Royalties
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Global royalty collections for song rightsholders grew 7.6% last year, to a new high of 11.75 billion Euros ($10.9 billion, based on the average exchange rate for 2023), according to CISAC (the Confédération Internationale des Sociétés d´Auteurs et Compositeurs), the Paris-based collecting societies trade organization. Much of the growth was driven by two categories: Digital collections rose 9.6% to 4.52 billion Euros ($4.18 billion), while live and background music royalties grew 21.8% — fueled largely by the concert business — to overtake the pre-pandemic total from 2019.
The big collecting societies all had good years, but the CISAC report offers unparalleled insight into a complicated but important part of the music publishing business. (CISAC includes other collecting societies from outside the music business, but publishing accounts for most of these royalties, which are, in turn, more important to music than to other businesses. CISAC breaks out music royalties, but its figures only include those that go through CISAC member societies rather than direct deals.) There are no big surprises here: Digital has been the main driver of growth recently, more than doubling in five years from 2.06 billion Euros ($1.90 billion) in 2019 to 4.52 billion Euros ($4.18 billion) last year — although last year’s growth of 9.6% was lower than in any of the preceding four. Digital now accounts for 38.5% of collections, more than any other category.
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Collections for broadcast and live concerts and background music represent the two other major sources of revenue, accounting for 28.7% and 26.1%, respectively. (Background music refers to compositions played in public, at restaurants, stores or bars, for example.) Royalties from TV and radio declined 5.3% to 3.37 billion Euros ($3.11 billion) after a significant jump the previous year. They have stayed fairly steady over the past half-decade.
The live and background music figures are more complicated because of the disruption from the pandemic. Last year those categories grew to 3.06 billion euros ($2.82 billion), fueled mostly by the return of live music revenue, which in some regions may lag live music events. More significantly, that represents a 12.7% jump from 2019.
Collecting societies take in most of their business in Europe and the U.S.; CISAC has one category for Western Europe and another for the U.S. and Canada. Western Europe collections rose 8.2%, while those in the U.S. and Canada rose 7.8%. Taken as a whole, Europe accounts for more than half of total collecting society revenue, and the U.S. and Canada together account for another 27.1%. Asia-Pacific royalties shrank by .3%, largely due to currency fluctuations in Japan, without which the region would have seen 6.8% growth. The fastest growing region is Latin America, up by 26.2% — and by 108.2% over the past two years – although it only accounts for 5.9% of the overall market. Africa, where executives have seen massive potential for years, is still growing very slowly – up 3.2% to .6% of the overall market.
General CISAC collections are also up 7.6%, to 13.09 billion Euros ($12.1 billion), also an all-time high, with digital up 9.6% to 4.62 billion Euros ($4.3 billion). (This includes collecting societies for other media, such as writing and visual art, which many countries in Europe have.)
Billboard will follow this news story with a more extensive analysis of growth sectors, the future of various markets, and how this business might grow in the years ahead.
PPL has been appointed to collect neighboring rights for John Lennon and Yoko Ono. Announced Tuesday (Oct. 15), the deal will see the U.K.-based collective management organization (CMO) collect broadcast and public performance royalties globally on sound recordings where Lennon or Ono are listed as performers in markets where such rights exist. “PPL has shown […]
Weeks after Nelly’s former St. Lunatics groupmates sued him for allegedly cutting them out of royalties for his chart-topping breakout album Country Grammar, three of the ex-bandmates now say they never wanted to be part of the lawsuit and must be removed immediately.
In a letter sent last month, Nelly’s attorney warned the lawyer who filed the case last month that Murphy Lee (Tohri Harper), Kyjuan (Robert Kyjuan) and City Spud (Lavell Webb) had recently retained his services and had “informed me that they did not authorize you to include them as plaintiffs.”
“They are hereby demanding you remove their names forthwith,” N. Scott Rosenblum wrote in the Sept. 24 letter, which was obtained by Billboard. “Failure to do so will cause them to explore any and all legal remedies available to them.”
