This article is second in a series of guest posts exploring the streaming issue from multiple angles, with a focus on how independent players are impacted. For another take, check out this post from Joe Steinhardt, owner of independent label Don Giovanni Records.read more
It’s pretty weird when you think about it: when you hear “I Will Always Love You” performed by Whitney Houston on AM/FM radio in the US, neither the Houston estate nor her label get paid. But songwriter Dolly Parton does receive compensation, along with her publisher. We love Dolly a ton, but this seems unfair. That’s because it is.
Things look much different in the rest of the world, where performers, labels, songwriters and publishers ALL get paid for radio play. Consider how certain genres of music—like jazz and r&b—are powered by performances. “Respect,” belted out by Aretha Franklin. “My Favorite Things” as interpreted by the great John Coltrane. Yet due to a weird loophole in US law that exempts radio stations from paying performers or labels, countless American artists have been unable to collect money owed to them for airplay here and abroad. The problem is particularly acute for performers who aren’t in a position to tour, such as older, so-called “legacy” artists. When it comes down to it, the lack of a public performance right for over-the-air broadcasting amounts to the government giving away music to the rest of the world for free.
These are exciting times at FMC. After 15 years at the intersection of music, technology, policy and law, we’ve taken some bold steps to better serve you well into the future.
As musicians, songwriters, managers, indie publishers and labels ourselves, we know that it’s a challenge to stay on top of the many issues that are reshaping music. But with so much happening in the policy arena and the marketplace, this is a crucial time for artists and their teams to get involved. In FMC’s next next phase, we’ll be coming up with new and innovative ways to help you crack the code of an evolving industry. Be sure to sign up for our newsletter so you don’t miss an opportunity. read more
Today, the United States Copyright Office released Copyright and the Music Marketplace, the result of last year’s Music Licensing Study—a project that combined roundtables in various cities with opportunities for written comments from stakeholders and the public. (FMC participated in the roundtables and official docket; see our initial comments here; reply comments here.)
There’s so much in the 245-page report that it’s impossible to offer a full breakdown of the recommendations in a single blog post. In fact, we’re still making our way through it, but the Executive Summary provides an overview of many of the key provisions. We certainly respect the effort it took to produce such a detailed report, and commend Register of Copyrights Maria A. Pallante for taking the initiative with such a thorny and complex issue set.
by Kevin Erickson, Communications & Outreach Manager
This week, cellist and composer Zoë Keatingwrote an eloquent and impassioned blog post wrestling with the question of whether she should participate in YouTube’s new Music Key subscription service under terms she finds objectionable. By any estimation, Zoë is a savvy observer of the industry and a DIY success story. With regard to YouTube, Zoë took issue with several provisions of the contract presented to her, including the requirement that she make her entire back catalog available in the new service. She also raised questions about the company’s negotiation style. The post clearly struck a nerve and has been widely discussed.
Zoë’s post is well worth reading. Here are some additional things you should know to really understand the full picture:
Welcome back to our series on transparency in the music business. If you haven’t already, be sure to check out Part One, Part Two and Part Three.
Here’s an overview of the three types of transparency we previously outlined:
1. structural transparency: how different services function and how they compensate artists 2. rates and revenue transparency: how money is split, who gets paid what and why 3. repertoire transparency: readily available ownership information to facilitate more efficient licensing and accuracy in payment
Today, we’ll take a closer look at revenue transparency. This goes beyond simply knowing how much you’re getting paid as a musician or songwriter. Revenue transparency should also include information about the terms of compensation and how revenue is collected and distributed.
Before we get started, it’s crucial to understand that there are two distinct copyrights in music: the musical work (think lyrics and notes on paper) and the sound recording (think of performances captured to tape or hard drive). Musical works belong to publishers and composers, while labels typically own sound recordings (though sometimes it’s the artist).
In certain circumstances, the law treats these two copyrights completely differently. This can make the revenue picture even more complicated. For a great breakdown, check out our Music and How the Money Flows charts—they’re particularly helpful for visual learners.
Keep in mind that the laws and business practices that govern compensation are often in flux. New or hybrid technologies can emerge that require a novel approach to payment, and some individual deals end up affecting the entire marketplace. Additionally, the US government is currently examining current copyright law with an eye towards an eventual update. With those caveats in place, here are some examples to consider.
Welcome to Part Two of FMC’s look at transparency and why it matters to musicians and composers. In Part One, we described three different types of transparency, and outlined why each matters to anyone who wants to get paid in the digital age:
1. structural transparency: how different services function and how they compensate artists
2. rates and revenue transparency: how money is split, who gets paid what and why
3. repertoire transparency: readily available ownership information to facilitate more efficient licensing and accuracy in payment
Today, we’re going to look at a current hot topic—direct deals for performance rights in music publishing—as a case study.
Let’s say your metal band is playing a headlining club gig. At the end of the night, the promoter hands you an envelope containing $200. Is that a fair share?
Or say you’re a R&B singer with a CD released by an independent record company. Your label sends you quarterly royalty checks, but how do you know if the amount is correct?
Or imagine you’re the composer & lyricist of a popular country song that gets played on an on-demand streaming service. You get regular checks from your performing rights organization (PRO) for this use, but how do you know if the rate you’re getting is fair compared to what other songwriters get for plays of their songs?
When music is played on a non-interactive digital service like Pandora, Sirius XM, or cable radio, payment for the sound recording copyright is collected and distributed by SoundExchange, a non-profit performance rights organization. As we detail in our handy “Music and How the Money Flows” chart, this revenue is divided up in a standard formula: 45% goes to the featured artist, 50% goes to the sound recording copyright owner (usually a label), and 5% goes into a union-administered fund to compensate backing musicians and session players. We’re fond of this system because it treats all artists equally, ensuring direct payment that can’t be held against recoupable debt to a label, with equitable splits.
But what happens if you’re a self-released artist who doesn’t work with a label, but owns the copyrights to your sound recordings? You are entitled to collect both the artist share and the label share yourself. Unfortunately, many artists don’t know this, and end up missing out on money they ought to be collecting, because they’ve only registered for the artist share. Other artists haven’t registered with SoundExchange at all.
CD Baby, a popular distribution service with a large userbase of mostly self-released artists, recently announced a change to their terms of service that allows them to collect the label share from SoundExchange for their roster of distributed artists. This move was met with some minor controversy, as indeed, artists are entitled to collect that money themselves directly from SoundExchange, without the administrative cut that CD Baby charges. We decided to go directly to the source: CD Baby CEOTracy Maddux answered our questions this week via email.