EMI Doesn't Pay Royalties, Or It Does, But To The Wrong People, Or It Doesn't, Or Maybe It Does...

from the ah,-major-labels dept

Wed, Aug 24th 2011 7:58pm — Mike Masnick

A few years ago, we wrote about Tim Quirk's struggle to get Warner Music to actually provide any sort of accounting for the money earned by his band, Too Much Joy. There have been a few similar stories over the years, and what you begin to realize is that it appears the major labels basically don't even track this stuff. They seem to assume most bands just won't recoup, and so they never have to provide any accounting to them at all (and just keep the money for themselves). From what I've heard, if a band is truly successful and keeps bugging the label, eventually they'll put together something approximating an accounting of what's been earned. Who knows how accurate these statements are.

Of course, sometimes these stories go from just wacky to downright insane. Hans Ridder points us to the story of Bill Nelson, of the band Be-Bop Deluxe, and the rather ridiculous situation he went through over the years. The actual story is about a decade old, but got some renewed attention earlier this year when a bunch of blogs reposted it. We just came across it when Ridder sent it in, and wanted to post it here because it really shows how these labels treat some of their artists -- never giving any actual accounting, always slow to reply with any details, always denying that anything's been recouped. The fact that they then started changing their story and claimed they actually gave the money to the wrong people -- then denied that, then again said that was the case later -- is only an added dimension to the insanity.

The story began with Nelson asking EMI repeatedly for an accounting of what had been earned for Be-Bop Deluxe, and either getting no answer at all or (after asking many times over) being told that the band had "not recouped." There was never any evidence presented for this. The label kept reissuing works, and even contacted him to work on some of them. In one case, they told him that if he helped work on a "best of" offering, that would tip the account over, and he'd start receiving royalties. Of course, that never happened. Yet EMI came back again to ask him to work on a box set, and he asked again. And that's when things got bizarre:

Over a period of two years, a very strange story emerged. The first communication the lawyers received from EMI said that they HAD, in fact, been paying royalties...to 'the band.' My response to the lawyers was..., "Ask them which band," as I certainly had not received any royalty payments from the record company. After a long time and further prompting from the lawyers, EMI said that they actually had been making royalty payments to Nick Dew, Ian Parkin and Rob Bryan. The amazing thing about this is that these three people were NOT on any of the Be Bop Deluxe albums except the very first one, 'Axe Victim.' All the other albums were recorded with different musicians, (Charlie Tumahai, Simon Fox and Andy Clarke), under a different contractual set-up. It seemed that the first line-up, who only ever recorded the ONE album, had been receiving royalty payments from EMI for ALL Be Bop recordings, including re-issues... Recordings in which they had taken NO part, either as performers or otherwise. The really damning thing about this is that none of the original members of the band ever spoke up about it and said, "hang on a minute, I'm getting money here for music I didn't even make!" (It would be evident from the royalty statements they received that the payments were for various albums from the Be Bop catalogue, and not just the 'Axe Victim' album.) Record company cock-up aside, what does this say about people you once regarded as your friends?

Anyway, after I had explained to the lawyers, via Richard, that these people had not earned royalties on anything except the band's first album, letters were then sent to EMI requesting an explanation. Again, some months went by before any reply. I seem to remember that there was some muttering about EMI not knowing where to contact me to send royalties, (and me the only member of the original line up to have continued with a professional and public career in music), but, at a later date, they seemed to change their story and said that they hadn't paid the other members after all. Actually, they said, EMI were only obliged to pay a company called 'Be Bop Deluxe Ltd,' which had been set up by Be Bop's manager Mike Dolan and which no longer existed. As the company no longer existed, there was, EMI claimed, no legal requirement for them to pay any royalties generated by the product. (Despite earlier claiming to have paid money to the band's first line-up.)

Whilst trying to decide what to do next, I suggested that the lawyers should ask EMI to at least let me know how much my 'lost' royalty figures would have been. This would help me to decide whether it was worth pursuing EMI further. The legal costs are, of course, prohibitive, very much so for me. A major company like EMI can easily afford to spin things out until any opponent breaks under the financial strain. I, as they well know, can't.

Again, time passed, further reminders were sent to EMI and they finally replied. It seems that they had now gone back to their first story, that they HAD made payments but only to the three other members of the 'Axe Victim' line-up, excluding myself. A circular argument? Since then, further communications have been made between my side and theirs. These communications have always been marked by a painfully slow response from EMI. Spinning it out as long as possible, hoping that it might go away, perhaps? Eventually, an offer came... EMI would pay me any future royalties generated by Be Bop Deluxe product, provided, one suspects, that I didn't cause any more fuss. Basically, they said that they were under no legal obligation to pay me anything at all, (due to the 'Be Bop Deluxe Ltd' company's demise), although they do admit to paying royalties to the wrong members of the band. An administration mistake, apparently. Does that make it OK then?

In the end, his lawyers basically told him there was nothing he could do, except potentially sue the original members of the band, and that going any further with pretty much any strategy would be horrifically expensive. In the meantime, we're still supposed to believe that record labels have the best interests of artists at heart? Why does anyone believe this myth?

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: bill nelson, music, record labels, recording industry
Companies: emi

79 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Zot-Sindi, 24 Aug 2011 @ 8:10pm

but... but... we're doing it for the artists! it's for their own good!*

*cause we said so
[ link to this | view in thread ]
MrWilson, 24 Aug 2011 @ 8:13pm

so I signed on to the record company,
they said they're gonna give me lot's of money,
if I play what they want you to hear...

- Sell Out by Reel Big Fish
[ link to this | view in thread ]
Jay (profile), 24 Aug 2011 @ 8:15pm

So which one hurts worse...?
So which is worse and causing more economic mischief?

