KC In Finland
:: Posted by Sid Smith on Mon., Aug 15, 2011
Mister Stormy serves up an audient request KC in Helsinki from 2003.

And Now A Word From Our Sponsors...
:: Posted by Sid Smith on Fri., Aug 12, 2011
Here's a piece about the growth of music patronage in the pop scene. 

The Humans In USA
:: Posted by Sid Smith on Fri., Aug 12, 2011
The Humans featuring Toyah Willcox, Chris Wong and Bill Rieflin have some dates lined up in the USA. The team will be bringing their sounds to:
Boston 25th September
Philadelphia 26th September
New York 27th September (tickets also from here)

The trio have a new album out soon, called Sugar Rush, featuring some sounds from regular Humans contributor, Boppin’ Bobby Willcox. More details can be found over at The Humans website and at Toyah’s website.

JF&C - Reviewed
:: Posted by Sid Smith on Wed., Aug 10, 2011
A Scarcity Of Miracles is under the spotlight here and here. 

Guitar Circle In The Round
:: Posted by Sid Smith on Wed., Aug 10, 2011
The Guitar Circle of Europe have updated their forthcoming courses and events. 

Mastery & Innocence
:: Posted by Sid Smith on Tue., Aug 9, 2011
Trey Gunn has updated his online diary with an interesting post. Trey writes "I spent several days at the San Francisco Aikido Project last month. Along with lots of great work and many new friendships, I encountered a good chunk of insights. Both connecting to my musical life and to the practice of craft in general." You can read the whole thing here.

Royalty Scam Redux
:: Posted by Sid Smith on Tue., Aug 9, 2011
Following on from yesterday's posting about  dodgy dealings and the labels, this post from another Lefsetz newsletter mailing caught the eye:

Also anonymously:

When it comes to unabated thieves, lets not leave out Wolfgang's Vault.

They bought Bill Graham's belongings after he died. Included were many concert tapes that were originally intended to be played on the radio ONCE and discarded. That's what it said on the contracts we all signed 'way back then'. Wolfgang's Vault decided they could just put them out whether you liked it or not.

My favorite part was they sent you a really lopsided contract in their favor for each show, In the fine print it said that if this contract was signed by you, they had the right to apply it to ALL the other concerts they 'owned' by you. I quickly wrote them back and told them I would NEVER sign that contract. They said okay fine and then put my concert up for sale ANYWAY and just keep ALL the royalties for themselves. It is a concert I would never have approved for release to the public. If it was bootlegged off the radio back then, it probably wouldn't have bothered me.

Anyone that buys anything from them is supporting their abuse of the law and their colossal fucking nerve.

Here's the mailing in full...

There is some good information in the notes and some incorrect information from the personal statements, the anger is more than justified. The movie business started in the U.S. The film studios owned the theatres and the publishing companies. The studios determined it made no sense for them to pay performance royalties from films and music they owned and played to audiences to their writers if they weren't forced to. In Europe, it was different. The societies were paying all writers and publishers for public performances of music from films and sending checks to all writers and publishers including the U.S. But the other countries got no reciprocity from the U.S. The other countries have been and remained totally pissed off. The black box, which is cloaked as somewhat of a mystery has a simple explanation. It one of many manipulations devised to balance the fucking the foreigners were getting from the U.S. Side note, the worldwide societies pay out 11 billion dolla
rs annually. Have you ever heard of "broadcast
mechanicals"? It only occurs in Europe and is another retaliatory move to balance the scale for no U.S. theatrical performances.

Deep Throat

______________________________________

Bob,

I noticed around 18 months ago that there were NO digital earnings on ANY of my royalty statements from EMI/Capitol, granted the sales had dwindled and the (3) records I am speaking of were done between '89-'96 before downloads and streaming were the norm but they did have a considerable amount of sales during their heyday. Other companies such as Warners and Sony had added digital earnings to my statements automatically. I sent emails and called the EMI/Capitol royalty department consistently during that 18 month period. I was told that the company neglected to add digital earnings to my contracts. I was finally informed in February of this year that the digital earnings had been added to my statement. This past July I finally received a statement for ONE of these records that included digital earning, but only retroactive back to 2009. There was a substantial payment amount but I am still asking "what about before 2009" and what about these other 2 LP's I have been inquiri
ng about! I no longer use an accounting firm and I'm sure that if I did that this exclusion of digital earnings would have NEVER been noticed! I would like to mention that the royalty department NEVER returns my calls or emails and it's only when I get a representative live on the line that I accomplish anything!

