Music as a tool can be used to bring people together to be immersed in their form of self expression through the power of sound and words. Whilst this tool can bring joy, it is also very lucrative. The Guardian reported that world wide, revenue rose by 9.7% to be worth $19 billion! A profitable industry but, does that mean that artists are being paid fairly? In this article I will explore the complex world of music publishing.
Music publishing is protecting the commercial rights of songwriters and composers. If their intellectual property is used, it is the publisher’s responsibility to collect the royalties that have been agreed. Electronic arts annually release a new version of FIFA which always includes a plethora of recorded music. Because of the use of that music, different entities will be entitled to payment, the songwriter, the composer, the record label etc. For the avoidance of confusion, this article will only focus on the songwriter and composer. Whilst this may look as a simplistic form of exchange, publishing is far more complex which leads to millions in royalties being lost.
The complexities that comes from music publishing derives from the additional stakeholders that emerge depending on the origins of the intellectual property at hand. For Instance ‘Teenage Love’ by Drake has seven credited writers which include Drake himself and Jennifer Lopez. The reason for this is because ‘If You Had My Love’ by Jennifer Lopez was sampled by Drake to create his record. I am not aware of their contractual agreement but hypothetically that could mean that all seven writers on ‘Teenage Love’ all have seven separate publishing agreements. How does one come to an agreement regarding royalty splits? As confusing as the conversation of royalty splits can be with just the writers, composers will also be due royalty payments as well! Without clear communication this could be a very messy affair which could be worse if it was a lead single, but this all a hypothetical….
In 2015 bobs.com reported that 20–50% of royalty payments did not reach its recipient. This is due to several reasons for instance organisations could send payments based on information that may be outdated and is not followed up to be updated, leaving millions in unclaimed royalties. Also, payments do not seem to be accurate due to the many bottlenecks that appear during the process of payment for example in some cases, payments will only be due if a certain amount has been made and there is no time limit of when that could be. Another example could be that an artist’s track is played at a bar in another country, once that song has been played, royalties will be paid to the local collection society in that country. For it to get to the artist, the society may charge an administration fee for payment to be sent to the collection society of the artists choice thus reducing the amount that was due. This happens due to societies having differentiating databases and territorial behaviours in how they operate.
Music publishing has not moved at the same pace as music sales so how does the industry aim to combat this glaring issue? The New York Times in conjunction with Kobalt reported that one hit song under Kobalt’s administration had over 900,000 sources of income. How does one administer this if there isn’t one central place of collection? To Answer this question, Kobalt acquired the American Mechanical Rights Agency (AMRA) to create a centralised place of royalty collection. In 2012, Paul McCartney’s company MPL Communications signed a deal with Kobalt to administer his rights and they experienced a 25% increase in payments according to his Lawyer, Lee Eastman.
Earlier this year, it was announced that Ditto would launch Bluebox, a centralised system that would enable that royalty collection and splits to be dealt with quicker. This would be done with the use of Blockchain. Blockchain is a decentralised and distributed digital ledger that is used to record transactions that cannot be altered. With the use of this technology, in theory this should reduce the amount of missed payments if all parties involved used this system. MusicBusinessWorldwide.com reported that Ditto has already secured the partnerships of MGM and Sentric Music.
The issues in music publishing a very apparent, the move to the digital world was something that the industry was not ready for, the emergence of the internet in conjunction with iTunes lead to the industry forever playing catch up Whilst that still goes on and artists are losing income that they may not be aware of themselves, does that highlight an even larger issue at hand with the lack of education that artists have prior to and whilst in the industry?