Song writing royalties in the future

There was a comment made from a past blog asking, What are song-writing royalties going to look like

 in the future? With all the changes,  lack of clarity, and unstable atmosphere  in the music industry at present

there is no way at this time to answer that with any certainty. So bare with us over the next little while

as we dive into this very complicated topic. Hopefully, we will be able to provide some clarity real soon.

In the mean time digest the article below. That should keep you busy for a while!

Songwriter Royalties and Digital Retailers

If you’ve ever looked at who gets paid (and how) in the digital music space, you may have walked away dizzy. The two copyrights in music — sound recording and composition — wend their way through the marketplace in lots of curious ways. For us, the most important thing is how money gets back to the actual muscians and songwriters.

As convoluted as things can be in the US, the picture is even more complicated in other countries. This post at the TuneCore blog looks at the rights that digital download stores need to acquire in order to pay the people that are supposed to get paid when a piece of music is sold. (There’s also a separate but related post about a recent incident with TuneCore and Amazon EU/UK, in which the latter company pulled TuneCore artists’ tracks due to an unresolved royalty issue.)

The TuneCore/Amazon situation is still being sorted out, but there may be some early takeaways. Of the millions of artists who use TuneCore to get their music into digital stores, a healthy percentage are also the songwriters. And it’s probably a good bet that not all of these songwriters have publishers or are even members of Performing Rights Organizations (PROs). In fact, 99 percent of the world’s songwriters do not have “publishing deals” (by default, they are the publisher but can do little to enforce their rights in certain environments).

This isn’t to suggest such institutions aren’t worth belonging to, but rather that there are now a great many creators who exist outside the traditional music industry structures. They should, however, have the same rights as other artists when their music is purchased.

For US songwriters and US digital music retailers, there is a degree of predictability to the marketplace. When these same songwriters and tunes are sold on digital platforms overseas, things can get weird — especially if nobody’s paying close attention. TuneCore honcho Jeff Price explains:

When a song sells in the United States, a digital music service like Amazon pays the songwriter money to the record label and then the record label pays the songwriter.

When a song sells outside of the United States, a digital music store must get the licenses and pay the person or entity directly that controls the songwriter rights. The digital music service does not pay the money to the record label to pay the songwriter.

OK, that seems pretty straightforward, right? A digital service simply pays the money to whatever entity owns the songwriting copyright. Not so fast. The hiccup comes from the fact that there are TWO rights that a digital music retailer needs to acquire to sell a songwriter’s music overseas: the right to reproductionand the right to public performance.

In the US, the reproduction right (aka the mechanical royalty) is paid by the labels to the publisher through the Harry Fox Agency (the publisher typically has a split worked out with the songwriter, or the songwriter is the publisher). There is no public performance royalty owed for digital downloads in America; here, that right only exists for broadcasting (over-the-air or online).

This means that many US songwriters who sell music in digital services outside the US may not have a way to collect all the money they’re owed. And even if you belong to a PRO like ASCAP, SESAC or BMI, you aren’t covered for the reproduction royalty. Confused? Here’s Jeff again:

If an artist is affiliated with a performing rights organization in the US like ASCAP or BMI, it is only for the right of Public Performance, not for Reproduction, which is just one of the two needed songwriter licenses.

The digital music service still needs to obtain the second license (the right of Reproduction), and make payments to the person or entity that controls that right for the songwriter….

…Some digital music services might try to get the licenses and make payments to a local, third party that does not represent all the rights (or any of the rights) of the songwriter.

These local collection agencies hold onto the songwriter’s money, take over 20 percent of it, and give the rest of it away to others companies like Warner Bros., Universal, EMI, Sony and others based on what percentage of the “market” they control.

The reason we bring all of this up is because it stands to reason that there will be more and more artists coming into the marketplace who use services like TuneCore, CD Baby or ReverbNation to get their music on global digital retail platforms. This means that there is the increasing need to make sure the money owed to these creators gets to them, even if they aren’t members of a foreign royalty society (or a domestic one, for that matter).

We think it’s great that Jeff from TuneCore is going to bat for the artists who use his service. But what about non-TuneCore artists? We’d love to see even more open dialogue on this subject, as the internet has made music a truly global phenomenon. Getting things to run smoothly for creators will require cooperation from a lot of parties, old-school and new-school.

