# Goldman Sachs estimate for the music industry ten years out



## Nick Batzdorf (May 14, 2020)

Why am I skeptical in addition to being cynical about this, having doubts, taking this with a grain of salt, and not feeling certainty about these projections?









The Beat Goes On for the Global Music Industry Despite Covid-19. Goldman Picks the Winners.


It is going to be a painful year for the global music industry as concerts get shelved, but the best has yet to come, says Goldman Sachs.




www.barrons.com


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## babylonwaves (May 14, 2020)

why doesn't that surprise me ..?


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## gsilbers (May 14, 2020)

yea, streaming services revenue has been great.... 

for the record labels and tech companies that pay just a few cents. 


there needs to be chnaged from us. not sign record deals, or change them to only use streaming services that pay X amount per stream or.. something. 

im still amazed on how companies like UBER, spotify, etc spend SOOO much money on their services. like millions and billions... and then you see somethig like craglist humming along with the largest user base and not going around spending billions on who knows what.


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## SamC (May 14, 2020)

Well, as long as streaming revenue goes up, composers earnings will go down. The comparisons on my royalty statements don’t paint a very rosy future for the working composer. Particularly in production music. As people consume more VOD, the backend has been roughly 4% of what it was on network TV. The fees aren’t getting any bigger either.

Still not a peep from the PRO’s about this issue either.


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## Pablocrespo (May 15, 2020)

Stephen Limbaugh said:


> Ha.
> 
> This is what happened last time when industry experts predicted no disruption over the next ten years:



Indeed, did dear old Piotr count as an industry expert?


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## ptram (May 15, 2020)

Stephen Limbaugh said:


> This is what happened last time when industry experts predicted no disruption over the next ten years:


Isn't this the Swap Lake?

Paolo


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## SamC (May 15, 2020)

Gene Pool said:


> I don't know about the music industry on the whole, but orchestral musicians—live, session, all of them—have been devastated by this and will continue to be for some time. Some are retiring early. Some are looking to give lessons full-time for the foreseeable future. Some are looking for a teaching position or professorship at colleges, conservatories and the like. Major adjustments beyond just this lockdown phase.
> 
> I don't imagine seeing a group of 90 musicians crowded together for hours on end for, I guess, a year, at least? Who knows? The brass and winds obviously can't even use face masks. And now I'm wondering if the "ecosystem" regarding scoring sessions will be permanently changed for the worse, even more than it has been. As for standing orchestras, I don't know of a single one that doesn't operate on a deficit. They are kept afloat mostly by grants and corporations looking for tax write-offs. So whatever their financial state was before, it's now been obliterated, and no one's going to have any spare funds anytime soon.
> 
> ...



I had a recording session with full orchestra booked in Hungary for a project before it was postponed.

However, I’ve heard rumours that they’re starting to get things up and running again over there which is a good sign!


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## Dietz (May 15, 2020)

Things seem to return to some kind of super-wary "new normal" here in Vienna / Austria.

Orchestra recordings have been possible all the time, though, as long as the facility offered enough space to comply with the COVID-19 induced distancing rules. Synchron Stage wasn't closed at all, for example.


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## Dietz (May 15, 2020)

Gene Pool said:


> Where could you even put a 40-piece group and comply with the distancing rules?


540 square metres are sufficient, it seems.








Gene Pool said:


> And how do you record that, much less how are you not going to run into insurmountable ensemble problems?


I don't really understand the question, but it might very well be that I couldn't answer it with authority anyway as I don't work at Synchron Stage.


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## Daryl (May 16, 2020)

Abbey road and Air Lyndhurst are opening in a couple of weeks. Just limiting the number of players. Synchron has been open for much of the pandemic. There was just a limitation on the number of musicians. At least two studios have been open in Hungary. I've recorded one album already, and another one coming up in a couple of weeks. Orchestral recording will be back up and running very soon. Live music is another kettle of fish entirely.


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## Daryl (May 16, 2020)

SamC said:


> I had a recording session with full orchestra booked in Hungary for a project before it was postponed.
> 
> However, I’ve heard rumours that they’re starting to get things up and running again over there which is a good sign!


