Justice Department Requests Documents from PROs & Major Publishers

The US Department of Justice sent CIDs (Civil Investigative Demand for Documents) to a group of PROs (Performance Rights Organizations) and major music publishers. It is speculated by the recipients that this request is in connection with the examination of the consent decrees but the investigation will also include the possibility of collusion between major publishers and the PROs during the rate trial with Pandora. The judge from that trial determined “In her rate-setting decision, Judge Denise Cote, the ASCAP rate court judge, wrote on page 95 of her decision that Pandora has shown the Sony and UMPG licenses (which were direct deals, cut after the publishers withdrew digital rights) to be the product of, at the very least, coordination between and among these major music publishers and ASCAP.”

Many moving pieces here, this article in Billboard helps to lay out the detail.

 

 

 

Billboard Weighs in on MIDIA Research: Music Rev Still Dropping

Glenn Peoples for Billboard reports (here) on new research coming from MIDIA: “Global Music Forecasts 2014 to 2019: The Shift to the Consumption Era”.

Unfortunately the revenue of the music business will continue to sink into 2019 throughout the world market. The revenues from digital sources (downloads, streaming, ad-supported models, etc) will continue to increase its share but the overall revenue pie will shrink. This is primarily due to the lower profitability of the newer digital products. The report predicts a further shift in the music business as distributors, labels and artists retool to adapt.

From a royalty processing standpoint, this research shows that the accounting for these complex, low-revenue, high-transaction volume products will continue to be a challenge to content companies. New markets will open as well, further forcing the globalization of content management.

“As the report notes, streaming services have achieved the highest penetration in countries that had little success with downloads. Take Sweden, a country frequently hailed for its adoption of subscription services. Downloads never accounted for more than 8% of Swedish recorded music revenues. In contrast, the download peaked at 43% of U.S. revenues. Other factors will play a part in how markets evolve: piracy, per-capita music spend and GDP, and the adoption of mobile devices and other technologies.”

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Royalties: A Simple Definition

The American English definition of the word ROYALTIES seems straight forward, but with the expanded the legal definition, it is easy to illustrate how the complexity grows as you drill down into the details. This complex system is the supportive structure on which many types of creativity rest.

The licensing of musical works and the subsequent royalties your company pays and receives is essential to your business. But the day to day management of these responsibilities and obligations can serve as a major distraction from the essence of your business, MAKING MUSIC.

Royalty Solutions Corp. was established to remove the burden of the complex and costly process of licensing and royalty processing. We see our service as an important piece to the puzzle, allowing our clients to focus on the creative side of their business.

Merrian-Webster: “a payment to an author or composer for each copy of a work sold or to an inventor for each item sold under a patent”

Oxford: “A sum of money paid to a patentee for the use of a patent or to an author or composer for each copy of a book sold or for each” public performance of a work.

Cambridge (Royalty – Payment): “a payment made esp. to writers and musicians every time their books or songs are bought or used by others.”

USLegal.com: “A royalty is a percentage of gross or net profit or a fixed amount per sale to which a creator of a work is entitled which is agreed upon in a contract between the creator and the manufacturer, publisher, agent and/or distributor. Inventors, authors, movie makers, scriptwriters, music composers, musicians and other creators contract with manufacturers, publishers, movie production companies, producers, and distributors to be paid royalties in exchange for a license to manufacture and/or sell the product.”

Law.com: “a percentage of gross or net profit or a fixed amount per sale to which a creator of a work is entitled which is determined by contract between the creator and the manufacturer, publisher, agent and/or distributor. Inventors, authors, movie makers, scriptwriters, music composers, musicians and other creators contract with the manufacturers, publishers, movie production companies and distributors, as well as producers and distributors for a license to manufacture and/or sell the product, who pay a royalty to the creator based on a percentage of funds received. Should someone use another person’s creation either purposely or by mistake, the user could be found liable to the creator for all profits on the basis of copyright or patent infringement, which usually is far more than a royalty. However, a creator does not have to license his/her creation to anyone.”