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The move is a major twist just weeks after Harper, Kyjuan and Webb joined fellow St. Lunatics member Ali (Ali Jones) in filing the lawsuit against Nelly (Cornell Haynes). But it also makes sense after Nelly’s performance on Sunday (Oct. 6) at the American Music Awards, where all three men joined him on stage and appeared to be on good terms.
The withdrawal of Harper, Kyjuan and Webb means that the case is now essentially a dispute between Nelly and Ali alone. Ali’s attorney who filed the case, Gail M. Walton, did not immediately return a request for comment.
A group of high school friends from St. Louis, the St. Lunatics rose to prominence in the late 1990s with “Gimme What U Got”, and their debut album Free City — released a year after Country Grammar — was a hit of its own, reaching No. 3 on the Billboard 200.
In their Sept. 18 complaint, the bandmates claimed that Nelly had repeatedly “manipulated” them into falsely thinking they’d be paid for their work on the 2000 album, which spent five weeks atop the Billboard 200. But they said he never made good on the promises.
“Every time plaintiffs confronted defendant Haynes [he] would assure them as ‘friends’ he would never prevent them from receiving the financial success they were entitled to,” the lawsuit reads. “Unfortunately, plaintiffs, reasonably believing that their friend and former band member would never steal credit for writing the original compositions, did not initially pursue any legal remedies.”
During and after the Country Grammar recording session, the lawsuit claimed, Nelly “privately and publicly acknowledged that plaintiffs were the lyric writers” and “promised to ensure that plaintiffs received writing and publishing credit.” But decades later, in 2020, the lawsuit claimed that the St. Lunatics “discovered that defendant Haynes had been lying to them the entire time.”
“Despite repeatedly promising plaintiffs that they would receive full recognition and credit… it eventually became clear that defendant Haynes had no intention of providing the plaintiffs with any such credit or recognition,” the lawsuit read.
Limp Bizkit and frontman Fred Durst are suing Universal Music Group (UMG) over allegations that the label owes the band more than $200 million, with Durst’s lawyers writing that he had “not seen a dime in royalties” over the decades — and that hundreds of other artists may have been treated similarly.
In a lawsuit filed Tuesday (Oct. 8) in Los Angeles federal court, attorneys for Durst and the 1990s rap rock band accused UMG of implementing a “systemic” and “fraudulent” policy that was “deliberately designed” to conceal royalties from artists and “keep those profits for itself.”
“UMG’s creation of such a system, while holding itself out as a company that prides itself on investing in and protecting its artists, makes plaintiffs’ discovery of UMG’s scheme all the more appalling and unsettling,” Durst’s lawyers write, adding that “possibly hundreds of other artists” had also “unfairlyhad their royalties wrongfully withheld for years.”
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In a stunning claim, Durst alleges that as recently as August, Limp Bizkit had “never received any royalties from UMG,” despite the band’s huge success during its turn-of-the-century peak. The lawsuit said the band’s albums had all sold millions of copies, and that Limp Bizkit continues to have “millions of streaming users per month on Spotify alone.”
“Despite this tremendous ‘come back,’ the band had still not been paid a single cent by UMG in any royalties until taking action against UMG, leading one to ask how on earth that could possibly be true,” Durst’s lawyers write.
A spokesman for UMG did not immediately return a request for comment on Tuesday.
Durst claims that the current dispute dates to April when he retained new representatives who were “shocked” when he informed them he had “not received any money for any Limp Bizkit exploitations — ever.” He claims UMG had previously told him that he was not being paid because the band remained unrecouped — meaning its royalties still had not surpassed the amount the group had been paid in upfront advances.
“Durst explained that he had been informed by UMG that he had not received any royalty statements because UMG told him over the years that it was not required to provide them since his account was still so far from recoupment,” his lawyers write. “Durst’s representatives, suspicious that UMG was wrongfully claiming Plaintiffs’ accounts were unrecouped, suggested investigating further.”