The compensation picture for artists is likely to remain pretty complicated — as initial findings from ourArtist Revenue Streams project attest — but that doesn’t mean we can’t work together to make it less so.

Submitted by Casey on February 1, 2012 - 6:22pm

Tags: 

• Digital Distribution
 
• Artist Compensation
 
• Mechanical Royalties
 
• Performance Royalties

Royalty Changes

Record Industry Braces for Artists’ Battles Over Song Rights

By LARRY ROHTER

Published: August 15, 2011

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Since their release in 1978, hit albums like Bruce Springsteen’s “Darkness on the Edge of Town,” Billy Joel’s “52nd Street,” the Doobie Brothers’ “Minute by Minute,” Kenny Rogers’s “Gambler” and Funkadelic’s “One Nation Under a Groove” have generated tens of millions of dollars for record companies. But thanks to a little-noted provision in United States copyright law, those artists — and thousands more — now have the right to reclaim ownership of their recordings, potentially leaving the labels out in the cold.

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Frank Stefanko/Sony Music Entertainment via HBO

Bruce Springsteen in an image from an HBO documentary on the making of 'Darkness on the Edge of Town.'

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• ArtsBeat Blog: Don Henley Urges Artists to Know Their Rights(August 16, 2011)

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When copyright law was revised in the mid-1970s, musicians, like creators of other works of art, were granted “termination rights,” which allow them to regain control of their work after 35 years, so long as they apply at least two years in advance. Recordings from 1978 are the first to fall under the purview of the law, but in a matter of months, hits from 1979, like “The Long Run” by the Eagles and “Bad Girls” by Donna Summer, will be in the same situation — and then, as the calendar advances, every other master recording once it reaches the 35-year mark.

The provision also permits songwriters to reclaim ownership of qualifying songs. Bob Dylan has already filed to regain some of his compositions, as have other rock, pop and country performers like Tom Petty, Bryan Adams, Loretta Lynn, Kris Kristofferson, Tom Waits and Charlie Daniels, according to records on file at the United States Copyright Office.

“In terms of all those big acts you name, the recording industry has made a gazillion dollars on those masters, more than the artists have,” said Don Henley, a founder both of the Eagles and the Recording Artists Coalition, which seeks to protect performers’ legal rights. “So there’s an issue of parity here, of fairness. This is a bone of contention, and it’s going to get more contentious in the next couple of years.”

With the recording industry already reeling from plummeting sales, termination rights claims could be another serious financial blow. Sales plunged to about $6.3 billion from $14.6 billion over the decade ending in 2009, in large part because of unauthorized downloading of music on the Internet, especially of new releases, which has left record labels disproportionately dependent on sales of older recordings in their catalogs.

“This is a life-threatening change for them, the legal equivalent of Internet technology,” said Kenneth J. Abdo, a lawyer who leads a termination rights working group for the National Academy of Recording Arts and Sciences and has filed claims for some of his clients, who include Kool and the Gang. As a result the four major record companies — Universal, Sony BMG, EMI and Warner — have made it clear that they will not relinquish recordings they consider their property without a fight.

“We believe the termination right doesn’t apply to most sound recordings,” said Steven Marks, general counsel for the Recording Industry Association of America, a lobbying group in Washington that represents the interests of record labels. As the record companies see it, the master recordings belong to them in perpetuity, rather than to the artists who wrote and recorded the songs, because, the labels argue, the records are “works for hire,” compilations created not by independent performers but by musicians who are, in essence, their employees.

MUSIC THE NEXT 5 YEARS

FUTURE CAST...  LOL

OK THIS IS MY BLOG, SO I CAN TAKE CERTAIN LIBERTIES

Honestly guys things are going so fast in the music industry, to the point you can feel the wind of change rushing by. We are working hard at AMP to ride this wind and to help you catch the excitement with us. Things are changing so fast that by this time next week we may have to change our opinion again. However we are on top of some cool stuff we are putting together for you. Stay tuned! Read the article below with a Jules Verne attitude and you'll do just fine.

