This Week In Royalties: Feb. 27 - March 3

Mar 03, 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.

Global Recorded Music Industry Up 7% to $16.1 Billion (Music Business Worldwide)
Benom’s Take:
This 2016 data is more good news for the global industry. It's the largest growth the industry has seen in over 15 years! Global streaming revenue grew by almost $2 billion between ‘15 and ‘16. As the article states “If streaming can outrun tumbling download and CD revenues, then good times are indeed here.” I’d say we’re definitely on the way. Just look at Chance The Rapper’s unorthodox Grammy success. An independent, streaming-only artist just won three Grammys. That’s a new one for this business and will hopefully set a solid precedent.

BMI and Radio Industry Agree To Interim Royalty Rate (Inside Radio)
Benom’s Take:
Public performance royalties are really the best source of long-term income for the music publishing business. However, I certainly don’t envy the radio industry having to haggle with four (count ‘em, 4) U.S. performing rights organizations - ASCAP, BMI, SESAC and Irving Azoff’s latest creation, Global Music Rights. This “interim rate” just allows the radio industry to remain legal while fighting with BMI for a final royalty rate to be set for the time period of 2017 - 2021. ASCAP settled their 5-year licensing deal with the radio industry in December of 2016 and BMI hopes to get the same deal or similar - somewhere upwards of 1.75% of gross revenue. For an excellent summation of all the major issues facing radio royalties, check out the next link from Inside Radio.

Radio Royalties: A Look At The Battle On All Fronts (Inside Radio)
Benom’s Take:
I don’t think we’ll see an AM/FM sound recording performance royalty anytime soon. However, I do think the issue of Federal copyright protection for pre-1972 sound recordings will eventually go to the Supreme Court. Hopefully, that issue can be resolved in the music industry’s favor. It’s absolutely absurd there isn’t any Federal copyright protection for pre-72 recordings. Some of the most classic recordings are pre-72! Or perhaps all of these issues can be addressed in a new reformed Copyright Act.

UK Music Biz Calls For Gov’t Intervention After Majors Fail To Act On Transparency (Billboard)
Benom’s Take:
This is a hot-button issue in the industry and we’re just getting warmed up. Why would the major record labels be transparent about their license agreements with digital streaming services? All of these deals were signed under Nondisclosure Agreements  - so that means no disclosure! It’s rumored the majors accepted millions of dollars of advance payments from these licensing agreements and did not share it with their artists. Some companies (such as Sony) say are they are sharing this income with artists, but much of the issue remains shrouded in mystery. If it takes a government to unlock the mystery and force more transparency, then so be it. Bottom line, there are valid questions that need answers and there absolutely needs to be more transparency and equitable payments back to the artists.