How ASCAP Takes Money From Successful Indie Artists And Gives It To Giant Rock Stars

from the not-cool dept

Back in 2009, we wrote about the crazy situation in which ASCAP, the giant US collection society will funnel money from indie artists and pay it to big rock stars -- which seemed incredibly unfair. It's just one particular part of the royalties that ASCAP pays, but it's still clearly a case of taking from independent artists and giving money that they should be paid under the system and giving it to the most successful artists. The short version of the story is basically that, to make its own life easier, ASCAP just pays those performance royalties to the top 200 grossing tours in the US, and every other touring musician is more or less screwed -- unless you can convince ASCAP that you play "serious music."

Very successful independent musician Zoe Keating, who has had multiple run-ins with the unfair practices of collections societies giving money she's owed to major labels, just came across this same issue and wrote a blog post about her experience:

After a concert, there is this thing called “doing the settlement”. This is where the artist or their representative meets with the promoter, goes over the financial outcome of the night in relation to their contract…and gets paid.

Sometimes the contract is for a percentage of the gross revenues, but more often for me, I get a guarantee and maybe a percentage of “net” if it was a positive number. The line item deductions that go into the calculation of net are things like sound & lights, staff, venue rental, advertising, insurance, etc. There tend to be many line items in the calculation of “net” and I can’t help but notice that one of them is ASCAP.

For example, at one concert I played last month the gross ticket sales for the night were $9336. Of the many expenses deducted that night, one of the items was $86 to ASCAP.

What is this? This is the nightly portion of a license fee that the hall pays to ASCAP for the permission to perform music by ASCAP artists in their venue. My compositions are registered with ASCAP, so I should get this money eventually, right?

Wrong.

I remembered that when I’ve played in the UK I listed all the songs I played on something called a PRS from and gave it to the venue. Six months or so later, I got a check for the percentage of the night’s revenues due to me according to the PRS formula for that venue.

Thinking that maybe instead of placing the burden on the venue, ASCAP puts it on the artist, I called ASCAP to see how I should go about claiming these concert royalties.

The customer service representative on the phone said there was nothing for me to claim. He informed me that ASCAP pays out performing royalties only to the 200 top-grossing concert tours, as determined by Pollstar. They also pay royalties for “Live symphonic and recital concerts”, whatever they are (he said I don’t qualify for those).

In other words....

Every day, thousands of venues are required to pay a percentage of their gross ticket sales to ASCAP who then gives that money to... let’s look here on Pollstar and find the highest-grossing concerts for 2011....U2, Taylor Swift, Kenny Chesney, Lady Gaga, Bon Jovi, etc.

Yup. The thing is, I actually would have thought that Keating, whose music is usually classified as "classical" would have qualified for that "serious music" exception -- because back in 2009, we were told that applies to classical music. But now it appears they're limiting that to "live symphonic and recital concerts" and telling her she doesn't qualify for that either.

But, really, this seems borderline criminal. There is simply no way to describe what's happening here other than ASCAP taking money that is owed to independent artists and giving it to the most successful artists in the world instead.

Keating then discusses how, in researching this, she came across a separate program which appears to be something of a lottery for independent artists for herself:

Looking online, I found an ASCAP program that I didn’t know about. Perhaps in an attempt to compensate for this incredible distribution of wealth to the wealthy, ASCAP has something called the “ASCAP Plus Cash Awards”. What are these amazing “awards”?

“For over 50 years, these special awards have recognized writer members each year for substantial performance activity in media and venues that are not included in performance surveys, or whose works have unique prestige value. The program has also been an inspiration to members just starting out to persevere in advancing their music careers. More than 4,200 songwriter and composer members of ASCAP received Plus Awards in their January 2012 disbursement…”

You have to submit an application to ASCAP to qualify for consideration (which I just did). The gist of it, as far as I can tell, is that if you are the winner of this black-box calculation ASCAP will make a special award to you of a portion of your own money. Awesome! I’ll let you know if I “win”.

Of course, we've written about this "program" too -- such as noticing in 2010 how ASCAP was bragging about bringing in more money than ever... at the very same time it announced it was massively cutting payments to those who qualify for this mysterious ASCAP Plus program.

I know that lots of musicians swear that ASCAP isn't like the RIAA, and that it really is about helping artists, but time and time again, we see that it really just functions to perpetuate the system that only rewards the biggest artists, and causes significant problems for the smaller artists. From examples like the stories above, to ASAP's aggressive efforts to shut down any and all open mic nights unless coffee shop owners pay up, ASCAP has successfully been screwing over independent artists for quite some time. It's a real shame and something that organization should work on. As Keating notes, it is possible to do this in a much more fair manner, such as the way PRS handled the exact same situation in the UK (though, obviously, PRS has its own issues).

Perhaps, rather than focusing on attacking Creative Commons, EFF and Public Knowledge -- three organizations that have done amazing things for independent artists, ASCAP should focus on actually paying those artists what they've earned.

Filed Under: copyright, music, performance royalties, royalties, zoe keating
Companies: ascap

Why We Don't Need To 'Think Of The Artists': They're Doing Fine

from the what's-the-problem? dept

Just as politicians routinely invite us to "think of the children" when they want to push through some new liberty-reducing law, so the copyright industries regularly invoke "the artists" when they want to justify longer copyright terms or harsher enforcement laws.

They claim they are being hit so badly by piracy that artists are suffering as a result. But that's a little hard to square with the fact that media companies still manage to pay their CEOs huge salaries. This suggests (a) the media companies are not doing too badly and (b) that if they really cared about the woes of their artists, they could alleviate it by redirecting some of their fat cats' hefty salary downstairs.

Of course, most people have long ago seen through this rather implausible concern on the part of the copyright industries, but that still leaves open the question of how artists are faring. Here's some interesting evidence that in Australia, musicians, at least, aren't doing too badly:

Even though recorded music sales are down, artists are taking a bigger slice of the overall music industry revenue pie - and more total revenue - than they have in decades. Largely fuelled by copyright-based performance royalties collected on their behalf by APRA and AMCOS, artists' revenues from public performance royalties have doubled in Australia from $110 million in 2000 to $220 million in the past 10 years. Compare that with the recording industry, where wholesale sales have dropped from $594 million to $384 million over the past decade and it seems that it is the record labels that are feeling more pain than the artists they claim are the major victims of online piracy.

As the writer points out, this suggests that artists aren't really suffering from the supposed scourge of piracy. And since everyone – even the record labels, apparently – agrees that what really matters is whether creators are able to make a living from their work, and thus carry on creating, this has to be good news. It also indicates politicians should stop trying to prop up the copyright industries' old business models and just let the artists get on with it.

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Filed Under: artists, payments, performance royalties

Sirius XM Passes RIAA Tax On To Consumers

from the but-of-course dept

Not quite sure how I missed this earlier (update: oops, turns out we didn't miss it -- so consider this an encore presentation), but Bret alerts us to the news that with the ever increasing royalty rates pushed by the RIAA in the form of its "spin-off" Sound Exchange, and codified by the Copyright Royalty Board (for whom I still do not understand how anyone can justify its existence), that Sirius XM has simply added a $2 RIAA tax to everyone's monthly bills to help pay for the new performance royalties. Yup, because the RIAA and its members haven't been able to come up with a business model that works, they get the courts to tax you for listening to your satellite radio (on top of what you already pay and what they already pay to songwriters and publishers) and that gets passed on to you. Just imagine what will happen if the RIAA gets its wish and gets to add a similar tax to terrestrial radio stations as well. If you thought radio was chock full of commercials before...

Filed Under: performance royalties, radio, satellite radio, tax
Companies: riaa, sirius xm