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.
BMG Purchases Broken Bow for a Reported $100M
Benom’s Take:
BMG is an acquisition and investment powerhouse in the music industry. They have gobbled up so many amazing music assets, it makes me jealous. I wish I could own all of those great songs and recordings that now call BMG home. And yes, it’s true, Broken Bow is an independent powerhouse in Nashville. I know this to be true from my years working in the city. The opening quote is encouraging to potential investors as well: “It’s being widely observed that recent investment in music copyrights has started to spiral upwards - as market confidence grows over streaming’s future potential.”
SoundExchange reports 10.1% increase in artist royalties from 2015 to 2016
Benom’s Take:
More positive growth news for streaming royalties. This 10% increase is also due to new, higher royalty rates set for the years 2016 - 2020. The current rates can be found here on SoundExchange’s website. Please take note! These royalties are for digital and internet platforms only. In the U.S., AM/FM radio generally doesn’t pay a royalty to record labels and recording artists, unless through a directly negotiated deal. However, the AM/FM radio royalty DOES exist in the rest of the developed world. ‘Merica!!
Canadian Performance Royalties Grew 8% in 2016
Benom’s Take:
SOCAN is like the ASCAP and BMI of Canada. This article reports that SOCAN’s revenue grew 8%, but that overhead costs required to pay out those royalties increased over 3%. Every royalty collection society strives for a low income-to-distribution ratio, the difference between the royalties collected and the royalties paid out to members. SOCAN does in fact maintain a fairly low income-to-distribution ratio in comparison with other worldwide collection societies. Canada is a strong royalty territory, especially for Canadian music. The “MAPL System” is a set of radio regulations that require radio stations to air a minimum quota of “Canadian content” (i.e. Canadian artists, songwriters, etc.) Oh, Canada!
50 Cent Pays $22M To Debtors, Ends Bankruptcy
Benom’s Take:
It’s unfortunate, but it’s common in the music industry - artists going into bankruptcy. Artist bankruptcy cases are gold mines for music asset investments. I know colleagues and other music industry professionals that have acquired classic pieces of music assets for pennies on the dollar through bankruptcy. You have to know some well established entertainment attorneys and such, but it’s entirely possible - and potentially lucrative. It’s ironic though isn’t it? After this bankruptcy case, all 50 Cent has left now is literally….$0.50!