Songwriters Are Owed Nearly $2B In Unclaimed Royalties!!! — Maybe More — I’ve Been Saying This For Some Time Now (Against Pushback), But Finally The Press Has Confirmed It
Over the last few years, I’ve been researching and sounding the alarm on the growing problem of unclaimed music royalties or so-called “black box” royalties.
I’ve estimated the value of the collective black box to be nearly or above $2B. I’ve presented research, have written extensively and have spoken publicly about this problem, which disproportionately affect independent and legacy songwriters.
Despite my fanfare, industry insiders and stakeholders have shrugged or have blatantly called my estimates a gross overstatement and have held that unclaimed royalties are at best a few hundreds of thousands of dollars and mostly owed to “long-tail artists” who do not quite understand how the music industry works. This is a very myopic, company-focused view. These talking heads tend to speak from their position of administering one right for some music licensees. My estimates are looking at multiple rights administered by multiple entities, which would make the collective black box exponentially greater than the escrow account of a single entity.
Also Read: State of Unclaimed U.S. Music Royalties and Licenses
Yesterday, Variety published an article on the Music Modernization Act where a very important fact was tucked away on a single sentence in a paragraph near the end of the piece:
The DSPs are holding some $1.5 billion in unmatched mechanical royalties. If the MMA passes, that money would be passed through to the MLC which would match it to the songwriters and publishers. [bold and underline added for emphasis]
via Variety
$1.5B of royalties (I still believe this number is higher) is sitting in, probably, interest-bearing escrow accounts while songwriters and small-to-medium sized music rights holders struggle to understand how and why.
Last year I founded RoyaltyClaim, the world’s first search engine of unclaimed music royalties and licenses, which has recently been acquired by Made In Memphis Entertainment. We’ve helped DIY musicians and rights-holders identify thousands of unclaimed entitlements in just a few months, with one paricular music producer uncovering nearly $150k in unclaimed royalties due to him.
The problem is huge. The system is not transparent. And the people in charge could do a better job communicating these things to rights-holders.
Also Read: I’m Working On A Side Project Addressing ‘Black Box’ Royalties
I’ve been on many panels at music industry conferences where I’ve maintained my position that DIY musicians and small-to-medium sized rights-holders are owed hundreds of millions of dollars, if not several billion, and often my co-panelists have taken a position that my claims are sensational and overstated.
I disagree.
When those on the panel talk about black box we are talking about the aggregate of unclaimed royalties that occur because of any number of factors,’ and not just limited to one service or one collection society, explained moderator Dae Bogan, CEO of TuneRegistry.”
via Billboard
Source: https://www.billboard.com/articles/business/8456271/black-box-royalties-myths-panel-music-biz-2018
Read the Variety article here.
Check out my commentary on black box royalties here.
Rule Takers vs. Rule Makers: Congress Should Support Startups in the Music Modernization Act
Chris Castle eloquently expresses a view and sentiment on the MMA, in regards to its potential impact on startups and competition, with which I agree. One could also argue that antitrust regulations would suggest that the proposed MLC (Music Licensing Collective) ought to have competiton in much the way ASCAP directly competes with BMI. Ironically, though, I recently wrote about the antitrust regulations that prevent visual artists from entering into collective licensing mandates in the United States for their reprographic rights, which ultimately result in unclaimed “black box” reprographic royalties internationally.
If you read the current version of the Music Modernization Act, you may fine that it’s more about government mandates that entrench incumbents than a streamlined blanket compulsory license that helps startups climb the ladder. Yet in the weeds of MMA we find startups dealt out of governance by rule makers and forced as a rule taker to ante up payments by their competitors in a game that the bill makes into the only game in town.
Billboard reports that Senators Cornyn and Cruz suggested a fix for this flaw—allow private market competition alongside the MMA’s government mandate. (Vaguely reminiscent of the “Section 115 Reform Act” from 2006.)
Let’s review why this fix is necessary and how it could balance the roles of rule makers and takers.
