Archive

Posts Tagged ‘Global Music Rights’

20 Questions for New Artists Part 6: Performing Rights Organization Affiliations

October 27, 2019 Comments off

There is a bit of strategy involved with affiliating with a performing rights organization in the United States. All the societies have a creative staff. The decision to affiliate with a particular society should be made after the artist/writer has taken some meetings with the performing rights society and decided if there’s more love coming from one than another.

Most of the time we like to wait until the music is fairly well formed and the band has gelled into a working unit before approaching the societies unless there’s a reason to move more quickly, such as getting a film or TV license, or substantial radio/webcasting play. In more experienced bands, the writers will already have an affiliation, so it is a good idea to know this in advance for purposes of servicing the creative staff with new music, competing for slots on compilations and festival shows, etc.

The major U.S. performing rights societies are the American Society of Composers, Authors and Publishers (http://www.ascap.com/), Broadcast Music, Inc. (http://www.bmi.com/), the Society of European Stage Authors and Composers (http://www.sesac.com/) and Global Music Rights (http://www.globalmusicrights.com).

There are, of course, payment differences among the societies.  For detailed background we recommend reading  Music, Money and Success by Jeff and Todd Brabec.

A recent case highlights the competitive nature of the U.S. PROs.  In order to understand the issue in the case of Shane McAnally, you need to know a little bit about how PROs divide up the revenue they receive.  With few exceptions, ASCAP and BMI license music users on a revenue share basis and receive various reports of song usage.  Realize that the PROs don’t divide these license fees on an even pro-rata share.  Instead they use a formula based on a weighting and credit formula.  This includes something called the “Audio Feature Premium Credit” which is a kind of bonus.  In a nutshell, and I’m sure they’d argue about this, but the bottom line is that the more successful you are, the more money you get paid because you are more successful:

Audio Feature Premium Credits (AFP – for audio performances only, where applicable): Songs that earn certain threshold numbers of audio feature credits in a quarter receive additional credits in that quarter. These credits are applied to performances on radio, satellite and audio streaming services.

There’s a certain logic to this–as one Nashville musician/songwriter asked me years ago about mechanical royalties, “if I get double scale for a session, why can’t I get double stat for a song” (meaning twice the statutory mechanical royalty rate).  That ain’t crazy particularly given the sad state of mechanical royalties.

Shane McAnally left ASCAP to join Global Music Rights, or tried to.  As reported in Music Business Worldwide:

Due to internal rules regarding exiting songwriter members, ASCAP continued to license McAnally’s catalog to US radio for two and a half years following his resignation. Yet, according to McAnally (pictured), ASCAP declined to pay him full quarterly bonuses (‘Audio Feature Premiums’) from his biggest hits after he left – despite his co-writers of said songs (and remaining ASCAP members) receiving their share of this extra money.

McAnally’s payments were apparently ‘phased out’ by ASCAP, who paid the writer 100% of his AFP bonus for the first quarter after he left the PRO, but then 75% in the second quarter, 50% in the third quarter, 25% in the fourth quarter – and 0% from then on.

Important: McAnally alleged that this ‘phase-out’ deprived him of $204,612.84 in ASCAP distributions as of his January 2016 accounting statements.

Again according to Music Business Worldwide, Mr. McAnally appealed his case through the rather Kafka-esque appeals process which resulted in a ruling by a panel of arbitrators.

Instead of awarding McAnally the money as an award (again, he actually lost the case regarding how ASCAP applied its policies), the Panel instead ruled that he was owed the exact same amount as ‘costs incurred’.

The Panel concluded: “For the reasons stated in the Comment section of this Award, the Panel has decided to award $204,612.84 to Claimant as costs incurred in relation to its claims which are the subject of this Arbitration.”

MBW quotes ASCAP’s Chairman of the Board and President Paul Williams saying the following:

“ASCAP is of, by and for creators. Our member-elected Board of Directors is comprised of creators and publishers and we care deeply for all of our songwriters. Our priority is to provide the best possible service and to maintain the highest good for all concerned — for every member, from the beginning of their careers to the heights of success.

Our distribution rules are created by the ASCAP Board of Directors and are meant to protect 725,000 members as a whole, and it would be unfair to disregard our rules for the benefit of one songwriter over our broader family. In this singular and unique case, Shane was paid all of the money that he was owed after he left ASCAP and went to GMR….Two full and fair hearings have confirmed this finding. The first hearing was before an independent Board of Review comprised of ASCAP members and the second hearing was before three outside arbitrators selected by Shane and ASCAP.

We were sorry to see him leave the ASCAP family, but we wish him well. Given the results of this thorough review, we believe this case was handled properly and fairly.”

Mr. McAnally’s case is a cautionary tale of how difficult and costly it can be to change PROs which is a process that is infrequent in my experience–so who  you pick for your PRO should be carefully thought out as you’ll probably be in business with them for a very long time.  The full ruling of the arbitrators is here.

