Dutch Music Collection Society Loses Artist Royalties In The Stock Market
from the good-job,-guys dept
The various music collection societies keep insisting that they're just the important middlemen helping make sure artists get the royalties they're due. Except, for some reason, they keep getting caught not actually giving that money to artists, but hanging on to it themselves. Billboard reports that the Dutch collection society, Buma/Stemra, is happily telling people that revenue rose by 2% last year -- though, oddly, the Billboard report leaves out one rather interesting detail. Reader Marcel de Jong notes that Buma/Stemra invested a bunch of the money it collected for artists into the stock market and then lost a chunk of it, so it's paying artists less money than it collected for them. What's unclear is if Buma/Stemra would have paid out more if it had made money... and also why it's gambling on the stock market with money it supposedly collected for artists.
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Filed Under: collections societies, losses, money, royalties
Companies: buma/stemra
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Whiskey Tango Foxtrot
Oh, right. The landlord actually has some power over you.
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Why
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Re: Why
I wanna know when they're actually gonna get sued for it.
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Re: Why
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They are obliged at some point to try to make a reasonable amount on the money on hand.
Also, more income in would lower the cost of overhead to the musicians. If the current cost is 10% of income (example, I have no idea) and they make 10% on investments, it means that the artists would net 10% more as well. Neat, isn't it?
In the end, it would still be much more expensive for individual artists to go out and try to collect their money for multiple sources themselves.
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Re:
'Did nothing with it?' These aren't brokers, they're a collection agency. They're *supposed* to be trying to find the artists and give them money, not betting it on the market.
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Re: Re:
Since neither of these documents are presented here, it is a bit premature to start railing against it. Maybe railing is deserved. Then again, maybe it is not.
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Re:
Yeah, which is why they should have been giving it to the artists. I fail to see how an agency collecting money for artists should be doing anything else with the money they collect.
"They are obliged at some point to try to make a reasonable amount on the money on hand."
Why?
"Also, more income in would lower the cost of overhead to the musicians. If the current cost is 10% of income (example, I have no idea) and they make 10% on investments, it means that the artists would net 10% more as well. Neat, isn't it?"
No. Thanks to this agency's actions, they now get less. Losing 10% of your money to agents' fees is a little different than losing it because they decided to gamble with it before they gave it to you.
Imagine if your employer said to you "yeah, we promised a $1000 bonus payment to you this month but I lost half of it on the horses. Sorry.". Imagining what you could have gotten if he'd won would hardly compensate for the loss of the money that should have been yours, and I doubt you'd be happy about that.
All this does is highlight why an agency such as this should not be in business for profit.
"In the end, it would still be much more expensive for individual artists to go out and try to collect their money for multiple sources themselves."
Finally, you come up with something that's not astoundingly dumb. But that doesn't excuse the corrupt actions displayed here.
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Golden Rule
Those with the gold, make the rules. And those with enough money to pay off politicians are immune to prosecution until it hurts the politician more to ignore the injustice (ie. the public finds out and gets outraged).
Sad, but true.
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It's worse than that...
>$1000 bonus payment to you this month but I lost half of
>it on the horses. Sorry.". Imagining what you could have
>gotten if he'd won would hardly compensate for the loss
>of the money that should have been yours, and I doubt
>you'd be happy about that.
I suspect it's worse than that. I suspect that if they MAKE money, they keep it, but if they LOSE money, it comes out of the musicians' cut.
It's a fantastic scam... if you're not the musician.
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happened before
http://www.aboutdj.nl/nieuws/295-buma-stemra-wel-echt-zon-goede-organisatie.html
Dig around and bit and you'll notice a lot of fishy things about the dutch branch of the RIAA
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Re: Why
The crime isn't being committed between the parties of the RIAA/MPAA and its members, but rather between the RIAA/MPAA and the public.
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Try to do some research next time
1) Buma/Stemra receives money from licensing sound for bars, restaurant, hairdressers, television and radio stations, etc. This money is passed on through to the musicians, but because B/S has to pay its accountants, lawyers and other employees, not all of that money can be payed out. In other words, there are costs for administration.
2) Buma/Stemra (B/S) has been investing a portion of this money for years. In good times, they get some nice returns on this. These profits are used to pay the administrative costs, so artists can get as much of the money "owed" to them as possible. In 2007, dutch artists got 98.8% of the money owed to them, which is one of the highest rates in all of europe. If B/S would not invest, artists would have gotten a lot less.