When Durst’s reps contacted UMG, they say they learned that Limp Bizkit’s accounts actually held more than $1 million in royalties but that the label had “failed to alert” the band about the money. That prompted more suspicion about “UMG’s accounting and payment practices” and an investigation into Limp Bizkit’s records.
They didn’t like what they found. According to the lawsuit, UMG had allegedly failed to issue royalty statements at all during significant periods of the band’s history, including “during the height of Limp Bizkit’s fame.”
“UMG’s failure to issue royalty statements in particular from 1997-2004 — the height of the band’s fame and during periods in which they made record-breaking sales — with respect to its most popular albums suggests that UMG was intentionally concealing the true amount of sales, and therefore royalties, due and owing to Limp Bizkit in order to unfairly keep those profits for itself.”
The suggestion that the band’s albums are still unrecouped is also “highly suspect,” Durst’s lawyers write, citing the band’s huge commercial success during its early years: “Given that Limp Bizkit’s first three albums had already sold several million copies by the early 2000s, the recording funds and costs should have been quickly recouped, and UMG should have started paying royalties on those albums right away — not over twenty years later,” the lawsuit reads.
The lawsuit also points to potential “fraudulent accounting practices” that Durst’s attorneys claim were used by UMG to improperly keep the band in the red and avoid paying royalties.
“But where did this additional $199,676.00 charged to the account come from?” his lawyers write, referring to one such alleged inconsistency. “It seems to have come out of thin air to overdraft Limp Bizkit’s due and payable account in order to defraud Limp Bizkit and show an unrecouped account.”
When those issues were raised with UMG, the lawsuit says the label argued that Limp Bizkit had been paid $43 million in recoupable advances over the years, which explained why the royalties had not started flowing into the accounts until recently. Durst’s attorneys say the label eventually released $1.03 million to the band and $2.3 million to Durst’s Flawless Records, but that they’re owed far more than that.
“Given the vast amounts of money collected by UMG in relation to sales of Limp Bizkit’s and Flawless Records’ albums over the years … UMG is liable to plaintiffs for tens of millions of dollars in copyright infringement, if not more,” the lawsuit reads. “Indeed, Plaintiffs allege that the amounts owed to them by UMG following the rescission of these agreements will easily surpass $200 million.”
In technical terms, the lawsuit seeks not only allegedly unpaid royalties, but also a ruling voiding the band’s contract with the label, the return of the band’s copyrights to their recordings and copyright infringement damages over those rights.
Primary Wave Music has acquired the producer royalty and neighboring rights royalty streams for artist manager, music critic, and record producer Jon Landau.
This deal includes Landau’s points and neighboring rights royalties to songs by Bruce Springsteen, whom he worked with as a co-producer for Born To Run, The River, Darkness on the Edge of Town, The Promise, Born in the U.S.A., Live 1975-1985, Human Touch, Lucky Town and Tracks. The deal also entails his producer and neighboring rights royalties for his production on Jackson Browne’s The Pretender.
A Rock & Roll Hall of Fame inductee, Landau was a pivotal figure in rock music during his decades-long career. Landau got his start writing about music for publications like Crawdaddy and The Boston Phoenix and by 1967 he was hired by Jann Wenner as the lead writer for the brand new Rolling Stone publication, a position he held for a decade.
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By 1970, Landau was simultaneously writing for Rolling Stone and getting back to his roots as a lifelong musician by producing MC5’s studio album debut Back In The USA.
He got to know Springsteen in 1974 after he reviewed a performance by the singer-songwriter and called him the “future” of rock music. The following year, he co-produced Born To Run, cementing both his relationship with The Boss and his career as a producer. He would go on to co-produce eight more of his records. During this time, he also befriended Browne and produced 1976’s The Pretender, featuring songs like “Here Come Those Tears Again” and the title track.