Artists-producers beware! Check your statements carefully! DIY Baby!

Bob....if you mention this in your letter...please withhold my name since I am still dealing.......thanks.....

______________________________________

Also anonymously:

When it comes to unabated thieves, lets not leave out Wolfgang's Vault.

They bought Bill Graham's belongings after he died. Included were many concert tapes that were originally intended to be played on the radio ONCE and discarded. That's what it said on the contracts we all signed 'way back then'. Wolfgang's Vault decided they could just put them out whether you liked it or not.

My favorite part was they sent you a really lopsided contract in their favor for each show, In the fine print it said that if this contract was signed by you, they had the right to apply it to ALL the other concerts they 'owned' by you. I quickly wrote them back and told them I would NEVER sign that contract. They said okay fine and then put my concert up for sale ANYWAY and just keep ALL the royalties for themselves. It is a concert I would never have approved for release to the public. If it was bootlegged off the radio back then, it probably wouldn't have bothered me.

Anyone that buys anything from them is supporting their abuse of the law and their colossal fucking nerve.

______________________________________

Hi Bob,

There is no question that record companies and the greed of their corporate leaders deserve the majority of the blame for their terrible reputation and the severe downturn in their fortunes. And when someone really examines what happen with an unprejudiced eye, I'm certain they will trace the downfall of the business to the late 1960s when Wall Street began its inexorable march toward taking over the American music industry.

In the interest of balance, however, I feel compelled to provide a snapshot of the other side of the coin here. Not every record company story is tale of woe, filled with creative accounting and the exploitation of musicians and producers. Take my story for an example.

I joined the A&R staff of Epic records, then owned by the CBS Corporation, in the summer of 1976, and I worked for the company until it was sold to the Sony Corporation in the 1980s, when I took the offered parachute and went independent again. I rose to the position of Vice-President of A&R, West Coast, and every day I worked there was an adventure. I wouldn't have traded it for anything.

Mostly, it was the people: Gregg Geller, Becky Shargo (now Becky Winding), and Larry Hamby were the three I worked most closely with, but everyone at the company was great, and I remain friends with most of them. I had the privilege of interacting with some legendary record people - Bruce Lundvall, Ron Alexenburg, Steve Popovich and many others, way too numerous to mention. I also had the great fortune to produce some wonderful artists - Boston, Charlie Daniels, Michael Murphey, Angel City, and quite a few others. In addition, I participated in soundtrack projects such as "Urban Cowboy" and "Footloose."

And while I'm sure there was some financial bullshit going on, it wasn't happening to me. I was very well paid. Not only did I receive a very competitive salary, but I received full royalties on anything I produced, and I still get royalty checks to this day. My business manager, who scrupulously examines my statements, has never found a discrepancy. I also had a generous expense account and the freedom to follow my instincts and take a chance on unknown artists, some of which did not pan out very well. No matter - the company stayed with me. No doubt, the fact that I was lucky enough to have some hits was a factor in all this, but that would be true in any company environment. In addition to the work I did for CBS, the company was also generous enough to recognize that I had been a fairly active independent producer before I worked there, and they gave me permission to produce one artist outside Epic every year I was there. I used this permission to work with both Little Ri
ver Band and Quarterflash. I still get my full royalties on those projects as well.

The parachute I got when I left was unbelievably great, and when I turned 65, I received a huge check for my full pension.

I have no idea whether my story is atypical or not, but it is true, and should be considered in the final judgement.

Best,
John Boylan

______________________________________

ASCAP, with its motto that it is the protector of the writer, whereas bmi protects the broadcasters, is as guilty as anyone of defrauding writers.

Firstly, they developed and copywrote a system that allows them to track any song played digitally.  Yet they still pay the writer on a "survey" of any given region of the country during a certain time period. When you ask them why not pay us per play, they say their units pay out too highly so they couldn't afford to do that.  Huh? Why not just lower what each play is worth and pay everyone for exactly how often their songs are getting played.

Secondly, they are notorious for paying "matching funds" to writers, under the guise of "advances" to keep writers from bolting to BMI. Now we all know this is standard practice so why mention this? Because under their agreement with the justice department they are not allowed to give matching funds, as they are not allowed to compete as if they were a private business.  So they give writers advances with a wink, saying don't worry, these are matching funds, we won't ask you for this money back.