Is downloading one song that a person can get for free through Pirate Bay really hurting the artists?

Or is allowing any person, place, or thing (we call them evil labels) holding all of the cards to your finances really going to make you, the artist more money? Does streaming a movie over the internet really constitute a crime? Or does the fact that you want to keep up with your shows at the same time as friends in different regions mean you don't care about that particular consequence? Would you like to play games at your own convenience on the system of your choice? Or would you like to have a bloated system which watches you while you sleep?

Reading this story, it's hard to take any copyright maximalist seriously. These are the rights that copyright allow? Criminalize your customers while your record label steals from you?

I'd rather make my own channel and content, produce material, and make or break with my own initiative any day.
[ link to this | view in thread ]
Anonymous Coward, 24 Aug 2011 @ 8:23pm

And this is exactly why any artist dumb enough to believe the line "we will do all the administrative tasks for you" deserves to get robbed blind.

The really strange part is that apparently this irresponsible accounting practices only happen in the US.

Everybody else in the world seems to have got the memo and put up accounting servers everywhere.

Now, why exactly is the American government allowing those things to happen under their noses when if it were anybody else they would be in jail for fraud and tax evasion?

You see even if EMI is paying taxes by not paying correctly those artists the government can't double dip and tax the artists again for earnings, that right there is lost revenues by the government.
[ link to this | view in thread ]
Transbot9, 24 Aug 2011 @ 8:25pm

Really?
Wow. Just...wow.

People really need to read the fine print in any contract before signing to prevent this sort of thing. Best way to protect yourself.
[ link to this | view in thread ]
Anonymous Coward, 24 Aug 2011 @ 8:42pm

As always, if you want to go looking for an exceptional case, you can find one.

First off, the guy signed a contract without knowing who was getting paid? He didn't know that the contract was paying "be Bop Deluxe"? Why would he have signed a contract without knowing the very basics?

Seems to me to be more a case of someone who signed a contract blindly, ignored the details, and ignored his rights for a long period of time, and all of a sudden wakes up wondering why he wasn't paid. How freaking odd is that?
[ link to this | view in thread ]
Anonymous Coward, 24 Aug 2011 @ 8:47pm

Re:
Why are you making up facts?

The story took place over 2 years. That's not the time that it took for him to notice, that's the time it took for the entire discussion and discovery to take place.

EMI screwed up, and refuse to do anything about it. End of story.
[ link to this | view in thread ]
Anonymous Coward, 24 Aug 2011 @ 8:52pm

Re: Re:
Umm, the "story" took place over 2 years, the music was many moons ago. The contract has been around for probably 10+ years, and he only now notices (or was told) who was actually getting paid?

Seems like he took a long time off working on Rhapsody or something, rather than worrying about his royalties. Make me think he is intentionally trying to drag the music business through the mud to make his service seem somehow better.
[ link to this | view in thread ]
teka, 24 Aug 2011 @ 9:03pm

Re: Re: Re:
still working on the reading comprehension there friend?

Lets try look at what Mike said.. hmm..

The story begins with Nelson asking EMI repeatedly for an accounting of what has been earned for Be-Bop Deluxe, and either getting no answer at all or (after asking many times over) being told that the band had "not recouped." There was never any evidence presented for this. The label kept reissuing works, and even contacted him to work on some of them. In one case, they told him that if he helped work on a "best of" offering, that would tip the account over, and he'd start receiving royalties. Of course, that never happened. Yet EMI came back again to ask him to work on a box set, and he asked again. And that's when things got bizarre:

In other words, he had been told, again and again since day one, that he would be getting paid once the label "recouped" (which is code for "paying a fraction of the income to themselves against the payment made in the past while not letting anyone see their books")

And then he asked some more, again and again. Then EMI changed their tune. The band Had recouped and they had been paying everyone else who had been involved in the first record (and none since?) and not paying him. Wait, they mean, they had been paying a defunct company. Or they had been paying the other people And the defunct company, but not the person who still existed and worked with them. And then they claim they don't have to pay him anyhow, So There!

In other words, we have an example of how "We Are Doing This For The Artists!!!!!!" can be a lie.
[ link to this | view in thread ]
Anonymous Coward, 24 Aug 2011 @ 9:04pm

Re: Re: Re: Re:
Yet, the company "be bop deluxe" apparently isn't in business anymore. Why would you let a company die if it's due a bunch of money?

Seems like he just didn't care, and then suddenly cared when it gets him some publicity.
[ link to this | view in thread ]
Jay (profile), 24 Aug 2011 @ 9:08pm

Re: Re: Re:
Run that by me again? The part where he's been busy making music, talking to lawyers and trying to get an answer to his very simple questions about royalties?

The fact that this story about the problems with the record labels has been told by Lady Gaga, Eminem, a ton of garage bands, and discussed at least for a number of years by a number of people?

The fact that EMI, through the RIAA, is looking to screw you out of your money, by limiting your choices to what they want and what make them the most money?

