80 years ago, the most important person in the music business was James Petrillo. It’s difficult to imagine the head of the musician’s union on the cover of Time magazine, but there he was.
Petrillo saw how technology was changing an industry and pushed for changes in the flow of credit and royalties. The story of how recorded music, movies and then streaming turned into a mess is illustrative as we think about AI and creativity. Multiply all of this by a very large number and you’ll get the idea…
The change in tech created new winners, and threatened the status quo for those that were already succeeding. The union already existed, the ability to track contributions and cash flows existed, and the issues seemed clear.
Petrillo said that musicians performing on records was a bit like asking the iceman to produce refrigerators. The fridge destroyed the market for home delivery of ice, but at least the iceman didn’t have to actively participate in his demise. He asserted that once people had a record player, there’d be no demand for live music. (History has shown that the opposite was largely true).
He called two union strikes. During the first, the record labels had no musicians to cut records–but vocalists weren’t part of the union. This opened the door for singers like Frank Sinatra to build careers, and it was the beginning of the end of the big band era.
The strikes ended with a royalty stream designed to compensate session musicians–but it was paid to the union, not to the musicians. Petrillo used the money as patronage, spending money to organize live concerts outside of the major cities, meaning that the musicians who played on the records didn’t get the money… part-time performers in smaller towns did. And so did the bureaucracy.
As millions of dollars flowed into various organizations (some more well-run than others) the paperwork and litigation expanded. As recently as ten years ago, tens of thousands of musicians found their royalty checks held up by a complex bottleneck of conflicting claims and battling organizations–something that’s still being ironed out.
Along the way, every country in the world (except China, North Korea and the US) became part of a treaty that pays musicians on recordings a royalty for broadcast music. The US opted out because of lobbying by the radio industry. This costs labels and musicians about $200 million a year.
One particular story makes it clear just how messy this all is. Lee Oskar is one of the greatest harmonica players of our time. Originally from Denmark, he joined Eric Burdon (from the Animals) and joined WAR, which had a ton of hits in the 1970s. His distinctive tone and approach were a foundational element of their music.
Years later, the musician Pitbull hired a little-known harmonica player to perform an intro on his song Timber. Paul Harrington was asked to play just like Lee Oskar…
That song has more than 1.5 billion views on YouTube and has sold a lot of copies.
When Harrington mentioned to a fellow musician that he’d only gotten a $1,000 buyout for his performance, his friend (who was also a lawyer) encouraged him to file a claim, because the royalty agreement supersedes a buyout…
That class-action lawsuit led to a change in the royalty accounting system. At around the same time, involving the very same song, Lee Oskar sued Sony. The lawsuit against Sony in the US was dismissed because of complications in the rat’s nest of co-owners and licenses, but was able to go ahead on the international rights to the song.
Sony settled, Oskar is now officially listed as a co-songwriter on Timber, and he gets paid every time the song is played on the radio. And of course, every agency, union and lawyer along the way gets paid too.
Because of James Petrillo.