How Do You Know What You’re Missing If You Don’t Know What You’re Owed?

By George Howard
(follow George on Twitter)

You’re an artist — a songwriter.  Your song is played on the radio. Because you wrote the song, you — and you alone — have the exclusive right to “publicly perform” your song (it’s one of the six exclusive rights you get when create a copyright).  The radio station that played your song didn’t get your direct permission to play the song you wrote. They didn’t have to. Instead, they paid a fee to the Performance Rights Organizations (ASCAP, BMI, and SESAC).  In exchange for this fee, the Performance Rights Organizations (PROs) issued the radio station a license that gave the station the right to play (publicly perform) the copyrighted songs of any artist who have affiliated with the PROs.

You — as a responsible writer, and a writer desiring to be compensated for your work — affiliated with a PRO.  In so doing, you granted the PRO with whom you affiliated the right to negotiate on your behalf with those who publicly perform music (radio stations, TV networks, venues, restaurants, etc.).  Additionally, you granted the PRO the rights to issue licenses on your behalf, and — perhaps most importantly — collect on your behalf and distribute this money to you (after taking their cut for overhead).

All good, right?  Obviously, a clearinghouse agency (the PROs) needs to issue these blanket licenses.  The alternative — anyone desiring to publicly perform someone’s copyrighted work having to negotiate on an individual-by-individual basis — is far too inefficient.

There is a problem, however.  Going back to the hypothetical at the top: a songwriter who has affiliated with a PRO (and submitted her song submittal form to said PRO) having a song played on the radio.  How much did she earn? How much did that station actually pay her for the right to use her exclusive copyright?

I’ll be damned if I know.

This doesn’t seem like it should be too hard to determine, right?  Obviously, a smaller station (one with fewer people listening) will pay less than some mega-watt station (with millions of listeners).  No one is saying there isn’t a range of what is paid, but there should be a way to accurately define and communicate what you earn when your property is sold.

Imagine if someone wanted to use your real property (your house, your car), and said they’d make sure you got paid for this usage, but they wouldn’t tell you how much.  Would you do that?  Of course not.

And yet, that’s precisely what’s happening with public performance royalties.  Sometimes you get paid; sometimes, if you haven’t earned “enough,” you don’t.  In either case, getting any sort of precision about what you’re owed is…impossible.

How does one build a business with this “anti-data?”

I’ve been singing from the rafters for some time now saying that the continuous, consistent, systematic obfuscation around the rates associated with public performance (particularly, with respect to streaming) is the type of hindrance that keeps the “smart money” — and thus, innovation — out of the music business.

I have my fingers non-optimistically crossed that an undeniably innovative and fantastic service like Turntable.fm can emerge from this gauntlet of obfuscation unscathed enough to still hold any value (is Turntable.fm interactive (sort of)? Non-interactive (sort of)?).

It’s one thing to be frustrated by how this information fogginess has an impact on the development of new business models, but it’s personal when the same haze of information creates yet another barrier for the individual artist.

This is decidedly non-trivial.  As we hurtle inexorably towards a “business model” that dominantly revolves around income derived from public performance (streams), as opposed to income derived from the sale of downloads/physical, what once was sort of the cherry on top of the sundae, is now the entire dessert.

For any artist hoping to sustain their art on their own terms, they must devise a plan that includes multiple revenue streams.  For most of these streams — income from gigs, income from subscriptions, income from merch, etc. — forecasts can be generated and refined.  However, for arguably the most material income stream — uh, streams — no such forecasting can occur.

You can’t build a business without information.

Additionally, this lack of information extends out to individuals in a very odd and disquieting manner: PROs frequently enter into deals with entities who represent a group of writers, and yet the PROs will not disclose the terms to these writers who they (the PROs) represent. While I understand the elements of non-disclosure agreements, the fact remains that if I hire a third party to negotiate on my behalf, I should be able to know the terms of this negotiation.

