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New MMF guide explains why songwriters are often missing out on their digital dollars

By | Published on Thursday 9 May 2019

Dissecting The Digital Dollar

The Music Managers Forum has today put the spotlight on the complex way in which song royalties from the streaming services are processed each month, and the impact that has on how much cash actually flows through to the songwriter, and how long it takes for them to get paid. Significant sums are likely caught up in or lost to the system.

These complexities and issues are outlined in the latest ‘Digital Dollar’ guide, produced by CMU Insights for the MMF, which is being launched at the CMU+TGE Digital Dollars Conference at The Great Escape in Brighton today.

Launching the report, the MMF explains: “While featured artists can be paid royalties within weeks of a track they performed on being streamed – especially if they self-release via a DIY distribution platform – those who actually wrote the track must frequently wait years before receiving their share”.

It goes on: “This is the result of a complex system of ‘royalty chains’, whereby global-facing digital music services are often licensed on a territorial basis and revenues flow between a succession of overseas collecting societies, publishers and other intermediaries. It means songwriters and composers frequently face a series of delays and deductions to their royalty payments, as well as a significant risk of their rights being misreported and unattributed”.

The guide makes a number of recommendations as to what songwriters and their managers can be doing right now to reduce the negative impact of the royalty chains, while also calling on the wider music community to make a number of reforms. That includes ensuring both more transparency around the way streaming income is processed and that songwriters – and their managers, lawyers and accountants – are much more involved in the ongoing debates around song royalty systems as the streaming market continues to evolve.

MMF CEO Annabella Coldrick said today: “Streaming should be boosting songwriters’ incomes, instead MMF research reveals much of their money is subject to unnecessary data disputes, deductions and delays. Long and complex royalty chains need to be simplified and shortened so more of the money gets back to the creator of the music. Digital licensing needs to be fit for purpose”.

Meanwhile MMF Chair Paul Craig of Nostromo Management, who is talking about the guide at TGE today, added: “This is a timely report and should be required reading for everyone in our business. In great detail, it shows how the complexities of online licensing have hampered industry growth and impact on the livelihoods of songwriters and composers”.

He goes on: “It’s a situation we cannot allow to continue. Urgent reforms are needed. At the core of these must be an overhaul in the practices of collecting societies, and adoption of more fluid and globalised licensing processes. Personally, I’m a supporter of collective licensing, but only through such modernisations will we break the royalty chains and ensure creators receive all revenues they have earned”.

You can download the new guide here.