An Examination of the Songwriter & Music Publisher Relationship [PART 2]

[Editors Note: This is a guest blog written by Justin M. Jacobson, Esq. Read Part 1 of this series here. Justin is an entertainment and media attorney for The Jacobson Firm, P.C. in New York City. He also runs Label 55 and teaches music business at the Institute of Audio Research.]

We will now continue our examination of some of standard clauses contained in the music publishing company’s exclusive agreement with a songwriter.

Below is another clause included in a major publishing agreement.

ROYALTIES – Provided that Publisher has recouped any and all monies payable to Writer under this Agreement, Publisher shall pay to Writer the following royalties with respect to the exploitation of the Compositions: 

(a) Mechanical Income – fifty percent (50%) of Publisher’s Net Receipts derived from the license of the Compositions. 

(b) Synchronization Income – fifty percent (50%) of Publisher’s Net Receipts derived from the license of the Compositions for use in commercials and synchronized in audiovisual works. 

(c) Print Income – fifty percent (50%) of Publisher’s Net Receipts derived from the licensing of the right to print, publish or sell printed editions or other printed reproductions of the Compositions. 

As the paragraph heading states, the above language describes the royalty rate that the writer earns. It is important to note, similar to most agreements in the music industry; the music publisher must first recoup “any and all monies” already paid to the writer, such as advances or other costs or expenses incurred on behalf of the songwriter, prior to the songwriter earning any of the above listed royalties. This means that until the writer’s account is balanced, they will receive no additional funds from the publisher.

However, once the songwriter recoups the outstanding balance, they will begin to earn royalties based on the above listed percentages. For instance under the above language, the writer is entitled to fifty percent (50%) of the “mechanical income” (CDs, Downloads), fifty percent (50%) of the “synch income” (song used in motion picture or television show), and fifty percent (50%) of the print income (printed or digital sheet music).

The listed percentages are fairly standard and are applicable to most exclusive publishing deals. Nevertheless, it is prudent to at least attempt to negotiate for higher percentages or better provisions; ultimately, the publisher may not agree to any increase.

Writer warrants he is a writer member and publishing member in good standing of ASCAP, BMI or SESAC. In the event that Writer is in breach of Writer’s warranty of being a member in good standing of ASCAP, BMI or SESAC, Writer hereby warrants he will become a member in good standing of ASCAP, BMI or SESAC. 

In addition to the above listed clauses, most standard publishing deals require the songwriter to be a member in good standing with their respective country’s P.R.O. This is typically due to the publisher requiring the P.R.O.’s assistance in collecting the public performance royalties due for the licensing of compositions. If a writer is not in good standing or is not a member of a P.R.O. at all, it could potentially cause issues in the publisher receiving payments, which they want to avoid. The above language helps obviate the issue by requiring that the songwriter warrant they are in good standing with their P.R.O. and will stay as such.

OPTION TO PURCHASE – In the event that Writer desires to grant, sell, license or otherwise transfer any right, title or interest in or to any of the Compositions, for a period of thirty (30) days, Writer hereby agrees to negotiate in good faith exclusively with Publisher, and to exert best efforts to reach an agreement with Publisher for Publisher’s acquisition of such rights in and to the Compositions. In the event that Publisher and Writer fail to finalize the terms of such agreement by the end of the thirty (30) day period, then Writer shall thereafter be free to negotiate with any third party for the sale, license or other transfer of such rights, but only on terms and conditions that are no less favorable to Writer than those last offered by Publisher. Furthermore, if Writer receives an offer from a third-party at any time (the “Third Party Offer”) to purchase all or any portion of Writer’s interest in the Compositions, or any one of them, and Writer desires to sell such interest, Writer agrees to first offer in writing to sell such interest to Publisher (the “First Offer”).

The First Offer must specify all of the terms and conditions of the Third Party Offer. In the event Publisher does not agree to match the First Offer within fifteen (15) days after Publisher’s receipt thereof, then Writer will have the right to accept the Third Party Offer. However, any sale to such third party must be consummated upon terms no less favorable to Publisher as those contained in the First Offer. If such sale is not so consummated, Writer will not sell all or any portion of Writer’s interest in the Composition(s) or any one of them without again offering such interest to Publisher as provided hereinabove. 

