Author: Trichordist Editor

Trichordist Editor

Bridgeport Music Files Notice of The MLC’s First Royalty Audit

[Editor Charlie sez: a royalty “audit” is a right of the song owner to look inside the books and records of the party paying royalties to confirm that all royalties were paid and that all royalties were paid correctly, usually during a specified period of time. This usually results in the song owner discovering an underpayment that would have gone unpaid without the audit.]

By Chris Castle

It is commonplace for artists to conduct a royalty examination of their record company, sometimes called an “audit.” Until the Music Modernization Act, the statutory license did not permit songwriters to audit users of the statutory license. The Harry Fox Agency “standard” license for physical records had two principal features that differed from the straight statutory license: quarterly accounting and an audit right. When streaming became popular, the services both refused to comply with the statutory regulations and also refused to allow anyone to audit because the statutory regulations they failed to comply with did not permit an audit. I brought this absurdity to the attention of the Copyright Office in 2011.

After much hoopla, the lobbyists wrote an audit right for copyright owners into the Music Modernization Act. However, rather than permitting copyright owners to audit music users as is long standing common practice on the record side, the lobbyists decided to allow copyright owners to audit the Mechanical Licensing Collective. At the expense of the copyright owner, of course, no matter how many mistakes the copyright owner discovered or how big the underpayment. This is consistent with the desire of services to distance themselves from those pesky songwriters by inserting the MLC in between the services and their ultimate vendors, the songwriters and copyright owners. The services can be audited by the MLC (whose salaries are paid by the services), but that hasn’t happened yet to my knowledge.

But the MLC has received what I believe is its first audit notice that was just published by the Copyright Office after receiving it on November 9. First up is Bridgeport Music, Inc. for the period January 1, 2021, through December 31, 2023. January 1, 2021 was the “license availability date” or the date that the MLC began accounting for royalties under the MMA’s blanket license.

2023-27554-bridgeport-audit-noticeDownload

Why Audit Now?

Bridgeport’s audit is wise. There are no doubt millions if not billions of streams to be verified. The MLC’s systems are largely untested, compared to other music users such as record companies that have been audited hundreds, if not thousands of times depending on how long they are operating. Competent royalty examiners will look under the hood and find out whether it’s even possible to render reasonably accurate accounting statements given the MLC’s systems. Maybe it’s all fine, but maybe it’s not. The wisdom of Bridgeport’s two year audit window is that two years is long enough to have a chance at a recovery but it’s not so long that you are drowned in data and susceptible to taking shortcuts. 

In other words, why wait around?

Auditing the Black Box

A big difference between the audit rules the lobbyists wrote into the MMA and other audits is that the MLC audit is based on payments, not statements. The relevant language in the statute makes this very clear (17 USC §115(d)(3)(L):

A copyright owner entitled to receive payments of royalties for covered activities from the mechanical licensing collective may, individually or with other copyright owners, conduct an audit of the mechanical licensing collective to verify the accuracy of royalty payments by the mechanical licensing collective to such copyright owner…The qualified auditor shall determine the accuracy of royalty payments, including whether an underpayment or overpayment of royalties was made by the mechanical licensing collective to each auditing copyright owner.

Royalty payments would include a share of black box royalties distributed to copyright owners. It seems reasonable that on audit a copyright owner could verify how this share was arrived at and whatever calculations would be necessary to calculate those payments, or maybe the absence of such payments that should have been made. Determining what is not paid that should have been paid is an important part of any royalty verification examination.

Systems Transparency

Information too confidential to be detected cannot be corrected.  It is important to remember that copyright owner audits of the MLC will be the first time an independent third party has had a look at the accounting systems and functional technology of The MLC. If those audits reveal functional defects in the MLC’s systems or technology that affects any output of The MLC, i.e., not just the royalties being audited, it seems to me that those defects should be disclosed to the public. Audit settlements should not be used as hush money payments to keep embarrassing revelations from being publicly disclosed.

