Benom Plumb, Assistant Professor of Music Industry Studies at the University of Colorado Denver, reviews the biggest stories of the week affecting music royalties. He is a music industry professional, not an attorney.
Benom’s Take: EDM (Electronic Dance Music) and other forms of electronic music (House, Trip Hop, Dubstep, Chiptunes, the list goes on...) is one of the more difficult genres of music to license and collect royalties for.
It’s a well-known problem in the music industry that professionals have been trying to solve for many years. Which is why this week’s announcement is a welcome one. French royalty collection society SACEM is now working with DJ Monitor to improve its royalty tracking and collections in France. DJ Monitor uses advanced audio “fingerprinting” technology to identify music played by DJs in clubs, venues and festivals across Europe.
As noted in the article, the core problem deals like this aim to solve is the lack of education and knowledge about royalties and licensing rights within the electronic music community. Most creators simply don’t know money is owed to them, or that they are even supposed to register songs for royalties.
“The deal follows a SACEM survey that highlighted some of the difficulties and unique challenges in identifying and distributing rights for EDM artists and rights holders. They included a general lack of understanding in the electronic music community about collective rights management practices and insufficient tracking mechanisms of works played in clubs or remixed as part of a DJ set. Another issue highlighted in the study was that EDM tracks are often not included in the catalogues of rights management societies as few of them are registered by their creators.”
The company already has similar deals in place with societies in the UK, Netherlands and Belgium. “Fingerprinting” technology is essentially identifying a song via its specific waveform. For example, when you listen to a song on SoundCloud, the entire “fingerprint” of the track is on display as the song streams. This kind of technology is also used by ASCAP, BMI, SESAC and Shazam to identify songs.
However, the advanced technology can’t track as well if creators don’t register their songs and upload recording(s). For example, when I register a song at SESAC, I fill out all the necessary metadata info (Song Title, Artist, Label, Writers, Publishers, Release Date, ID Codes for recording/composition, etc.) and then I upload a recording with the registration. SESAC will then mark my song with their fingerprinting technology, which allows easier and more accurate royalty tracking whenever the song is performed.
But if I don’t register the song and SESAC picked up the performance for royalties, SESAC still wouldn’t know who to pay. So even with the fancy technology, the need to educate artists is still essential to solving this problem. DJs, producers, and their representatives must register their songs and understand there is money out there just waiting to be claimed. No amount of technology will help if they don’t.
What’s especially noteworthy about this story is all of the missing and unallocated royalties that have accrued on EDM tracks and various DJ re-mixes. These unclaimed royalties are typically called “black box” money. When unclaimed royalties are generated, the money is held in a type of escrow or holding account. The societies know a song was performed, but just don’t know who to pay. Therefore, this money is “unclaimed” and goes into the “black box” until someone claims it.
There are literally millions of dollars in unclaimed royalties from the electronic and dance genres. Some societies have an unclaimed royalties database that their publisher and writer members can search. For example, in the UK, I was able to sign multiple clients simply because I found thousands of pounds just waiting for them to claim.
What’s really crazy about “black box” income is that there is no obligation by a society to remit this income to a publisher. After a certain amount of years (depends on the country and society) black box money is liquidated from the holding account. These unclaimed royalties could be paid out to society members as bonus payments or other payments to parties not actually entitled to those royalties. Sounds crazy, but the collection societies can’t hold onto the money forever.
So, the moral of the story for all artists and the electronic music community in particular is this: Time is limited to claim your royalties. Those on the business side are working hard to accurately track royalties. All creators have to do is tell them who to pay.
And now for this week’s other headlines:
Spotify On Course To Hit 500M Users and A $100B Valuations, Says GP Bullhound (Music Business Worldwide)
The Future of Major Labels (Lefsetz Letter)