One way a publishing company ensures that they can potentially retain rights to lucrative materials after the expiration of the agreement is through a right of first refusal or a “matching right.” As described above, a right of first refusal provides the publishing company with the option to purchase a composition and/or all of the compositions, if the writer is attempting to sell the rights to the material. This language provides the publisher with a proscribed time period (30 days) where the writer must present any third-party offer they receive for the material to the original publisher.

The publisher then has a specified time period (15 days) to either match the third-party offer or to pass. If the publisher matches the offer, then a deal will be finalized on those terms; however, if the publisher fails to match the third-party offer, the writer is free to enter into a new arrangement with the third-party on the same terms as those presented to the original publisher. The above specific language requires that the deal must be consummated no later than a specified period of time (15 days). If the deal with the third-party is not finalized by the end of this time period, the original publisher has an additional opportunity to purchase the composition(s) for the same terms as those offered by the third-party to the writer.

Since “publishing” money is one of the most lucrative and consistent streams of income in the music business and music publishers are the top facilitators of licensing in this space, it is prudent to fully understand how they function and the best way to approach them. Overall, most standard deals are negotiable and should be viewed as so.

This article is not intended as legal advice, as an attorney specializing in the field should be consulted. Some of the clauses have been condensed and/or edited for content purposes, so none of these clauses should be used verbatim nor do they act as any form of legal advice or counseling.

An Examination of the Songwriter & Music Publisher Relationship [PART 1]

[Editors Note: This is a guest blog written by Justin M. Jacobson, Esq. Justin is an entertainment and media attorney for The Jacobson Firm, P.C. in New York City. He also runs Label 55 and teaches music business at the Institute of Audio Research.]

 

UPDATE: Read Part 2 of this series here!

We will now examine the music publisher and its exclusive publishing agreement with a songwriter. In addition to the standard exclusive publishing agreement explored below, there are other types of related agreements a songwriter could potentially sign with a music publisher, including a co-publishing, sub-publishing or administration arrangement; however, these will not be explored in this article.

Music publishers, which include Sony/ATV Publishing, Universal Music Publishing and Warner Music Publishing, are companies that manage a songwriter’s rights in a track. This may be typically referred to as an “administration” right in the composition. This provides the publisher with the right to license the music to others as well as to collect payments from any third-party for their uses of the songwriter’s work. The publishing company also handles the “paperwork” associated with the composition, including registering the copyrights in the songs, indexing the track with the appropriate Performing Rights Organization, as well as accounting and distributing the collected funds. A publisher may also “shop” a songwriter’s tracks in order to obtain licensable placements for its signed talent. An individual responsible for this task is sometimes referred to as a “song plugger.”

In most instances, the songwriter and publishing company equally split all of the proverbial “publishing monies.” In reality, this means that fifty (50%) percent of the total amount earned is allotted for the “writer’s share” of the composition and the remaining fifty (50%) percent is allocated for the “publisher share” of the composition. Since a single track can have several co-writers, this means that several publishing companies and other individuals may also be entitled to a part of the “writer” or “publisher” share of the track. For instance, if a song has two co-writers, the “writer’s share” of the composition could be split equally with each writer receiving fifty (50%) percent of the entire track’s “writer” share.

The streams of income generally subject to an exclusive publishing agreement include mechanical royalties, public performance royalties, synchronization fees and print incomes. Mechanical royalties are paid for the use of a musical composition on CDs, vinyl, cassettes and as MP3 downloads. In the United States, the Harry Fox Agency is generally responsible for collecting and distributing mechanical royalties. Print Income is also subject to these agreements and applies to any funds earned from the sale of the printed musical work, such as in lyric and musical score folios, individual sheet music and when the same is displayed or sold as sheet music on the Internet.

Public performance royalties are also subject to a publishing agreement. This income is due when a musical composition is publicly performed, including when it is played on the radio, at a nightclub, a concert hall, or a stadium. These funds are collected by Performing Rights Organizations (P.R.O.). In the United States, the P.R.O.s are ASCAP, BMI and SESAC. A songwriter must become a member of a P.R.O. in order to receive their public performance royalties. Additionally, each country has their own P.R.O., so a foreign citizen should become a member of the organization in their country of citizenship.