What exactly is it about the record labels that you seem to want to defend so much, that when an artist's plight is recognized, you look for any way to defend their behavior?
[ link to this | view in thread ]
Manabi (profile), 24 Aug 2011 @ 9:32pm

Re: Really?
Like that would help here? The contact says he's supposed to receive royalties once the band recouped the advance. But EMI

1. Won't actually provide an accounting (and never does through the entire process);
2. Then claims they paid royalties but to the wrong people;
3. Wait, maybe they didn't pay those other people after all and they don't have to pay anyone;
4. On second thought, we did pay them to the wrong people;
5. Since you won't drop the matter like we were hoping, how about we'll pay you royalties going forward if you keep your mouth shut and go away. Oh, and the only way you can fight this is a long drawn-out legal battle that we can afford and you can't. Your choice.
What part of reading the contract would have helped? EMI's not acting ethically at all. They're equivocating, possibly flat-out lying, and dragging things on forever and ever hoping he'll go away and they won't have to pay what they legally owe him. Once he backs them into a corner by refusing to just give up in disgust, they finally agree to pay him royalties from that point on, but he's just out of luck for the past ones they may or may not have paid to the wrong people. This is a recording company bullying its musicians simply because it can get away with it, not a contractual issue.
[ link to this | view in thread ]
Manabi (profile), 24 Aug 2011 @ 9:34pm

Re: Re: Re: Re: Re:
Taking two years of his life to try to get an answer isn't "suddenly car[ing] when it gets him some publicity". Your reading comprehension (and reality comprehension) is pretty bad.
[ link to this | view in thread ]
teka, 24 Aug 2011 @ 9:37pm

Re: Re: Re: Re: Re:
No, that part is wrong too. I see you are still not read..

ah.. i see.
You are not really interested in actually knowing anything, right? So any reasonable response i bring out will receive a shamefully foolish reply.

In that case, He suddenly started to care because the Illuminati are leaning on him to pay off the hit he arranged. You see, he assigned all royalty money in exchange for a time traveling assassin to kill Lincoln and implicate John Wilkes Booth but was lax in making sure the payments were actually made. So now he has to get that money or he will Never Be Born! Bum bum bummmmm!
[ link to this | view in thread ]
Anonymous Coward, 24 Aug 2011 @ 9:44pm

Re:
It's sad how far you freetards will go to defend depriving artists of their royalties.

Oh, wait.
[ link to this | view in thread ]
David Muir (profile), 24 Aug 2011 @ 10:12pm

Edge Case?
Whether this happens infrequently or not, it is shameful. There have been many more examples of this kind of thing: outright thievery perpetrated on average citizens by corporations. However, it is particularly bad when it is done by a corporation in an industry that:
a) claims to need government support to continue to exist
b) claims to be wholly concerned with the artists' rights and happiness
c) vigorously pursues, through legal and quasi-legal means, their "share of the pie" -- including seeking multi-million dollar damage claims from copyright infringers

It is not really that surprising. Their accountants are too busy counting up how much damage one pirated song is doing -- they have no time to see if a measly artist has hit the "recoup" level yet.
[ link to this | view in thread ]
Pixelation, 24 Aug 2011 @ 10:13pm

Can artists get together and create a class action lawsuit? If the accounting is as shady as it seems perhaps a judge might drop the hammer?
[ link to this | view in thread ]
Just John (profile), 24 Aug 2011 @ 11:07pm

My wife wants to become an artist
I am seriously beginning to question how I want to approach this issue.

See, my wife is trying to become a singer, and is still in the process of trying to prove her worth to the company involved.

My problem is, the more I read, the more I begin to think that a record deal for her might actually be one of the worst decisions she could make (even with me, who is familiar with contracts, since that is part of my normal job, and a lawyer, which if she gets a contract, I will hire to look over it in full for us, no matter the costs, so I will not have to worry about this kind of BS).

I have started to think on other ways of getting her known and out there, including going via youtube, youku (Chinese version of Youtube, since we live here and she will be singing Chinese language songs), tudou (Similar to youku).

I am worried more about exposure, since we know how good record labels push their artists, but it is harder when you don't have the money on your side to push it.

So, basically, here is what I am wondering:
1. It seems that if you use a record company, you have to go over every detail of contracts with a fine tooth comb
2. Even if you go over the details, they may still find other ways to not pay you (not responding to challenges, finding other clauses that will prevent payments, etc)
3. Exposure is difficult in the main consumer arenas without the big money that the labels have
4. How would one go about self publishing music content without the money and marketing to back it up?

Suggestions would be wonderful, and given that I am immersed in the new technology daily, I understand it's use, but I am not as good at figuring out the strategy.
[ link to this | view in thread ]
mike allen (profile), 24 Aug 2011 @ 11:21pm

well if a class action suit is to be done all artists on every label (including independents) will have to sue every label.
could be fun to watch.
[ link to this | view in thread ]
mike allen (profile), 24 Aug 2011 @ 11:25pm

Re: My wife wants to become an artist
John seriously a deal with a lable is really not a good idea go the you tube route if you eant or talk to independent artists if you want some contacts their contact me on FB.
[ link to this | view in thread ]
The eejit (profile), 24 Aug 2011 @ 11:56pm

Re:
Dude, in any other non-Pharma industry, this would be a RICO case, due to the fraudulent accounting and constant refusal to pay the right person.
[ link to this | view in thread ]
The eejit (profile), 24 Aug 2011 @ 11:57pm

Re: My wife wants to become an artist
Kickstarter, Soundcloud and Jamendo are far better places top start.
[ link to this | view in thread ]
Jay (profile), 24 Aug 2011 @ 11:59pm

Re: Re: My wife wants to become an artist
Go the Youtube, Soundcloud, Kickstarter, Amazon route.

Don't sell your copyrights. Don't get into any 360 deals and only use the labels for what they're good for: distribution. Don't use their advertising, don't use their outdated ways of thinking. Record your shows, put them on Youtube, open up revenue sharing, maintain a consistent online presence and slowly but surely, build up your fanbase. It may take a few months, it may take a few years. But just keep working at it.
[ link to this | view in thread ]
PaulT (profile), 25 Aug 2011 @ 12:38am

Re:
"if you want to go looking for an exceptional case, you can find one."

There seems to be a lot of "exceptional cases" over the years, don't there?

