More Equitable Payouts for Musicians

This came in my bi-annual Sony Music statement last week. It said “You may be Eligible for Increased iTunes Payments (or other permanent Digital Download or Ringtone royalties) as part of the Settlements of Class Action Lawsuits. Please see the enclosed notice for details.”

Ka-ching!

Congratulations to “Shropshire” and the “Youngbloods” (great band) in their pursuit of more fair treatment on how royalties are calculated for digital transactions. Even though this is a small settlement, it represents a step in the right direction of ending years of unfair accounting and payment practices.

Sources in the know infer that progress was indeed made but – still it ain’t anywhere near fair. David did not slay Goliath thus far, nor did David get completely slain. There is more to come.

I’ve written about this before as have many others. Lots of musicians are suing the labels over the claim of unfair payments on digital transactions. Here is the latest article about all of this from Variety.

Weird Al Yankovic

Tower of Power

The Temptations

And many, many more to come.

We have to be patient, and change will happen. Lots of people are jumping on this train.

The good news is that the powers that be seem willing, at last, to try new things and to negotiate. As my friend and co-author Gerd Leonhard has said, “when the pain gets great enough, they will compromise and negotiate.” We must be getting close.

From Billboard.biz yesterday, an agreement was reached between the music industry trade associations for record labels, music publishers and digital music providers. The Copyright Royalty Board, will create new rates and terms for five new digital music service categories.

It also creates new rate formulas for five new digital business models:

– For the paid locker services like the one iTunes offers consumers, music publishers will get a mechanical rate of 12% of revenue or 20.65% of total content cost or 17 cents per subscriber, which ever is greater.

– For digital lockers that provide free cloud storage with a download purchase, music publishers will get 12% of revenue or 22% of the total cost of content, which ever is greater.

– For the third category, called a mixed bundle such as when your cell phone services subscription rate comes with a music service, music publishers get 11.35% of revenue or 21% of total content cost, whichever is greater.

– The fourth new category, called limited interactive service such as when a subscription service can offer limited amounts of music to, say, one genre or playlists that the user can access at a lower price, music publishers will get 10.5% of revenue or 21% of total cost or 18 cents per subscriber, whichever is greater.

– Finally, for the fifth category, called a music bundles such as when a CD album comes with a download, music publishers will get 11.35% of revenue or 21% of total content cost.