Tuesday, August 17, 2010

Royalty Complexity - But The Attorneys Love It

Musicians and songwriters are often a bit baffled by the complexities of the music business, especially the various royalty streams that they may or may not be participating in.

Let's count a few - on a record label level we have physical sales, licensing, download, streaming and foreign royalties.

On the publishing side we have performance, licensing, mechanical, and streaming, not to mention royalties on physical merch and even image licensing. And there's more; a lot more. If you're getting income from all of these than you're probably doing very well.

But the music business is a complex world that gets more tangled with each passing year.

As an example,  the UK's Pure radios recently release a new service called FlowSongs, which allows anyone listening to to a song to click on a button to get all of the song's details and even buy the song. A great idea if there ever was one, but it seems that the technology surrounding the service was the easy part. Things really get dicey when it comes to sorting out the artist royalties.

At the FlowMusic launch, Pure’s CEO Hossein Yassaie shared a slide showing the complicated mess his company had to decipher when it came to paying out royalties to the various parties involved. He said the slide on the left took three hours to be explained to him, and it's been dumbed down!

“I didn’t believe it at first… being an intellectual property company we understand licensing,” Yassaie said. “But I have to say I have never seen anything as complicated at this.”

This is why music attorneys still remain a part of the music business that continues to thrive. The way things are going, they'll be forever employed.

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