But then, sometimes they give out too many advances and their accountants wave a flag and say we have to start recouping on writers or we'll get busted by the justice department.  So they start collecting on the writers matching funds, often years after they've been given them.  I'm sure those writers would have bolted to BMI if they knew that was coming down the track.

I know a number of writers who have co-written on a song, are all ASCAP members and yet they were paid different amounts on the song.  I'm not referring to one of the writers being BMI and one ASCAP. Im referring to them all being ASCAP.

You can't audit them.  There's no transparency. 

I could go on and on.  Although they do so much to help writers otherwise, their financial department is scamming the writers. They're as bad as anyone else

Name withheld

______________________________________

Bob-

I managed a band signed to Columbia Records that released its debut album in 2004. The album had a 2+ year cycle- and sold over 1.3 million copies-- a large majority of which were actual cds not  downloads- and spawned the most played rock song of the year for 2005- which last time I checked was still the longest charting single in active and modern rock radio history ( 65 weeks and 42 weeks  in the top 20 respectively). The album ended up having  3 #1 active rock and 3 top 10 alternative rock radio singles.

for 1.3 MILLION record sales- we received $14.500 ( I think the exact total was $14,345.00) in royalties. 1.3 million x $7.00  appx per disc to retail = $9,100,000 of income  ( appx ) on the album- and we received less than $15,000.00.

we spent a LOT of money on a forensic accountant-  $40,000 that we earned touring-but  the label had a receipt for every single penny of the deductions the claimed they spent- even though most  of them were unapproved by the band---and were not the kind of deductions that could be disputed........... monies spent on so called indie promoters in out of the way unimportant markets..... promotions we had never heard of or approved and other questionable "marketing  campaigns" the label swore they actually paid for but we never saw the benefits of totaled MILLIONS of dollars.

during the accounting process we were told by someone at the label there that they thought that we- by asking them to account for where our royalties went- were "nickle and dimeing" and "were creating ill will with those who did so much to build your career  that is making you a ton of money on tour and from your PRO"

I responded that we EARNED that money- just like we earned  a lot more than $15,000.00 in royalties - but was given the cold shoulder by all we dealt with on this matter- and quite frankly put on the labels shit list for our next release because we had the audacity to ask why we were being screwed so royally by the label.

The next release  sold appx 15% of the first release and  got barely a fraction  of the attention the first release did from the promotions and marketing departments.  To add further insult to injury  the sales department only shipped 100 cds to the bands home town for the week of its release-one of the few markets we were receiving airplay in - even though their debut  had sold THOUSANDS in that market.

Less than 6 months after its release we asked for- and received- our release from the label because it was pretty obvious they were not doing anything to promote the band and quite frankly it was humiliating to have people who were HUGE fans telling us they had no idea our record has been out for months because their radio station - stations that played songs on the first album THOUSANDS OF TIMES- had yet to mention the new release or play the new singles even though all three singles from the first album were still being played. 

I won't go any further into this horror story here.  But every time I hear someone talk about  how the major labels have unjustly earned  a bad reputation for being dishonest in accounting to their acts I tell them this story..... and not one single person has continued to defend the majors after hearing it.

 I will end by saying that THIS situation was one of the main reasons we no longer work together- as they thought it was me being inept instead of the system being corrupt that caused them to be so grossly underpaid.

Even though I gave some pretty big clues about who the band is  out of respect to them as individuals I didn't want to mention their name - but I don't mind mentioning mine.

Thanks a lot and keep up the amazing work Bob.

Chris " Hot Rod" Long
Chris Long Mgmt
Los Angeles

______________________________________

The only label that will think about an artists everyday of every year is one the artist owns!

Thanks for 'keepin em honest'

Nona Hendryx

______________________________________

I had to join in to add this little bit
most musicians would be likely to be easy to rip off, because the truth is that most of us, if given an offer something like "you can go in the studio, make records, and be in the music business" we would have probably asked "How much is it" and "can I put some of it on my dad's credit card?" because the truth is we wanted it so badly that we didn't even think of the consequences.
I am saddened when I hear all these people who got their music and talent stolen, but the revenge is to keep going and one day get to say "THEY STOLE TOO SOON".................... like the Stones.

Peter Noone

______________________________________

if u r @ a showcase & their r other labels there & u have a manager u more than likely suck & can hardly play urr instruments ...but  u will get 2 b on late nite t.v looking @ urr shoes playing urr one weak ass song...then back 2 college 2 finish urr degree & off 2 medical school or maybe u can open a subway sandwich shop....believe me what u guys r talking about has absolutely nothing 2 do w/ music.....pete anderson ....get in the van

______________________________________

Warner owns a Christian record label in Nashville, Word Entertainment, that is doing 360 right.  They have an in-house booking agency as well as a merch company that services their artists.  It's a great model that nobody else in town has been able to replicate.