Two decades later, Landau experienced another career peak as the manager for Shania Twain. He helped build the country-pop artist’s career, leading her to true super stardom with her 1997 album Come On Over, featuring the song “Man! I Feel Like a Woman!” and “You’re Still The One.”
Landau has also worked with artists like Natalie Merchant, Train, Alejandro Escovedo, Livingston Taylor and more.
“I thank all at Primary Wave for recognizing my contributions over the last fifty years and look forward to having an ongoing and productive relationship with them,” says Landau of the deal.
Marty Silverstone, president of global synch at Primary Wave, adds: “We’re honored to be partnering with Jon Landau and all of the legendary music he helped shape. He’s an influential figure in music, and we’re proud to welcome him to the Primary Wave family.”
The transaction between Landau and Primary Wave Music was facilitated by David Simone and Winston Simone.
SoundExchange is suing a free streaming service called AccuRadio over allegations that the company failed to pay royalties for music, claiming the streamer has “directly harmed creators.”
In a lawsuit filed Friday in Washington D.C. federal court, SoundExchange accused AccuRadio of violating the federal law that governs how radio-like services pay royalties to record labels and artists for the right to publicly perform copyrighted sound recordings.
SoundExchange – the non-profit that collects and distributes such “statutory royalties” – says AccuRadio had always paid its full bill until 2016, when its payments “slowed” and then finally stopped in 2018.
“AccuRadio has directly harmed creators over the years by refusing to pay royalties for the use of protected recordings,” said Michael Huppe, SoundExchange’s president and CEO said in a statement on Monday. “Today, SoundExchange is standing up for creators through this lawsuit to protect the value of music and ensure creators are compensated fairly for their work. We hope AccuRadio will immediately reverse course and pay what they owe for the use of the music that sits at the foundation of its service.”
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Founded in 2000, AccuRadio boasts that it is “the only online music streaming service curated by human beings, not algorithms.” The company offers hundreds of ad-supported free music channels that users can further customize, including skipping songs they don’t like.
According to SoundExchange, after AccuRadio stopped paying its royalty bill, the two sides have attempted to negotiate a solution for years, including a so-called forbearance agreement last year in which the streamer agreed to make a set down payment and then regular additional payments. But after three months, SoundExchance claims AccuRadio defaulted on that agreement, too.
“The cumulative amount of defendant’s underpayment – which harms SoundExchange, as well as the performing artists and copyright owners on whose behalf it collects and distributes royalties – continues to grow with each passing month,” SoundExchange’s lawyers write in their complaint.
In addition to demanding payment, the lawsuit is seeking a preliminary injunction that would immediately force AccuRadio to either pay up or stop offering copyrighted music to its listenership.
“While defendant has defaulted on the payments due pursuant to the forbearance agreement, it continues to operate its multichannel internet radio service, providing access to over a thousand pre-developed music channels and access to millions of sound recordings,” the lawsuit reads. “Injunctive relief is reasonably necessary to stop defendant from abusing the statutory license and incurring further damages throughout the pendency of this litigation.”
AccuRadio did not immediately return a request for comment on Monday.
Country star Randy Travis had members of Congress gushing and brought star power to an otherwise businesslike hearing titled “Radio, Music, and Copyrights: 100 Years of Inequity for Recording Artists,” held Wednesday (June 26) by the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet.
“This is a great honor,” said Rep. Darrell Issa (R-Calif.), chair of the subcommittee, adding that the other three witnesses “will have to live in his shadow.”
Travis, who has had difficulty speaking since suffering a stroke in 2013, was represented at the hearing by his wife, Mary Travis. His circumstances made him a fitting witness and supporter of the American Music Fairness Act (AMFA), a bill that would create a performance right for sound recordings at terrestrial radio. Unable to sing, Travis has given up touring and relies on royalties for his long-term health care. A country artist who performed others’ compositions would benefit from royalties from continued airplay on terrestrial radio.