It’s necessary because the problem doesn’t come from songwriters. It comes from the real rule makers—Amazon, Apple, Facebook…
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Introducing, The American Society for Collective Rights Licensing (ASCRL) — The Organization That Wants To Help Visual Artists Collect Their Unclaimed ‘Black Box” Royalties
ASCRL homepage. Featured photo © Neil Zlozower
As many of you know, I’ve researched and have written extensively about unclaimed music royalties held in escrow or so-called “black boxes,” which are monies owed to music creators and rights-holders (and founded RoyaltyClaim to address this issue). Today, I want to draw your attention to a similar matter in the world of visual art (e.g. photography, illustration, stills, text design).
This morning I had the pleasure of speaking with Eugene Mopsik, the CEO of the American Society of Collective Rights Licensing (ASCRL). A successful corporate /industrial photographer with over 32 years of experience, Eugene was previously the Executive Director of the American Society of Media Photographers (ASMP).
Eugene and I talked about issues related to the representation and rights of visual artists and the monetization of their works outside of the United States. He and his co-founders of ASCRL are working to help visual artists claim their fair share of royalties that have long gone to the publishers of visual works.
Similar to musical works (aka compositions or songs) that earn mechanical royalties when the work is reproduced, visual works, in many cases, earn reprographic royalties. Whereas mechanical royalties outside of the U.S. are collected by mechanical rights organizations (MROs) in territories under the MRO’s jurisdiction, reprographic royalties are collected by reprographic rights organizations (RROs) in territories under the RRO’s jurisdication. And, much like the complex web of legal and regulatory issues that makes it challenging for songwriters to collect their ex-U.S. mechanical royalties, similar limitations make it challenging for visual artists to collect their ex-U.S. reprographic royalties.
Antitrust laws has made it difficult to form a collective licensing body. Consequently, the U.S. does not have a local RRO to enter into reciprocal agreements with foreign RROs for the purpose of passing through ex-U.S. reprographic royalties to be paid to U.S. visual artists. Once again, this is similar to the absence of a U.S. MRO for songwriters. Notably, however, the U.S. has made an exception for the collective licensing of performance rights in musical works.
Since 1914, songwriters and composers have been able to join a performance rights organization (PRO) for the collective licensing of performance rights and payment of performance royalties. In the United States, the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Inc. (BMI), SESAC, and Global Music Rights (GMR) are PROs that represent the performance rights of songwriters and publishers.
Currently, when reprographic royalties are earned outside of the United States, they are collected by RROs. RROs then distributes royalties to the publishers of visual works and authors of visual works (visual artists) who’ve joined the RRO. The RRO passes reprographic royalties for works due to members of foreign RROs to the RRO in the respective territory. In cases where the publishers or authors of works are unknown or if the author is an unrepresented U.S. visual artist, royalties are held in escrow and eventually distributed by market share to publishers. In the latter, royalties that are fairly owed to U.S. visual artists are being distributed to publishers. This is what the American Society of Collective Rights Licensing aims to address.
Joining ASCRL is free. Members can submit their works and use the ASCRL claiming portal to claim their entitlements and unlock unclaimed royalties. To learn more about ASCRL or to begin the process of joining, visit http://www.ascrl.org.
Spotify Is Launching A New Streamlined Playlist Submission Tool
An email from ADA announcing Spotify’s new playlist submission tool has gone viral on social media, passed between music industry insiders.
Here’s the full version of the email:
Starting tomorrow July 19th, Spotify is rolling out a beta feature designed to help your teams share unreleased music for playlist consideration. As part of this beta period, both the existing processes and this new, streamlined process will co-exist.
Our beta feature will give you a streamlined way to share unreleased music with our global editorial team. This feature will be available to you in Spotify Analytics and for artists in Spotify for Artists. If you don’t have access to Spotify Analytics, you can reach out to your central team to get access.
“Beta” means this is the first step in making our playlist process better for our partners and for artists. This is a big focus for us, and we’re going to continue to work to make the process better. We definitely encourage you to try out this feature and share any feedback you have with me, so we can continue to improve the product.
