# Sony threatens to withdraw from ASCAP and BMI



## JohnG (Jul 11, 2014)

http://www.nytimes.com/2014/07/11/busin ... share&_r=4

This is an important development in the other thread about lawmakers.

The article reads in part:

"A publisher exodus would severely diminish Ascap and BMI, which together process almost $2 billion in royalties each year.

Musicians of all kinds have long complained about minuscule earnings from streaming services, which usually pay fractions of a cent each time a song is played. But songwriters say that outdated licensing rules — and the decline of separate royalties from CD and download sales — have made their losses particularly acute.

“It’s almost like their 401(k)’s have been wiped out in a heartbeat,” Mr. Bandier said in an interview on Thursday."


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## rgames (Jul 11, 2014)

This has been coming for a while. The royalty system is archaic and confusing. The thing that composers and musicians don't seem to get is that complex and confusing systems are usually put in place to screw the people at the bottom (that would be us...).

Direct licensing used to be impractical because it was harder to manage the logistics - the PROs served that function. With the rise of the online world, though, I think that problem disappears, so direct licensing becomes a lot easier to do. So why do we need the PROs? If a production wants to use my music, they can contact me or my publisher and arrange a deal where there is no back end, so the up-front payment is higher. No PRO. No un-filed cue sheets. No blanket license. No unfair payouts. They arrange the deal directly with me or my publisher based on some standard use payout structure and it's done in 5 minutes.

It makes perfect sense - getting rid of the PROs removes a mouth to feed. So, in theory, there should be more money for everyone else.

Also, direct licensing is already allowed under the ASCAP agreement (not sure about BMI or other PROs) so, for ASCAP at least, this isn't really a new development. You already have the right to bypass ASCAP if you're an ASCAP member.

rgames


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## rJames (Jul 11, 2014)

Just one more way to erode the value of creative work. Sony, as a publisher, stands to gain if they can license their music, marketing the fact that using their music will save broadcasters billions of dollars. All the bigs will have to follow suit to stay competitive.

Good luck at convincing music users to pay more upfront.

The little guy, who may have to sell publishing to eek out a living, will have no royalty income at all.


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## clarkus (Jul 11, 2014)

Hi, RGames - 

Where is this "Standard use payout structure" your would like to see to emerge from? Is Sony looking out for my interests? Are the people on this Forum ready to march on ... um ... well, why I'm determining what we would march on, let's discuss what we can do on our own. I don't think Washington has a lot of bandwidth for us just now.

Your line of reasoning sounds fine when presented in this way, but I am reminded of the dismantling of organized labor. The PRO system is far from perfect, but they can and do work for us. 

In your example wherein a client contacts you personally (or, more likely, in my case, through a third party, a music library I am with), let's see how that request for use would play out. If your name is Steven Price or Bear McCreary that contact will be with the composer's agent & they (the composer) will likely get a pretty good return on whatever they are asked to produce or give permission for.

If you are relatively unknown, it's a race to the bottom. You can negotiate as vigorously as you like, but if someone else is letting their music go for 20. a minute, or .02 cents per use (or whatever the new standard is), good luck asking for twice or ten times that. 

In reality, what I think you'd see is more and more illegal use, as - has been discussed at length on a recent thread here - litigation of illegal use requires a lot of do-re-mi, which few composers have. This isn't a theoretical problem. The article from the NY Times that started this thread was copied without the writer's permission. He was paid once (lucky fellow - how many writers can say that?), and now his creation is fair game for anyone with an internet connection.

I'll stick with ASCAP, who I'm sure will pull out every weapon they have to keep themselves a middleman, which, in this case, is needed.


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## clarkus (Jul 11, 2014)

By the way, RJames, it is "Eke" out a living. But in this case I think "Eek" is appropriate.


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## rgames (Jul 11, 2014)

clarkus @ Fri Jul 11 said:


> Is Sony looking out for my interests?


No - you are! The standard payout structure will be whatever you can negotiate.

Whether determined by Washington or Sony or ASCAP or whomever, if the deal is not good for you, don't take it. As you say, there are too many people willing to take crappy deals. That is their right, just as it is your right not to take those deals.

Group negotiators and labor unions are necessary where people have limited economic opportunities - in that case, they serve to prevent exploitation. But composers are not being exploited - they don't have limited economic opportunity because anyone who can compose can do lots of other things for a living (in fact, most do).

rgames


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## passenger57 (Jul 11, 2014)

I don't have detailed knowledge of the ends and outs of this issue, but I'll just throw in my two cents. 

I've been lucky to have enough work over the last seven years to make a decent living and support my family composing for film/tv. 

This has only been possible because of ASCAP and the residuals. 

It the PROs are out of the picture and there are no longer residuals, I'm out of business. 

It's just that simple.


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## jeffc (Jul 11, 2014)

I think the idea of us as composers abandoning ASCAP/BMI and going it alone with direct licensing is incredibly naive and scary, and would lead to terrible deals, not to mention a logistical nightmare for anyone wanting to license music. I don't think you can really comprehend the power that Ascap (and BMI) have in fighting for us - lobbying in congress, lawyers, high level stuff that all allows us to go the the mailbox a few times a year and get a nice check. That would be incredibly hard to do on your own and the buyers would screw all but the very top.

The beautiful thing about Ascap is a use on TV is the same for you as it is for whatever A list composer. The payout is the same - it's incredibly fair. 

And here's the big problem with direct licensing, where I guess if you're in favor, you've never experienced the upside. But how do you know when you do a license what it might turn into. Who knows if that show or film goes on to big a huge international hit. Direct Licensing gives up all back-end for an upfront payment. But you don't know the real value when you do the license. And if you're wrong, you could be given up 20 or more years of royalties and income for ONE LICENSE. Can't really stress how valuable that is, and with Ascap/BMI you don't have to guess wrong and undervalue your work.,,,,


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## JohnG (Jul 11, 2014)

it is bonkers to think that any broadcaster is going to negotiate with us as individuals. 

If Sony and the other major libraries make a separate deal, it will severely hurt the ability of ASCAP and BMI to negotiate on behalf of the rest of us.

That will be bad.


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## José Herring (Jul 11, 2014)

rgames @ Fri Jul 11 said:


> This has been coming for a while. The royalty system is archaic and confusing. The thing that composers and musicians don't seem to get is that complex and confusing systems are usually put in place to screw the people at the bottom (that would be us...).
> 
> Direct licensing used to be impractical because it was harder to manage the logistics - the PROs served that function. With the rise of the online world, though, I think that problem disappears, so direct licensing becomes a lot easier to do. So why do we need the PROs? If a production wants to use my music, they can contact me or my publisher and arrange a deal where there is no back end, so the up-front payment is higher. No PRO. No un-filed cue sheets. No blanket license. No unfair payouts. They arrange the deal directly with me or my publisher based on some standard use payout structure and it's done in 5 minutes.
> 
> ...



Unbelievably naive. You probably should just leave the discussion while there's still somebody on this board that might still have a decent opinion of you.

You can't just throw out crap like that and still expect to be taken seriously.


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## clarkus (Jul 11, 2014)

So, hey, rgames, I just read your latest. I don't mean to get all up in your grill, but I think you might examine the rigor of your logic just a bit. Either:

a) "complex and confusing systems are usually put in place to screw the people at the bottom (that would be us...)"

Or:

b) "composers are not being exploited - they don't have limited economic opportunity..."

But not A and B. 

I hope you follow. We are either "The people at the bottom" or "We are not being exploited."

In truth, of course, some us are doing just fine, thanks very much, some are wondering if they will ever see a paycheck for their work, and many (yours truly) are situated in the middle. 

With that out of the way, can I just quickly respond to:

"Is Sony looking out for my interests?

No - you are!"

My ability to convince someone to pay X for my music seems, by your lights, to hinge on my being able to say no to a bad deal and hold out for a good one. You seem to be living in a world where us dudes will lock elbows and tell Sony to fuck off if they can't come up with more scratch for our awesome music.

I was a working musician for years (and I see from your website that you have done this too). Happily, I moved to composing and teaching before things got grim, but I can tell you that when club-owners and restauranteurs here in the Bay Area decided to pay bands for their services with pizza and beer about twenty years ago, there was not a mass revolt. In our dreams, maybe. Or a generation ago, when the Musicians Union had more reach.

The folks who are holding the line in composer-land are ASCAP and BMI, just as the Screen Actor's Guild works for those ladies and gentlemen, rich and poor. You may also remember the Writer's Guild strike in Hollywood about a decade ago. Another imperfect organization that is working for its membership. I feel a little odd explaining all this. Are we breathing the same air?

But to wrap up, spend a moment with your argument that composers "don't have limited economic opportunity because anyone who can compose can do lots of other things for a living." I'm not sure you want to use that as the genius formulation upon which your argument hinges. Again, either

a) You and Sony have a great idea how to best help us composers prosper, or

b) I shouldn't worry because I can always get another job.

A or B. Not A and B.


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## dinerdog (Jul 11, 2014)

rgames - no offense, but don't you have a full time job and do music on the side? (I could be wrong, if I am, ignore the rest of this, if I'm right read on.

You always throw this "if you don't like it, don't do it" stuff out there, but most here have chosen to do nothing but music. No safety net, no plan B, just give it our all. You kind of dilute some of the real world discussion we try to have hear. We're not in the position to say "I don't like that". We need to keep working.

And no offense to people who do have other jobs (your life is a little less stressful these day - I just never had a Plan B, and it's WAY too late now).


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## rgames (Jul 12, 2014)

passenger57 @ Fri Jul 11 said:


> It the PROs are out of the picture and there are no longer residuals, I'm out of business.


No, if the PROs are out of the picture then you use a different business model - you charge more up front and/or figure out other mechanisms that are agreeable to everyone, like 99.9% of other businesses.

It's just that simple!

I always encounter this resistance when discussing this issue: "We've always done it that way." Well, there are plenty of other ways to run a business and make it work. Just because it's the historical system doesn't mean it's the only system. The truth is that in terms of running a business, the royalty system is the exception, not the rule.

Here's an example: a painter is commissioned to do a painting. Have you ever heard of a such a painter requiring someone to stand by the work and count the number of people who view it then send off a check based on that count? Absurd, isn't it? Well, that's basically what the royalty system is. The only reason it doesn't sound absurd in the context of music is because that's how it's been done for a long while and everyone is accustomed to it. It is, in fact, equally absurd.

Likewise, photographers and videographers have no PROs that keep track of how many people see their images in print or on the web or on TV. They get paid up front then move on.

If painters and photographers and videographers can make a living by figuring out appropriate up-front fees without back-end royalties then so can we. The vast majority of businesses work that way, so it's not some unknown business model.

A world without PROs is not worse, it's just different and, in my estimation, highly likely. So start preparing now!

And, of course, I'm not against PROs. If it makes everyone else feel comfortable to do business that way then fine - I'll go along with it. But it doesn't matter to me - as I said, you can make money with them or without them.

And you can call me naive or you can refute my arguments. Better to do the latter...!

rgames


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## rJames (Jul 12, 2014)

The good news from Richard's scenario is that if there were no more royalties, then there won't be hobbyist composers flooding the market with music that they give away to multiple libraries in hopes of getting a writers royalty.

Unluckily, that would probably take a decade to shake out.

If you're not good enough to get a deal where you share in licenses, you'll be out of the business.

And that means that all of the new "music supervisor. com .net .tv etc" will be outta business.

Buyout libs will have no incentive (other than for the owner of the lib) Good luck finding free music in that scenario.


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## Daryl (Jul 12, 2014)

rgames @ Sat Jul 12 said:


> passenger57 @ Fri Jul 11 said:
> 
> 
> > It the PROs are out of the picture and there are no longer residuals, I'm out of business.
> ...


Unfortunately I have upwards of 200 pages on my quarterly PRS statements. are you honestly suggesting that all of those clients should have contacted my Publisher to negotiate a contract? That's really not practical. I have no problem with alternative business models, but yours is no solution for the majority of working professionals.