Finally, synchronization income, referred to as “synch” monies, are subject to the same publishing deal. This income is paid when a composition is displayed with a visual image, such as in a motion picture, in a television program, in a music video or in a video game. There is income here that may also be collected by the owner’s respective P.R.O.

As is standard with most exclusive recording agreements, the deal is usually cross-collateralized with any other agreements between the same parties. Again, this means that any advance and any other funds expended on behalf of the writer, whether under a recording contract or a publishing contract, are recouped against any royalties earned from either agreement. If possible, it is prudent to limit or prevent the cross-collateralization of the agreements; however, most companies will not permit this.

In addition, some publishing companies attempt to cross-collateralize the royalties earned by one co-writer in a composition with that of any other co-writers of the same track. This permits the publisher to credit any royalties earned by any co-writer of a composition toward the outstanding royalty balance of any other co-writers of a song, even if they are not attributable to this particular co-written song. If it is cross-collateralized, the publisher is permitted to credit any royalties earned by any co-writer of a composition, even if they are not attributable to this particular co-written song, toward the outstanding royalty balance of any other co-writers of a song. It is prudent to ensure that each writer’s royalty account is not cross-collateralized with any other co-writers of a track by ensuring that only tracks written by one writer are credited toward that writer’s outstanding balance without permitting the cross-collateralization of accounts with any other co-writers.

Another point to be aware of is that an artist should try to ensure that if they are signed to both a recording and publishing agreement with the company; and, if the company wants to extend one of the deals, the other deal is also not automatically extended. This prevents the artist from being dropped from the label while still being signed to the publishing company.

One final matter that should be addressed in this arrangement is the songwriter’s creative control and approval for the uses of its compositions. In particular, a writer should try to include a limitation on the types of works that their composition can be licensed to or included in. For instance, a “kid friendly” pop star may not want their composition featured in a commercial that contains drug, alcohol or tobacco use, features sexual content, or violence. In addition, an artist should have a right to approve any changes to their finished music. This includes ensuring that any song or lyric alterations conform to the artist’s “mood” or “style” of music. For example, a publisher should not be able to take a dance track created by a dance artist and edit it so that it is now a heavy metal record.

We will now examine a few standard clauses included in an exclusive songwriter publishing agreement.

SERVICES – During the Term, Writer shall furnish to Publisher, Writer’s exclusive services as a songwriter and composer and shall deliver to Publisher, for exclusive exploitation hereunder, all of Writer’s interest in and to all of the Compositions. 

(a) New Compositions – Musical works that are written, composed, created, owned and/or acquired, during the Term, by Writer, alone or in collaboration with another or others (hereinafter referred to individually and collectively as “New Compositions”) 

(b) Old Compositions – Musical works that are written, composed, created, conceived, owned, controlled and/or acquired, in whole or in part, prior to the Term, by Writer, alone or in collaboration with another or others (hereinafter referred to individually and collectively as “Old Compositions”). The New Compositions and the Old Compositions are individually and collectively referred to as the “Compositions.” 

As described above, the publishing agreement usually signs the writer to an exclusive agreement for their publishing rights in all of their Compositions. This means that the agreement applies to any existing compositions that the writer has created and owns as well as any new material they create or acquire during the term of this agreement. It may be advisable to attempt to exclude certain existing tracks from the agreement in an effort to prevent the publisher from receiving income from those compositions. This is especially true, if those tracks are already under a prior exclusive publishing deal. This is not the easiest goal to achieve as most of the time; the artist is only receiving the publishing deal due to an interest in all of their existing material as well as any new material they create going forward.

GRANT OF RIGHTS

(a) Writer hereby irrevocably assigns and grants to Publisher and its successors, all rights and interests of every kind and nature in and to the results of Writer’s songwriting and composing services, including, the Compositions, the copyrights therein and any and all renewals and/or extensions thereof throughout the Territory, all for the full term of copyright protection and all extensions and renewals thereof throughout the Territory. 

(b) Administration – Publisher shall have the sole and exclusive right to administer one hundred percent (100%) of Publisher’s and Writer’s respective interests in and to the Compositions, whether now in existence or hereafter created, including the following: 

(i) To perform the Compositions publicly, by means of public or private performance, radio broadcasting, television, or any and all other means, whether now known or which may hereafter come into existence. 