The PROs for too long have not been held accountable.  It’s high time we begin demanding more transparent information with respect to the money collected and paid out.  Additionally, we must demand more transparent and understandable rate structures around public performance.

One of the main reasons the PROs have been able to ignore the (perhaps muffled) calls for more clarity and accuracy has been because they’ve enjoyed a virtual monopoly (or oligopoly) for nearly 100 years (ASCAP was founded in 1914).

Fortunately, technology has created easier ways to track public performances and a PRO is not needed for digital public performances (i.e. streams).  Instead of helping the songwriter, the PROs inadvertently get in the way, take more money from the songwriters, pay out less frequently (if at all), and no one has any idea what the rate per stream is supposed to be to know if they are being paid the right amount.

This is exactly why TuneCore is launching a new service to protect songwriters.  TuneCore is able to go directly to these entities and get this money — all of it — back to the songwriters more quickly and get more money into their pockets.

With transparency the world changes, money cannot be as easily taken or misappropriated, decisions and business plans can be made, and shoulder shrugs of “I don’t know” will no longer hold water.

_____________________________________________________________________________________________________________________________

George Howard is the former president of Rykodisc. He currently advises numerous entertainment and non-entertainment firms and individuals. Additionally, he is the Executive Editor of Artists House Music and is a Professor and Executive in Residence in the college of Business Administration at Loyola, New Orleans. He is most easily found on Twitter at: twitter.com/gah650

  • http://twitter.com/stagebite Gil Garcia

    George, when will this new service become available?

  • http://www.facebook.com/steven.cravis Steven Cravis

    I appreciate the greater levels of transparency that technology brings.

  • http://twitter.com/sbdeem stacey deem

    Insightful….thoughtful…so George!

    • http://twitter.com/gah650 George Howard

      you’re too kind, Stacey!

  • http://www.facebook.com/molasses.jones Molasses Jones

    This is why I liked Jeff from the beginning. He’s a REAL dude.

    Please contact me! If at all possible I would like to collect on royalties earned from hits that I wrote in 2006. I have been calling labels, managers, attorneys, agents, friends, and GOD, but everyone it seems has been able to easily AND illegally dodge the bullet. There is no way that someone should participate in the creation of a hit song, for whatever reason, in what ever manner, and not get a dime. Jeff, Sign me up and let’s get PAID!

    Otherwise the music business will totally be diminished. There won’t be a music industry to speak of. I’d like to avoid this if at all possible. And just build a business built on standards that allow us to shine and flourish from our talents.

    For an update here’s my story: http://www.myspace.com/sweetmolassesjones/blog/512698349The whole system has too many flaws in it for real artists to survive. It’s time for a CHANGE! ~molasses jones

    http://www.facebook.com/molasses.jones http://www.youtube.com/molassesjones11 http://www.reverbnation.com/molasses

    I might not even interested in putting out anymore music until this thing is figured out. So tired of not reaping the benefits of my work! DONE!

  • Tswang (R&B/Hip Hop/Soul)

    From TSwang:I know I have some over due monies coming in… I have been with BMI as a Publisher and writer for about 20 years and have never received one royalty payment from them. I guess my money was lost in the shuffle or something. I have been played on college radio, local radio and when I go to talk to rep they always seem to play like they just don’t understand. “So I can’t wait until you all get it going! TSwang (R&B/Hip Hop/Soul)

  • http://www.facebook.com/molasses.jones Molasses Jones

    Thanks for posting this George.

  • Molly

    Why do we need PRO’s
    Can’t we start are own PROS’s. To be directly paid all money. ??????????