Things have always been up and running. The problem is that some of the studios closed, as they were owned by the Government. There are still two big orchestral studios open, and one slightly smaller (45 or so people) and many small studios as well. However, you can't get into Hungary at the moment, so it all has to be done on remote. However, there is supposed to be an announcement over the weekend, so let's see here we end up. I suspect that there will be a date given for the opening of the borders, but maybe with an enforced self-quarantine for anyone coming in.


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## gsilbers (May 16, 2020)

SamC said:


> Still not a peep from the PRO’s about this issue either.




i think theyve been trying and fighting for it. and on their website and newsletter they boast about some few laws past in congress. but yeah... its a drop in the bucket compared to how muhc they should be getting. 
it might be that the PROS... two small companies... have to battle with apple, spotify, netflix, amazon, microsoft, walmart, broadcasters, google, disney, universal, etc etc... and thats only in the US. Europe has a ton of other streaming services and broadcaster and tech companies. 
all of these have very deep deep pockets that pay up for lobbying and their insterests. 
and their interests are their stockholders interests.. which is screw the small guys. spend less. dont pay for music that much. 
do manuveours like its "home entertainment" model and not broadcast. say its calculated their way per stream and so on. bmi/ascap have very little recourse besides a few lawsuits theyll loose most of the time. 
and let say we win a battle and we get paid more.. those streaming companies have enough money to spin the news around and get people to think its just arriana grande or any of those pop divas with millions of dollors trying to get more money. and get public opinion on their side and minize it as rich celebrities needing another yatch or something.


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## SamC (May 16, 2020)

gsilbers said:


> i think theyve been trying and fighting for it. and on their website and newsletter they boast about some few laws past in congress. but yeah... its a drop in the bucket compared to how muhc they should be getting.
> it might be that the PROS... two small companies... have to battle with apple, spotify, netflix, amazon, microsoft, walmart, broadcasters, google, disney, universal, etc etc... and thats only in the US. Europe has a ton of other streaming services and broadcaster and tech companies.
> all of these have very deep deep pockets that pay up for lobbying and their insterests.
> and their interests are their stockholders interests.. which is screw the small guys. spend less. dont pay for music that much.
> ...



The way it’s been relayed to me is that BMI made a bad deal with Netflix when they first came on the scene.

I brought this issue up in a thread on a different site and someone from a PRO chimed in saying “_As to where the future of traditional TV is going, no one knows as a new technology can be right around the corner to dismantle the TV model as we know it.”_

My point to him/her was that the technology is already here...and there is a lot of denial about it.

I have the feeling that some of the PRO’s are the blockbuster video of the changing media landscape. They don’t think it’s going to happen when it already has.

Netflix and streaming services are already working with younger composers and buying them out of their paltry backend for a low fee anyway. They’re establishing a norm and PRO’s are twiddling their thumbs.

I can live with less backend if composing fees went up but that doesn’t really seem to be the case and if you’re a production music writer, things are probably going to get tough.

Good luck out there, everyone!


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## rgames (May 16, 2020)

SamC said:


> The way it’s been relayed to me is that BMI made a bad deal with Netflix when they first came on the scene.
> 
> I brought this issue up in a thread on a different site and someone from a PRO chimed in saying “_As to where the future of traditional TV is going, no one knows as a new technology can be right around the corner to dismantle the TV model as we know it.”_
> 
> ...



Another solution is to get rid of the PROs. Then you have control.


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## ptram (May 16, 2020)

I wouldn't be surprised is if the economic model that we are going to see in the next years will be something like this:

- The owners of news and content will also be the ones who own political leaders and decide for politics.

- Content will not be paid, apart for symbolic rewards, and content distributors will not pay tax.

- Artists and creatives will be in fact unemployed, and depend on the grant/donations from the owners of news and contents.

- No longer citizens, but clients/dependants, artists and creatives will be part of a clan, and work on request for their master.

Paolo


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## SamC (May 16, 2020)

rgames said:


> Another solution is to get rid of the PROs. Then you have control.



What gives people control is knowledge of the industry. Loads of young composers accept low fees and give up their backend. Sometimes if they keep their backend, it comes along and saves them from a bad upfront deal.