"He didn't know that the contract was paying "be Bop Deluxe"?"

Reading comprehension always seems to fail you when the facts are inconvenient, don't they. He knew full well that "Be Bop Deluxe" would get paid. What he didn't expect is that people who were no longer part of that band would be getting 100% of the royalties for albums they were not involved with.

Should Dave Mustaine be getting royalties instead of Jason Newstead for Metallica's Black Album because he was an original band member? Of course not, why do you support it here?

"ignored his rights for a long period of time"

Once again, ignoring plain facts when they're inconvenient. He attempted on numerous occasions to find out why he wasn't being paid royalties he was entitled to. Then he spent over 2 years fighting to try and get a straight answer, during which time he was hiring lawyers at his own expense. He didn't "suddenly wake up one day", he went through increasingly difficult and

Besides, now we get to the core of your usual anti-artist, anti-consumer, pro-corporate response - it doesn't matter who's affected so long as the corporation can get away with it.
[ link to this | view in thread ]
PaulT (profile), 25 Aug 2011 @ 12:41am

Re: Re: Re:
"and he only now notices (or was told) who was actually getting paid?"

Again, reading comprehension disappears when inconvenient for you:

"The actual story is about a decade old, but got some renewed attention earlier this year when a bunch of blogs reposted it."
[ link to this | view in thread ]
Richard (profile), 25 Aug 2011 @ 12:48am

Re: Re: Re: Re: Re:
Even if all you say is correct EMI has no excuse.

Sticking to the letter of the law rather than what is morally right is not acceptable.

Persisting in this line for several years more or less proves that this is not an exceptional case. (If it was then surely EMI would have found it cheaper to pay the guy to go away at an earlier stage.) Seems to me that their behaviour is only explanable by the desire not to set a precent - and that means that this is NOT an exceptional case.
[ link to this | view in thread ]
Karl (profile), 25 Aug 2011 @ 1:08am

Re: Really?
People really need to read the fine print in any contract before signing to prevent this sort of thing.

Under traditional label signings, you (the artist) sign a "deal memo" before contract negotiations even begin. A deal memo basically says "we haven't got a contract yet, but we will, and until we do, you can't go anywhere else."

So, if you don't like your contract, too bad. Your choice is to sign, or not release recordings at all. The only way you'll gain any concessions is if the label isn't willing to wait for you to cave - a pretty unlikely scenario.

Thank goodness that's changing.
[ link to this | view in thread ]
anonymous, 25 Aug 2011 @ 1:19am

i would think that the only people that believe this type of garbage are the record labels themselves and the politicians that are 'encouraged' to go along with what they say. artists are ripped off continuously by the 'accounting methods' used so that only the labels get paid. and all done under the umbrella of 'we are protecting the artists interests'. what absolute bollocks!
[ link to this | view in thread ]
Karl (profile), 25 Aug 2011 @ 2:35am

Re: My wife wants to become an artist
My advice, from (limited) firsthand experience, and the experience of some of my (more successful) musician friends...

See, my wife is trying to become a singer, and is still in the process of trying to prove her worth to the company involved.

This is actually tricky to answer, because if there's a company involved, she already may be limited in what her options are. Especially if she signed anything at all - doesn't have to be an actual contract, just a "deal memo" from an A&R rep will do it. If so, then you should have already hired a lawyer.

If not, then I'd suggest she shift her priorities. If she's trying to become a featured artist (e.g. a pop singer), then it's not the company that she needs to prove her worth to. It's the public.

On the other hand, if all she wants to do is sing for a living, then it would be a good idea to join a musician's union. She would do things like singing backup on commercials or other peoples' albums. This kind of work is work-for-hire, and she would get paid scale rates set by the union.

I don't know what the story is in China, though. You might want to contact the Chinese Musicians' Association for advice.

I have started to think on other ways of getting her known and out there, including going via youtube, youku (Chinese version of Youtube, since we live here and she will be singing Chinese language songs), tudou (Similar to youku).

Always keep in mind that she will have to do this no matter what. The kind of promotion that labels are good at is the traditional kind: radio, mainstream TV, etc. In fact, that's really the only reason to sign with a label in this day and age - if you don't, these promotional venues are closed to you. (It's not the paycheck, that's for sure.)

But labels (even most indies) are simply not very good at promotion on the internet, especially through social media, and that's really how you end up getting a following these days.

And how much a label promotes her, is entirely up to them. If they don't feel your wife's music is going to sell at least a million records, they might not even promote it at all.

Besides - label or not, it can't hurt. It's not like she'll wake up someday and say, "Oh, I wish I would have promoted myself less!"

One thing to note: I'm American, as is this site, so what we're talking about here applies to American recording contracts. The general outlines are pretty standard worldwide, but the details will be different - most especially in China, since their copyright laws are very different that America's. If you decide to go the indie route, I'm sure there are a lot of differences in the types of business opportunites as well.

1. It seems that if you use a record company, you have to go over every detail of contracts with a fine tooth comb
2. Even if you go over the details, they may still find other ways to not pay you (not responding to challenges, finding other clauses that will prevent payments, etc)
3. Exposure is difficult in the main consumer arenas without the big money that the labels have
4. How would one go about self publishing music content without the money and marketing to back it up?

That pretty much sums it up.

As for #4, I'd have a gander at the Case Studies section of this website. Here are some more links you both should check out:
Tunecore Blog
New Music Strategies eBook
Music Biz Acadamy articles
IndieGuide.com

Hope that helps.
[ link to this | view in thread ]
That Anonymous Coward (profile), 25 Aug 2011 @ 2:54am

Re:
like when they sued them in Canada for pirating artists music (used without permission and never paid for) and the math showed them on the hook for around 6 billion and somehow that got settled for 50 millionish?
[ link to this | view in thread ]
alex (profile), 25 Aug 2011 @ 3:41am

Nice article. Very interesting. But...
One thing that really bothers me though is saying that it's a myth that record labels have the best interests of artists at heart. Shall we also say that journalists are unscrupulous fiends who will hack into phones to get a story?

