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Who Should Watch Over The Royalties?

Last year, the Music Modernization Act became law, in an attempt to fix some aspects of Copyright. While it had a nice clause about moving some very old music into the public domain, the issue that got all the artists excited was the changes required to the mechanical licensing process for songwriters, making it easier for songwriters to get the royalties they are owed.

But.

In all the excitement no one thought to read the details. The law gives birth to a new collection society for these mechanical royalties. So companies/organizations had to submit their proposals to The Copyright Office. And the one that looks like it could win the “bid” (the National Music Publishers’ Association (NMPA)) is one of the organizations which caused part of the current mess with royalties.

In other words, it’s another system created to move money to the big music publishers and away from independent artists.

The publishers have the PR down, telling people how they represent all songwriters which is not quite true.

And independent songwriters make up 99% of the music business, but they are all confused about what is going on and what they need to do to collect their royalties. Trusting in organizations to do the right thing is not really a good business model. And in times of confusion, the one that benefits most, is the one in power, which is the NMPA.

As the Techdirt article explains:

There is a pot of unclaimed royalties that have already been paid by music services that is estimated to be between $1.5 and $2.5 billion.

With so much money at play, the new organization will need to create some fancy algorithms to match the monies to the songwriters. However, the new law also gives the new organization a POWER to distribute any unclaimed royalties to themselves after a three year period.

So how proactive do you think this new organization would be to find these independent songwriters?

And this kind of conflict of interest isn’t new. SoundExchange is a good example. In 2005, this new body was formed, a spin off from the labels to collect online royalties and by 2009 it had a lot billions of unclaimed royalties to couldn’t match, even to well known artists.

If the NMPA gets the green light from the Copyright Office they will control billions of dollars in royalties. It’s more power to the old legacy players.

As the are Techdirt article states, the biggest challenge to being a successful independent musician is not piracy, but rather the legacy industry getting in the way and keeping money it owes independent musicians.

The Techdirt article.

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