Backend which is bad in one area won’t be bad in another so I’d never dream of tearing down the whole system. Especially my PRO who have even paid its members a relief fund during this pandemic. It’s a good system when it works well, I just wish they had more to say about streaming royalties.

Either the budgets grow and the backend shrinks or the budgets shrink and the backend grows. You can’t have both shrinking as you’ll have no control at all.

It used to be great fees and great backend but it’s been chipped away for years now. It’s even more disconcerting since these streaming giants have an unbelievable amount of cash to spend.

I love the likes of Netflix, I just hope they can work symbiotically with PRO’s. I don’t think you have to have either/or.


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## rgames (May 16, 2020)

SamC said:


> Loads of young composers accept low fees and give up their backend. Sometimes if they keep their backend, it comes along and saves them from a bad upfront deal.


True, but that's a different problem. The argument that "PROs protect people from themselves" isn't good justification for holding on to them. They're archaic, inefficient and anti-free-market. There's no PRO protecting restaurant owners, or plumbers, or electricians, or engineers, or lawyers, or doctors, or about 99.99% of other professions. You try, you fail, you try again and eventually you succeed or you go do something else.

Engineers get royalties. They don't have PROs. They do very well because they have control.

rgames


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## Nico (May 16, 2020)

rgames said:


> There's no PRO protecting restaurant owners, or plumbers, or electricians, or engineers, or lawyers, or doctors, or about 99.99% of other professions. You try, you fail, you try again and eventually you succeed or you go do something else.



yes, but in a restaurant, your customer has to pay every time he wants to eat. He gets to enjoy the food once, for a limited amount to time.


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## Daryl (May 16, 2020)

Nico said:


> yes, but in a restaurant, your customer has to pay every time he wants to eat. He gets to enjoy the food once, for a limited amount to time.


Yes the idea that one could track all your Global Royalties without the PROs is ludicrous, and no professional would seriously consider it.


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## SamC (May 16, 2020)

rgames said:


> There's no PRO protecting restaurant owners, or plumbers, or electricians, or engineers, or lawyers, or doctors, or about 99.99% of other professions. You try, you fail, you try again and eventually you succeed or you go do something else.
> rgames



I just got a ‘nam flashback to the Discovery thread I read - I don’t think me or anyone else would be able to convince you otherwise on the subject of royalties.

Agree to disagree on this!


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## rgames (May 16, 2020)

Daryl said:


> Yes the idea that one could track all your Global Royalties without the PROs is ludicrous, and no professional would seriously consider it.


Nonetheless, engineers do it all the time.

EDIT: and, on average, they make a lot more money than composers and musicians


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## rgames (May 16, 2020)

Nico said:


> yes, but in a restaurant, your customer has to pay every time he wants to eat. He gets to enjoy the food once, for a limited amount to time.


Do you pay your plumber every time you flush your toilet? No, he gets paid up front for a fee that makes it worth his while.

VFX artists provide services for the movies and TV - do they get paid every time their lens flares show up on screen? Nope. Like the plumber, they get paid up front for a fee that makes it worth their while.

Yes, PROs are one way to get paid. But they're not the best way.

rgames


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## Daryl (May 16, 2020)

rgames said:


> Nonetheless, engineers do it all the time.
> 
> EDIT: and, on average, they make a lot more money than composers and musicians


So, engineers sell 100s of thousands of separate licences, for 100s of products a year, do they?


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## Peter Williams (May 16, 2020)

ptram said:


> Isn't this the Swap Lake?
> 
> Paolo


The Music Business has turned into Swine Lake.


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## rgames (May 16, 2020)

Daryl said:


> So, engineers sell 100s of thousands of separate licences, for 100s of products a year, do they?


WAY more than that.

EDIT: Apple, alone, likely deals with more licenses than that. Do you think they're going to let some outside agency decide what's a "proper" fee for a license? No way. They own it.


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## Nick Batzdorf (May 16, 2020)

rgames said:


> Another solution is to get rid of the PROs. Then you have control.



^ Classic example of why ideology doesn't work when you try to shoehorn reality into it.