    • Anonymous

      @molly

      that is the plan! that’s it! It really is that simple. The challenge is changing the system to allow this to happen

      For example, we are in a direct deal with Apple in the US for public performances from iMatch. This means, if you choose to have TuneCore represent you, we can collect this money directly from Apple and hand it back to you – less taken out of your pocket with the money going into your pocket more quickly with more transparency

      There are other things that you do need a PRO for, for example, they monitor public performances in venues, retail stores, restaurants etc – no way TuneCore can do that

      But we CAN do it better than them in regards to iMatch

      Jeff

  • Seraphim

    how do we do this , do we sign up with you or what, or does this service automatically come with you tunecore membership?  THIS IS GOOD INFORMATION  …..THANK YOU

  • Linda Davenport

    George Please contact me also I need this service, because I actually hear my songs on the radio and the station ask me for more info etc… It is hard to keep up with this information it is a full time job and you get the run around a lot.

  • http://www.billwrenmusic.com Bill Wren

    Wow what a timely post for me. My debut album One Day In A Life was # 9 out of 100 top album plays for FM radio according to the ZMR reporting, and my PRO is telling  me there was not enough airplay to even mess with us. This is out of 150-200 plus New Age/ Smooth Jazz stations. We even sent them at list of the stations from all over the US and Europe. My co writer who has 1/3 writing royalties who uses another PRO got paid for XM and some internet plays. 
    Not getting it in Texas. 

  • Nathan

    So basically Tunecore will show a weekly or monthly report from our PRO in full detail? That’s Awesome!

    • Anonymous

      @nathan

      my goal is to get the stores like iTunes, Spotify etc (the digital services) to report directly to us so we can get that back to you more quickly and with more transparency

      it would cut our middlemen from taking more of your money and paying you less often

      jeff

      • Nathan

        That’s great! So would this just be an added feature/upgrade to Tunecore?

        • Anonymous

          @nathan

          I wish it was that easy.

          First, we have to hire the people and build the global infrastructure – oh wait, we did that – check out this press release – http://www.shorefire.com/index.php?a=pressrelease&o=4758

          Jamie has been building this system for the past three months

          Next we need to create a way for you to provide us the name of the person who wrote the song, what % they own and some other info. (we are working on building that system)

          • Nathan

            I’m excited!!! So we will still need our PRO?

          • Anonymous

            @nathan

            yes, your PRO will do things we cannot do. The things we can do, you can withdraw from your PRO

            Jeff

  • Dvon

    Sounds like good business to me!

  • Luvis420

    awesome !

  • http://www.roundtownsound.com Morrisoncraig

    I see my soungs for sale many places. I wonder if I’;m getting my share for that too!

    Craig Morrison
    http://www.roundtownsound.com

    • http://www.roundtownsound.com Morrisoncraig

      How do we know the digital retailers are paying us?

      • Anonymous

        well, each digital store writes software to track sales. This same software applies to everything in their store – from major to indie content.

        Therefore, if they are not paying you on sales, they are not paying others on sales.

        This would be a bit of a disaster for them as if discovered, the majors (and all other rights holders) would sue the hell out of them.

        Now add to this that they are publicly traded companies and there is a whole other level of scrutiny and auditing that occurs

        jeff

  • Acanthuspro

    now if tunecore could only solve the problem of artist getting their music played on the radio or create a service that at least distributes an artist music to radio stations,, then we could worry about what we should be getting paid.                                                            Granpachuck

  • http://www.facebook.com/profile.php?id=100000043525972 Wes Bound

    An excellent summary of what my feeling has been for quite some time, i.e. that the PROs withhold information and have anything but transparent collection and distribution methods. I highly welcome tunecore being the spearhead in yet another revolution: The EFFICIENT direct handling of licensing and performance rights negotations on a (roughly) one-on-one basis! I’ve been WAITING for someone to come up with this and I’ve always thought that tunecore.com would be the ideal candidate (for reasons of existing infrastructure coupled with business acumen and experienced individuals making the company). In a nutshell: This is GREAT news!