Kyle Johnson

______________________________________

Bob - my landlord is demanding a percentage of my recording career because I have a studio and take a home/office deduction. He's calling it a "360 deal."

I believe I can negotiate that he has to wear my t-shirt at least weekly when he walks his chihuahua. I'm calling it "social marketing."

I'm a little sad that it's a chihuahua, because it kind of confuses my "branding" but I guess I should have had some foresight before I
signed the contract.

Plus, I hear the latin market's on the upswing in the States.

I'll keep you updated on this legal debate from the frontier of the
music industry.

Mike Errico

______________________________________

I worked in the business for 40 years on both sides of the table (artist and label).  Now retired, I teach a course in Legal Issues in the Music Business at USC Law School.

As I walk my students through a basic record deal, I come back to the the same theme: every time a record label or publisher promises to do something there is a "take-away: clause that negates the thing that is promised.  For example, an artist signs a one album deal. You would think this means that the company has to allow you to record an album. Yes, but,he contract will specifically say that the record company is not obligated to record that album, instead they can terminate the deal, usually by paying little money. If the album is recorded and the artist has a "release" guarantee, the contract provides that the album does not have to be released.  And so it goes.  Some record companies have clauses that say that no matter how great your royalty underpayment , you can't terminate claiming this underpayment is a material breach!!

This raises the one question I would like someone to raise in court (and the one I always pose to my class): is a record contract illusory? The problem is that the only people who can afford to bring this suit are so successful, their contracts are not illusory. As for the rest, a record label can effectively tie an artist up for two years and do nothing.

As for royalties, and, remembering that I've been on both sides of the issue, I never understood why royalty provisions have to be 25 pages long---and, when companies got around to transparent royalties, they still figured out ways to screw artists. Because of cutbacks, It takes three years to do an audit and when you try to settle, record companies say "We don't pay interest" meaning that after they get you to accept less than they owed, they don't think they should pay for the use of your money all those years. 

While I do believe that major labels have done good things for some artists, that consistently are dismissed by your column and reader's e-mails, the fact is that the horror stories are true most of the time.

None of this was necessary.  It simply got institutionalized and, like Topsy, "just growed".  When I think of all the mistakes that record companies made (a two volume tome minimum), I think of the condemned man who has to dig his own grave before they put a bullet in his head and he falls in. As an old man, with no axe to grind, that's what happened to the record business; the graves are dug and everyone is waiting for the fatal shot.

 And screw the publishers as well. "Swiss-Twisting" the Beatles (and everyone else), pulling off hide the salami manoeuvres in every country in the world sometimes with the help of corrupt foreign societies that operate on a supra-governmental level, honoring themselves more than Roman emperors and modern day "cult of personality" despots and, oh by the way, laziest pricks that ever drew breath except having ample time to attend extravagant dinners, usually at the writer's expense

There's a ton of reasons why all  empires eventually collapse. The music business brought this all on themselves.

Respectfully.
Lance Grode

______________________________________

Please don't print my name if you use this, Bob, but let's just cut through all this nonsense.  If the artists and managers were also about the music, instead of greedy in their own right for fame and the almighty dollar, they'd simply bypass the labels and do it themselves, using all the modern tools available out there, and partnering with the new companies offering more equitable revenue splits.  The artists of yesteryear didn't have that option, what with the labels' distribution and information strangleholds, but the modern artist does and is therefore just as responsible for embracing change and trying to destroy the old paradigm.  The know-how to do it is out there, so ignorance and laziness are no longer excuses.  No artist who's really in it for the music, not the cash, and is willing to put in his/her 10,000 hours of woodshedding need sign with a major label - just the 'artists' looking for a possible fast-track to fame and fortune, and artistry be damned.  This is
 where the idealism we harbor as music fans smacks up against the cold hard reality: no one is innocent!  It's a vicious circle and that's why all the players have been deadlocked for a decade, each desperately hanging onto their scrap instead of working towards a solution.  Luckily, technology will eventually FORCE a solution, and that'll be that.

______________________________________

Bob:

What I am consistently gathering from the so-called music industry reminds me of the state of the steel industry in the 70's. Responding to market forces -- technology, energy, supply and demand, outside competition, etc. -- they commissioned studies to see possible solutions to their plight, all the while holding concern for stock prices, as well as their own positions and power.