Click here to download a pdf overview Spotify has provided. https://adamusic.app.box.com/s/a6bg9iz4u100j9we14ua4014px3m9bc1
Current open questions communicated to Spotify:
– Visibility into which editors have listened to the track
– Ability for editors to insert feedback
– Functionality to get unfinished music to editors
– Functionality to pitch released music – Label filterHere are guidelines/FAQs we have complied to assist you with this new process:
– How is music pitched?
Music can be pitched from within Spotify Analytics or Spotify for Artists. The track has to be delivered via our standard feed, with an upcoming release date. All pitch-able content is contained in a new ‘upcoming’ tab in the Catalog view within Spotify Analytics.– Who can pitch music?
Anyone with Spotify Analytics and/or Spotify for Artists access can pitch music.– What happens if the wrong track is pitched, or if we decide to change the focus track?
Pitches can be overwritten. Spotify will consider the most recent pitch. Submissions show the name of the person who submitted a track, and when the submission was made.– How long does it take from delivery to ingestion in Analytics?
Product should be visible in Analytics shortly after Spotify has received delivery from the ADA feed.– I have music that’s not finished but want to share with Spotify. Can this be done?
At the moment, this tool is designed only for music that has been delivered via the feed. Spotify has suggested that we submit music for ingestion via the feed as early as possible. However, music/release planning meetings for long-lead projects should continue to be utilized as a forum to play music for editors in advance.– What about music that has already been released?
We cannot pitch music through this tool that is already released. Continue to use forms in the short term (although these will be phased out eventually) and communicate priorities directly with the Artist & Label Marketing Team, as well as editors, when relevant.– What information needs to be provided for a submission?
The follow criteria has been outlined:
Genre
Music culture
Mood
Language
Recording Type
Instrumentation
Artist Origin
Song Description
Marketing Details– What editors will receive my music?
All submissions are global, meaning all relevant editors based on the criteria submitted will receive the pitch. We have been advised that updates and advance music links should be sent to Artist & Label Marketing team as well as appropriate editors when applicable, but the new process should also be followed.– If submissions are global, what if local markets want to pitch different tracks?
We will not be able to submit different tracks in different markets. The repertoire owner will be responsible for which track is pitched, but please follow up with local editors to reiterate these track priorities.– How much music can be pitched each week?
There is no cap on how much music you can pitch weekly. However, you can only pitch one track per product.– What if you decide to pitch a track from an album?
A pitched track from an album will be highlighted as a priority to editorial, as well as for Release Radar. However, the full album will be available to editorial for programming.– Release Radar Impact
Pitched tracks will be prioritized within the algorithm for Release Radar playlists. Tracks must be submitted 5 business days prior to release for Release Radar consideration.– What will happen to the Google Forms we’ve been using?
The current Google forms will continue to run for a period as we transition to the new system. Phase-out has been tentatively scheduled for October 1, 2018.
I wonder how this will affect the numerous Spotify playlist submission services out there.
Dae Bogan To Speak On Panel ‘The Future of Data’ At A3C Conference — Atlanta’s Premiere Hip-Hop Conference & Festival
I’m looking forward to joining Vickie Nauman and Cherie Hu on the panel “The Future of Data” at A3C Festival & Conference in Atlanta on Oct 3rd. It’s always a good time on the panel with these amazing women! The panel will be moderated by Jaxsta Music’s Dick Huey. For details, visit http://www.a3cfestival.com/conference
Here’s Why I Refunded 100% Of Our Revenue To Every Single Paying Customer, For Four Months
A LESSON ON CUSTOMER SERVICE DURING THE MOST DIFFICULT OF TIMES:
I’ve just spent the last several hours personally emailing (original email at the very end of this post) and refunding every TuneRegistry customer who made a subscription payment since my departure at the top of March 2018.
I’ve refunded each and every one of these wonderful music creators and rights-holders for every day that my co-founders and I were unable to oversee the operations and support of the technology that we sacrificed 3 years to build and grow.
