Earlier this week a number of artist managers in a Facebook group posted photos of letters that their clients received from Music Reports Inc. on behalf of Amazon. They asked what the notices meant and if they were legit.
I am sharing my post, which was shared to a number of other music industry groups:
In the last couple of days, several of you have posted about receiving a notice from Music Reports Inc. and questioned whether or not you should act on the letter.
Let me clarify what you’re receiving, why you’re receiving them, and what you should do about it.
The short answer: Unless your client is signed to a major music publisher or major indie (e.g. Kobalt) OPT IN TO ALL DIRECT LICENSES!
Who is sending these notices?
Music licensing clearing houses such as Music Reports Inc. and the Harry Fox Agency (via it’s service Rumblefish) are hired by digital music services (including the big ones like Amazon, Apple, and Spotify; as well as hundreds of small startups like what musically was but is now TikTok) to help the digital service to secure proper licenses (compulsory or direct) to use music in their service, to calculate royalties, and to make payments and remit statements to the proper copyright owners.
What are you receiving?
What you are receiving are opportunities to opt-in to a predetermined (generally nonnegotiable) direct license, alongside every other non-major / non-major-indie publisher in the world, to license your copyrights to a digital platform within the United States (sometimes the deal is worldwide, which can be problematic, but I don’t want complicate this post). There are also Section 115 NOIs, which goes out for every track released on a DSP for the US mechanical license for the underlying composition (this process is being disrupted by the Mechanical License Collective beginning Jan 1, 2021).
Why are you receiving the notice?
You’re receiving the notice because the agent has your information as the copyright owner (or authorized agent of the copyright owner) for copyrights (generally compositions) that have been matched to sound recordings that the digital service either already has or has access to. THIS IS A GOOD THING. This means that the digital service, via their agent’s (MRI, HFA, etc) database of song ownership information, knows who to pay once the copyright begins to earn royalties (or in the case of a one-time payment, they know who to pay from the pro rata advance pool). The flip side is if they do not have your ownership info, the copyright would not be properly licensed and the creators would not be paid — the royalties earned against their copyright would go into the so-called “black box” or the content will be blocked from the service altogether (e.g. notice that your music isn’t on or monetized on Facebook, Instagram, and Oculus?). Also, if the agent does not have your info for certain uses covered by Section 115 of the US Copyright Act, the notice is currently being remitted to the US Copyright Office.
How do you respond?
Review the license and decide if you want to opt-in or not. For most copyright owners, opting in is really your only shot at being licensed by the service. Up-and-coming artists are not going to be able to do a separate direct license with the service as the service has zero incentive to administer a separate agreement with you. They will do a deal with the major publishers and major-indie publishers and a unicorn artist here or there.
How to make sure that your contact information is readily available to these agents to ensure that they can contact you with licensing opportunities and have your payee info for royalties?
You can hire a pub admin (they’ll earn a 15% to 25% commission on all royalties collected) or you can do it yourself and keep 100% of your royalties in North America via TuneRegistry. See this article as an example of DIY.