EMI is not a typical record label. They are one of the 4 majors and the way they do business should not tarnish the thousands of independent labels' business ethics.

Sorry to rant but I read that a lot and it bugs me.
[ link to this | view in thread ]
Michael, 25 Aug 2011 @ 3:42am

Re:
Yeah, because a guy fronting a band, writing and recording albums and touring to support them (a life consuming undertaking) has time to fly out and sit down with the record company and discuss these things. He made contact and responses took months. You are entirely spinning your little comments to make out musicians to be lazy gits.
[ link to this | view in thread ]
Anonymous Coward, 25 Aug 2011 @ 3:51am

Re:
So...

Exhibit A:

Artist is screwed by labels (the heroes of the artistic world*).

Proper reaction: HA HA HA! What a fool! He should've read the contract! I spit in his general direction!

Exhibit B:

Music piracy (you know, fans sharing music, making it more widely available and appreciated).

Proper reaction: Those damned THIEVES!!!

Is that about right?

*Because we all know art is just movies, video games and music. But mostly music. The other ones are just there to feed off the music industry...damned leeches...
[ link to this | view in thread ]
Richard (profile), 25 Aug 2011 @ 4:10am

Re: Re: Re: Re: Re: Re:
not to set a precedent
[ link to this | view in thread ]
Anonymous Coward, 25 Aug 2011 @ 5:02am

Re: My wife wants to become an artist
Stay as far as possible away from record companies as you possibly can.

They do not exist to help you.

They do not exist to promote music.

They do not exist to enrich culture.

They exist to stuff money into the already-bulging wallets of their greedy executives. That is their ONLY purpose.

They are not the friends of musicians: they are the enemy. Treat them as such at all times.
[ link to this | view in thread ]
abc gum, 25 Aug 2011 @ 5:15am

Re:
"And this is exactly why any artist dumb enough to believe the line "we will do all the administrative tasks for you" deserves to get robbed blind."

Although I'm sure you were typing in jest .... this sort of thinking is just plain wrong, for many reasons. I do not feel it is necessary to list them.
[ link to this | view in thread ]
Chronno S. Trigger (profile), 25 Aug 2011 @ 5:31am

Re: Re:
While it is still wrong, AC does have a small point. By this time, anyone who signs up for a major label should know that they're going to get boned. Only a little bit of research will show what the RIAA is into. Hell, a simple Google search of "RIAA" will show it. And seriously, who's dumb enough to let money change hands without at least a little research.
[ link to this | view in thread ]
Transbot9, 25 Aug 2011 @ 6:34am

Re: Re: Really?
A Deal Memo, if legally enforcible, is then a contract - and if you don't like the terms, don't sign. At least today, going the indie route is cheaper than ever.
[ link to this | view in thread ]
Anonymous Coward, 25 Aug 2011 @ 6:50am

Re: Re:
Who should and should not get paid is something that he should have stayed on top of on a regular basis. Not years and years later.

He may have known about Be Bop Deluxe, but apparently didn't know enough to communicate with the company or to make sure it stayed alive.

He spent 2 years fighting 10 years after the fact, it seems. A little late, don't you think?
[ link to this | view in thread ]
Transbot9, 25 Aug 2011 @ 6:50am

Re: Re: Really?
People get bone because they agree to a contract with vague clauses and little to no protections for themselves. These companies maneuver hopeful musicians through the temptation of riches and outright intimidation. Make it big and we'll pay you, if you can prove that you are making it big.

A better contract makes it harder for them to weasel out of, and it makes it harder for them to draw out the legal battle. Heck, M.C. Hammer refused his first contract because he was making more money selling media out of his car (his financial downfall was because he over-spent his fortune followed by a drop in popularity).

Is EMI unethical? Yes. Is this probably the result of poor account management? Yes. Are they stonewalling? Of course.

All I am saying, is that the situation is preventable in the first place.
[ link to this | view in thread ]
pjcamp (profile), 25 Aug 2011 @ 6:57am

class
Isn't this what class action lawsuits are for?
[ link to this | view in thread ]
The Logician (profile), 25 Aug 2011 @ 7:14am

Re: Re: Re: Really?
It does not good, Transbot, when the record label (in this case, EMI) does not honor the terms of the contract at all. In that case, it does not matter what the contract says or how it is phrased. If the label refuses to act according to it, as EMI did here, then they are at fault, and they alone. It is not about contract wording but rather unscrupulous companies who have no interest in abiding by any agreements that do not excessively favor them in every way.
[ link to this | view in thread ]
Onnala (profile), 25 Aug 2011 @ 7:22am

New music and back catalogs.
One of the things that I have seen about music is that many of the new bands I know of are not using the big labels. In recent years, take the last ten or so, the number of small start up music labels has actually grown.

It's those small labels that are signing new bands and putting out their 'first' studio album and such. At least that is the way it is working in Portland, OR and Seattle, WA.

What I have also seen is bands that are working with a small label and do really well do sometimes sign with a big label. However by then they have a full time lawyer, are after selling in Wal-Mart, and can cut a much better deal as they don't need the 'upfront studio costs' that new bands need.

So for the big labels there are some extra pressure and a new reality. They are not making the same kind of money off bands they are signing today as they were thirty years ago.

