We [songwriters] get the shaft. We don't earn from merch, we don't see tour money..

The Internet was supposed to "democratize" the content creation scene... but all we see are blood suckers coming out of the woodwork. Sure, there's a shed-load of money to be made from writing music, but sadly not if you're the songwriter...

Along with the pirate sites, the people making out are the tech companies leeching on our work. [cough Google cough]

I'm not worried about the PRO's as they are an invaluable ally/asset... "Spotify" on the other hand...

Thanks Paul (and Jeff) for putting this discussion front and center with the helpful graphics. Direct licensing (around BMI, ASCAP & SESAC) is on the rise for sure.  middlemen PROs do indeed need to prove their value. In some cases, like negotiating (collective bargaining) with radio stations en masse, they're necessary. In others, like negotiating with a network or large cable concern, not so much. 

This article beggars belief.

I'm no cheerleader for the U.S. PRO's but all you're suggesting is for songwriters and/or publishers to cherry pick which direct licensing deals appeal to them.

1.  PRO's exist because it is impractical for any rightsholder to do all the direct licensing to capture all the revenue out there. So long as the PRO keeps their overhead in check, all publishers come out ahead.  If not someone else, the major publishers will make sure of that.

2.  For the lesser publisher, the need for a PRO is even greater.

3.  Strangely,  the only income that has not fallen off a cliff the last 10 years has been public performance monies.

4.  If only I could say the same for the Harry Fox Agency (on the mechanical royalty side of the ledger).  That brings up an indirect riposte to your specious "value added" jibe. 

During the last century, the Fox Agency consistently recovered more in audit recoveries than commissions taken, even for small fry like my company.  Unfortunately, during the past decade the Fox Agency has been more concerned with the theoretical right to collect mechanicals than the actual collection and distribution of same.

The writer of this article does not seem to understand the PRO's work;  it is as though they just sit around waiting for the cascade of performance royalties to fall into their laps, without any effort on their part.

B.S.  Meanwhile while PRO's are "collecting" royalties for you, they're charing 700 dollars a year to anywhere that plays recorded music in the country.  You think that they're actually divying up that money between the songwriter's they represent?  or sitting in every bar in the country counting the number of times a hank williams song gets played?  It's a racket.  Always always always has been.

Only $700? That's not much compared to your establishment's other bills, is it?

Maybe you should focus on saving rent if you want to stiff songwriters :

"Restaurants that are 3,750 square feet or smaller are exempted from paying royalty fees for playing radio and television music; and retailers are exempted if they are under 2,000 square feet.  Larger restaurants and retailers also may be exempt if they have four or fewer televisions (no more than one per room, or larger than 55 inches diagonally) and six speakers (no more than four per room). If they play radios, there must not be more than six total speakers, with no more than four per room."

 
You still don't like it?  

You could pay for Muzak.  Still don't want to pay?  Use a jukebox and let your customers pay!

Or switch to public domain classical or early Irving Berlin.  Or silence.  Remember, it's golden.

Another vote that the PROs are B.S. For example: if you're a songwriter with music used in television productions or anything else generating a cue sheet, try matching the cue sheet data with the data on the statement from your PRO that comes with your check. You will be astounded at the discrepancy and you will NEVER see all the money you earned and are actually owed. It's a racket and it's long past time for it to go away.

Look, we all know mistakes are made in registering songs and cue sheets.  I find anomalies all the time when performing due diligence on re-issues.  Usually the mistake is owing to the forgetfulness of the songwriter and they are grateful to be notified.

And prior to online registration, obviously mistakes could be made in the transfer of information from handwritten or typed song clearance forms to the PRO's database.

So the mistakes got fixed (thanks BMI Clearance in Nashville!), so long as it was not a dispute between claimants.  

In your case, let's say you obtained a cue sheet from the production company and you have a copy in your possession. Have you taken the basic step of contacting the TV department at BMI/ASCAP/SESAC and offering to provide your cue sheet?

Furthermore, the foreign performance royalties only flow somewhat freely if you have a local sub publisher registering all your cues and collecting on your behalf (yes, another racket!). 

I deal mainly with BMI.  ASCAP, I loathe.  But with BMI I do feel I am within 50% of what I am owed and I was told a long time ago that if you're getting half of what you are owed in this business, you're streets ahead.

@robbie

I understand this is confusing, but you are not correct in what you state.  In the case of streaming mechanicals in the US, a PRO is not needed.  That's the point

Jeff Price wrote :

I understand this is confusing, but you are not correct in what you state.  In the case of streaming mechanicals in the US, a PRO is not needed.  That's the point.

Yes, that's your point.  But you have not refuted my argument one bit.  I even gratuitously dragged the Fox Agency into it, now to find out that that it is the cutting edge argument you wish to make :

The digital music service is already required by law to pay the songwriter/publisher directly for the mechanicals - therefore it can just include the public performance with the payment.

It is hardly earth shattering for a songwriter/publisher to baulk at licensing through HFA.  And many have chosen not to.  And a few have never cleared their songs with a PRO nor affiliated as writers with one.  And they think they are really, really clever by keeping their rights.  