1 — We will soon see the emergence of many different kinds of iPhone-influenced Netbook-like devices; some will be Apple-made but most will not. These devices may be 2-3 times the size of an iPhone and will connect to the Internet in every conceivable way, i.e. 3G/4G, LTE, Wimax, Wifi etc. They will be touchscreen, zoom-interface enabled, cloud-computing, speech-controlled, location-aware, mobile-money equipped, socially hyper-networked, always-everywhere-on, HD-camera equipped and possibly project images and audio or even support basic holography.

In addition to the high-end, fully-loaded and perhaps still rather expensive versions that many of us in the so-called developed countries will gobble up, low cost and more basic editions for the developing markets will be sold in the 100s of millions (think India, China, Indonesia…). These smart gadgets will have very low energy consumption and therefore extremely long battery life, may even sport basic solar-power options, and may ultimately cost less than 30 USD, or even be ‘free’ (why bother to sell the box if you can make a lot more $ with selling services…. Nokia?).

It is these mass-market yet very smart and networked devices, together with cheap or free wireless broadband that will really revolutionize reading, newspapers, books and education; not to mention our music, TV and film consumption habits. Content commerce will be completely redefined as a consequence. As BTO told us a loooong time ago: “You ain’t seen nothin’ yet”

2 — Very cheap or free wireless broadband – at fairly high speeds, i.e. at least 2MB / sec – will be available in most places, particularly in the booming new economies of Asia, India, Russia and South-America, and a bit later, in Africa. Funded by the likes of Google and by the future ‘telemedia’ conglomerates, governments, cities and states, wireless broadband will probably reach 3-4 out of 5 people on the globe within 5-8 years. User-generated & derived content (UGDC for those of you that must have an acronym  , virtual co-production, mobile editing and instant network sharing will explode by a factor of 1000, making control of distribution a very distant concept of the past. UGC or UGDC may make up to 50% of the global content consumption by 2015. Consumers will be (co)-creators, marketers, sellers and buyers, and come in a hundred variations, from totally passive to totally active. Then, indeed, filtering, culling and curation will be the key to success.

3 — Collective blanket licenses that legalize and unlock legitimate access to basic content services via any digital network will emerge, and are likely to take over as the primary way of content consumption, around the world (but in Asia, first). Just like water or electricity which is readily available when moving into a new home, the basic access to content will be bundled into access to digital networks, i.e. via ISPs, operators, telecoms, portals etc. This shift is starting with music (as already done by TDC in Denmark, and Google in China), and will be quickly followed by films, TV, books and newspapers. Access may often – but in local variations – ‘feel like free’ to the user but will in fact generate 10s of Billions of $$ via blanket licensing fees (yes… those pools of money), next-generation advertising and branding, data-mining & sharing, up-selling, re-packaging and many other new generatives. This topic will, 

I think that governments around the world will call for and / or support the implementation of collective content licenses that wil finally legalize content usage on the Internet, similar to how governments pushed for the radio and broadcasting licenses approx. 100 years ago. Whether these blanket licenses will be voluntary or compulsory remains to be seen – in any case the only alternative is to perpetuate a severely dysfunctional telemedia ecosystem that criminalizes almost all users and stifles innovation while generating virtually zero new revenues for the creators.

4 — Fuel-cells and other next-generation mobile energy sources are a certainty. A serious increase in mobile device power (and therefore, its use) will be achieved by employing next-generation technologies such as fuel cells that could provide for up to 500x the usage time that we have today. This is likely to become a reality in 3-5 years and will revolutionize how we use – and how much we rely on – our mobile devices, especially in countries where there the fixed-line power infrastructure is much less developed or non-existent.

5 — Completely targeted and personalized advertising, delivered largely on totally customized mobile computing & communication devices, will turn the the $ 1 Trillion USD advertising and marketing services economy upside down. Behavioral targeting and user-controlled advertising will, of course, become an even hotter potato and a much discussed challenge, but the good old deal of ‘I give you attention & personal data and you give me value e.g. content’ will be even more pronounced on the Net. In fact, advertising as we knew it is already more or less outmoded and will, during the next 2-3 years, be completely reinvented. Privacy and Trust are the #1 issues here.

The implication is that if your data (within your specific sets of permissions and opt-ins) is used to bring you perfectly synchronized advertising, than advertising really becomes more like content, too. Watch this play out in the mobile advertising space, starting this year, and quite possible boost the global value of advertising-content by more than 100% by 2015. Google will be the main driver here, plus Facebook, Nokia and yes… Twitter (soon to be = Google).

