The Audio Cynic

Credit? What’s Next—Money??

Last issue’s Audio Cynic discussed the ongoing battle to gain musicians and composers reasonable payment for the use of the work, primarily by streaming services. For every step forward in that battle—like the Music Modernization Act—there have been countermeasures, foot-dragging and moves geared at outright reversal, like the attempt by Spotify to overturn the financial restructuring measures instituted by the MMA.

One interesting point caught my eye in the midst of the back and forth from the various parties: “With the ink dried on the Music Modernization Act (MMA), the industry is now arguing over an estimated $1.2 billion in unattributed ‘black box’ mechanical royalties being held by the likes of Spotify, Apple Music, and Amazon Music Unlimited.  And that’s just one piece of a gigantic black box whose size is estimated to be in the multi-billions.”

“Unattributed”? What does that mean?

I’ve been peripherally involved in contracts for recording artists, and the experience was enough to make me wonder how anyone ever gets paid. Here’s a hypothetical example: John Meadowlark is the sole composer of a song, both music and lyrics. But John is part of a band, and the band members have agreed to share all publication royalties evenly between them, no matter which individual member 0r group of members wrote any given song. To muddy the waters, the band has an agent whose deal is that he gets 20% of all publication royalties. We’ll leave it at that for simplicity’s sake, although the history and distribution-net, let’s call it, could actually have several additional layers or branches to it.

So, let’s say the band earns $100 from some source or another in payment of publication royalties for the song John wrote. How is that $100 paid out?  Let’s say there are 4 band members; in theory, each member would get $25. But the agent gets 20% of those royalties off the top. So that leaves $80 to be divided amongst the members of the band—meaning each member gets $20.

While that is relatively straightforward, what happens if the band breaks up? Or if the group sells all their copyrights? Or if one of the four cites artistic differences and moves to Moldova? And again, there are any number of possible side deals that could muck up the distributions, or just simply figuring out who is supposed to get paid. These are the unattributed “black box” royalties, and there are a number of groups working on methods to ensure that the right people actually get paid for their work.

One is a group called Royalty Claim, whose website is slightly reminiscent of those ads that ask if banks or the government are holding unclaimed money for you. I wish every artist luck in getting fair payment for their work—and maybe these folks can help.

But groups such as Royalty Claim often have to muddle their way through a morass of incomplete records, contradictory or competing contracts, evidence that is more anecdotal than actual…it’s a mess. What if a system was set up to properly track the involvement of each and every artist, from the first second that tape rolls or a hard drive spins up?

That’s the intent behind an initiative presented recently at SXSW called Creator Credits, backed by heavyweight musicians and major companies involved in music production. The idea is to start tagging a recording with metadata from the very first track laid down, in order to properly credit the participants—and one hopes, eliminate that whole “unattributed royalties” thing. Yes, this is all tied to ProTools, which could limit its acceptance in certain circles—but it’s a start.

One last thought—that quote above that ends, “And that’s just one piece of a gigantic black box whose size is estimated to be in the multi-billions.” I hope they’re keeping tighter controls that are generally imposed upon vast pools of cash—this sounds ripe for pillaging.

Hey, I need to earn that “Cynic” sobriquet every now and then, don’t I?