According to an encouraging Ampere Analysis report, more than $220 billion was spent on global content in 2021 — a 14% increase (a little over $20 billion) over the previous year. Subscription-based streaming platforms like HBO Max, Peacock and all the pluses (Apple+, Paramount+, Apple TV+ and Disney+) were especially prone to spending their pandemic surplus on exclusive programming; their collective investment of nearly $50 billion signified a spike of more than 50% when compared to 2019.
Research manager Hannah Walsh saw no sign of things slowing down either, saying, “In 2022, we expect content investment to exceed $230 billion, primarily driven by subscription streaming services, as the battle in the original content arena intensifies — both in the U.S., but also in the global markets which are increasingly key for growth.”
Considering how crucial original content is within the ultra-competitive market of movies and TV shows released straight to the internet, you’d think there’s never been a better time than now to be a multi-faceted musical creator. Here’s the thing, however: Feeding the beast a steady diet of soundtracks and scores doesn’t necessarily mean a higher revenue haul for songwriters and composers. It’s often the opposite, actually — a bevy of corners being cut whenever creators are compensated.
Nearly 90 composers and songwriters banded together in Budapest to make this point at the International Council of Music Creators (CIAM) General Assembly a few years ago. According to Billboard reporter Kathryn Kranhold, they had a tense, private discussion with Netflix’s music attorney (Carolyn Javier) over growing concerns over buyout contracts. That’s when composers are given a one-time payment in exchange for any future royalties and most, if not all, of the rights to their work.
“This is not acceptable,” longtime Coen brothers composer Carter Burwell said in the story. “No one should have to accept [a buyout]. “[If Netflix] came to my agents with a deal like that, it wouldn’t last long.”
Since the term “buyout” is so loaded, Netflix has deemed the practice “direct licenses” and insisted they are not a mandatory part of contract negotiations with composers.
“It is not true [that] their only choice is to sign a direct license,” explained Netflix spokesman Jonathan Bing. “We’re committed to paying our creative partners fairly regardless of how the industry evolves.”
Several industry sources disputed Netflix’s claim and pointed out that the company’s “Delivery Requirements” handbook revolves around a work for hire agreement that grants Netflix the right to use a creator’s lyrics, performances, compositions and recordings “without limitation… throughout the universe in perpetuity.”
Netflix did not deny the default wording of their contracts with creators when Billboard pressed them about it; they simply said that the agreements are not final and can be negotiated. Which is probably a good thing given that the International Confederation of Societies of Authors and Composers (CISAC) has called buyout contracts a blatant example of pure “exploitation.”
“In this struggle,” said CISAC president and world-renowned composer Jean-Michel Jarre, “we face giant opponents — the goliaths of the tech world.”
Streaming Royalties Impact More Than Just Film
Before we go any further, here is a hefty guide to sync deals since this streaming royalties issue doesn’t just affect film score phenoms. Movie and TV producers are also licensing more compositions and recordings than ever before, so it’s important to know all your rights and options before signing a binding agreement with a major platform for digital programming.
One of the reasons creators should be careful about relinquishing their rights is the fact that composers reportedly earn more revenue from performance royalties — the repeated use of their music in a streaming movie or television show — than flat upfront fees. According to music lawyer Todd Brabec, the cost of recording a score with studio musicians, string quartets or a proper orchestra can often eat into or exceed a creator’s initial earnings.
“If a composer breaks even,” the former ASCAP exec writes in his book Music, Money and Success, “or even makes a little money, they are fortunate.”
Composer Joel Beckerman has witnessed this dynamic firsthand due to the replay value of breakthrough shows like Anthony Bourdain: No Reservations and ESPN’s acclaimed documentary series 30 for 30. “If you don’t get the backend on your hits,” he told Billboard, “You can’t make a living. It’s how [composers] put food on the table.”
To be clear, streaming TV royalties are not a surefire way of turning your compositions into a full-time career. They’re simply one of many possible solutions for boosting your bank account, and they’re not all that different from music streaming platforms in terms of their sobering performance royalty rates.
How Music Creators Are Responding
In “The Ugly Truth of How Movie Scores Are Made”, Vanity Fair writer Mark Rozzo mentions that more than three dozen composers recently sent an open letter to such Performing Rights Organizations (PROs) as ASCAP and BMI, saying their royalty earnings are now as low as “pennies on the dollar.”
“This raises serious concerns for the future financial outlook for all composers,” they explained. To which the internet added, hold my beer.
When this letter said “all composers,” it wasn’t kidding; even Hollywood icon Hans Zimmer didn’t have many positive things to say about streaming platforms in a brutally honest podcast with New York Times columnist Kara Swisher.
“Am I worried about it?” Zimmer said when asked about how streaming movies are cutting into the potential revenue of composers. “I stopped being worried about it because it’s already happened.
He continued, “Look, this idea of streaming didn’t start with movies. It started in the music business. It always starts with the lowest bandwidth…We have to go and rethink some of this because it might sound crazy, but I know some musicians who actually need to eat.”
One bit of good news: While Netflix still pushes direct licenses on songwriter and composers, a similar plan over at Discovery Networks was defused in early 2020 after a Variety story (headline: “Discovery Networks Corners Composers in Music Royalties Battle”) went viral. Apparently, the company — which distributes such major channels as Animal Planet, HGTV, and Food Network, and now has its own streaming TV service (Discovery+) — underestimated the collective power of leading composer organizations like Your Music, Your Future (YMYF).
“With the force of our community behind it,” YMYF wrote, “the Variety article covering Discovery’s initial plan to cut composer royalties was shared 9,700 times on Facebook and Twitter and generated 101,000 social media impressions. Composers have a voice!”
The Production Music Association (PMA) shared a similar statement on behalf of its more than 670 members. “We have been informed today by Discovery Networks that in regard to performance rights,” PMA said, “Discovery has decided that their U.S. channels will remain operating as is under the traditional PRO performing rights model…We greatly appreciate this and look forward as a community to working together with Discovery to provide their programming with the best quality music possible.”
The moral of this story will sound familiar to anyone who’s been in the music business for a while: With streaming music, television, and movies dominating our media diet these days, composers and songwriters can’t rest on their laurels anymore. What once worked in the favor of creators – whether it was a decade, year, or month ago — may not even apply anymore.
For more information on how Songtrust can help you make sense of it all, check out our Help Center or contact our team of like-minded creators and music industry vets here.