I came right out and stated my case :

"... all you're suggesting is for songwriters and/or publishers to cherry pick which direct licensing deals appeal to them."

Your appeal is stated unequivocally :  Cut out the middleman.

An echo perhaps of tunecore's philosophy :  Keep all your download royalties.

The next cri de bataille will be :  "Don't share your mechanicals!"

But you'll just be playing a very old song in the music publishing game :

"We're different".

@Robbie

This has nothing to do with Harry Fox.  In the US, the law states the entity that provides the interactive stream must pay the publisher directly, it cannot pay Harry Fox to pay the publisher not can it pay the label to pay the publisher.

As an example, if you live in Boston, MA, and you record a song you wrote, and that recording of your song is streamed on Spotify etc, Spotify etc must get a license from the publisher (and if they cannot get one, they must provide a NOI (notice of intent)) AND they must make the payment 15 days after the 20th of each and every month DIRECTLY to you along with a copy of all the formulas they ran to get the rate.

If they do not, you can then charge them 1.5% compounded late interest fees.

Again, I understand this stuff can be confusing, but before you make blanket statements suggesting the article is incorrect, its important for you to get educated on the law in the US.

As the digital service must already account to and pay the songwriter/publisher directly, it should include the full 10.5% as opposed to sending ~6.5% of it to ASCAP etc who then take between 15 -20% as an "Admin" fee and add about six months latency before the songwriter gets paid less money

Jeff

Earlier this year the NMPA, HFA and YouTube concluded a landmark agreement whereby independent music publishers may grant the rights necessary for the synchronization of their musical works with certain videos posted by YouTube users. HFA will administer these direct license agreements between YouTube and publishers and royalties will be based on advertising revenue collected worldwide by YouTube from ads placed alongside user-generated videos.

Looks like HFA is in the streaming game, after all.

Let's look at actual money flows, which is what your snazzy looking graphic at the head of the article is about, innit?

I get a nice check from BMI every 3 months as I have done for the past 30 years.  Despite sometimes earning 5 figures annually from TV performance royalties, I used to wonder whether I would ever get a multi page statement.  Well, times have changed.  These days I get page after page of micro penny earnings from the internet and it does not add up to a hill of beans.
 

Is new media therefore a waste of time?  No, Sat radio pays out real money, vastly greater than Spotify.  So if streaming is the new radio, why can't they pay as well as Sirius?

But back to BMI, the PRO.  After they subsidized my first record releases in 1978 by giving me an advance on royalties on previously unreleased songwriters, I am not going to give them the finger now because Jeff Price says they are taking an unnecessary piece of the action, all of $1.99, maybe.

That said, we are beginning to see some new money flows on the publishing side.  Bearing in mind that it is the Evil Empire, Apple, paying the lion's share on the download side it is the other Empire, Google that appears to be the saviour in waiting on the streaming and purely mechanical side (for downloads licensed under NOI provisions).  
 

Yes, thank goodness, Google now owns youtube.  The people who paid the majors for the videos but shafted everybody else.  Sounds almost like the Spotify playbook.  Now on the bright side the indie publisher has already started getting paid, with inflows from Google (Music) noted on their BMI and digital distributor statements.

 Part of Google's strategy was buying Rightsflow, which may very soon render the Fox Agency irrelevant for mechanical licensing, a good 10 years past its sell by date.  

The methodology of actual collection is fairly straightforward :

The songs, their ownership and authorship must be registered.

Unfortunately, there is no Central registry, as it were, in the USA for this purpose.  In fact, the Fox Agency dropped the ball on this issue big time.  They should have transitioned themselves to be that registry 10 years ago.  Instead they limped in with their Songfile app.  Google may become the unifying force. Yes, what a hoot that would be!  But if they provide the service free, their rivals won't mind holding their noses.

So how do these services know whom to contact with their millions of NOI's?

I don't know.  But I sure as heck make sure that every song is cleared with BMI.  I noted that youtube took their own approach by licensing metadata from IODA, probably from tunecore, as well.  Why not speak to that, Jeff?

My reaction was to to upload to IODA 30 albums that I would not normally consider for digital re-issue, just to get the metadata in the system, whether it be youtube (google), Gracenote or some other data miner. 

That is normally a music publisher's job, essentially register the songs and collect the money.

Isn't that what you are angling to do, Jeff :  become a music publisher in all but name?

We're Different Music

im so sorry you have screwed in the past, I understand it makes you distrustful

My mission is simple, improve the world for artists and songwriters.

They should get paid when their recordings and songs are used.

 Thats why we launched and built a global publising administration infrastructure that does publishing administration better than any other entity on the planet.

 We get songwriters more money, more quickly with transparency and an audit trail.

Jamie Purpora, The former SVP of Bug Music Publishing, the largest independent music publishing administration company in the world, joined TuneCore over a year ago.  The co- founder of Bug, Fred Bourgoise, joined our board of directors.  I wanted the best to build the best.