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“This piece of legislation is essential to correct 100 year old issue regarding artists and non payment for their work performed on the most prominent music platform in America — one which they helped to build and sustain,” said Mary Travis.
AMFA would establish fair market value for radio performance royalties similarly to how rates are set for streaming platforms. It also compels foreign radio stations to pay U.S.-based artists for the performance of their songs. Outside of the U.S., radio stations commonly avoid paying performance royalties to American artists and record labels despite the existence of a similar performance right in those countries.
The bill would task the Copyright Royalty Board, the three-judge body that determines streaming, satellite radio and mechanical royalties rates, with setting the royalty rates for the new license. Under AMFA, stations that earn less than $1.5 million in annual revenue (and whose parent companies make less than $10 million in annual revenue) to pay $500 annually. Small, non-commercial stations with annual revenue less than $100,000 would pay as little as $10 per year.
“I think you’ve gotten the balance exactly right,” Mike Huppe, president and CEO of SoundExchange, told members of the committee. While small broadcasters would pay modest fees under AMFA, the large national corporations that dominate the broadcasting industry would pay more. Huppe argued they could easily afford it. “This is a $15 billion business in the US,” he said. “Eighty-eight percent of all Americans listen to radio. The biggest broadcast groups are becoming bigger and more powerful.”
Radio broadcasters don’t see it that way, though. Curtis LeGeyt, president and CEO of the National Association of Broadcasters, warned the committee that any additional royalties would be too much. “AMFA would impose a new royalty on local radio that is financially untenable for broadcasters of all sizes,” he said. Eddie Harrell Jr, regional vp and general manager of Radio One, agreed. “Make no mistake that a new performance royalty imposed on local stations would create harm for local stations, listeners and the recording industry itself,” said Harrell. Local broadcasters, he said, “are operating on extremely tight margins right now.”
The most dire warnings from LeGeyt and Harrell often centered around AMFA’s threat to radio stations’ ability to serve their communities. Because stations’ revenue are not growing, Harrell explained, any additional expense threatens services stations provide to their communities — he cited a program that collects donated items for needy families — and undermine their ability to broadcast during natural disasters. “Those are the things that are lost in what we do as opposed to just playing the music and so our ability to lead community efforts like that would be impacted by any new expense that we’d have to endure.”
While Huppe acknowledged the value radio stations provide to their communities, he wondered why musicians shouldn’t be paid when stations pay to syndicate talk radio shows and license sporting events. “Why should Randy Travis have to be the one to bear the load of this community effort and all the charitable work?,” Huppe asked.
Artificial intelligence’s threat to the music business was interspersed into the conversation about performance rights and royalties. Travis proved an exceptional witness on this topic, too, having recently released his first new track since his stroke in 2013, “Where That Came From,” with the help of generative AI software to recreate his voice. (Issa paused the hearing for a minute to play the song over the loudspeakers by pressing his smartphone next to his microphone.) “His piece of AI work was humanistic and artistic,” said Mary Travis. “And that’s the difference [between] the good and the bad AI.”
When asked by Rep. Jerry Nadler (D-NY) if users of generative AI software should be able to create unauthorized copies of a singer’s voice, Mary Travis was succinct: “Absolutely not,” she said flatly. Later, she compared unauthorized use of an artist’s voice to identity theft. “There needs to be laws that are in place to keep that from happening,” she said, “which means consent and compensation and attribution and provenance.”
But the hearing mostly focused on the economics of the radio business and the two sides’ inability to come to agreement. Huppe said the NAB’s strategy “is to run out the clock” and wait for another bill to be introduced in the next Congressional term. LeGeyt took “significant issue” with Huppe’s characterization and blamed the recording industry’s representatives for not supporting the conversations. “NAB stands willing to be in a conference room,” he said.