The most forthright solutions addressed what was known as a "Greenfields" approach: building a new plant, using the latest tech and most efficient and effective practices, directed toward a desired result, while keeping their existing factories operating and their work force fully employed. It was an expensive proposition, but, in the long term, the best solution.

With the answer staring them in the face, what was their response? Not to invest, but to view this as expense. They took an alternative path, choosing, instead, to shut down sections of their operations and putting people temporarily out of work, while they retrofitted. The result? More expensive and less efficient operations.

The Japanese, on the other hand, were not so short-sighted. They adopted and embraced the U.S. studies, became even more competitive, and the rest, as they say, is history.

The U.S. industry (and lobbyist) response? More complaints about unfair trade practices, with the same old culprits, sometimes with new faces, and fingers pointing everywhere but at the mirror.

We -- the artists and representatives (the ones that are real creative advocates), service providers, and tech innovators -- are the new Japanese. It has now become our job to build the new models and show, not just how it can be done, but how it is.
 
David Kahl
MyGigNet, Inc.

______________________________________

Bob,

Re: "Anonymous Lefsetz reader"

This guy is probably in his 60's, and yes he probably signed a crap royalty deal, as they were back then, and who knows where the advance money went.  And let's hope he's not serious about the living in a box riff.  But he provides no details.  What were those advances?  And how many records were sold?  And what was the royalty?  Did he consider that maybe the record company IS faithfully paying per the terms of the deal that HE signed and he's simply not in the black?

What irritates me is the whine that royalties earned should not be deducted from amounts owing i.e. advances paid by the record company, that it's not ok to cross collateralize.   In fact It's perfectly right to CC. Why should a record company pay out on a success while writing off a failure?

As for the girl artist, it's no surprise she never made a record.  There is no "other 85% of the royalties."  What there is is recording costs +
mastering + packaging + manufacturing + marketing + mechanicals - all the elements required to bring a recording to market.

I run a label in Canada.  I write my own deals so I know exactly what's in them.  I personally look at every royalty statement that goes out and I take pride in their accuracy and transparency.  I feel good when I send an artist a cheque because it means we're both winning.  Depending on the leverage of the artist i.e. their ability to sell records, I can pay between $1.60 - $2.00 per album unit in royalties.  Every other penny goes to the items above, and if, at the end of the day, I didn't fuck anything up, and the record sells,  I can make $2.00 per unit sold to pay myself.  That's where the "other 85%" goes.

Our guy in his 60's bitches that he gets reams of royalty paperwork. That means he's being accounted to!  And if his output is still generating money 40 years later then chances are the material has been released in multiple countries on umpteen compilations and reissues and configurations.  So maybe the royalty accounting IS complicated and DOES require reams of paperwork. And a "huge artist"  gets "40 cartons"? Nice problem to have!

If you are not being accounted to per the terms of the deal that YOU signed then do something about it.  And if you are being accounted to, again per the terms of the deal that YOU signed, and you are in the red and not receiving royalties then acknowledge that  YOU HAVEN'T SOLD ENOUGH TO RECOUP YOUR ADVANCES!

Some labels and their managers are not angels.  Some are unscrupulous. Deals used to be incredibly one-sided (they're far less so now). But I don't believe for a moment that I'm the only guy out there dealing  fair and square with my artists.

Kim Cooke
Pheromone Recordings
Toronto

______________________________________

If anyone thinks the Kobalt %'s are clear as day need to re-read their agreement. Maybe it's better than umpg but they are still taking more than people think.

Nick Velo

______________________________________

All this royalty talk reminds me of when I worked for the IRS for three months right out of college ... I earned about $10K, then was let go due to being an "Intern" and not permanently hireable due to a state hiring freeze. This was in '09 ... they still refuse to send me a W2 so I can get my proper tax refund ;) That alone taught me to trust no one, and never expect a refund ... I now claim all my exemptions to take the money now.

What's clear is in a bureaucratic agency, you can't trust anyone else to make sure you get what's yours.

Jonathan Sanders

Mister Stormy's Monday Selection
:: Posted by Sid Smith on Mon., Aug 8, 2011
Today's top treat from the archive is an early run-through of People and (we think) the first try-out of the song with lyrics.

Vicious Bob Is At It Again
:: Posted by Sid Smith on Mon., Aug 8, 2011

The Royal(ty) Scam
:: Posted by Sid Smith on Mon., Aug 8, 2011
My thanks to several folks for emailing the following exchanges from The Lefsetz Letter which chime in with RF’s experiences with major labels as mentioned in numerous diary entries.