(ii) To substitute a new title or titles for the Compositions, and to make any adaptation or translation of the Compositions, in whole or in part, and to add new music or lyrics to the music of any Composition. 

(iii) To make and to license others to make, master records, tapes, compact discs, and any other mechanical or other reproductions of the Compositions, including the right to synchronize the same with sound motion pictures, radio broadcast, television, tapes, compact discs and any and all other means or devices, whether now known or which may hereafter come into existence. 

(iv) To print, publish and sell, and to license others to print, publish and sell, sheet music, orchestrations, arrangements, including, without limitation, the inclusion of any or all of the Compositions in song folios, song books or lyric magazines. 

(v) To collect all monies earned during the Term with respect to the Compositions. 

The above language explores the various rights granted to the publisher by the songwriter in the agreement. The clause affords the publisher with the exclusive right to administer one hundred (100%) percent of the song’s publishing. Under this provision, the publisher has the right to license the work for inclusions on CDs, as MP3 downloads and as sheet music. They also have the right to collect all the monies earned on the contracted for compositions.

Additionally, the publisher has the right to license the work on the radio, on television, in motion pictures and by “. . . all other means or devices, whether now known or which may hereafter come into existence.” This language permits the publisher to apply its current publishing deal to any new technology or means of distributing music that may come into existence at a later date. Furthermore, the publisher is granted the right to translate into another language as well as adding new lyrics to any composition created by the songwriter.

In our next installment, we will continue our discussion on a music publisher’s exclusive publishing agreement with a songwriter.

This article is not intended as legal advice, as an attorney specializing in the field should be consulted. Some of the clauses have been condensed and/or edited for content purposes, so none of these clauses should be used verbatim nor do they act as any form of legal advice or counseling. 

Event Recap: TuneCore Presents in Austin

Last week, TuneCore partnered with the Austin Music Foundation to offer an evening of education, networking, industry discussion, and a couple of amazing live performances. The goal of of our multi-functional event, dubbed ‘TuneCore Presents’, was to help artists and partners better understand TuneCore’s services and their music’s revenue sources.

The night kicked off with a VIP reception for some of our TuneCore Artists and music industry colleagues based in Austin. It was a blast to connect with members of the scene on both fronts, especially as our Austin office has still been open just over a year.

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After a few cocktails, guests filtered in and we kicked off some presentations! First up was TuneCore CEO Scott Ackerman, who opened up the evening discussing the value of digital distribution and making music available in stores and on streaming platforms in territories all over the world.

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Diving into the world of songwriter royalties and licensing next was TuneCore’s VP of Music Publishing Administration Gillian Morris. Gillian is an experienced expert in often confusing arena of publishing, making herself available to Austin-based TuneCore Artists who seek to learn more about how we administer and collect royalties on their behalf. She also dove into the much talked about value of sync placements and how TuneCore is helping to get independent artists of all genres placed in TV, film, ads, video games and more.

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The last speaker of the evening was TuneCore’s Director of Video Camille Moussard. Our foremost expert when it comes to how artists can utilize YouTube as a revenue stream, Camille broke it all down for artists and industry folks in the crowd. She  covered the ins and outs of collecting royalties from sound recordings on YouTube and how artists could very well be leaving dough on the table.

Each discussion wrapped with Q&A sessions, allowing for some very thoughtful and thorough questions from our engaged audience. Once everything was wrapped up, it was time for the artists to take the stage!

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The crowd was treated to a delightful set of synthy soul tunes from Austin trio Keeper.

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Closing out the night was the ever-entertaining three-piece Migrant Kids, who naturally invited our CEO Scott (who they endearingly nicknamed ‘Papa TuneCore’) to join them on lead vocals during their cover of Prince’s “Purple Rain”.

Thanks to all those TuneCore Artists, interested music-makers, and industry pals who showed up to a wonderfully successful event! We’re looking forward to more showcases like this in the coming year, so stay tuned. For now, enjoy our gallery of photos below – maybe you’ll see yourself!

Photos by Ashley Bradley & Megan Watcki

 

TuneCore Presents: Austin, TX — Nov. 1, 2016

On Tuesday, November 1, 2016, you’re invited to join us for TuneCore Presents – a two-part event going down at Emo’s in Austin, TX.

