Forget pop music, it's all about ringtones

Songwriters make more money from ringtones than downloads, but that may change if the record labels have their way.

Anytime Rick Carnes is out and hears a song played as someone's ringtone, well, it's like music to his ears.

Carnes, a songwriter for nearly three decades, laughs when he considers that his work is more valuable as a ringtone--just a few seconds of his music--than a full version of one of his songs downloaded from the Web.

Rick Carnes
Rick Carnes, in an undated photo

"Where's the logic in that?" asks Carnes, president of the Songwriters Guild of America.

Until last October, music publishers were able to pocket 10 percent of the retail price for a song, according to Steve Gordon, a copyright attorney. This meant that for a $2.99 ringtone, the publisher could make 30 cents and typically split half with the songwriter.

But the labels are now threatening to choke off that extra income. Record companies claim songwriters and music publishers charge too much and want prices restricted to a rate of 9.1 cents per song.

The labels argue that they are entitled to the extra money because music publishers pay nothing of the large upfront costs associated with producing master recordings, according to Gordon.

Carnes, 57, who has written songs for Alabama, Reba McEntire and Dean Martin, said that all the songwriters want is to be allowed to negotiate the price of their music.

Last October, the labels were able to convince the Register of Copyright to restrict publishers to the same 9.1 cents they make on a "compulsory license."

A compulsory license mandates that once a song is recorded and distributed to the public, anyone else can record that song if they agree to pay the publisher 9.1 cents (4.5 cents goes to the songwriter) for every recording they sell. This means, according to Carnes, that songwriters are prevented from seeking the best price for their work like everybody else in a free-market society.

"This shows you how we really don't have a free market," Carnes said. "Why would the government impose an artificial rate? Well, the record labels are just running roughshod over us."

Music publishers are appealing the decision of the Copyright Office and are gearing up for a big legal battle in coming months. If this sounds like a lot of people getting worked up over pennies, consider the story that Merv Griffin used to tell.

The crooner, talk-show host, game-show creator and billionaire businessman who died last week at the age of 82, once found a check for a large sum on his desk and couldn't figure out how he had earned it. According to a story in Rolling Stone magazine, Merv couldn't figure out why someone was paying him huge royalties for the song he penned for his show "Jeopardy."

The ditty had become a top-selling ringtone.