Funny How that Works: @edchristman reports: Irving Azoff, Top Radio Groups Reach Temporary Licensing Agreement

December 27, 2016 Comments off
mic-coalition-rmlc

The MIC Coalition

When two rational actors are economically interdependent on one another, disputes tend to get solved at a market clearing price.  So it is with Global Music Rights and the goliath Radio Music License Committee that itself is a member of the even bigger goliath MIC Coalition.  (My bet is that the Google-backed MIC Coalition is behind the bizarre push for 100% licensing by soon-to-be-former head of the US Department of Justice Antitrust Division, but that’s another story.)

As Ed Christman reports in Billboard:

While the Radio Music Licensing Committee and Global Music Rights continue to pursue anti-trust litigation against each other, the boutique performance rights organization started by Irving Azoff is offering temporary licenses that will allow radio stations to continue playing GMR songs without worrying about copyright infringement lawsuits.

According to a statement issued on behalf of GMR by lawyer Dan Petrocelli of O’Melveny & Myers, representing the PRO in the antitrust litigation; and a letter to RMLC members from RMLC chairman Ed Christian, radio stations have until Jan. 31 to sign an interim license agreement with GMR, which will cover them for playing the PROs songs through Sept. 30, 2017.

Each station willing to enter into the interim license has to contact GMR to see what their fee will be. However, the interim licensing agreement will leave each party the right to seek a retroactive fee adjustment, which could be based on a future licensing agreement subsequent to the interim license; the outcome of the antitrust litigation between the RMLC and GMR; or a possible rate settlement between the RMLC and GMR….

In fact, some music from songwriters in the Who, the Eagles, and by John Lennon and Drake, are no longer covered by ASCAP or BMI, and radio has been playing that music all along during 2016. But people familiar with GMR say they had no intention of suing for copyright infringement as long as RMLC was negotiating rates with the PRO.

Instead, they claim, the RMLC ambushed them with an antitrust lawsuit filed on Nov. 18  in the U.S. Eastern District of Pennsylvania Court by the law firm of Latham & Watkins. GMR filed its own anti-trust lawsuit, via O’Melveny & Myers, against the RMLC in California Federal Court on Dec. 6.

The songs at issue appear to be for GMR writers who left ASCAP in the last couple years, but arguably remain covered by ASCAP (and BMI) agreements expiring at the end of 2016–you know, next week.

What this comes down to, of course, is the one thing that the MIC Coalition doesn’t seem to think songwriters are much entitled to–property rights.  As my old law and economics professor Armen Alchien has written:

A property right is the exclusive authority to determine how a resource is used…One [attribute of private property] is the exclusive right to the services of the resource. Thus, for example, the owner of an apartment with complete property rights to the apartment has the right to determine whether to rent it out and, if so, which tenant to rent to; to live in it himself; or to use it in any other peaceful way. That is the right to determine the use. If the owner rents out the apartment, he also has the right to all the rental income from the property. That is the right to the services of the resources (the rent).

Finally, a private property right includes the right to delegate, rent, or sell any portion of the rights by exchange or gift at whatever price the owner determines (provided someone is willing to pay that price). If I am not allowed [or not required] to buy some rights from you and you therefore are not allowed to sell rights to me, private property rights are reduced. Thus, the three basic elements of private property are (1) exclusivity of rights to choose the use of a resource, (2) exclusivity of rights to the services of a resource, and (3) rights to exchange the resource at mutually agreeable terms….

Private property rights do not conflict with human rights. They are human rights. Private property rights are the rights of humans to use specified goods and to exchange them. Any restraint on private property rights shifts the balance of power from impersonal attributes toward personal attributes and toward behavior that political authorities approve. That is a fundamental reason for preference of a system of strong private property rights: private property rights protect individual liberty.

Or as Gloria Steinem put it, artist rights are human rights.  A host of human rights documents are consonant with this view, starting with Article 27 of the Universal Declaration of Human Rights (which, incidentally, was itself the inspiration for MTP):

Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.

The MIC Coalition routinely runs over the rights of recording artists to fair compensation for the use of their recordings, so it’s a fair assumption that they are used to riding rough on creators and intend to do so with GMRs writers.  We can all be thankful that GMR is both standing up for their songwriters and acting reasonably to allow business to get done.  Hopefully, mega media corporations will decide that their resources are better spent paying a fair royalty to the songwriters that drive their business rather than unproductive litigation.

 

@edchristman: Commercial Radio Group Files Antitrust Lawsuit Against Irving Azoff’s Global Music Rights — Artist Rights Watch

November 21, 2016 Comments off

With ASCAP and BMI still under unaltered consent decrees and SESAC agreeing to rate-setting arbitration in a 2015 settlement, the Radio Music Licensing Committee (RMLC) is going for the grand slam with an antitrust lawsuit against boutique performance rights organization Global Music Rights.

via @edchristman: Commercial Radio Group Files Antitrust Lawsuit Against Irving Azoff’s Global Music Rights — Artist Rights Watch

%d bloggers like this: