Wednesday, November 2, 2011

Digital Royalties at Risk

Sirius/XM is considering doing direct licensing deals with the labels. In plain terms this means that royalties would no longer be paid through SoundExchange, the government PRO that currently pays royalties for digital music. Last quarter they paid $88 million to artists and publishers.

Under direct licensing deals that money would instead go to the labels, who would then pay the artists. And we all know how good labels are at paying artists...

There is also the unknown about how small independent labels, like artist owned labels, would get paid. For example YouTube just negotiated direct licenses with the major labels to pay royalties, but the label that TMD owns was not part of that, and no avenue has been set up for small artist owned labels. (Note: after this this post was published a way was announced) So we aren't paid any monies from YouTube while the big labels are... No surprise there... Also no surprise that the royalties that are paid are small. Helienne Lindval writes in The Guardian that YouTube royalties are less that Spoitfy.

Of all the new things to come about during the digital music revolution Sirius/XM and the other digital radio stations have been a good thing for artists. They pay decent royalties (the rates, like over the air radio, are set by the government) and they have great exposure. Two ideas that don't normally work together in most new music biz models.

Here is a complete article about this issue and what artists can do to protect their digital royalties. If you are an artist I high recommend you read this and take action.


  1. According to this new agreement, artists who have been stakeholders in the past will now lose their voice at the table. Not only lose their voice but be completely cut off from the discussion. This does not seem right.

  2. Yes, Table/Voice. It is pretty much one and the same thing. This bypasses standards set up by the government decades ago. Standards that made sure artists got paid. That would go away. My royalty checks from BMI are largely made up of plays by satellite and cable radio channels. One of the few parts of the new music paradigm that actually works.