Rep. Issa, however, doubted LeGeyt’s willingness to make a deal with record labels. Noting that the NAB has been negotiating on Radio One’s behalf, Rep. Issa asked Harrell if his stations “would be willing to pay something to get this problem to go away?” “Mr. Chairman, I would not say that,” Harrell replied.
Minutes later, Issa took an admonishing tone with LeGeyt. The NAB did not offer “one penny” in higher royalties in their negotiations, Issa claimed, and if artists started to encourage people to listen only to radio station’s streaming offering, the cost to stations would be “far more than a modest concession,” said Issa.
The National Music Publishers’ Association’s (NMPA) war with Spotify continued at its annual meeting held Wednesday (June 12) at Lincoln Center’s Alice Tully Hall.
In an address to the publishing executives in attendance, NMPA CEO/president David Israelite announced that the organization has filed an official complaint with the Federal Trade Commission (FTC) and sent letters to the attorneys general for nine states as well as consumer trade groups to try to stop Spotify from reclassifying its premium tiers as “bundles” — a classification that allows the streamer to pay a lower mechanical royalty rate in the United States.
The NMPA alleges that Spotify has violated the Restore Online Shoppers’ Confidence Act (“ROSCA”), section 5 of the FTC Act and various consumer protection laws. Spotify has not returned Billboard’s request for comment.
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As Billboard previously reported, publishers anticipate a $150 million loss in U.S. mechanicals in the first year of the bundling reclassification compared to what publishers would have been paid had it never happened. The decreased payments began in March with no prior warning, according to the NMPA and the Mechanical Licensing Collective (the MLC). Spotify, however, believes it is playing by the book in making the change to how it pays out U.S. mechanical royalties given that it has “bundled” audiobooks in with the other offerings included in the streamer’s premium plans.
“Spotify has declared war on songwriters,” said Israelite at Wednesday’s meeting. “Our response shall be all-encompassing.” Israelite noted that the NMPA (as well as the MLC) has taken multiple actions to stop Spotify’s bundling reclassification already. The organization’s all-out retaliation began with statements made against the company in March, followed in May by a cease and desist letter in which the NMPA threatened to file a lawsuit against Spotify for allegedly using music and lyrics in some of its podcasts and videos without permission. (Spotify called the move a “press stunt” by the NMPA).
“Our letter was not just a warning shot, and the NMPA has never lost a lawsuit. So you’ll want to stay tuned,” Israelite added on Wednesday.
Only days after the NMPA threatened legal action, the MLC filed a lawsuit against Spotify for “improperly” reclassifying its premium tiers as bundles.
The following week, the NMPA sent a letter to the Judiciary Committees in both the U.S. House and Senate asking for an overhaul of the statutory license in section 115 of the Copyright Act, which binds publishers to strict regulations and rules over what they can charge streaming services for U.S. mechanicals.
In the NMPA’s letter to the FTC, obtained by Billboard, general counsel Danielle Aguirre wrote: “The [NMPA] writes to urge the FTC to address unlawful conduct by Spotify that is harming millions of consumers and the music marketplace… Spotify has deceived consumers by converting millions of its subscribers without their consent from music-only subscriptions into ‘bundled’ audiobook-and-music subscriptions, publicly announcing increased prices for those subscriptions, failing to offer an option for subscribers to revert to a music-only subscription, and thwarting attempts to cancel through dark patterns and confusing website interfaces. This bait-and-switch subscription scheme is “saddling shoppers with recurring payments for products and services they did not intend to purchase or did not want to continue to purchase.”
Aguirre continued, “Indeed, it has all the red flags of problematic negative-option practices that the FTC has consistently warned companies about: (1) Spotify has failed to give consumers all material information about its subscription plans up front; (2) Spotify has billed consumers without their informed consent; and (3) Spotify has made it hard for consumers to cancel.”
