UK songwriters could be losing out on millions in streaming royalties each year, says new MMF report

UK songwriters and composers could be losing out on millions in streaming royalties due to the way in which songwriters’ repertoire is licensed to digital music services.

That’s according to a new report from the MMF, produced by CMU Insights and unveiled and discussed today (May 9) at The Great Escape music business conference in Brighton, UK.

The ‘$ong Royalties Guide’ highlights how “inefficient payment systems are drastically reducing the royalties that creators receive” and calls for “urgent and concerted action to untangle and reform” how repertoire is licensed.

According to the report, a complex system of ‘royalty chains’ means that songwriters and composers frequently wait years before receiving their share of streaming royalties, while featured artists can be paid royalties “within weeks” of a track they performed on being streamed, particularly if they self-release via a DIY distribution platform.

This system of royalty chains, says the MMF, result from digital music services being licensed on a territorial basis, with revenues flowing between a succession of overseas collecting societies, publishers and other intermediaries.

“Long and complex royalty chains need to be simplified and shortened so more of the money gets back to the creator of the music. Digital licensing needs to be fit for purpose.”

Annabella Coldrick, Music Managers Forum

“In theory, songwriters should be major beneficiaries of the streaming revolution,” said the MMF in a statement.

“Proportionately speaking, the percentage of income allocated to the song copyright in streaming is often double that allocated on a CD sale.

“However, problems on the royalty chains mean most songwriters are yet to see the benefit.”

The $ong Royalty Guide includes the following six key recommendations that the MMF would like to see adopted including greater transparency of data, reveal disuputes, more global licensing, quicker payments, Black Box reform and lastly that songwriters, managers and accountants must push their publishers and collecting society partners to address licensing inefficiencies.

The full list of recommendations can be seen here.

Annabella Coldrick, CEO, Music Managers Forum, said: “Streaming should be boosting songwriters’ incomes, instead MMF research reveals much of their money is subject to unnecessary data disputes, deductions and delays.

“Long and complex royalty chains need to be simplified and shortened so more of the money gets back to the creator of the music. Digital licensing needs to be fit for purpose.”

“This is a timely report and should be required reading for everyone in our business.”

Paul Craig, Nostromo Management / MMF

Paul Craig, Nostromo Management (Biffy Clyro) and Chair, Music Managers Forum, said: “This is a timely report and should be required reading for everyone in our business.

“In great detail, it shows how the complexities of online licensing have hampered industry growth and impact on the livelihoods of songwriters and composers. It’s a situation we cannot allow to continue. Urgent reforms are needed.

“At the core of these must be an overhaul in the practices of collecting societies, and adoption of more fluid and globalised licensing processes.

“Personally, I’m a supporter of collective licensing, but only through such modernisations will we break the royalty chains and ensure creators receive all revenues they have earned.”

“Currently the vast majority of music creators have little insight into how their rights are licensed online and the MMF/CMU report highlights the enormous complexity underpinning this confusion.”

Crispin Hunt, The Ivors Academy

Crispin Hunt, Chair, The Ivors Academy, said: “Dissecting the Digital Dollar is an important series of reports that help explain how the industry is currently structured and ways in which it needs to improve.

“Currently the vast majority of music creators have little insight into how their rights are licensed online and the MMF/CMU report highlights the enormous complexity underpinning this confusion.

“The report suggests that creators should be more informed and able to understand what work societies and publishers are doing on their behalf – we endorse this view.”

“It’s a complex business but it doesn’t need to be. You need to look at all parts of the chain and understand all the links and the problems that are caused by any breaks.”

Nigel Dewar Gibb, Lewis Silkin LLP

Nigel Dewar Gibb, Lewis Silkin LLP, said: “It’s a complex business but it doesn’t need to be. You need to look at all parts of the chain and understand all the links and the problems that are caused by any breaks.

“It requires a range of skills to get on top of this and new and innovative services are evolving to address this so there is better understanding and management of the copyright assets and just as importantly the related royalty flow.”Music Business Worldwide

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