Songtrust
On July 19, Songtrust sent an email â part update, part apology â to the 350,000 songwriters who use the publishing administration company to collect their songwriting royalties. Songtrustâs message pointed to friction in this process: âslower registration timelinesâ for songs, which in turn would slow the flow of income, plus a âslower response rateâ for writers who believed they were missing money or had other questions.Â
The slow-down had a few causes, wrote Downtown Music Publishing president Emily Stephenson, including ânew leadership,â a new âorganizational structure,â and the implementation of Know Your Customer-style registration and payment processes to combat âincreased fraud in the music industry.â (Downtown Music Holdings owns Songtrust.) âWe recognize that these changes have caused frustration,â she added.
Four former Songtrust employees believe these delays have their roots in plans the company put into motion before this year. The ex-employees describe Songtrust as a âpioneeringâ organization that did something no company managed to do before: Offer professional-level publishing administration services to small, independent songwriters. âBefore Songtrust,â Stephenson tells Billboard, âthere was really no way for them to collect mechanical royalties.âÂ
The global publishing system was developed over decades to serve the needs of several thousand writers, not several hundred thousand. âThe problem with music publishing,â according to one former employee, âis that scaling is nearly impossible because itâs kind of like an archaic, dark art.â
So as music creation exploded and Songtrust was âtrying to sign so many peopleâ starting at the end of 2019 and into 2020, a second former employee explains, âthe technology couldnât keep up with the volume.âÂ
At times, former employees say, that volume â of both new songwriters and new compositions â simply grew faster than the company could handle. (Songtrust is almost certainly not the only organization that has had trouble keeping up with the surge in music creation.) âMaking the promise to help the little guys and then not following through on the best technology and best employees and resources â thatâs where they fâed up,â adds a third former employee. âThatâs just not a feasible business model.â (Half a dozen former employees spoke in total, all on the condition of anonymity for fear of alienating former colleagues.)
Downtown Music executives disagree. âAs the music industry grew, Songtrust grew, and weâre evolving to better serve independent songwriters,â Stephenson says. In a post-interview email, Songtrust executives added that despite âtemporary delays in responding to writer inquiries,â the company âhas continued to process and pay out royalties accurately and on time to all clients who have submitted accurate tax and payment information.â Multiple songwriters who spoke to Billboard about payment difficulties would take issue with that statement. Â
âAll Songwriters Deserve Publishing Administrationâ
Traditional music publishing companies focus on just a slice of the worldâs songwriters â the top earners. One publishing administration executive says itâs not even worth it for his organization to work with âthe bottom 80%â of clients because the cost of doing so would exceed the revenue collected.Â
Songtrust launched in 2011 with the belief, as Stephenson puts it, âthat all songwriters deserve a publishing administration solution.â The company has paid out more than $130 million in royalties so far, according to Downtown Music Holdings president Pieter van Rijn, and 2023 payouts are on pace for âanother record year.â
To collect publishing royalties, most songwriters either sign with a publisher or a publishing administrator. Otherwise, itâs possible to register songs with both a performance rights organization (PRO) and a mechanical rights organization, but Songtrust facilitates what would otherwise be a complex, time-consuming process for a one-time fee of $100 per writer, plus 15% of the royalties it collects.Â
In many cases, that may not amount to much; although some independent songwriters earn enough publishing income to live on, many earn next to nothing. And while there may be less money in this part of the market, the administrative work can be just as complicated, if not moreso. âIt is a laborious task to onboard and disseminate music publishing information, particularly with DIY artists who are disadvantaged because they donât have the knowledge base to understand the questions youâre even asking,â says Jeff Price, founder of another publishing administration company, Word Collections.
So itâs not surprising that former Songtrust employees say writers often make mistakes when registering their songs â claiming 100% ownership of a co-write, for example. Also, since it was relatively easy to sign up for Songtrustâs services, âif someone wants to register fraudulent things, they have the tools,â explains one former employee.
Fraud is a concern across the publishing sector. âIf you do not register your songs with a PRO, someone else will within a few months, almost guaranteed,â according to one label founder who also oversees a publishing operation for the acts he signs. âArtists donât know what publishing is to begin with, and thereâs a lot of confusion and disinformation, [creating] a perfect recipe for fraud. This problem is only getting worse, especially for international artists finding success for the first time in the global marketplace.â
In the case of Songtrust, a former employee says that fraud on the platform â such as users registering songs they didnât write â âcreates distrustâ with some of the societies charged with collecting royalties around the world. âThat was happening to a big extent,â the former employee continues.Â
There were also times, former Songtrusters say, that the societies simply didnât have the technology to keep up with the number of songwriters it was representing â and that some of the societies focused their resources on the big writers and publishers who generate more revenue. âAt scale, issues of bandwidth and efficiency are always a challenge when you have software-based rights administration,â a veteran rights administration executive says.Â
Songtrust is in âdaily communication with our partners at the collecting societies,â Stephenson says. âWe maintain a very positive relationship with them and weâre constantly looking with them to improve the way we can support songwriters.â
In a post-interview email, Songtrust executives added that âthe fact that [publishing administration] is a complex business does not change our belief that it is a worthwhile, meaningful serviceâ for the long tail of songwriters.Â
âThere Are Always Issuesâ
At the end of 2019 and the start of 2020, former employees say Songtrust amped up its efforts to sign more songwriters, which taxed the companyâs internal systems. (Around the same time, Downtown Music also went on a buying spree, acquiring the distributor CD Baby in March 2019 and the tech and services company Fuga in January 2020.)Â
One former employee says that the company âreally put their money into marketing.â The mindset, according to this person, was âletâs make us as shiny and inviting as possible on the front end, but weâre not going to fix any of the backend technology.âÂ
In another former employeeâs view, Songtrust was ânot prioritizing actually doing the job that weâre supposed to be doingâ â registering and paying songwriters. A third former employee says simply, âif you invite too many people to your house, itâs gonna fall apart.â
Stephenson rejects the idea that the company was too focused on growth. Downtown Music executives also pushed back on former employeesâ accounts of technical troubles. âTechnology was not the issueâ for Songtrust, van Rijn contends. âBased on the input of societies, we did improve our KYC [know your customer] and registration and data processes,â he notes. âPart of that is technical. Part of that is operations.â Van Rijn also points out that the $130 million Songtrust has paid out to date is money that âotherwise may not have found its way to the songwriter community.âÂ
The fact that small, independent songwriters have the means to collect royalties is fairly new; the publishing business wasnât built for a world in which anyone can write a song on an app, upload it right away, and immediately start earning money around the world. Some amount of friction is inevitable when so many songwriters need to be integrated into the intricate, infamously opaque global music publishing system.
âWhen you have outcomes that you donât like as a customer, or even as a partner, itâs easy to talk about incompetence,â says the veteran rights administration executive. âThe reality is that these are the outcomes based on the way rights administration happens in the world.â
Some of the challenges faced by Songtrust are âendemicâ in publishing, says Price, the Word Collections founder. The administration executive agrees: âWhether youâre a big company or a small one, there are always issues. Itâs just that youâre going to get way more issues the bigger you are.â
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