It's why I have suspected for a long time that the major labels are mostly making money off their back catalogs.
[ link to this | view in thread ]
Anonymous Coward, 25 Aug 2011 @ 7:55am

Re: Re: Re: Re: Really?
Technically, if it's true that they contracted to pay the Ltd, and that Ltd no longer exists, how are they not honoring the contract as written?
[ link to this | view in thread ]
Jesse Townley (profile), 25 Aug 2011 @ 8:10am

Re: Nice article. Very interesting. But...
Thank you!

There are definitely indie labels who stonewall and don't pay and lie as badly as the majors, but the % of majors who act like this to at least some of their artist is 100%, while the % of indies is much lower.

Not sure where major-label partially/fully-owned former indie labels are in these statistics, but yes.
[ link to this | view in thread ]
Martin Halstead, 25 Aug 2011 @ 8:17am

Chronno S. Trigger said:

While it is still wrong, AC does have a small point. By this time, anyone who signs up for a major label should know that they're going to get boned

I agree form a 2011 persepective, but the Be Bop Deluxe contract was signed in the mid 70's when a major label was the only way to get a record out.

As for the AC, I'm astounded that someone who clearly knows nothing of the history of the band somehow thinks he knows everything. Any first year law student would tell you that the "we're only obligated to pay the company, and the company doesn't exist" argument is total BS. Existing and future contractual obligations to pay are property of the company at winding-up, and pass to its sucessor in interest.
[ link to this | view in thread ]
Jesse Townley (profile), 25 Aug 2011 @ 8:24am

Re: Re: My wife wants to become an artist
What Karl said.

It's good you're a lawyer, that's a big step right there. (We tell all of our bands to get a lawyer to read our agreements. We want these to serve as ground rules that both sides *understand* so there's no confusion later on.)

It depends on what type of music & what "scene" she's aiming to be a part of, but I think this should help no matter what:

Artist advice:
1. Play live as much as possible. Build up a fanbase. Tour. Tour again. Tour again.

2. Document tours, recording sessions, make home-made videos, release demos to fans.

3. Work with and swap information with similar artists and record labels who are in the same musical scene. Small labels are generally interested in sharing resources.

Like someone else said, bands & artists should be doing this stuff regardless of whether or not they are on a large indie label, a small indie label, or a major label.

Record label advice:

1. About publishing ("don't sell your copyrights")- it's more expensive, but if you pay for the masters, you own the recording masters. THAT'S important.

2. If you can, license the masters to the label instead of allowing them to own the masters. In other words, keep ownership of the masters. It allows you flexibility and later on allows the music to be reissued on a different label even if the original label is stone-walling you or is defunct.

(We do a fair amount of reissues and run into this ALL the time. We just had to cancel a greatest hits retrospective of one of our bands because Universal refused to even discuss licensing some of the songs with us. VERY frustrating for the band, us, and their fans who were expecting the album)

3. Be open to licensing opportunities that are appropriate for the artist. That is one thing that record labels are usually better able to exploit for the artist- finding licensing deals- than the artist on his or her own. They get a cut for doing so.
[ link to this | view in thread ]
Jesse Townley (profile), 25 Aug 2011 @ 8:29am

Re: Re: Re:
It doesn't matter. There are sales that should be accounted for. It can take a lot of time to compile (especially for us small indies, cough cough), but a corporation like EMI with an army of bookkeepers & accountants?

I guarantee you they've spent more money delaying & obfuscating (in legal fees and labor costs) than any amount of $ the band may have been owed.

For these major labels (again, DIFFERENT than other labels- though some indies are just as shady), it's clearly part of the business plan to kick and scream before releasing accounting, let alone royalty payments, to catalog artists.
[ link to this | view in thread ]
Jesse Townley (profile), 25 Aug 2011 @ 8:32am

Re: Re: Re: My wife wants to become an artist
"Don't use their advertising, don't use their outdated ways of thinking."

I don't think this is good advice without knowing the company involved or the music scene she's a part of (or trying to be a part of). Like the diapers, it depends.

Other than that, you're spot on.
[ link to this | view in thread ]
btrussell (profile), 25 Aug 2011 @ 8:57am

Re: Re: Re: Re: Re: Really?
Life + how many years?

Who gets paid after death?

The company died, there are benefactors. Who would be liable for any debt the company had?
[ link to this | view in thread ]
Patrik, 25 Aug 2011 @ 9:10am

Re: Re: Nice article. Very interesting. But...
Off-topic, but I wanted to jump in and say that I love Alternative Tentacles! You guys, and the bands you've repped over the years, have been an incredible inspiration to my friends and myself. Keep up the good work. And for the other readers: Alternative Tentacles is definitely one of the good guys.
[ link to this | view in thread ]
btrussell (profile), 25 Aug 2011 @ 9:16am

Re: class
No, class action lawsuits are for the lawyers.

That is why you see commercials "did you buy such and such product between..., join our lawsuit..."
[ link to this | view in thread ]
Jesse Townley (profile), 25 Aug 2011 @ 9:24am

Re: Re: Re: Nice article. Very interesting. But...
Shucks, thanks!

(does this count as an example of CwF + RtB?)
[ link to this | view in thread ]
Anonymous Coward, 25 Aug 2011 @ 9:27am

Re: Re: Re: Re:
No, they're right. The recording industry spent years fighting 10 years after the fact, it seems. A little late, don't you think?

In regards to innovating in the digital landscape. A little late, the recording industry is, don't you think.
[ link to this | view in thread ]
The Infamous Joe (profile), 25 Aug 2011 @ 10:14am

Re: Re: Re:
And seriously, who's dumb enough to let money change hands without at least a little research.