D


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## Guy Rowland (Jul 12, 2014)

rgames @ Sat Jul 12 said:


> Direct licensing used to be impractical because it was harder to manage the logistics - the PROs served that function. With the rise of the online world, though, I think that problem disappears, so direct licensing becomes a lot easier to do. So why do we need the PROs? If a production wants to use my music, they can contact me or my publisher and arrange a deal where there is no back end, so the up-front payment is higher. No PRO. No un-filed cue sheets. No blanket license. No unfair payouts. They arrange the deal directly with me or my publisher based on some standard use payout structure and it's done in 5 minutes.



Sigh. Here we go again. I'm not sure why you are so keen to dismantle the royalty system, or what evidence there is that it might happen. Unless I've totally misread that article, the reason Sony want to leave ASCAP / BMI is not to abandon royalties, but the exact opposite - to increase them:



> Pandora’s litigation with Ascap and BMI was prompted by the publishers’ attempts to change their relationship with the licensing agencies by making “partial withdrawals” of their rights. *Under this plan, Pandora would be forced to negotiate directly with publishers — and thus pay higher licensing fees* — while Ascap and BMI would continue to represent the same songs for other kinds of outlets, like radio and TV.



Aside from that, the idea that your proposal makes things easier is a fantasy. On a typical entertainment show, a cue sheet might have - oh I dunno - 30, 40 different publishers and composers - library music, commercial music and commissioned music. Are you seriously suggesting that the broadcasters now individually negotiate with every one of those composers / publishers before they broadcast?

Here's how the system currently works - a production gets permission (and pays if applicable) to use tracks which it can use in all the territories it will be sold to. In the case of the BBC and other major broadcasters, most of these are covered by a blanket agreement, so it's a snap. If a track is not covered, mostly it is discarded and replaced unless it is essential, in which case negotiations begin. A cue sheet is made up which is passed on to all the broadcasters and PROs, who automatically distribute based on the channel and timeslot. The reason its complicated is because although under the hood it IS complicated, it is actually incredibly easy to use for the broadcasters and productions. If it isn't easy to use, it doesn't get used.


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## Guy Rowland (Jul 12, 2014)

JohnG @ Sat Jul 12 said:


> it is bonkers to think that any broadcaster is going to negotiate with us as individuals.
> 
> If Sony and the other major libraries make a separate deal, it will severely hurt the ability of ASCAP and BMI to negotiate on behalf of the rest of us.
> 
> That will be bad.



Yes, I totally agree.

TBH, there's no point in debating Richard's bizarre "no more royalties" fantasy, it's not even being considered in the real world. What's on the table is exactly as John says, a two tier system of high royalties for the majors and low royalties for everyone else. I see its only being discussed for the likes of Pandora with radio, film and TV retaining the status quo, but it's easy to imagine that would spread. At the moment, Paul McCartney gets the same as I do, the only difference is there is rather more Paul McCartney being played out there than Guy Rowland (hard to believe I know, but true). This sort of deal would see the end of that.


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## Daryl (Jul 12, 2014)

Guy, I agree with what you say. The idea that the Royalty system is going way is a fantasy. That wouldn't just affect music, but all IP, and the big companies would never allow that.

However, the big problem, as I see it, is when using a severely flawed legal system, a company is allowed to exploit monopoly legislation that was never designed for this sort of thing. As artists we are entitled to say that someone is not allowed access to our music, if they don't want to pay what we consider to be a fair price, and no judge should be able to force us otherwise. Besides it's not only about ASCAP. US judges have no right to rule on music that "owned" governed by foreign collection agencies.

D


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## AC986 (Jul 12, 2014)

Guy Rowland @ Sat Jul 12 said:


> At the moment, Paul McCartney gets the same as I do, the only difference is there is rather more Paul McCartney being played out there than Guy Rowland (hard to believe I know, but true).



His ex wife gets more than most us get put together Guy, and she never gets played at all, so don't worry about it. :|


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## clarkus (Jul 12, 2014)

OK, I'll bite. Responding to ...