For four months, we were unable to perform the quality service and support that we pride ourselves in providing. For four months, we were unable to deliver on our promise shaped by the value proposition that attracted our customers. For four stressful months, we were unable to push forward our mission to empower music creators and rights-holders.
And while returning over 4 months of subscription revenue is something no entrepreneur would ever volunteer to do, I do not believe that any customer who supports you, who believes in you, should have to pay the price for changes in upper management that impacts the service.
Today, hundreds of refunds were sent out. Here’s a few customer reactions:
“Hello Dae, Thanks for reaching out that was a great thing to do. The refund would be cool, however, I still want to keep the service. Thanks again.” – Dean
“Dae, Congrats on winning TuneRegistery back! Must feel good. I look forward to getting back on the platform and utilizing your updated services. Loving your work!” – Amishar
“I am glad things will be restored back to normal.” – Octavia
“Thank you for your honesty.” – Kristen
“Good afternoon Dae. I really appreciate your concern with regaining rapport with your customers and thank you for offering the refund!” – William
“Thanks Dae! I’m stoked you’re back at the helm and am looking forward to using the new platform!! Thanks!!” – Andy
“Thank you for your courtesy!” – Tiffany
“Thank you for taking over again. ” – Aleisha
“Welcome back, I’m looking forward to working with you and the renewing platform.” – Sadiq
“I am very happy that you are back hoping to continue working together as it is a great help for us independent producers and composers.” – Ricardo
“Hi , I kept my faith and you guys prove me well.” – Jabari
“Thank you SO much. I really wanted to enjoy this service, and I hope to continue to work with your program! ” – Eugene
“Thanks you for this email I was very upset with the service I am so glad you reached out to me about this.” – Wayne
“Dae, Truly grateful for your response. And look forward to moving forward with you guys. I appreciate this heartfelt message and thank you for touching bases and working to right what you feel are the wrongs. Bless. Thank you” – Allen
“I wish you all the best of luck! It’s great to hear that you’ve gotten back behind the wheel and I look forward to seeing you soar!” – Donny
“I’m glad to hear you are all back and on it. I’m praying the best for you on this endeavor.” – Jesse
“Hi Dae, I accept your apology and refund with open arms! Can’t wait to see what the new services are. Thanks.” – Sean
“Hey Dae, Appreciate this- I have been aware of your situation and completely understand. A refund would be appreciated, but I would love to give the platform another shot once you have things back to your standard. I wish you and your team the best in this, and I appreciate the insight you’ve given me in the past, thanks man!” – Tom
“I accept and would love to use your service with you back in charge again.” – Zachary
“Welcome back, Dae, Shane, and Kara!” – Jordan
Honesty is the way to begin building back rapport with frustrated customer base.
Subject: A huge apology from the co-founders of TuneRegistry
Hi Greg,
My name is Dae Bogan and I am the founder of TuneRegistry. I am contacting you in regards to your experience with TuneRegistry over the last four months.
Unfortunately, the TuneRegistry co-founders (myself, Shane and Kara) have not been apart of the TuneRegistry operations and support for the last nearly 4 months.
TuneRegistry was acquired by Haawk in November of 2017. Due to circumstances, the TuneRegistry co-founders, known for our excellent customer support, departed Haawk in early March 2018. Consequently, we have not been able to provide the great support and service that we take pride in providing. To make matters worse, the TuneRegistry platform was not properly maintained during our absence, making it impossible to complete tasks.
The good news is, we just acquired TuneRegistry back a week ago and now have the reigns once again. We will be working to restore operations and support over the next week or two and in the coming months, we will be launching a revamped platform with new features and service offerings.
I apologize for the the poor experience you’ve endured during our absence and would like to offer paid users a complete refund of the last four months. To claim your refund, simply reply to this email or contact us through the in-app messenger.
Kind regards,
Dae Bogan (CEO), Shane Zilinskas (CTO), and Kara McGehee (CPO)
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