Future Of Music Coalitions Principles For Artist Compensation

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Earlier today we discussed how songwriters will go about being compensated, since royalties are going to hell. The Future Of Music Coalition has come up with a great outline of what to do! They have proposed “Principles for Artist Compensation in New Business Models”. To see what they are head to the jump or read the whole thing here.

  • Revenue sharing:  Revenues must be equitably shared between copyright owner and original creator(s). [principle explained]
  • Unattributable income:  Some
    deals generate revenue that cannot be attributed to specific musicians
    at the time the initial deal is executed.  Unattributable income, such
    as advertising revenue, advances, delivery charges for online content,
    bulk catalogue licensing, revenues from covenants not to sue on your
    catalogue, and the value of non-monetary items such as free advertising
    or equity stakes, must be fairly apportioned between the copyright
    owners and the creators of the music that is being licensed in the
    deal. [principle explained]
  • Complete and accurate reporting:  Reporting
    is essential to enable a distribution of receipts.  Because sample and
    survey reporting shortchange smaller and niche musicians, revenues must
    be paid based on the actual use of a work and tracked using census
    data/reporting to the greatest extent possible. [principle explained]
  • Direct payment:  The
    creators’ share of the revenue must be paid directly to the creator or
    its collective agent, not to the copyright owner for redistribution. 
    Except where otherwise prohibited, musicians can assign the right to
    receive this income provided that the musician receives an accounting
    statement directly from the third party user or collective agent to
    ensure that the assignee appropriately accounted for this revenue.  Any
    assignments to copyright owners, when permitted, must be limited to a
    period of 3 years from the date the licensed work is published. [principle explained]
  • Equal access to new models:  All
    musicians and copyright owners  must have equal access to these new
    models.  An indie or unaffiliated musician must be able to license
    music to new services.  While services should be able to experiment
    with variable pricing and offer different marketing opportunities
    depending on the level of the artist or based on the size of catalogue,
    for items on the same service and with the same retail price, indie and
    unaffiliated musicians should receive the same per download or per
    stream payment as major label musicians. [principle explained]

  • Lawsuit or settlement monies: 
    All monies received as a result of copyright infringement claims
    brought by copyright owners, or resulting from their covenants not to
    bring claims, must be shared with the musicians who created the
    underlying works. [principle explained]
  • Best effort to pay creators:  The
    agency or organization designated to collect revenue shall make every
    reasonable effort to locate and identify creators who are entitled to
    receive a portion of the revenue collected. [principle explained]

Transparency

  • Accurate accounting: Tracking/accounting figures and calculations must be detailed and transparent, and the license terms must be clearly defined. [principle explained]
  • Right to audit:  All revenue recipients, including creators, shall have audit rights. [principle explained]

Governance

  • Equal representation on governing board:  Creators
    must have the same level of representation as copyright owners on any
    entity that collects licensing revenues for music, such as licensing
    and collection societies. To the extent decisions on licensing,
    distribution of revenues, other expenditures of collected funds, or
    resolution of disputes are made by committees rather than the full
    board of such entities, creators must have equal representation on
    those committees as well. [principle explained]

International

  • Collection of International Royalties:  Musician
    shares of statutory or other royalties collected overseas by musician
    organizations for the use of US works must be paid directly to the
    musician or its collective agent. If any taxes are withheld from
    foreign royalties, the artist should be the beneficiary of any foreign
    tax credits arising from such tax withholdings. [principle explained]

Jesse Cannon is the editor of Musformation. He produces records at his studio Cannon Found Soundation. Follow him on Twitter at @JesseCannonMusF. For more info please visit his website.