Other letters of complaint were also sent to the attorneys general for nine states, including California, New York, Tennessee, Colorado, Georgia, Connecticut, Illinois, North Carolina, Oregon and Washington, D.C. In the NMPA’s letter to both the New York bureau chief of the consumer frauds and protection bureau as well as the state’s assistant attorney general, obtained by Billboard, Aguirre wrote: “We urge your office to investigate and address Spotify’s conduct as well.”
Letters were also sent to consumer groups including the National Consumers’ League, the Consumer Federation of America, Public Citizen Consumer Action and the National Consumer Wealth Center in hopes of sparking a class action lawsuit.
The NMPA’s recent moves are being supported by representatives Ted Lieu (D-CA), Adam B. Schiff (D-CA) and Marsha Blackburn (R-TN) via a letter sent Wednesday to Shira Perlmutter, register of copyrights and director of the U.S. Copyright Office.
In the letter, the three representatives wrote: “As members of the Judiciary Committee, which originated the Music Modernization Act, we want to see the law faithfully implemented and copyright owners protected from harm arising from bad faith exploitation of the compulsory system. Digital service providers should not be permitted to manipulate statutory rates to slash royalties, deeply undercutting copyright protections for songwriters and publishers. A fair system should prevent any big tech company from setting their own price for someone else’s intellectual property, whether the owner wants to sell or not.”
Each year, the NMPA is known for announcing major breaking news at its annual meeting — typically against tech companies that, in its view, are not properly paying for songs. Last year, Israelite announced a $250 million lawsuit against Twitter, which is still in progress. In previous years, the NMPA has gone after Twitch, Peloton, Roblox and more.
“We will see what the Federal Court in the Southern District of NY, the United States Congress, the Copyright Office, the Copyright Royalty Board, the FTC, multiple State Attorneys General and consumer advocacy groups have to say,” Israelite told the crowd on Wednesday. “Most importantly, we will see what the songwriters and music publishers who make the product that allows Spotify to exist have to say.”
As the author of the Music Modernization Act (MMA), I am thrilled with the benefits it has provided music creators and music streaming services. Rarely does Congress come together in a bipartisan, bicameral way to respond to a market problem with a comprehensive, collaborative and business-driven solution.
The bill updated copyright law for the digital generation, and the cornerstone of the legislation — the creation of the Mechanical Licensing Collective (MLC) — has been a shining example of an industry working together to solve major market challenges. However, recent attempts by streaming services to redefine the original intent of the statute, to benefit themselves, are concerning and must be corrected.
The MLC was created to solve a massive music industry problem. Streaming services often failed to find the correct copyright owners and therefore held on to large sums of money owed to songwriters and music publishers. This both kept earnings from rightful owners and also opened streaming services up to large amounts of liability — from which lawsuits were piling up, costing them hundreds of millions of dollars. Both sides had a major incentive to find a better way forward.
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Along with my colleague, Congressman Hakeem Jeffries (D-NY), I authored a bill to establish a company that would be funded by the digital streaming companies, and governed by copyright owners, which would receive all of the streaming mechanical money owed and then distribute that money based on copyright ownership. The company would also operate a first-of-its-kind public database so that song ownership information would be more transparent than ever.
To create the MLC, the U.S. Copyright Office held an impartial designation period where anyone could campaign to run the company. A coalition representing the vast majority of the music publishing and songwriting industry came together and was selected.
In five short years, the MLC was activated and is now a towering example of success. It has distributed over $2 billion in royalties to publishers and songwriters. It has a match rate of over 90%. It operates the most accurate, open database of music rights information in the world.
Crucially, as the MLC is responsible for ensuring accurate payments to its songwriter and publisher members, the MMA made clear that it not only has the authority but is mandated to enforce the rights of its members if it determines any streaming service is not reporting or paying properly. Most recently, the MLC was forced to litigate against Pandora for underpaying royalties.