I recorded for XXXXXX  Records from 1968-1972. Later I did a few separate albums for them.

My last statement from them, which was 125 pages of gobbledegook says that I now owe them $80k and that I 'earned' $10k last year which of course they deducted from their figures to come up with the $80k deficit.

In my entire career with them I have never gotten more than $1k or 2k TOTAL as an artist. At the time I was also signed there as a staff producer.

btw they don't pay staff producers ANY royalties because they get meager salaries (except for the various Rick Rubins) while they are working. Allegedly, George Martin, another staff producer got no royalties from Parlaphone for any of the records he produced while on staff including all the Beatle albums.

When I had hit records, my alleged royalties were cross-collateralized from the costs of the next few albums I made. When record companies put out greatest hits albums and other compilations of an artist's work, ALL COSTS are deducted from the artists royalties no matter how much those artists have earned in the past. Artwork, packaging, mastering, studio time, etc. I understand movie companies learned a lot from this.

If I sue them, they will tie it up with their legal department until I can't afford a lawyer anymore. ALL the labels operate this way all over the world and are seemingly exempt from the law or sound reason. Let's see what happens if your various readers start writing in their experiences anonymously.

If it wasn't for BMI and my songwriting royalties, I would be living in a cardboard box under a bridge somewhere. Now streaming threatens that income and I pontificate soon I will be shopping for that cardboard box.

I have been in the music business for over 50 years and only survived due to live gigs, production advances, and the cavalry known as BMI.

I once signed a girl singer to a production agreement that tied her up for 6 months while I shopped a deal in my behalf. In my paper I said that she would get 10% royalties and I would get 5%. She was incredulous. "Who gets the other 85%?" she asked dumbfounded. "The record company, of course" I replied. She tore up my contract in front of me.

She has to this day never made an album that I know of.

If one took a typical record deal to a lawyer studying for his bar exam on a reality show  and asked if it were fair, the lawyer would laugh him out of the room.

Publishers own 50% of your royalties for 56 years from the day you sign each individual song contract. Starting 46 years later, if you don't inform them that you wish to retain the other 50% within ten years. They get to keep it for ANOTHER 56 years and then it becomes public domain and NOBODY gets any publishing money from those songs. This has already happened to Irving Berlin and the Gershwins. So hopefully my grandchildren will benefit from that money because I will surely be off this mortal coil and streaming will cut that money back in half again.

Lyor Cohen's 'interview' would have made me laugh if I wasn't so seriously concerned about my current survival for the rest of my short life.

He probably makes in one month more money then any record company or publishing company has ever paid me and I never had a 360 deal.

The Navy Seals should go after these bastards of their own volition.

Record companies killed a great many people in the 27 club. A huge artist I know gets forty cartons of royalty statements each period that it takes his accountants, three years to decipher once they are shipped to the accountants offices. Wonder what's left after the accountants bills for three years work are paid ?

When people ask my advice, I tell them to study to be great plumbers or electricians. Those guys work all the time for themselves if they are talented for pretty exorbitant fees. I am insanely jealous.

Anonymous Lefsetz reader

_______________________________________

Bob

Love the Lyor piece and also this royalty comment is valuable. Although, some of it indicates some ignorance on the part of DT as to the legalities of his/her agreement. For instance, they would have assigned the exclusive right to communicate with the PROs and collectives to UMPG, which explains the cold shoulder when going direct. That may or may not be a fair concept, but that's a different issue. There is a practical side to it, as the opposite could turn into a giant clusterfuck. The ultimate way designed into the system to check the work of your publisher is to audit them. Generally you can't audit the PROs, though, which is a whole other topic worthy of discussion.

They are the institutions most vulnerable to the transparency movement. Ironically, most are controlled in whole or in part by the creators themselves! A classic case of power corrupting. And BMI is owned by their customer (broadcasters), which is the most head scratching thing in the entire US industry. Their sole reason to exist was to bust the ASCAP union/monopoly so they could keep a lid on performance royalty rates. They've done a great job of it. US radio rates are among the worst in the world, and the streaming rate does not even rise to the level of a joke.