  • John

    Come on tunecore, this representation is a bit distasteful. If (as you claim) Tunecore elects to attempt the PRO business, yourselves will be doing much of what is being villified here. tunecore has a policy they dont cut a check under $20. Given the current payout rates from the streamers, an artist would have to get streamed about 5000 times to get payed that $20 from you. I rather expect that 5000 radio plays is really just noise given the pervasiveness of total radio , but even still,  would likely get BMI’s attention also. Note  they dont have the little dashboard such that one can watch theirroyalty climb up from 0 to a fraction of a dollar.Secondly, what sort of licensing deals are you going to cut with the radio stations ? Or are you going to go after the internet stations only ? I can imagine you may bring some value if you could put together a catalog deal with Pandora ( for example )
    Thanks in advance for the clarification, and please quit throwing punches in order to help sell your service, IMO, not in your best interest.

    • Anonymous

      @John

      sorry, no way I am going to “stop” pointing out where artists are getting screwed or working on their behalf to get them more of their money more quickly.

      And you are absolutely wrong, any TuneCore artists can withdraw any amount of their money 24 hours a day 7 days a week. There is no earnings minimum. It is possible you are not aware of this, now you are.

      Please tell me what the problem is with providing artist TRANSPARENCY to how much they make as well as getting them their more of their money more quickly

      What could possibly be wrong with that?

      Radio stations etc? No way is TuneCOre going to do that, but what we can do better than anyone else is digital public performance with Apple, Spotify, Rhapsody etc.

      jeff

  • Intgroove

    What if I already joined a PRO can I still use tunecore?

    • Anonymous

      @intgroove

      in the US, you are able to withdraw specific rights from the PRO – for example, you can ask them to continue to collect everything BUT digital public performance

      jeff

  • Nick

    What about music clips in youtube , dailymotion etc? Could these streams be valid to be covered as well ? 

    • Anonymous

      @nick

      yes, if your song is in a video on YouTube etc, it is considered a public performance and a license must be obtained from the songwriter (or publisher) to do legally

      jeff

  • Mike the SteelDrum Guy

    Would tune core’s new service cover jingle writers for ads?

    • Anonymous

      if you are the songwriter and you own the publishing as well, yes it would.

  • http://www.facebook.com/Dreamfullofzen Dreamfullof Zen

    This is excellent news (the info about Tunecore I mean, not the PRO evil shadowy business stuff)!

  • Bill Wren

    I wont go into all the boring details. I’m a member of ASCAP.  My and co-writer is a member of BMI. In 2008 I put out my debut album called “One Day In A Life” a neoclassical/ smooth Jazz album. The music was played on Satellite, FM and Internet radio world wide. My co-writer received royalties from BMI and I being the primary writer of the music received .00 royalties from ASCAP  The only answer I got out ASCAP  was that I didn’t get enough airplay to fool with. I guess (to fool with) is a relative term but by my estimation based on the percentage my co-writer received from BMI would have added up to several hundred dollars maybe more over a 2 year period . My advice to those that are deciding which PRO to go with, go with BMI. Now I’m going to have to get a lawyer to get me out of the ASCAP contract so I might be able receive royalties off my second album “Journey Around The Sun” A Mayan Odyssey. 
    Bill Wren
    billwrenmusic

  • Kiki

    It is frustrating.  I’ve called BMI writer/publisher services in NYC 6 or 7 times, left messages, never get a live person or a call back.  25 years w/BMI. As performing songwriters we occasionally appear on radio and television shows as featured guests.  Some of these television shows broadcast the show multiple times. Between two and seven of our original songs are performed in their entirety on these shows. (We also get radio airplay on various radio stations when we’re not featured guests and internet play on various internet radio stations).    Total royalties thus far from BMI = $0.00.

    • Anonymous

      send them something in writing with details and cue sheet info

      hire TuneSat to track your public performances

      demand an itemized breakdown of how they calculate your royalties

      tell them they are in material breech of their agreement with you

      reach out to the US dept of justice and tell them BMI is not following the consent decree
      jeff