BMG says that it is speeding up payments to more than 20,000 US and UK songwriters on old contracts.
The company says the move is “part of [our] program to ensure established clients are not left behind by changes in the industry”. It will see songwriters paid within 60 days of the close of a royalty period rather than the 90 days specified in their contracts.
According to BMG, distributions will now occur a month earlier than previously on February 28 and August 31 of each year.
BMG says that the majority of its publishing clients, mainly those on newer contracts, are already on 60 day terms.
This change extends the benefit to most of BMG’s remaining clients, mainly those who signed contracts subsequently acquired by BMG with companies including Chrysalis and Cherry Lane.
The move was driven by Eric Scott, SVP Rights Administration & Royalty Services US and Aidan Kenny, SVP Royalty Services & Income Tracking UK, says BMG.
BMG says that the move forms part of a “program to modernize industry practices”, which has seen BMG abandon packaging deductions on digital formats (benefiting recording artists) and removing the controlled composition clauses from its contracts (which benefits songwriters).
Prospectively, BMG’s pledge to pay songwriters faster won’t just benefit songwriters, either – but also those song rightsholders who’ve acquired catalogs and rely on BMG as a service provider.
For one, it will likely be music to the ears of the company’s new financial partner KKR, with whom BMG signed a deal last month to jointly buy music copyrights.
Hartwig Masuch told MBW last month that BMG’s “fairness agenda… isn’t some kind of hobby, separate from our business strategy – it’s integral to it”.
Added Masuch: “You can raise $1bn, $2bn, $3bn – as much as you like – but if artists and, increasingly financial investors, cannot trust you to play it straight and treat them and their work with respect, then all the money in the world will not be sufficient to persuade them to do business with you.”
“This service update reaffirms BMG’s commitment to deliver 21st century levels of fairness, transparency and service to songwriters and artists whenever they signed their deals.”
Sebastian Hentzschel, BMG
Sebastian Hentzschel, BMG CIO, who is responsible for BMG’s global royalty processing, said: “With 60 day terms the new standard in music publishing, we are delighted to extend them to our acquired catalogues.
“This service update reaffirms BMG’s commitment to deliver 21st century levels of fairness, transparency and service to songwriters and artists whenever they signed their deals.”
“Paying our clients faster forms part of our broader program to make the music industry work better for artists and songwriters.”
Hartwig Masuch, BMG
Hartwig Masuch, BMG CEO added: “Contracts define minimum terms in the relationship between music companies and their clients, but too often they become frozen in time, creating generations of disadvantaged musicians.
“Paying our clients faster forms part of our broader program to make the music industry work better for artists and songwriters.”Music Business Worldwide