3) It is a publicly known fact that B/S invests part of the received money. This isn't some scam, or some secret that has only now been brought to light, this is something they advertise on their very website. Everyone could have known this, and I asume each artist receiving money knows this too. It is most likely part of their contract with B/S.
4) In the last year, every major index has crashed. Some indices have lost more than half their original value. It doesn't matter how "safe" you invest, how little risk you take, everyone is going to loose money. All major companies that have money invested have lost lots, from pension funds to organisations like B/S.
5) B/S is organised in a way that it can't make any profit. It's not legaly possible. However, this also means it can't legally have large buffers. A loss as this one means there's less to pay the artists, no way around that. No matter how much they would like to pay the artist, there's simply no money.
6) Despite all of this, artists still get 90% of the money that's been collected. So it's a shame that they don't get all of it, but hey, that's life, that's the consequence of a system that in normal times has only advantages.
So despite all your righteous talk about money collected "for the artist", and "What's unclear is", everyone who's involved in this (notably the artists themselves) already knows all about this system. So what's really unclear is not why they invested the money, because B/S explains this in some detail on their website. What's unclear is why you, Mike, didn't try to do some research before reposting and feeding this hate-breeding nonsense.
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Re: Try to do some research next time
At least we now know that the musicians who contracted with this parasitic and morally bankrupt company knew full well what they were getting into and deserve to be shafted.
The scum always floats to the top.
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Re: Try to do some research next time
Thanks for clarifying some of the details (though, you don't have to be rude about it). We expect people to add additional details in the comments (which is why we leave them open). This is a conversation, not a journalism project.
However, I still don't see how the points you raise make this any better or more reasonable. It just highlights the silliness of having a collections agency in the first place for all of this.
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Re: Try to do some research next time
And thus not lost any money during the market crash.
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Re: Try to do some research next time
...but probably more than they got this year when the investments went sour. It's still unclear why an agency in the business of collecting money for artists is OK to gamble it in the hope of making further income.
Whichever way you cut it, you're still looking at an agency that's making risky investments with other people's money. For an industry that routinely blames any losses on other peoples' activities. Maybe the Dutch are aware of this already, but to those of us outside, it seems astounding that risky stock market moves are being taken with what's essentially collected payroll. Major companies have collapsed under similar moves with pensions, etc.
"In 2007, dutch artists got 98.8% of the money owed to them, which is one of the highest rates in all of europe. If B/S would not invest, artists would have gotten a lot less."
How long has this been happening for? If the stock gambling has only been happening during the last decade, during a period of constant growth, it's hardly a sustainable basis for the future.
"Despite all of this, artists still get 90% of the money that's been collected."
Great. Now, wouldn't it be a good idea to re-evaluate the situation? Maybe imposing a standard 3-5% fee on collection would stabilise the process and encourage a reduction in operating costs as opposed to hoping the investments pays enough.
"3) It is a publicly known fact that B/S invests part of the received money. This isn't some scam, or some secret that has only now been brought to light, this is something they advertise on their very website. Everyone could have known this, and I asume each artist receiving money knows this too. It is most likely part of their contract with B/S."
What other options do Dutch artists have? You seem to be implying that there's some other agency they can use if the B/S contract is not acceptable to them. If not, they're the only game in town and it doesn't matter whether the terms are acceptable to the artist. If the terms are "you sign with us for a risky venture, or you get a guaranteed 0%", artists will have to sign, won't they? What are their choices?
From the B/S website:
"Buma/Stemra is the only copyright organisation for music copyright in the Netherlands."
So, yeah.
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Time-Value of Money
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Re: Re: Re:
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Re: Time-Value of Money
I, for one, would be EXTREMELY interested to get the details on this. For instance, do they reconcile every month (like most businesses do, on a net-30 schedule)? Every quarter? Every year? Also, what is their methodology for seeking out artists to pay them? As I noted elsewhere, SoundExchange couldn't seem to find Uncle Kracker for payment. Uncle Kracker.....
"However, between the moment they receive the money and the moment they distribute it, it would be somewhat silly to stick it in a checking account at 0.04% wouldn't it?"
....Why? The yield on a checking/savings account isn't particularly good, but on the other hand it CAN'T FUCKING GO DOWN, YOU TWAT! Ahem, sorry. Again, this is NOT they're money, by their own admission. What possible justification is there for using SOMEONE ELSE'S money in a way that could potentiall devalue it?
"It's not gambling, it's just logical."
Ok, seriously, what country are you from? It CAN'T be America. The stock market is a gamble, end of story. It can be a stupid gamble, a complete gamble, an educated gamble, or even a reasonable gamble, but it is ALWAYS a gamble.
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