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## rgames (May 16, 2020)

Nick Batzdorf said:


> ^ Classic example of why ideology doesn't work when you try to shoehorn reality into it.


As I've said dozens of times in these discussions, PROs are the exception, not the rule. Reality is a world that doesn't use PROs.


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## Nick Batzdorf (May 16, 2020)

rgames said:


> They're archaic, inefficient and anti-free-market



And there you have it: the classic mantra about free markets (which of course don't exist, since every -opoly is the norm rather than the exception).

Hey, if you really want free markets then what about getting rid of *all* patent monopolies, not just copyrights? That's actually a serious argument - one that I have mixed feelings about. Does the present system of having sick people fund drug research make sense, for example?


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## Nick Batzdorf (May 16, 2020)

rgames said:


> As I've said dozens of times in these discussions, PROs are the exception, not the rule. Reality is a world that doesn't use PROs.



I may have to move this to the politics OT section, but all the power in this world has shifted away from labor to capital. We let money rule all.

Not a very good situation, in case you haven't watched the news.


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## SamC (May 16, 2020)

rgames said:


> Nonetheless, engineers do it all the time.



Even it were possible, personally, tracking global airplay for thousands of cues, liaising with networks to make sure cue sheets are filed for those thousands of cues, doing that same job across all platforms, including live performance and online, and administrating the transfer of royalties owed for each licensee is something I simply don’t have time to do.

When you’ve got a tv show to score in 9 days this is simply impossible. If engineers have found a way to do this with music royalties I’m all ears!


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## rgames (May 16, 2020)

SamC said:


> Even it were possible, personally, tracking global airplay for thousands of cues, liaising with networks to make sure cue sheets are filed for those thousands of cues, doing that same job across all platforms, including live performance and online, and administrating the transfer of royalties owed for each licensee is something I simply don’t have time to do.


The stock photo/video folks do it and they deal with vastly higher volumes. They don't have PROs.

Sure, PROs are one way to get paid. But people used to pay each other with vegetables and livestock and we moved away from that to a much better system. Just because it's the way it's always been doesn't mean it's the best way.

rgames


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## Dietz (May 16, 2020)

Gene Pool said:


> I don't know what the rules are in Europe at the moment, but in the States they keep throwing out six feet as the magic number, and in greater Los Angeles they are being particularly dogmatic about it so far. [...]


Being dogmatic is a good idea, in that case. 8-/ ... It's "1 meter" in each direction here. Rigid measures have been taken at SSV to comply with all the current rules (also regarding the specific issues of individual instruments / ensembles). As far as I know, there was even surveillance of the local labor regulations inspectors, who are not known to be particularly forgiving in a city like Vienna, with its strong social-democratic tradition. 8-)


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## SamC (May 16, 2020)

rgames said:


> The stock photo/video folks do it and they deal with vastly higher volumes. They don't have PROs.
> 
> Sure, PROs are one way to get paid. But people used to pay each other with vegetables and livestock and we moved away from that to a much better system. Just because it's the way it's always been doesn't mean it's the best way.
> 
> rgames



The licensing of stock imagery is completely different to a music royalty. Stock image/video royalties, even on macro platforms, are really a license cut that they happen to call “royalties.” That’s like an MCPS royalty (mechanical right) in music terms which is what you already get in the UK. That is not a ‘performance royalty,’ though. The way you administrate them is completely different.

My brother is an accomplished editor/filmmaker and has been in the macrostock business for years — ironically, he often laments the fact he *doesn’t* have a PRO to catalogue, track, liaise, collect, distribute a royalty for him. It’s just him, the Macrostock giant taking a huge cut (which grows bigger every year) and the client. On top of that, his work is stolen all the time and there isn’t enough tech in place to track it the way PRO’s fingerprint cues and catch undeclared usages. Stock image/video creators are losing money more and more every year, it is such a shame.

Honestly, if you know a way to collect royalties without a PRO and it doesn’t hurt my time spent composing, I’m open minded.


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## rgames (May 16, 2020)

SamC said:


> Honestly, if you know a way to collect royalties without a PRO and it doesn’t hurt my time spent composing, I’m open minded.