Teenagers with guitars in their hands, dreams in their heads and dollar signs in their eyes, that's who.
[ link to this | view in thread ]
jupiterkansas (profile), 25 Aug 2011 @ 10:17am

I read these stories all the time but this is the first time it's happened to an artist that I'm a big fan of. Bill Nelson has many independent recordings that are worth checking out.

It's the artists that should be writing the contracts. They should be hiring the record labels to distribute and promote their music, not the other way around. The labels do nothing but commercialize art and I'm astounded that anyone has any sympathy for them.

http://allmusic.com/artist/bill-nelson-p5002/biography
[ link to this | view in thread ]
Auditrix (profile), 25 Aug 2011 @ 11:12am

Reason for existance
This is why royalty auditors exist. And, BTW, it doesn't solely apply to the major labels (indies are often worse) or even the music industry. Pretty much any industry in which compensation is contingent on certain factors is an industry where you need to audit to get a fair share or something close to it.

It is true that cases like this are not always but often cases of unrecouped accounts. I have had hundreds of artists contact me under similar circumstances and I can't help most of them because they will never recoup. The cases where the accounts are recouped or will recoup and there is an active product with material sales are much less common, but those are the people who are due something worth pursuing.

Of course, when products earn more money, the companies are more willing to spend time to resolve these disputes. It just isn't worth it for them to invest the time to account to a payee that isn't earning the company any money, which is why a lot of contracts stipulate that no accounting is required if earnings do not reach a certain threshold. So, just because a record company doesn't account to an artist does not mean that there is a pot of gold at stake. It is more likely closer to $50, which is why it often does not make sense to pursue such matters by hiring an auditor and/or an attorney.

So, while I know better than anyone about the inaccuracies and failures of royalty accountings, I also think artists waste energy fretting about not receiving royalties for a product that is not selling. Right or wrong, these folks are better served by going out and making a better product.

However, if your product is selling well and you haven't received an accounting, it may make sense to shake the tree. One way auditors can help is simply to advise how much tree shaking may be worthwhile. Mr. Ridder could have hired an auditor to spend a couple hours to help figure that out, but I suppose he didn't want to spend the money.
[ link to this | view in thread ]
Joey Flores, 25 Aug 2011 @ 12:05pm

Re: So which one hurts worse...?
The two have little to do with each other. Just because there is this glaring example that a label screwed yet another artist does not justify not making your own effort to compensate content creators for their hard work. What happens after the dollar leaves your hand is mostly irrelevant. If you really want to make your point, I am sure the artist wouldn't mind receiving a check from you directly for your downloads.
[ link to this | view in thread ]
BeeAitch (profile), 25 Aug 2011 @ 12:19pm

Re: Re: So which one hurts worse...?
"I am sure the artist wouldn't mind receiving a check from you directly for your downloads."

Except that if the artist is signed to a label, they can't legally take your check, because they don't own the copyright!

Besides that, why would anyone pay twice for the same music?
[ link to this | view in thread ]
McFortner (profile), 25 Aug 2011 @ 1:30pm

Payout
Of course EMI pays out royalties. It's to themselves, but still they are paying out!
[ link to this | view in thread ]
btrussell (profile), 25 Aug 2011 @ 1:53pm

Re: Reason for existance
"...which is why a lot of contracts stipulate that no accounting is required if earnings do not reach a certain threshold."
How do you know when that threshold is reached? A gut feeling?
[ link to this | view in thread ]
btrussell (profile), 25 Aug 2011 @ 2:34pm

Re: Re: So which one hurts worse...?
Just one?

"The claims arise from a longstanding practice of the recording industry in Canada, described in the lawsuit as "exploit now, pay later if at all." It involves the use of works that are often included in compilation CDs (ie. the top dance tracks of 2009) or live recordings. The record labels create, press, distribute, and sell the CDs, but do not obtain the necessary copyright licences.

Instead, the names of the songs on the CDs are placed on a "pending list", which signifies that approval and payment is pending. The pending list dates back to the late 1980s, when Canada changed its copyright law by replacing a compulsory licence with the need for specific authorization for each use. It is perhaps better characterized as a copyright infringement admission list, however, since for each use of the work, the record label openly admits that it has not obtained copyright permission and not paid any royalty or fee."
http://www.michaelgeist.ca/content/view/5563/125/

Aaargh all you pyrites infringing on these great big C's, keep your "pending" lists in hook or beak!
[ link to this | view in thread ]
Jesse Townley (profile), 25 Aug 2011 @ 5:51pm

Re: Re: Reason for existance
Are you suggesting that a shady record label, large or small, would not be truthful about reaching this threshold?

I'm shocked! Completely shocked!
[ link to this | view in thread ]
Transbot9, 25 Aug 2011 @ 8:47pm

Re: Re: Re: Re: Really?
It does when you slip in liability clauses for not meeting very specific obligations (such as good accounting practices), along with daily multiplying fines and a loss of copyright. Sure, they could stonewall for a while, but not only does that sit them with an iron clad breach-of-contract penalty, it puts them potentially liable for criminal copyright infrignment.

I know a very, very evil person when it comes to contract law that makes the RIAA look like amateurs.
[ link to this | view in thread ]
Karl (profile), 25 Aug 2011 @ 9:50pm

Re: Re: Re: Really?
A Deal Memo, if legally enforcible, is then a contract - and if you don't like the terms, don't sign.

A Deal Memo does not really have "terms" in it. They are really basic, and usually consist of one or two paragraphs at most. It says blanket statements, such as, "Band X will release a full-length album on Label Y." Royalty rates, advances, all that jazz - they're not even mentioned.

