Introducing, The American Society for Collective Rights Licensing (ASCRL) — The Organization That Wants To Help Visual Artists Collect Their Unclaimed ‘Black Box” Royalties
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.
As of this writing, there are currently 116,133 verifiable* payments owed to music creators and rights-holders that are sitting in unclaimed/undistributed royalties escrow accounts (referred to as “Black Box” funds**) in the United States.
The actual number of individual payments owed is likely closer to or exceeds 1 Million, however the actual number is unknown because the administrator(s) of some of the biggest Black Box funds have not made public their list of payees to whom they owe royalties.
Unfortunately, due to the statute of limitations on these funds many of these payments expire. Every month payees unknowingly forfeit their rights to these payments and the interest in the royalties revert back to the administrator. This happens because the payee does not contact the administrator of the fund to claim their royalties. Granted, most payees are unaware that these payments are waiting for them because the administrator is unable to reach the payee for various reasons.
It has been estimated that the global “Black Box” royalties could be in the billions of dollars owed to music creators and rights-holders.
Imagine working somewhere and then you do not receive a paycheck because the HR department does not have your new address. Not a perfect analogy, but not receiving monies that you’ve earned as a result of your hard work seems unfair.
THIS IS A HUGE PROBLEM
So, I am happy to announce that I am working on a side project called Royalty Claim. Royalty Claim will attempt to work with as many of these administrators to aggregate their databases of millions of records of unclaimed/undistributed royalties and make that information available to the public. There are other services and insight that we will offer through Royalty Claim to help educate music creators and rights-holders on Black Box funds and how to limit/prevent their earnings from falling victim to the broken global music licensing ecosystem (such as taking control of your music catalog with TuneRegistry).
Also, follow @RoyaltyClaim on Twitter.
* These 116,133 payments are specifically verifiable because the list of payee names can be gathered from several databases.
** I am currently aware of over 30 funds and sub funds being managed in the United States. However, there are definitely many more that are “private”.
What Can The Socioeconomic Context Of The Culture From Which Hip-Hop Is Derived Tell Us About How The Biggest Genre In The World Gets The Shitty End Of The Royalty Stick?
Streaming services are a beast that needs constant feeding. Younger hip-hop artists, already accustomed to providing sites such as SoundCloud with a constant stream of mixtapes and features, have adjusted to its demands more quickly than artists from other genres, and have thrived accordingly. At the heart of rap’s streaming dominance is something more ephemeral: Some songs just stream better than others, for reasons that no one can really explain yet. Hip-hop streams better than other types of mainstream music, and trap music streams better than other types of hip-hop. – The Washington Post (April, 2018)
R&B/hip-hop music was the year’s biggest genre, accounting for 24.5 percent of all music consumed….R&B/hip-hop genre represented 24.5 percent of all music consumption in the U.S. — the largest share of any genre and the first time R&B/hip-hop has led this measurement for a calendar year. (The 24.5 percent share represents a combination of album sales, track equivalent album units and streaming equivalent album units — including both on-demand audio and video streams.) — Billboard Magazine (January, 2018)
The statistic presents the number of on-demand music streams worldwide in 2016 and 2017, by genre. According to the source, the number of urban [Hip-Hop and R&B] on-demand streams rose from 55.9 billion in 2016 to 100.34 billion in 2017 – Statista (2018)
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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If you’re planning to attend the ASCAP “I Create Music” Expo or Music Biz 2018, please add these panels to your schedule. I’m looking forward to re-connecting with industry colleagues to discuss topics around music rights, royalties, and being a kick-ass business-savvy DIY music creator in the ever-changing digital music landscape.
Here’s my Spring 2018 music conference schedule:
Panel Date/Time: Monday, May 7 • 4:15pm – 5:30pm
Panel Description: Understanding how to manage and make money with digital rights is key to an artist’s financial success. New technologies are dominating the news across industries, and music is no exception. These new technologies promise to empower entrepreneurial artists with affordable, revolutionary rights management and monetization tools. Immediate benefits include fair compensation and transparency around ownership, but the full potential of this technology remains untapped. Join our expert panel to hear more about how new technology and other alternative financing options are revolutionizing the industry.
- Edward Gennis – Founder & CEO, OpenPlay
- Dae Bogan – Music Industry Consultant
- Shari Hoffman – CEO, Transparence
- Ray Young – CEO, RightsLedger
Panel Date/Time: Wednesday, May 9 • 1:30pm – 2:30pm
Panel Description: The way fans pay for music has changed fundamentally. And that’s had major ramifications on how songwriters and other music creators make a living. Fortunately, there are many new paths to revenue in today’s new music industry. This panel will compile them all, with examples of how artists at every stage is taking advantage, and what that means for your career.
- DeDe Burns – Director, Strategy Services, Royalty Exchange
- Dae Bogan – Music Industry Consultant
- Vickie Nauma – 23 Capital
- Tracy Maddux – CEO, CD Baby
- Andy Hermann – Former LA Weekly Music Reporter
Panel Date/Time: Tuesday, May 15 • 1:45pm – 2:45pm
Panel Description: In recent years, issues related to unattributed and unpaid royalties have made more headlines than ever before. As the digital music ecosystem continues to grow the licensing mechanisms, data flow infrastructure, and royalty attribution and payment methods have been challenged to keep up with and support an insurmountable aggregate of transactions, often leading to unclaimed royalties. This panel will discuss perspectives around unclaimed royalties and review best practices that rights-holders can implement to better capture all of their earned royalties.
- Bill Colitre – VP & General Counsel, Music Reports, Inc
- Kayce Laine – Publicist & Musician, Gold Sky Music
- John Raso – HFA & Rumblefish, SVP of Client Services
- Dae Bogan – Founder, TuneRegistry & RoyaltyClaim