TuneCore is partnering with Austin Music Foundation to offer educational presentations and discussions, covering digital distribution, music publishing administration, and making money from your music on YouTube. Additionally, attendees will be treated to musical performances from TuneCore Artists Keeper and Migrant Kids.

This event is FREE and begins at 6:45pm at Emo’s.

RSVP HERE!

The event is open to everyone who’s interested in learning more about how they can better monetize their music and take their careers to the next level.

Want to learn more about selling your music online, collecting songwriter royalties from all over the world, and earning dough every time your song gets played across YouTube? TuneCore Presents is the perfect opportunity to do so!

Make sure to swing by to get to know members of the TuneCore team, including the following speakers:

Scott Ackerman – CEO of TuneCore

Gillian Morris – VP, Music Publishing Administration at TuneCore

Camille Moussard – Director, Video at TuneCore

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TuneCore Sync Placements Q3 in 2016

We’re extremely proud to be able to help our TuneCore Artists get their music out to the world in the form of synchronization licensing. From TV shows and movies to video games and advertisements, sync placements are one of the most sought-after successes among independent artists.

In an effort to celebrate and showcase these licenses, we’re continuing to share highlights from each quarter here on the TuneCore Blog! If you’ve been interested in TuneCore’s Music Publishing Administration, peruse through these placements to see just some of what our publishing team has been up to:

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The Girl on the Train (trailer)
Song Title: “Classical Piano Music For Baby Sleep”
Writer: Jeffrey Deary
Artist: Einstein Baby Lullaby Academy

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Atlanta (promos)
Song Title: No Hook
Writer: Otis Williams
Artist: OJ Da Juiceman

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So You Think You Can Dance, Season 13
Song Title: TRNDSTTR (Lucian Remix) (ft. M. Maggie)
Writer: Mary Miller
Artist: Black Coast

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Vice Principals
Song Title: Sunset Blood
Writer: Georgios Smaragdis
Artist: Starcadian

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Forza Horizon 3 (video game)
Song Title: The Wild Life
Writer: Carlos Sosa
Artist: Outasight

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Legends Rising (series title track)
Song Title: Chinatown
Writer: Georgios Smaragdis
Artist: Starcadian

August Songwriter News

By Stefanie Flamm

From Rio to the US Presidential election, it’s been a busy summer for everyone, including songwriters around the world:

  • Rio turns out to be as much a competition for artists looking to get sync placement as it is for the Olympic athletes.
  • Donald Trump stirs even more controversy by using “We Are the Champions” at the Republican National Convention, against the wishes of Queen.
  • Apple makes a motion to set a standard streaming rate, a move that would revolutionize royalty payments for songwriters.

Advertiser’s $1.2 billion budget for the Rio Olympics turns sync placement into a competition of its own.

It should come as no surprise that the Olympics is one of the most widely-popular televised sporting events around, particularly for US viewers. Even for a disappointingly low year, a whopping average of 27.5 million viewers watched Rio Olympic coverage via NBCUniversal over the 15 days of competition. And with that high number of average viewers, comes a high demand for prime advertising placement.

With the Olympic viewership paling only in comparison to the Superbowl, companies were chomping at the bit for an opportunity to intersperse the high-profile swim and women’s gymnastics competitions, among many others. Particularly at the opening ceremonies, with an outrageous rate of one commercial every eight minutes, there was a lot of competition amongst companies and ad agencies alike to help their product stand out from the crowd. This is where a skilled Music Supervisor comes into play.

Between the more US-friendly time zone and the hype surrounding high-profile athletes like Simone Biles, NBCUniversal had planned for a higher viewership than they received for the 2012 Summer Olympics in London. As a result, companies were flocking to advertising agencies as early as a year before the competition began. “I’ve been doing this for 20 years — it’s the first time we’ve had to dig deep so early,” commented Grey Group Director or Music Joshua Rabinowitz.

Sync royalties for Olympic commercials were reaching upwards of $250,000 for the Rio games, not to mention the added benefit of an audience of 27.5 million people who could download or stream the song after hearing it.

