got a hearing on that. When was the law ever passed? The judicial branch can’t make law? They’re making law, by that consent decree they’ve created essentially a statutory right for broadcasters to have our songs.
And really, people are like, “Songwriters, I understand they’re being screwed, but it’s just a small portion of Americans.” If they can do this to our songs, they can do this to your photos that you post on the Web. There’s a law, there are proposed laws that generally fall under the title “orphan works” for photographs that essentially would allow that.
Once people start thinking that, well, if songwriters songs can be collectivized for the good of these for-profit corporations without a trial or legislation or anything like that, they can do the same thing with what you write on your Facebook account or the photo you post on Twitter. You know what I’m saying? It’s eventually going to get to everybody.