It's easy, if you're doing so much licensing that you can't handle the workload then you sub it out. That's how it works in the vast majority of cases, the stock video/photo world being one. You can use a lawyer or some other party but it doesn't matter, the point is that YOU get to decide what the license fee is, or pick someone you trust.

If you think the PROs have your best interests at heart then you have every right to use them - they're already providing that service for you. The problem is that they're a monopoly. There are no other options (as a practical matter - yes, technically you can direct license, at least with ASCAP, but the PRO mentality is so entrenched that the license holders aren't going get away from it - the push needs to come from composers/musicians).

When was the last time you told your PRO "I'm not willing to license my music for that amount." You can't. The music royalties world is the only one where you don't get to set your prices. That's absurd. I've fought with ASCAP a number of times over low/no payment uses of my music. Their response is always "that's just the way it is." Well, it doesn't have to be. Someone brought up the point about not working for free - ASCAP *forces* people to do that!

But here's another point: you don't actually need a royalty model. Ever seen that weird shiny bean thing in Chicago (the "Cloud Gate")? If so, did the artist get a royalty when you looked at it? Is there a little slot where you drop a nickel when you walk past it and take a look? Nope. The artist got paid up front and that was it. The vast majority of the world economy works that work that way - VFX artists are a great example in the media world. Why do composers get royalties and VFX artists do not? If you want a royalty-type setup then fine, you have every right to structure your business deals however you want. But the truth is that pretty much everybody is better off if you just get paid up front and be done with it.

It can work either way, but guess what? The VFX artist doesn't have a PRO telling him what his time is worth!

rgames


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## SamC (May 16, 2020)

rgames said:


> It's easy, if you're doing so much licensing that you can't handle the workload then you sub it out. That's how it works in the vast majority of cases, the stock video/photo world being one. You can use a lawyer or some other party but it doesn't matter, the point is that YOU get to decide what the license fee is, or pick someone you trust.
> 
> If you think the PROs have your best interests at heart then you have every right to use them - they're already providing that service for you. The problem is that they're a monopoly. There are no other options (as a practical matter - yes, technically you can direct license, at least with ASCAP, but the PRO mentality is so entrenched that the license holders aren't going get away from it - the push needs to come from composers/musicians).
> 
> ...



Well sure, VFX artists don’t get royalties. But most are underpaid, don’t get over-time, and some don’t even get paid at all either - it’s ridiculous. VFX artists are totally under appreciated, creatively and monetarily. So I wouldn’t call it a “great example.”

That’s where we differ - I don’t look at how VFX Artists are compensated and think “composers should be treated the same.” I think VFX artists should be treated like composers, writers, directors, and producers. VFX houses should earn points, imo. Maybe then, working conditions would be better.

There was even an open letter to James Cameron a few years ago from the VFX community which brought up these issues and even pointed to the backend model being desirable.

The VFX community isn’t exactly the best repository for how to treat the creative, despite the phenomenal work they do.

Again, I’m gonna agree to disagree with you on this man! I don’t want to flood this thread with another boring royalties debate.


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## rgames (May 16, 2020)

SamC said:


> Well sure, VFX artists don’t get royalties. But most are underpaid, don’t get over-time, and some don’t even get paid at all either - it’s ridiculous. VFX artists are totally under appreciated, creatively and monetarily. So I wouldn’t call it a “great example.”
> 
> That’s where we differ - I don’t look at how VFX Artists are compensated and think “composers should be treated the same.” I think VFX artists should be treated like composers, writers, directors, and producers. VFX houses should earn points, imo. Maybe then, working conditions would be better.
> 
> ...


That's fine - I just used VFX artists because they're part of the same team as composers. But the fact remains that nearly the entire world economy works that way - no royalties.

The artists who did the Cloud Gate is a good example, too. How about visual artists in general? Do they get royalties every time someone looks at a painting in a gallery? Is there a slot next to each painting where you drop your nickel? Nope. The get paid up front and they're done.

How about architects? Do they get paid every time someone opens a door or window? Nope. They get paid up front and they're done.