6 — We will witness the more or less complete decline of most forms of physical mediawithin 7-10 years. The very definition – and thus the core economic business models – of newspapers, magazines, CDs, DVDs and books will be completely re-written, and new forms of content packaging will rapidly emerge. We can already see a preview of how this may work in the current mobile applications boom: content as part of software packages; paying for the packaging, the curation, the bundling, the personalization – not just for the zeros and ones that are ‘the copy’. This trend is important not just because it will reflect the users’ (or better… followers’) new consumption habits but also because because of the increasing need to save energy and material costs – and moving from content products to content services will certainly go a long way in this regard. The total decline of printing in people’s homes, and for personal use, will commence, as well.

7 — Paying for privacy will become a distinct option. Today we pay to go online and connect; in the future we may end up paying for the luxury to go offline, disconnect, enjoy the quiet, and give our brain some rest. Maybe if we don’t want to share our click-trails and usage data, we will be able to make cash payments instead – and the more you pay, the more private you can be..?

8 — Travel 2.0: alternatives to ‘actually going there’ will explode: immersive, 3D video, virtual rooms, holography. This is a key development that will nurture new forms of entrepreneurship, education and group work.

AMP -- ASSOCIATION OF MUSIC PROFESSIONALS STATE OF YOUR UNION

STATE OF YOUR UNION

This blog is not going to be about the digital market place, where it's going, or how to get better at your craft. We are going to be asking some tough questions you need to sincerely and honestly answer.  I have spent the last several years compiling information on where the music industry is going by meeting with artists, developing artists, and working with up and coming stars.  There is a commonality between them all, in their hopes, dreams, and aspirations. I hope to cover that commonality that I learned while standing outside of venues, in the studio, in phone conversations, talking with agents, A&R, managers, publicists, friends, family and the artists themselves. While this will not be an exhaustive outlay, it should give you some clarity on if you're in or out.

The one thing I am sure of is this is the best time ever for the independent artist/ entrepreneur. The internet has opened up a whole new world of possibilities, and they're yours for the taking. Another thing I have learned is, if you're not willing to do the work, you're in the wrong business, and you should stop wasting your time and go back to your day job. However if you are willing to put in the hours upon hours of hard work, the rewards are limitless. 

BALANCING  ACT

Nearly all of the up and coming artists I talk with have day jobs, and some have families. First it is important that you get your priorities in check. Ask yourself, what is my definition of success? If you do not put God and family first, you may still make it to the top. However along the way you will make those around you miserable, families will breakup, children will be divided between parents, life will be miserable. and when you get to the proverbial top you will be alone, empty and ridden with guilt. So, balancing your career is not an act. It must be the very fiber you're made of.

ARE THERE CHALLENGES?

You bet! I had the distinct pleasure of performing with Christian recording artist Luke James the other night.  We hung out a little while with a group of artists after the show. The conversation was no different than the ones I heard hundreds of times before. One comment I heard was, "I need help".  While the artist who made this statement was a consummate professional, and if he perseveres he will make it someday, this is a reality check for us all. We all need help, and can't make it on our own. Your family and friends can only help you so far. You must employ your fan base in this venture as well. This is a must. You can overcome all of the challenges of this business and have them become an asset with the help of those around you. First you must learn how to do that. One of our goals at AMP is to help you learn to use your resources.

REALITY CHECK

Here are some questions you need to ask yourself in order to determine if you truthfully have what it takes and that you're not just running off the fumes of ego and denial. This is where the rubber meets the road. Do not take this lightly!!!!!!!

1. Am I self motivated

2. Am I willing to sacrifice

3. Can I take rejection

4. At the beginning am I willing to work long hours with no pay

5. Do I believe in myself

6. Do I have the patience

7. Can I not put a time limit on my career

8. Can I ask for help

Our goal at AMP is to help guide you through this maze. While this blog may seem tough. I meant it to be. THE MUSIC WORLD IS TOUGH. However it can be a lot of fun and highly rewarding in many ways. Let us help you succeed!

Click on join to become a part of the  AMP TEAM