We  built the first scalable system that auto registers compositions directly with collection agencies AND digital music services

 And it worked, we unlocked and have been able to identify hundreds of thousands of dollars owed to songwrites that never would have made it back to them.  And we just go started.

Once identified, we then built the system to get this money back to them

TuneCore Songwriter Service collects the following types of royalties:

             • Mechanicals

            • Streaming Mechanicals

            • Download Mechanicals

            • Print

            • Ringtones

            • Synchronization

            • Master Use Fees (from Synchronization uses)

            • Direct Digital Performance (bypassing ASCAP/BMI and SESAC with digital sources/stores)

            • Performance (radio/TV)

            • Digital Performance (streaming, satellite radio)

            • Live Performance

 BMI, ASCAP and SESAC collect the following:

             • Performance (radio/TV)

            • Digital Performance (streaming, satellite radio)

            • Live Performance

TuneCore monitors, audits and gets this money from BMI, ASCAP and SESAC back to you.

 The mechanical royalties due from streams, downloads (outside of the US & Mexico) and physical sales are not collected by performance societies like ASCAP, BMI and SESAC. The digital stores that stream and sell downloads do not have your songwriter information, therefore the money goes unclaimed. The TuneCore Songwriter Service registers your information with the stores, song by song, so you get paid.

We also license and collect royalties for print, ringtones, synchronization fees (for film and TV licenses) and collect directly from some digital stores for streaming performances. By going direct to the digital stores for streaming performance, we bypass ASCAP, BMI, SESAC and get you more money.

Jeff

"We  built the first scalable system that auto registers compositions directly with collection agencies AND digital music services"

I am excited.  Truly excited and somewhat envious.  It took me 16 years to find an admin. deal that met my needs.  Maybe within a few years it will be a no brainer to switch to a post modern music publishing company, or just maybe, the traditional company I'm with will up their game.  But I don't begrudge you scooping up the new business.  Far from it.  I'm ready to collect social security (I think Fred might already be there!) and like you, I love artists and they desperately need these income streams.  

"im so sorry you have (been) screwed in the past, I understand it makes you distrustful ..."

Fred Bourgoise might agree with the uncorrected version.  No, Jeff.  I am getting screwed in the present by Spotify and their like and I have scratched my head wondering why you're such a booster for them.

My guess is that due to Spotify willing to license you directly and provide cred for your worldwide music publishing company, you're cutting them slack.  This bolsters your "cut out the middleman" sales pitch. 

You're trumpeting "10.5%" captured but any increase less than 1000% is meaningless with Spotify on account of how little they pay.  Actually, I am being too kind : on the publishing side, we need a 10,000% increase in revenue to be in the same ball park as Sirius and Sirius really does promote sales and not cannibalize as Spotify has done in the USA since launch.

"TuneCore Songwriter Service"

Now I know.  I was facetiously calling you We're Different Music.  Mark Chung beat everybody at this game by calling his publishing company Freibank, 30 years ago.

Of course, there's another game in town called Songtrust who are less coy than you about being associated with the nomenclature music publishing.   They had me also scratching my head wondering why they are taking the opposite public approach to you and stressing their relationship to the Fox Agency and absolutely avoiding mention of Rightsflow, in other words they are pushing paying commission to the middleman rather than commission free direct licensing!

It also has me wondering whether HFA has offered direct access to Songtrust that they have not offered to the rank and file publisher principals.  What's your take on that?  Does your system automatically register every copyright with HFA, as they claim to do? 

While I am dropping names, a message to Gary Churgin :  when a company likes Rightsflow can find me and pay me significant royalties on licences that HFA should have issued in the first place, you have a systemic and possible fatal problem.

Jeff, that should provide you with some Schadenfreude.  But the HFA case study is a reminder that if you increase commissions (fees) as they have done, loyalty will evaporate. 

Most music streamed today is on YouTube. Bigger than iTunes and Spotify combined. This article is whining about a system that was completely broken in 1999. The people who are paid to monitor your intellectual property and monetize it are all asleep at the wheel. YouTube (Google) makes tens of millions of dollars per week monetizing songs via advertising and driving traffic to other pages on their site. Songs played as beds for pet videos, songs screen ripped from music videos that were screen ripped from other music videos, songs, songs, songs. Over 31% of all YouTube traffic. Don't call it promotion. It's consumption people.

Wake up an smell the coffee. Songwriting has been completely neutered as a business. You are quibbling about the scraps of old rotting food they have thrown out to you outside the palace.

What should you do? Protect your copyrights. Understand the new business models. Embrace the ones that work. Fight the ones that rip you off. Take a cue from the movie business. They aren't f-ing around like we are. 

Just more complications in the world of digital music.

It would be easier to believe Jeff was bothered about this if he didnt want to charge artist $50 to "help" them

He has a good nack of twisting figures, this is another example

You're going to have to explain this comment to me.  Charging a fee for a service that is optional to musicians invalidates copyright law?

Jeff