However, once you've signed it, you're committed to that label, and that label alone. Going to another label will get you sued for breach of contract. (Not that any other label will touch a band that signed a deal memo, of course.)
[ link to this | view in thread ]
ThatAVGuy (profile), 26 Aug 2011 @ 3:00am

Re: Re: Re: So which one hurts worse...?
Perhaps the artist could setup a page with a donate button - so your not paying for your downloads but instead just donating money to a good cause....
[ link to this | view in thread ]
Karl (profile), 26 Aug 2011 @ 3:03am

Re: Re: Re: Really?
Lest I sound too negative:

At least today, going the indie route is cheaper than ever.

This is absolutely right. In fact, if there is a problem in music, it's with too many indie labels and musicians entering the market. If you're a music fan, that's not a bad problem to have.
[ link to this | view in thread ]
btrussell (profile), 26 Aug 2011 @ 3:04am

Re: Re: Re: Reason for existance
I'm not suggesting anything.

Just asking a question.

I'm curious as to what audit trix are used to determine when threshold is reached when there is no account?
[ link to this | view in thread ]
Hans, 26 Aug 2011 @ 8:46am

Re: Reason for existance
Mr. Ridder (me) submitted the link to TechDirt, and doesn't see the need to hire an auditor.

The band member who was screwed by EMI is Mr. Bill Nelson.
[ link to this | view in thread ]
Auditrix (profile), 26 Aug 2011 @ 5:46pm

Re: Re: Reason for existance
I regret the error Mr. Ridder.
[ link to this | view in thread ]
Auditrix (profile), 26 Aug 2011 @ 5:46pm

Re: Re: Reason for existance
I regret the error Mr. Ridder.
[ link to this | view in thread ]
Auditrix (profile), 26 Aug 2011 @ 5:48pm

Re: Re: Re: Re: Reason for existance
btrussell - I have developed many audit techniques, which cannot be summarized in a short post.
[ link to this | view in thread ]
Auditrix (profile), 26 Aug 2011 @ 5:49pm

Re: Re: Re: Reason for existance
No, Mr. Townley,

That is not what I am suggesting at all.
[ link to this | view in thread ]
k-h, 27 Aug 2011 @ 9:16pm

It's a pity they can't be sued like Jammy
It's a pity they can't be sued like Jammy for illegally distributing music.

How much per copy?
[ link to this | view in thread ]
btrussell (profile), 27 Aug 2011 @ 9:44pm

Re: Re: Re: Re: Re: Reason for existance
I wasn't asking about all of them.

You make it sound like trying to figure out whether or not threshold has been met is too costly.

So we don't keep an account and it is too expensive to figure out later?
[ link to this | view in thread ]
Robert Johnson, 1 Apr 2013 @ 12:29pm

Ride of Paul Revere by Terracetones
I definitely agree with their royalty arrangement; I am the lead singer and author of the Ride of Paul Revere and received a royalty check for the amount of 230.36 dollars 12/21/06 and this record was record in 1958 to which the Monotones claimed.
The check was sent to Robert Johnson, however not the right Robert Johnson. this needs to be investigated.

Robert Johnson of the Terracetones
[ link to this | view in thread ]
The devils web, 6 Feb 2017 @ 9:07am

EMI Ripped me off. They were in debt and not paying alot of people back in the day. Then in 2011 they decided to sell the publishing assets to sony and I never saw any money. There needs to be accounting done for everyone. They want us to just shut up and go away.

Sony is EMI, it always was. They just drove EMI into the ground then used the bank to recover and re-buy themselves! They just REABSORBED their own company! Obviously they did some illegal shit. The publishing is worth more than any debts they created to fund their life styles and wars.

FUCK THEM.
[ link to this | view in thread ]
anyone?, 6 Feb 2017 @ 2:28pm

Re: Re:
Can we start a petition?????? 100K signatures this should be easy
[ link to this | view in thread ]
Rob Bryan, 18 Nov 2017 @ 8:04pm

Bill Nelson royalty issues for Be Bop Deluxe
I found this article accidentally whilst surfng the net and am surprised to learn about this .
I can tell you as one of the two surviving members of the Axe Victim band who allegedly received royalties illegally that the story published is incomplete .Since royalties began being paidto me have been less than five thousand pounds in 43 years . This amount was for performing rights on tracks I played on.
HOWEVER i will add that these royalties were based on sides of an album so on subsequent albums which included a track off Axe Victim we were due royalties on the full side of any album even if we only played on one track.Not our doing this was set up by EMI on sign g the BAND
Royalty statements issued by EMU showed amounts due were divided by 4.

Publishing royalties were paid by song.I received royalties for Rocket cathedrals and no other songs.Initially these royalties were included on the same statement as the performing royalties.

On signing with EMÌ two advances were given ,one for performance against record sales and one for publishing.
The publishing advance all went to Bill ,and none were paid to anyone until the advance was cleared. 10% it that advance was against Rocket cathedrals which was never paid.
The performance advance was spent on new gear and a van which on our firing from the band stayed with Be Bop Deluxe ,the 3 of us receiving no compensation in any way whatsoever.
So wherever the missing royalties went , they didn't come our way.
Ian Parkin and myself went back to the relatively high paid electronics industry we gave up to sign to EMU.
It was about 2 years before we saw any royalties the first cheque was a catch up about 1200 pounds if I remember and every 6 months we got a cheque for around £100.
I still get publishing royalties for Rocket Cathedrals but thanks to Brian Setzner who put it on 2 Albums he has more than tripled any royalties paid to me from the Axe Victim album.
So there you have it ,the story from another perspective , If Bill was ripped off by EMI he wasn't the only one .Despite my efforts to find out why my performance royalties were stopped many years ago , I am still waiting for an answer .His management company at the time were very dubious to say the least.
[ link to this | view in thread ]