"Here's an example: a painter is commissioned to do a painting. Have you ever heard of a such a painter requiring someone to stand by the work and count the number of people who view it then send off a check based on that count? Absurd, isn't it? Well, that's basically what the royalty system is. The only reason it doesn't sound absurd in the context of music is because that's how it's been done for a long while and everyone is accustomed to it. It is, in fact, equally absurd."

A) We are not painters. We make music that is intended to be reproduced again & again, multiplying like rabbits from SoundCloud to Music Library to movie screen or television show to endless re-runs and (if we're lucky) viral videos. So, no, it is not absurd to have someone track use, as lord knows I couldn't do it if I wanted to.

B) Rich painters have agents and do fine. Poor painters have no-one and starve. Whereas there is a vast middle-class in the composing world, which we would like to preserve.

So this analogy is not really working for me. Sorry.


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## doctornine (Jul 12, 2014)

Daryl @ Sat Jul 12 said:


> rgames @ Sat Jul 12 said:
> 
> 
> > passenger57 @ Fri Jul 11 said:
> ...



+1 from me on that.


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## dinerdog (Jul 12, 2014)

clarkus - the one major problem with your comparison is that there is "usually" only one copy of the painting (if were typically talking about a high quality painting). It can usually only be seen where it physically exists. Music? Not so much.

The argument that artists used to only get paid by commission from richer patrons (and that we've just gotten used to royalties etc...) is useless really because of the evolution of technology today. To think that the "cream will rise to the top" or that artists should be supported as the were in Mozart's day is kind of meaningless in today's world.

rJames - I don't think the loss of royalties would shake out the hobbyist's either (not to any useful extent). They're also doing it because they "like" doing it. Many of them don't get much in the way of royalties (if at all) and would continue doing it on the off chance something will get used, same as now. IMHO.


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## clarkus (Jul 12, 2014)

dinerdog - If you go back & look at my post (or you can take my word for it), I am saying what you are saying. 

The painter / composer analogy was not mine. I was attempting to dismantle it. Which I think we have both now done. It lies in fragments, next to various & sundry specious arguments and straw men.


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## dinerdog (Jul 12, 2014)

Agreed!


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## milesito (Jul 12, 2014)

With or without PROs it seems like there will always be a middle man...meaning would you rather spend your time writing music, or tracking sales and negotiating back end deals? Maybe a new middle man will emerge over time w/o the PROs...at the end of the day, if the PROs disappear, it's not like we recuperate 100% of their cut, or even 1/2...it may be even less than that after we have to hire an agent or lawyer or someone to follow up on our best interests...and individually we can loose leverage as smaller time composers...I just don't see the value of removing the PROs, but I do think there is PLENTY of room for improvement ...Competition is a healthy thing...but I think there will definitely be other entities playing the role and taking some sort of cut...if they can do it more efficiently and accurately - more power to them.


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## rpaillot (Jul 12, 2014)

I really dont see that happening, at least not tomorrow ....


Removing pros would means rewriting past contracts and current contracts.


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## Ned Bouhalassa (Jul 12, 2014)

Oh Richard you're so predictable. Like the colour of the hair of the next Fox News female host.


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## wst3 (Jul 13, 2014)

Ned Bouhalassa @ Sat Jul 12 said:


> Oh Richard you're so predictable. Like the colour of the hair of the next Fox News female host.



Not sure I'd say predictable so much as consistent, he sticks to his guns. A new model is not impossible. I'm not sure direct is the right model, but something has to change.

But the real reason I am responding is I LOVE that last part! You are brilliant Ned!! I might have to steal it.


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## RiffWraith (Jul 13, 2014)

wst3 @ Mon Jul 14 said:


> But the real reason I am responding is I LOVE that last part! You are brilliant Ned!! I might have to steal it.



You are going to pay him royalties, right? :D


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## MichaelL (Jul 14, 2014)

wst3 @ Sun Jul 13 said:


> But the real reason I am responding is I LOVE that last part! You are brilliant Ned!! I might have to steal it.



Works on many levels. :lol:


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## Peter Alexander (Jul 14, 2014)

Refreshing - Ned watches Fox and is clearly paying attention...


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