Record labels that make tracks available for permanent download through US music services such as iTunes, Amazon, Google and Microsoft receive royalties when the downloads are purchased.
But a portion of these – the mechanical royalty - should be passed on to the relevant international publishers and their sub-publishers. In many cases, the record labels say they do not know where to direct these payments so they remain unclaimed.
In accordance with US ‘pass through’ legislation, digital music stores are not responsible for separately distributing the mechanical royalties due for permanent downloads – it is the duty of the record labels to do this. However, this arrangement does not apply to streams and limited downloads.
Stateside company Harry Fox Agency (HFA) collects and distributes royalties directly from the digital music stores and their aggregators on behalf of US publishers, while major international publishers often collect their royalties directly.
It is the overseas independent publishers and sub-publishers, including those in the UK, which could be losing out as they are supposed to be paid directly from the record labels.
The Music Publishers Association (MPA) and PRS for Music are working together with digital service aggregators to find a solution to this problem. They are exploring a number of avenues to gauge the worth of the missing royalties and secure their recovery.
Stephen Navin, Chief Executive of the MPA, told M: ‘We need to find a solution that works for all parties. I see digital music as an archipelago of complexity between songwriters and publishers at one end and digital download providers at the other. It’s about getting the money to flow through the archipelago to the rightsholders.
‘While no solution has been found to this complex issue, we have to find a way of helping record labels to pass on these mechanical royalties accurately.’
All PRS for Music members interested in this matter are invited to contact Stephen Navin directly at the MPA.
But a portion of these – the mechanical royalty - should be passed on to the relevant international publishers and their sub-publishers. In many cases, the record labels say they do not know where to direct these payments so they remain unclaimed.
In accordance with US ‘pass through’ legislation, digital music stores are not responsible for separately distributing the mechanical royalties due for permanent downloads – it is the duty of the record labels to do this. However, this arrangement does not apply to streams and limited downloads.
Stateside company Harry Fox Agency (HFA) collects and distributes royalties directly from the digital music stores and their aggregators on behalf of US publishers, while major international publishers often collect their royalties directly.
It is the overseas independent publishers and sub-publishers, including those in the UK, which could be losing out as they are supposed to be paid directly from the record labels.
The Music Publishers Association (MPA) and PRS for Music are working together with digital service aggregators to find a solution to this problem. They are exploring a number of avenues to gauge the worth of the missing royalties and secure their recovery.
Stephen Navin, Chief Executive of the MPA, told M: ‘We need to find a solution that works for all parties. I see digital music as an archipelago of complexity between songwriters and publishers at one end and digital download providers at the other. It’s about getting the money to flow through the archipelago to the rightsholders.
‘While no solution has been found to this complex issue, we have to find a way of helping record labels to pass on these mechanical royalties accurately.’
All PRS for Music members interested in this matter are invited to contact Stephen Navin directly at the MPA.