Unfortunately, this has led DiMA, which represents the major streaming companies and has a seat on the MLC’s board, to attempt to reinterpret the original intent of the MMA. They are pushing the misguided idea that the MLC was meant to be “neutral” when it comes to enforcing the rights of copyright owners. Nothing could be further from our objective.
This definition of neutral is simply another way to take the voice away from those who have struggled to be heard when it comes to receiving what they are owed for their labors. This was never the intent.
Should the MLC not enforce and litigate when necessary to uphold the rights of its members, those members would have absolutely no recourse to defend their property rights. This notion of neutrality would make the MLC toothless and completely undermine the important role of the Collective. Allowing the MLC to dole out royalties is inextricable from its primary purpose of ensuring those royalties are correct.
It is a perversion of the legislation to attempt to convince current lawmakers that the MLC was meant to give equal weight to the opinions of the digital companies as the rights of songwriters. Of course, there is a massive incentive for DiMA and its membership to want the MLC to relinquish its role as enforcer of music creators’ copyrights. Billions of dollars in royalties are on the line.
The streaming services’ vision of a neutral MLC is not in line with the original intent of the MMA, and they know it because they were intimately involved in the lengthy negotiation of the language of the bill. The resulting legislation was fair and allowed for the collective and the courts to do their jobs when it comes to disputes.
The five-year milestone since the MMA was signed into law is an important time for reflection and refining. However, it is not a time to redefine the most important music legislation of our time.
Doug Collins is a lawyer and former Member of Congress representing Georgia’s Ninth Congressional District. He served as Ranking Member of the House Judiciary Committee as well as Vice Chairman of the Subcommittee on Courts, Intellectual Property, and the Internet. He introduced the Music Modernization Act along with the bill’s lead cosponsor, Rep. Hakeem Jeffries (D-NY).
On Tuesday (June 11), the Association of Independent Music Publishers (AIMP) held its annual global music publishing summit at 3 West in New York. Boasting panels on a wide-ranging list of publishing hot topics, from fraud to film/TV synchronization, the one-day event featured executives from ABKCO, Rimas Publishing, Spirit Music Group, Warner Chappell, CD Baby, Pex and more.
One highlight of the day included the panel Opportunities Abroad: Maximizing Overseas Collection featuring Michael Simon (Harry Fox Agency), Alexander Wolf (SESAC International), David Alexander (MusicIndustry.Africa), Mark Chung (Freibank Music Publishing, IMPF) and Tomas Ericsson (AMRA).
During the panel, the experts, who hail from around the world, discussed the increasingly globalized music market, which regions hold the most value and how to maximize that value. “It can’t be like it was in the 90s,” said Simon. “Back then the answer was to sit back and wait for checks to arrive in your mailbox — that world seems to be disappearing.”
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Some experts stressed the importance of leaning on sub-publishers with local knowledge to ensure proper collections. Ericsson, whose company AMRA collects digital royalties on a worldwide basis, explained that using AMRA can also be a solution to pain points in collection worldwide because “the majority of societies do not have the capital incentives to invest in better technology and therefore use whatever means they have to process this money to others.”
“My bet is on Asia,” said Wolf of the region with the most untapped potential for publishers. “They’re knowledgeable, and they’re making money… Africa as a continent is more troubled. Countries like Nigeria are especially great countries, great musicians but in the last thirty years, Nigeria had seven different collection societies. There is value there, but we need patience.”
The AIMP event coincided with what’s known as New York Music Month (NYMM) — a collection of events across the five boroughs to support the city’s local music scene. Though the festivities continue throughout the entire month, the bulk of NYMM events happen the week of June 10-15. In the publishing business, the annual gathering is fondly known as “Publishers’ Week” or “Songwriters’ Week” in reference to events like AIMP, the National Music Publishers’ Association’s annual meeting and the Songwriters Hall of Fame — all of which take place in the same five-day period. Others also call it “Indie Week,” a reference to the Association of American Independent Music’s five-day conference of the same name.