Royalty Stream: June 5 - Weekly Royalty News

Jun 05, 2016

Donald Trump Jumps to Delaware, Apple Streaming Takes Off, and Musicians Tackle YouTube Royalties


Each week, Royalty Insider takes a look at the top headlines that shaped the royalty business, music industry, and global economy.

Donald Trump Avoids Royalty Taxes in Delaware Deal

Republican presidential candidate Donald Trump has relocated at least 110 registered trademarks and other intellectual property assets to Delaware in a decision that could help him save millions in taxes each year. Thanks to a relocation of popular trademarks like "Trump Tower," "Trump National Golf Club,” and the “Trumptini” to the First State, he will avoid having to pay taxes on any royalties generated from this intellectual property.

This is important royalty news for two reasons. First, with taxes in focus during the election season, Trump will likely have to address the topic on the campaign trail. He and competitors Hillary Clinton and Bernie Sanders have discussed tax proposals on high-net-worth individuals. Both Clinton and Trump have corporations in Delaware, a state known for its low-tax, pro-business policies.

This royalty news also raises the ongoing debate between Pennsylvania and Delaware over taxable assets.

Pennsylvania recently announced that it lost roughly $493 in potential tax revenue from individuals and companies shifting assets to its neighboring state.

Monsanto Reaches Major Royalty Deal with Argentina

In other royalty news, one of the world’s largest soy exporters reached an agreement with Monsanto Company (NYSE: MON). The deal ensures royalty collection in Argentina's agricultural sector. It has even been called a generational “cultural shift," one that could a nasty dispute between Big Business and Big Government in South America.

The Washington Post reports that Monsanto will give the Argentinian government full control of the soybean cargo testing. The government will take charge of ensuring that GMO seeds are not used illicitly by farmers across the country.

In the past, farmers had “generally avoid paying royalties and instead use GMO seeds saved from previous harvests or purchased from non-registered suppliers.”

Monsanto had considered pulling its entire GMO operations from Argentina in May. The company complained about royalty collection problems and the nation's plunging currency. The firm argued it was owed royalties for its significant investment in genetically engineered seeds that repel crop-eating worms.

Royalty Payments Surge 25% in South Africa

A landmark decision will place a 90% quota for local music for stations operated by the South African Broadcasting Corporation (SABC). The organization plans to boost royalty payments from 3.2% to 4% on radio for all owed recipients.

“This move is meant to stimulate the music industry, through creating jobs and unearthing new talent,” said SABC’s COO Hlaudi Motsoenefng. The radical decision to promote local music is aimed at boosting the popularity and development of music across a multitude of genres, including kwaito, jazz, reggae and gospel music.

The 4% figure is significantly higher than the royalty rights set by the nation’s courts. Despite the concessions, South African artists are still seeking back payments and better ways to document “needle time” and the amount of money owed.

Musicians to YouTube: Time to Renegotiate Royalties

The New York Times’ offers first-class insight into the battle between today’s pop stars and digital video giant YouTube. At the center of the battle: Royalty compensation for music streamed on the website that has one billion users.

As the Times explains, musicians are demanding changes to a 1998 federal law that protects YouTube and similar sites from financial responsibility if their users upload copyrighted materials that don’t belong to them. But more changes are possible, including ones that would dramatically affect any free-streaming platforms in the future.

Musicians are exploring “embargo” periods on free-streaming sites that would aim to increase subscription purchases and digital downloads. Many film studios use this strategy.

Any pending change could produce significant value for music royalty streams. For more on how you can profit from this royalty news, click here.

Tidal Tops Apple Streaming Numbers By Wide Margin

No royalty news section would be complete without an update on Apple Inc. (Nasdaq: AAPL). The digital giant's streaming payouts are averaging about half a penny to an artist that is generating interest from 42 countries.

On Spotify, the same band was part of major playlists, generated roughly one million streams over the last three years, but earned just $5,000 in royalties.

Meanwhile, the band more than doubled Spotify’s payouts, and nearly doubled that of Apple Music's streaming payouts by using Tidal. Digital Music News offers the evidence to back up Tidal's payout claims.

No word yet if AAPL is planning on hiking its streaming payouts just yet, but musicians are starting to find ways to boost their revenue streams.

For more insight into the global royalty business and how to learn more about the buying and selling of royalties, visit Royalty Insider.