One driver of this is the ASCAP consent decree, which says that neither BMI nor ASCAP can refuse a license, and if the parties can't agree on a rate, they can take it to the ASCAP rate court. However ASCAP has never done well in that environment. End result is a dramatic inability to negotiate. Check out the Pandora IPO filing. They practically brag that investors needn't worry about royalty risks to publishers due to the consent decree. It also said 45% of revenue was being paid out as royalties (hurray - finally a business that is entirely dependent on exploiting music rights actually pays much of their revenue to their main suppliers), but 90% of the royalty payments were to Sound Exchange. In other words, the master is worth 10x the song copyright. It's a joke, and a massive failure  of ASCAP to prepare for their future. One of the reasons EMI pulled digital rights from them, in my opinion

_______________________________________

Hey Bob,

All this talk about transparency from the labels is the biggest load of crap I've ever heard. I am a royalty auditor, so please keep my name confidential.

The records you are "permitted" to see during an audit are ridiculous.  All of the majors refuse to provide any source royalty statements from digital service providers such as Apple, Rhapsody, etc. You are allowed to select a certain number of catalogue numbers, then they run a report for those catalogue numbers from their system, which has already processed the original source statements. Talk about a self-fulfilling prophesy.  And that's only one thing.

Both Doug Morris and Rio Caraeff have been quoted in the press saying they receive "a lot more than" tens of millions of dollars per year from You Tube. Try getting a YouTube statement during an audit. Pretty much impossible.

An even bigger problem is the licensing of all these new services.  The majors get tens, if not hundreds of millions of dollars in upfront advances and fees, and a fraction of that comes through as royalty earnings, which is what gets reported to artists.  Not much different from the record clubs, when majors got huge advances and "trademark fees", and royalties were a fraction of the advances, with tens of millions of dollars in "unrecouped" balances forgiven by the clubs at the end of a deal's term, and new advances paid at the start of the next deal term.

The culture of the majors was always to pay bupkes to artists, but now that the business is in serious trouble, and the majors are even more desperate, it's worse than ever.  Most record company deals with licensees are now structured so as little as possible gets classified as "royalties" to be shared with artists, but the majors receive all sorts of other "fees" and equity in some licensees, not to mention huge advances that are never recouped.  Artists never see a nickel of these.

Until the culture of the majors is not about keeping as much for themselves as they can get away with, and artists are seen as valued 50/50 partners, all this talk about transparency is a load of hogwash.

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Royalties, what a subject!

If you're a Sacem member you will get a certain amount of your income kept by your employer(sacem) for all the retirement health plan, retirements etc.. The legal amount is around 30 % in the French system.

It sounds like a good idea, however the vast majority of the writers registered with sacem do not make enough money to actually be part of the various insurances.

In short sacem decided that you do not make enough, we dont send the money you made to the various retirement and insurance funds, we keep it.

How's that for a highway robbery.

Last but not least Sacem is governed by the elected members of sacem . Those members are the most successful and recognized writers. They have passed new rules about the surplus of money.

They spread the money among the biggest earning writers!

Sounds like Lobbying for yourself and voting favorite new rules for your own scam. You can't do that in America!

Thianar Gomis

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I'm German and member of the Deutsche GEMA. They stole almost all of my royalties in the last 20 years.

How?

They changed the rules. If the composer performs the music himself (like I did in more than 2000 concerts*) other rules apply and he gets almost nothing.

I would get something if certain conditions were met, but it's almost impossible to do so, if you're unsigned and sell only self produced CDs etc.

There is a group of musicians trying to get heard by German politicians in order to change this system but GEMA's lobbyism is stronger. Politics don't care.

Cheers

Stefan Schoener

* I checked regularly that my concerts are registered to GEMA by the promoters. On the average I loose around 80 euros per concert.

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I've been trying to get $2500 out of UM in the UK for over a year now.

Approved PO's, approved invoices.

Good luck figuring out their uniport system - which as far as i can tell was designed to ensure no one ever gets paid.

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Transparency-obscuring (also known as "thievery" when applied to a balance sheet, I suppose) is not limited to the major labels. A musician friend of mine who shall remain nameless here is signed to an indie (also remaining nameless here), and according to the terms of his contract, after X amount of albums have been sold, an "enhanced" royalty kicks in. So the time arrives when he gets a statement and it appears that he is very close to that threshold, like within a couple hundred more sales to go, and is feeling pretty good all around. Next statement arrives: still close to the threshold, but not quite past it. And then the next statement: ditto. How is this possible, he wants to know, that during the first period he sells a bunch of records, then all of a sudden sales go permanently flat -particularly since he continues to tour and pick up press, etc. throughout all this? One might expect an initial burst of sales for a new release followed by a decline, but still... he's!
 contemplating hiring a lawyer and demanding an audit, but isn't really in the position to afford doing that, not to mention the hassle and heartache of potentially suing the label, as he has (or so he thought he had) a good relationship with the folks there. Which is all another way of saying that an artist can get ripped off at ANY level of fame or commerce in this business.

