Royalties for Remixes, Royalty Tracking, and Royalty Returns

Aug 25, 2017

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.

Dubset Makes Sony Music First Major Label Legalized for Remixing (TechCrunch)
Benom’s Take: The remix culture is huge, but licensing songs and recordings for DJ remixes is one of the most common questions I receive from students and clients. “How do I release my remixes without getting into legal trouble?” Until Dubset, the answer was that a DJ must conduct their own copyright research and go through the clearance process themselves. Quite the difficult task if you’re a creative professional with no background in licensing or copyright. And if the remix has multiple rights owners involved... forget about it! Nevertheless, these “unofficial” remixes are some of the most popular tracks in the world, and money has certainly been left on the table when they are streamed online without proper licensing.

Dubset’s technology seems to help solve this problem by matching up remixes with the rights owners of recordings used in the remix. The company is also handling the licensing clearances on behalf of the DJ. It’s obvious that Sony Music thinks the Dubset system works, otherwise they wouldn’t sign up. From what I’ve read and seen, Dubset is filling a major need in the industry. This kind of technology is the future. Technology that is user-friendly and transparent means we can better streamline the licensing and royalty payment processes. If we can make it easy for creative professionals to license content and at the same time, make it easy for rights owners to clear those uses and get paid, it’s a win-win! Let’s see if the other majors jump on board. To see how the Dubset system works, click here.

BMG Launches Royalty Tracking App (Hypebot)
Benom’s Take: More news on the tech-royalty front this week with BMG’s newly launched app. Most of the big companies have some kind of proprietary technology that allows their clients access to an online portal for their royalty accounts. The systems operate very similar to how online banking portals do. The online portal allows clients to track their royalties in real time, request royalty advances, and provides access to various royalty data analytics. BMG’s new app will link up to its online portal and allow clients to get their royalty data even faster via their mobile phone, tablet, etc. Once again, royalty technology that is user-friendly and transparent is the future. Everyone wants to have the data at their fingertips, 24/7. Companies that don’t develop their own online royalty portals or license one out will eventually be left behind and lose business.

Spotify Finalizes Licensing Deal with Warner Music Group (Music Business Worldwide)
Benom’s Take: The trifecta is complete! To pave the way for a rumored IPO, Spotify had to get new licensing deals in place with the three major record companies. In order, from biggest to just plain big is:

  1. Universal
  2. Sony 
  3. Warner

In April, Spotify finalized a new licensing deal with Universal Music and it’s reported they also finalized a licensing deal with Sony Music last month. We were all waiting to see when Warner would join the party and here we are.

So what now? Many analysts have speculated that once Spotify had locked in licensing deals with the three majors, they would have the “all-clear” for the IPO. The major record company hurdle is cleared, yes. However, as previously mentioned, new lawsuits on the publishing front may (or may not) hamper the IPO move. We’ll just have to wait and see. For the moment though, Spotify is probably sighing in relief!

Hitmaker Max Martin Made $19 Million Last Year, a 22% Increase Over 2015 (Variety)
Benom’s Take: Swedish producer, Max Martin, is the pop music producer king. He’s written and produced so many No. 1 songs by A-list artists it'll make your head spin. He’s most famous for his work with Britney Spears, Backstreet Boys, NSync, Justin Timberlake, Taylor Swift, Celine Dion, Ariana Grande and Katy Perry, just to name a few. The report states that his production company reported income of approximately $54 million, while Max personally profited around $19 million.

Because of the multi-faceted work a producer does, they often share in the whole pie of commercial music royalties. A producer the caliber of Max Martin is not only earning significant income from his production services, but also from the sound recording royalties (record sales and streams) and the publishing royalties (songwriting contributions). I often tell students, if they have a talent for record production and songwriting, it could potentially be a very lucrative career. Just look at Max Martin. Everybody had to start somewhere, right?