Some agencies decided to stick with tried-and-true classics, like Cyndi Lauper’s “Time After Time” or the Gershwin classic “Rhapsody in Blue,” and some chose to highlight newer artists, like Boys Noize’s “Rock the Bells.” A personal favorite advertisement for Nike included music from the 2003 song “Drums Are My Beat” by Sandy Nelson.

But not every song used for ad sync placement at the Olympics was a catchy or recognizable tune. Writers Andrew Simple and Michael Logan curated a sync-worthy song that snagged them a spot in a commercial for Folgers that left me quietly weeping at my desk. A colleague of Simple’s noted, “I knew it could be the soundtrack for a spot that taps into a close relationship,” and the song was pitched for sync placement before even being released.  

Simone Biles, Michael Phelps, and a handful of songwriters were able to take home the gold at this year’s Olympic games.

Repeated unauthorized use of their song “We Are the Champions” on the Donald Trump campaign leaves Queen seeking legal action.

Whether you’re voting for him in November or you’re adamantly protesting against him, everyone can pretty much agree that Donald Trump isn’t playing by the rules of a typical US Presidential campaign. He brought this attitude to the world of publishing recently after his second unauthorized use of Queen’s “We Are the Champions” at the Republican National Convention in Cleveland.

The issue first came up in June of this year, after the last Super Tuesday of the year when Donald Trump celebrated his victory over the last remaining primaries. Trump’s campaign blasted “We Are the Champions” to commemorate their victory, only it didn’t occur to anyone on Trump’s staff to acquire permissions from Queen first.

Queen’s guitarist Brian May immediately expressed his upset over this, taking to his personal website for a reaction statement. “…permission to use the track was neither sought nor given… Regardless of our views on Mr Trump’s platform, it has always been against our policy to allow Queen music to be used as a political campaigning tool.”

Unfortunately, Trump’s team did not see this statement as an unofficial cease-and-desist, as they played the song again this July at the RNC. After Melania Trump’s semi-plagiarized speech, the RNC was a one-two punch of intellectual property theft. Queen took to Twitter shortly after the broadcast to follow-up that Trump’s campaign had, again, failed to request permission to use the song.

This month, Queen’s publishing company Sony/ATV Music Publishing announced a formal statement regarding the Trump campaign’s use of “We Are the Champions:”

Sony/ATV Music Publishing has never been asked by Mr. Trump, the Trump campaign or the Trump Organization for permission to use “We are the Champions” by Queen. On behalf of the band, we are frustrated by the repeated unauthorized use of the song after a previous request to desist, which has obviously been ignored by Mr. Trump and his campaign.

Queen does not want its music associated with any mainstream or political debate in any country. Nor does Queen want “We are the Champions” to be used as an endorsement of Mr. Trump and the political views of the Republican Party. We trust, hope and expect that Mr. Trump and his campaign will respect these wishes moving forward.”

Apple’s proposition to set a concrete, per-stream royalty rate could revolutionize songwriters’ relationship with streaming.

The battle between songwriters and streaming services has been around since the latter’s inception, and it doesn’t look like it’ll be easing up anytime soon. In the wake of the United States Department of Justice ruling for 100 percent licensing, songwriters and publishers alike are not satisfied with the DoJ’s perceived favoritism of streaming services. However, Apple has put an initiative into place that might change streaming payouts in favor of the songwriter.

In a proposal made by Apple, in conjunction with the Copyright Royalty Board, streaming services should pay 9.1 cents in songwriting royalties for every 100 times a song is played. While that only results in a payout of $0.0091 per stream, having a standard rate of streaming could mean more transparency between streaming services and songwriters.

“An interactive stream has an inherent value,” Apple wrote in their proposal, “regardless of the business model a service provider chooses.”

The need for the DoJ, streaming services, and songwriters to come together is ever-present in the increasingly streaming-friendly world. The general consensus seems to be at “freemium” streaming services like Spotify need to change their subscription models in favor of making more money for the songwriters. While this Apple proposition isn’t exactly giving songwriters what they’re asking for (and doesn’t necessarily favor its competitors’ pricing models), it’s a direct attempt to eradicate freemium streaming, and it looks like it may be a step in the right direction towards more harmony between artists and the streaming services that pay them.

For more information on TuneCore Publishing Administration, click here.

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