One of the most significant negotiations ever reached in the music industry will soon result in roughly $280 million (£180 million) in previously unpaid mechanical royalties making their way from US major record companies to music publishers and then to their songwriters. More money will likely come from indie labels soon. As set up under the deal, the first-ever working groups of label and publisher personnel are also coordinating the way they will resolve obtaining and sharing songwriter and publisher information on new record releases.
For at least the last 10 years, unpaid mechanical royalties on US releases have been piling up at the labels, booked into their ‘pending and unpaid’ (P&U) accounts. The labels either have not received what share each songwriter/publisher is to receive on co-written songs (ie the so-called ‘splits,’ especially for hip-hop songs that involve multiple songwriters and often samples written by other songwriters), don’t know who the publishers are or don’t have contact information for them.
The problem gets worse under US labels’ ‘controlled composition’ clauses in artists’ recording contracts. Under these provisions, the artist agrees that the label need not pay more than a certain multiple of the set mechanical royalty rate per album. To calculate this, the label must first determine what it owes to all publishers on an album. If the total amount exceeds the ‘cap,’ then certain other royalties are reduced proportionately. US labels have often held up payment on all songs on an album when they do not have the splits on one of the songs.
While it is actually the songwriters and their publishers (if any) who should decide on their shares of co-written songs before the album is released, they often do not or cannot come to agreement. Labels have blamed publishers for not getting the splits to them promptly, publishers have blamed labels for not requiring the information be provided by the artist/producer before releasing the album, and labels then say they cannot hold up releases for artists, producers, songwriters and publishers to all get on the same page.
Negotiations to pay out royalties from the P&U accounts began after the US Copyright Royalty Judges in 2008 imposed the first-ever late fee for mechanical royalties not paid on time.
National Music Publishers’ Association President/CEO David Israelite and Recording Industry Association of America Chairman/CEO Mitch Bainwol brokered the historical deal.
The pay-out, broken into two time periods, is for songs on US record releases since 2000. Publishers who received mechanicals and those who did not (but should have) may share in the fund. But publishers must ‘opt in’ by specific dates to claim a share from the independent administrator.
All the details are at www.NMPALateFeeSettlement.com
Susan Butler is Executive Editor of MusicConfidential
Susan@MusicConfidential.biz
For at least the last 10 years, unpaid mechanical royalties on US releases have been piling up at the labels, booked into their ‘pending and unpaid’ (P&U) accounts. The labels either have not received what share each songwriter/publisher is to receive on co-written songs (ie the so-called ‘splits,’ especially for hip-hop songs that involve multiple songwriters and often samples written by other songwriters), don’t know who the publishers are or don’t have contact information for them.
The problem gets worse under US labels’ ‘controlled composition’ clauses in artists’ recording contracts. Under these provisions, the artist agrees that the label need not pay more than a certain multiple of the set mechanical royalty rate per album. To calculate this, the label must first determine what it owes to all publishers on an album. If the total amount exceeds the ‘cap,’ then certain other royalties are reduced proportionately. US labels have often held up payment on all songs on an album when they do not have the splits on one of the songs.
While it is actually the songwriters and their publishers (if any) who should decide on their shares of co-written songs before the album is released, they often do not or cannot come to agreement. Labels have blamed publishers for not getting the splits to them promptly, publishers have blamed labels for not requiring the information be provided by the artist/producer before releasing the album, and labels then say they cannot hold up releases for artists, producers, songwriters and publishers to all get on the same page.
Negotiations to pay out royalties from the P&U accounts began after the US Copyright Royalty Judges in 2008 imposed the first-ever late fee for mechanical royalties not paid on time.
National Music Publishers’ Association President/CEO David Israelite and Recording Industry Association of America Chairman/CEO Mitch Bainwol brokered the historical deal.
The pay-out, broken into two time periods, is for songs on US record releases since 2000. Publishers who received mechanicals and those who did not (but should have) may share in the fund. But publishers must ‘opt in’ by specific dates to claim a share from the independent administrator.
All the details are at www.NMPALateFeeSettlement.com
Susan Butler is Executive Editor of MusicConfidential
Susan@MusicConfidential.biz
