Billboard Doesn’t Understand How Music Royalties Are Paid

You kind of expect an industry publication to know what they’re talking about. Billboard is the trade journal for the music industry in the US, and they published an article yesterday entitled Apple Updates Music Data, Which Should Benefit Classical Composers and Performers. It’s a shame that this article is just wrong.

Let’s look at what Apple did. As I explain in this article and this one, recent updates to iOS and iTunes have improved the way some metadata (composers and performers) is displayed when browsing Apple Music.

Apple has started using the Grouping tag, which has been available in the iTunes Store and in iTunes for some time, to better display metadata about work names, composers, and performers.

The Billboard author seems to think that because this metadata is now visible, payments will increase to composers and performers.

As previously reported, artists and rights holders can’t be properly paid if digital services and performing rights organizations don’t have full, accurate metadata.

True, but there is no correlation between the above statement and the change to the metadata that Apple is displaying to users. The belief that there could be a correlation between the two suggests that the author of the article has a very limited understanding of metadata in general, and royalty payments in particular.

Apple – and Spotify, Pandora, Rhapsody, and others – have all the metadata they need to pay publishing rights (i.e., the share that goes to songwriters and composers). Just because the user can now see this doesn’t mean that something magically changed, and that composers will start buying Ferraris. With all the complaints about payments by streaming music services, does this author really think it’s possible that songwriters and composers haven’t been paid in the past? Most popular singers don’t write their own songs; if the songwriters hadn’t been paid because their names don’t show up in Spotify or Apple Music, they would have certainly filed massive lawsuits.

In addition, as one classical music label executive told me, “there is no necessary correlation between the composer and the rights holder. Indeed there is more often than not no correlation.” For example, when Michael Jackson was alive, he purchased the publishing rights to songs by The Beatles. His name never appeared as songwriter on any records, yet he pocketed the cash. With classical music, it’s the same. Obviously, Beethoven, Bach, and Brahms are dead, and their music is in the public domain. But for music that is still under copyright, the actual composer may have sold the rights.

It’s worth noting that in the US record labels pay the publishing rights for downloads (and physical sales), whereas streaming services pay publishing rights for music they stream (as well as performance rights, which they pay to record labels). In the rest of the world, download stores and streaming services pay both.

8 thoughts on “Billboard Doesn’t Understand How Music Royalties Are Paid

  1. Zero argument with your points here. In fact, they are dead-on. But I do want to add one note to a tangent you went off on:

    “In addition, as one classical music label executive told me, “there is no necessary correlation between the composer and the rights holder. Indeed there is more often than not no correlation.”

    This is true, but the amount the composing rights’ holder gets paid has a very direct effect on how much a composer can earn for selling away their rights, either after the fact, or before the fact during the original contract.

    This basic principle applies to *all* situations where the rights’ holder differs from the artist.

    And it’s always why I’ve had no patience with folks who steal content and justify themselves by saying that they’re ripping off the greedy labels, not the artist. If you want to steal content, steal content. But don’t make up false justifications to assuage your conscience.

    • Actually, no. I corresponded with a few young composers a couple of months back, asking how they felt about streaming royalties. They pretty much ignore that stuff – both streaming and sales – because most of their income derives from commissions and grants. (And some may teach as well.)

      I do agree, of course, about your final argument.

  2. Zero argument with your points here. In fact, they are dead-on. But I do want to add one note to a tangent you went off on:

    “In addition, as one classical music label executive told me, “there is no necessary correlation between the composer and the rights holder. Indeed there is more often than not no correlation.”

    This is true, but the amount the composing rights’ holder gets paid has a very direct effect on how much a composer can earn for selling away their rights, either after the fact, or before the fact during the original contract.

    This basic principle applies to *all* situations where the rights’ holder differs from the artist.

    And it’s always why I’ve had no patience with folks who steal content and justify themselves by saying that they’re ripping off the greedy labels, not the artist. If you want to steal content, steal content. But don’t make up false justifications to assuage your conscience.

    • Actually, no. I corresponded with a few young composers a couple of months back, asking how they felt about streaming royalties. They pretty much ignore that stuff – both streaming and sales – because most of their income derives from commissions and grants. (And some may teach as well.)

      I do agree, of course, about your final argument.

  3. “most of their income derives from commissions and grants. (And some may teach as well.)”

    Fair ’nuff. And makes perfect sense. I strongly suspect there are numerous other ‘museum-ish’ creative areas where the exact same rule holds. But in the more commercially viable popular arts, my basic point still operates.

  4. “most of their income derives from commissions and grants. (And some may teach as well.)”

    Fair ’nuff. And makes perfect sense. I strongly suspect there are numerous other ‘museum-ish’ creative areas where the exact same rule holds. But in the more commercially viable popular arts, my basic point still operates.

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