I could go on but you get the idea. You don't like the VFX example, fine. There's an entire planet's worth of others!

The royalty model is not a necessity as of about 20 years ago. Nearly the entirety of the rest of the world doesn't use it, even professions that are extremely similar in function and scope to music creation and production.

rgames


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## Daryl (May 17, 2020)

rgames said:


> It's easy, if you're doing so much licensing that you can't handle the workload then you sub it out.


And we do. It's called a PRO...!


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## muk (May 17, 2020)

Aren't there enough royalty-free stock music sites that show us what our job would look like without royalties and PROs? You can upload any music you want, set the one-time fee to whatever you like, and there you go. Isn't that what you are suggesting instead of PROs @rgames? The effect of these sites? Quality doesn't matter, you can upload any s%*&. The only thing that matters is that the fee isn't higher than a few dollars, otherwise the track wont sell. So you need to upload thousands of tracks to make an income. To achieve that, forget about actually composing music. Just do drones with a few loops on top. Then you'll have dubious people steal your tracks and sell them. Good luck finding them on your own. And even if you do, good luck trying to make the site take these tracks down if your just on your own. I think I have seen enough of your proposed model to say thanks, but no thanks.


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## SamC (May 17, 2020)

rgames said:


> That's fine - I just used VFX artists because they're part of the same team as composers. But the fact remains that nearly the entire world economy works that way - no royalties.
> 
> The artists who did the Cloud Gate is a good example, too. How about visual artists in general? Do they get royalties every time someone looks at a painting in a gallery? Is there a slot next to each painting where you drop your nickel? Nope. The get paid up front and they're done.
> 
> ...



Actually, Arists/painters can earn a royalty - from a royalty scheme started in France in the 20’s because the French impressionist Jean-François Millet left a widow behind in financial ruin. The impetus behind that royalty lies in the perceived disparity between the relative poverty of many artists and the wealth of many collectors and market intermediaries.

“On this view, a royalty on later resales simply reflects the increased value that was always inherent in the work. As this is said to be attributable to the artist’s act of creation, in conjunction with their later body of work and their efforts in establishing their reputation, it is argued that the artist should have the right to participate in the proceeds of those sales.” If you don’t believe in that sentiment, fair enough!

I’m in Europe, and here, the royalty is seen as an expression of the artist’s “moral rights” in the created product. It’s also enshrined in law as a European human right and a legal right under the design and patents act in the UK. Article 13 in the UK actually has a wide array of what should earn a royalty. There’s simply a belief here that if you’re using a product (music) to help sell another product, the artist deserves a cut of that. Again, if you don’t believe in doing that, so be it.

Architects can create a type of royalty by franchising/licensing their designs. But let’s take every example you can think of who don’t earn a royalty — why shouldn’t they be able to earn a royalty? I’d simply quote yourself; “_Just because it's the way it's always been doesn't mean it's the best way.” _Personally, I only work in media and film where royalties are the norm, so I don’t feel like I can compare myself to a “doctor” or a “lawyer” - I’m no way near as smart as them!

Funnily enough, my mums second husband is a Doctor who earns royalties from his medical books. Thank god for them! He’s retired now and yet he can still monetise his lifelong expertise, doctorates and PhD’s passively. His past work in his field is constantly benefiting future Doctors and I am in full support of him being rewarded for that.

It might not sound it, but I’m actually open minded. This is a business like any other and should simply follow the money. If there is no money in royalties any longer for whatever reason, let’s change! If I didn’t feel like my PRO had my interests at heart, I would stop being a member. I feel like it’d be easier on composers for the PRO’s to adapt and work symbiotically with new technology rather than completely collapsing is all.

If you can go against the grain and command a really high budget, go for it. Leave your PRO, and if you feel like having royalties down the road, sub it out to a lawyer. For me, I would rather see how composers like John Powell and Hans Zimmer handle it, and it doesn’t look like they’re giving up on PRO’s - and they command the biggest fees in the industry. In fact they’re doing the opposite and campaigning for composers to learn about their royalty rights. It’ll be interesting to see where all this goes in the future. Royalties and PRO’s may die a long drawn out death anyway.


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