Fred Mills
Editor, Blurt Magazine

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long ago when i was managing rick danko from the band we did a tour of japan.  at the time, the last waltz was the number one album in japan and the movie was also number one.  we sold out six shows in six cities with ricks band.  while there i sat down and calculated what rick was making personally as his royalty share off the last waltz album in japan.  the retail price was around $ 100 US dollars in Japan.  Rick had a 1/5 share of the artists royalty (most of the guest artists let the "the band" have all the artists royalty as a tribute)......as i remember,  his royalty share calculated out to 25 cents out of an album that was selling for $ 100 retail and was a top seller.   I showed this to rick and he was flabbergasted that he and the other band members were getting so screwed.   The next day we visited warner brothers japan and sat down with the president......i showed him my 3rd grad arithmetic calculations of rick's royalty (it was very accurate).....he looked very e!
mbarrassed.....the whole losing face japanese thing....the next day we had a chauffer driven mercedes limo 24/7 courtesy Warner Brothers....but he still had the same royalty.  none of the guys in the band ever got rich off those wonderful albums and all that work....except robbie, and he only because of the publishing royalties.  record labels and publishing companies have been screwing artists since copyrights and recordings were invented....especially with foreign licensing and all the smoke and mirrors.  rod stewart is a very rich artist partially because his very astute manager at the time, billy gaff,  negotiated  separate direct record distribution deals  for virtually every territory/country/market in the world.  in those days it was common for artists to sign a global contract with a record label, and then the label would sub-license the record to foreign markets taking 50% of the royalty as an "administrative fee" and god knows what other charges.

Sepp Donahower

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Thank you for posting this. I'm getting a clearer picture of the whole royalty scam in particular in Germany in this writing, however in some instances like mine, it definitely comes down to outright thievery.

I was signed to German label ___________ in late summer 2008. The CD they released was a compilation of selected songs from my current CD at the time and the previous. The head of this "label" _____ _______, submitted royalty statements to me (2) but in writing, via email, outright told me: "Regarding the royalties... Money is tight at the moment, so I cannot pay you before the end of the month." This was sent to me in July 2009. What an idiot and he actually put it in writing.

The end of the month came and went. I never saw one dime despite seeing the astronomical amount that was being charged on Amazon.com for my CD amongst other internet music sites. I received a total of two royalty statements despite my continuous asking til this day. The CD was only available in Europe. I was able to get a lawyer via the Volunteer Lawyers for the Arts in Philadelphia, where I live.  For quite some time this guy continued to use my name and image on his website and "played dead" when my lawyer contacted him, never replying. Ultimately all we could do was to get him to stop using my image, name. God only knows how much money he's made via my music that I'll never see. The only thing to do was litigate and this lawyer was working pro bono on my behalf. There was no money for him to go to Europe and serve him with papers, start a litigation, etc.

I thought that he was doing this because in spite of my 20 plus years in this business, I'm still an unknown. He has some bigger "names" on his label. I have reached out to some of them and have come to find he's done the exact same thing to them, not paid them their royalties, always promising, never delivering, always with an excuse. Not to be believed. All of this despite having a written contract. Would love to have the money to litigate, although I'm sure I'd probably wind up with nothing. At this point its not about the royalty payment, its the principle. No one has the right to take what's not theirs, especially on the backs of our music, that we work so hard to create. Yeah, this sounds like sandbox mentality, which is exactly what it is. I know one day I will meet this guy, and there is no doubt I will get what I rightfully deserve, as will he.

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We've made the same argument about Kobalt.  Nice to see Bob doing it in his first paragraph.  And with such colorful language.

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Kobalt has had a transparent system with an online account login since their inception.  I've used both UMPG and Kobalt's online accounts.  UMPG is a joke.

Paul Steele

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Thanks Bob! As an ASCAP member I would like to add that there needs to be more transparency at ASCAP as well..... their survey methods are dated and downright lopsided, to say the least! Please withhold my name and e-mail as ASCAP has been known to punish those that question its accounting methods in the past.

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Ask Deep Throat to speak about Black Box and the other kickback schemes from the PRO's. Don't publish my name with this request.