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Ivors Academy proposes using unallocated streaming royalties to support music-makers hit by COVID-19 crisis

By | Published on Thursday 26 March 2020

Ivors Academy

While a number of initiatives have launched this week to provide short-term funding to artists and songwriters facing financial hardship as a result of the COVID-19 crisis – including the creation of funds by Spotify, PRS and Help Musicians – UK songwriter organisation The Ivors Academy has proposed two additional ways that the industry could provide extra support.

The first of those proposals is that unallocated streaming royalties – aka ‘black box money’ – be set aside for those in the music community facing hardship amid the COVID-19 shutdown, rather than being paid out to songwriters and publishers based on market share.

In theory there shouldn’t be any unallocated streaming royalties because – unlike, say, when music gets played in public spaces – the streaming services can tell the industry exactly what music was played where and when.

However, complexities around music data and the way song rights are licensed (as explained in the ‘Song Royalties Guide’ published by the MMF and CMU) mean that – on the songs side – not all royalties are claimed and paid to the songwriters and publishers who control the works that have actually been streamed in any one month.

Quite how much money goes unallocated has never been confirmed on an industry-wide basis, but its widely believed to be between 20% and 30%, which is a significant amount of cash. How that unallocated money is shared out is always controversial.

Market share distribution is often employed but, some argue, that benefits superstar writers and big music publishers, ie the people and companies who should have the systems in place to ensure they have actually claimed any money they are due.

With that in mind – and given how many artists and songwriters are being negatively impacted by the COVID-19 shutdown – the Ivors Academy reckons that that unallocated money could be put the better use.

The organisation’s CEO Graham Davies said yesterday: “There is an estimated 20-30% of streaming royalties which are currently paid on a market share basis, because there is insufficient data on who was played. This means millions of pounds will presently go to those who are reporting massive profits and huge margins from streaming. This is wrong. We call for these black box royalties to be paid into hardship funds for musicians so that targeted help can get to those most in need”.

In an accompanying statement, the Ivors Academy added: “Studies of unattributable funds have demonstrated they mostly arise because many fail to understand how to register their works. When these funds cannot go to their true owners, using a market share model to reward those already in profit feels incongruous and wrong, especially at this moment in history. We believe something can and should be done”.

While welcoming some of the other existing initiatives to support musicians at this time, Ivors Chair Crispin Hunt said much more needed to be done, and utilising unallocated streaming money was a neat solution.

He stated: “We are enormously appreciative of the work being done by the Musicians’ Union, Help Musicians UK, PRS For Music and PPL to boost their hardship funds and get money flowing to musicians. But these amounts are nowhere near enough. It is time the platforms and major labels provided help to the people that create the content on which their businesses depend”.

Beyond streaming money, the Ivors Academy has also called on the BBC to play more classical music by living British and Irish composers, so that those on the classical side who have seen their live income slump because of the COVID-19 shutdown can earn extra broadcast royalties.

In an open letter to BBC Radio 3 boss Alan Davey, the Chair of the Academy’s Classical Committee, Gary Carpenter, wrote: “Our performances are being cancelled along with the work of freelance players and as their fees disappear, so do our royalties. We therefore wondered if, during this challenging time, you might consider broadcasting more work by living British and Irish composers?”

He went on: “This would help ameliorate our financial losses whilst at the same time demonstrating real support for our community. It would add value to our work and make it available in such a way that may well bear fruit once these terrible times are past”.

“We appreciate that not all programmes may be suitable at all times of day – new complexity at breakfast may be a little niche”, he conceded, but added that: “‘Through The Night’ and the ‘Radio 3 Mixtape’, for example, might be appropriate platforms, particularly as neither demurs from programming contemporary music”.

It remains to be seen how the wider music industry now responds to the Ivors’ proposals.