This may be the strongest case yet for skipping that direct deal with Sirius XM.
It comes from an artist manager, who offered this comment following Sirius’ aggressive lawsuit against SoundExchange and A2IM.
Your own articles answer where we should all land on this issue.
How many articles (and comments to articles) have been posted on DMN asking, “What is Spotify, Rdio, Rhapsody, Grooveshark, etc. paying artists?” NOT ONE of the articles can be accurately answered because the answer truly is that everyone is paid differently based upon direct licenses with master owners (typically large labels) that are subject to non-disclosure agreements (hiding the fact that superstar artists on major labels are given preferential treatment in terms of per stream royalties).
Now compare that to the publicly-announced statutory royalty rate that is mandated by the Congressionally appointed Copyright Royalty Board (and administered via SoundExchange).
Every play of every record is monetized at the same royalty rate. Equitable treatment! Every dollar paid is split 50/50 between the master owner and the performing artists and the artist share is paid directly to the artists, not to the labels and then tied up in ‘unrecouped accounts’. How novel!
Are there problems at SoundExchange? Absolutely. These problems have been well documented here on DMN. There are artists who say they aren’t getting paid or can’t get straight answers from SoundExchange. That needs to be fixed, for sure. I can’t speak to those charges because I, for one, have a pretty good relationship with Shane German at SoundExchange and I get good answers from him when I have questions on behalf of my clients. My clients get regular checks every quarter from SoundExchange.
I can’t say that about any of the services I mentioned above nor can I say that about the labels I’ve signed artists to.
I’ve never had to negotiate or haggle about what percent my clients should get from SoundExchange (try haggling with a label over Spotify rates – ugh!). I just register them and then occasionally check in on their metadata to make sure that errors aren’t occurring. I have new artist clients who don’t make anything or don’t make much and they get frustrated but the rates are so small (per play) that it takes a while before they get enough play to get paid. I’ve seen it first hand.
If labels sign these direct licenses with Sirius guess what happens: 100% of the royalties get paid to the labels and artists only get paid if they’re recouped. Labels and artists lock in at lower rates than what Sirius is currently paying (and this year there will be a new rate setting announced by the Royalty Board and it’s very likely that they’ll increase Sirius’ rates). And small indies will get a lower royalty rate (per stream) than bigger indies and majors will get even higher rates and they’ll all be under the cover of non-disclosures so no one will ever know what they should be paid unless they pony up to audit their label. That doesn’t seem to be a system worthy of defending. I say congrats to SoundExchange, A2IM, Merlin, etc. for defending this statutory rate. I think that’s what these organizations were constructed to do, no?