Unsurprisingly, The MLC lobbied to have broadly confidential treatment of all audits. Realize that there may well be confidential financial information disclosed as part of any audit that both copyright owners and The MLC will want to keep secret. There is no reason to keep secrets about The MLC’s systems. To take an extreme example, if on audit the auditors discovered that The MLC’s systems added 2 plus 2 and got 5, that is a fact that others have a legitimate interest in having disclosed to include the Copyright Office itself that is about to launch a 5 year review of The MLC for redesignation. Indeed, auditors may discover systemic flaws that could arguably require The MLC to recalculate many if not all statements or at least explain why they should not. (Note that a royalty auditor is required to deliver a copy of the auditor’s final report to The MLC for review even before giving it to their client. This puts The MLC on notice of any systemic flaws in The MLC’s systems found by the auditor and gives it the opportunity to correct any factual errors.)

I think that systemic flaws found by an auditor should be disclosed publicly after taking care to redact any confidential financial information. This will allow both the Copyright Office and MLC members to fix any discovered flaws.

The “Qualified Auditor” Typo

It is important to realize that there is no good reason why a C.P.A. must conduct the audit; this is another drafting glitch in the MMA that requires both The MLC’s audited financial statements and royalty compliance examinations be conducted by a C.P.A, defined as a “qualified auditor” (17 USC § 115(e)(25)). It’s easy to understand why audited financials prepared according to GAAP should be opined by a C.P.A. but it is ludicrous that a C.P.A. should be required to conduct a royalty exam for royalties that have nothing to do with GAAP and never have. 

To be frank, I doubt seriously whether anyone involved in drafting the MMA had ever personally conducted or managed a royalty verification examination. That assessment is based on the fact that royalty verification examinations are one of the most critical parts of the royalty payment process and is the least discussed subject in the lengthy MMA; at the time, the lobbyists did not represent songwriters and tried very hard to keep songwriters inside the writer room and outside of the drafting room as you can tell from The MLC, Inc.’s board composition; and that the legislative history (at 20) has one tautological statement about copyright owner audits: ”Subparagraph L sets forth the verification and audit process for copyright owners to audit the collective, although parties may agree on alternate procedures.” Well no kidding, smart people. We’ll take some context if you got it.

As Warner Music Group’s Ron Wilcox testified to the Copyright Royalty Judges, “Because royalty audits require extensive technical and industry-specific expertise, in WMG’s experience a CPA certification is not generally a requirement for conducting such audits. To my knowledge, some of the. most experienced and knowledgeable royalty auditors in the music industry are not CPAs.” (Testimony of Ron Wilcox, In re Determination of Royalty Rates and Terms for Ephemeral Recording and Digital Performance of Sound Recordings (Web IV), Copyright Royalty Judges, Docket No. 14-CRB-0001-WR (Oct. 6, 2014) at 15.). 

I would add to Ron’s assessment that the need for “extensive technical and industry-specific expertise” has grown exponentially since he made the statement in 2014 due to the complexity and numerosity of streaming. I’m sure Ron would agree if he had a chance to revisit his remarks. But inside the beltway of the Imperial City, it ain’t that way and you can tell by reading their laws handed down by the descendants of Marcus Licinius Crassus. All accountants are CPAs, all accounting is according to GAAP, all the women are strong, all the men are good-looking, and all the children are above average and go to Sidwell Friends. In the words of London jazzman and club owner Ronnie Scott to an unresponsive audience, “And now, back to sleep.”

The “qualified auditor” defined term should be limited to the MLC’s financials and removed from the audit clauses. This was a point I made to Senate staff during the drafting of MMA, but was told that while they, too, agreed it was stupid, it’s what the parties wanted (i.e., what the lobbyists wanted). And you know how that can be. So now we sweep up behind the elephants in the circus of life. But then, I’m just a country lawyer from Texas, what do I know.

All praise to Bridgeport for stepping up.

This post first appeared on MusicTech.Solutions

by Trichordist Editor

Must See Testimony by @MMercuriadis at @KevinBrennanMP Hearing on Streaming Economy

Very important testimony by Merck Mercuriadis at the UK House of Commons Culture Media and Sport Committee revisiting the Committee’s inquiry into the economics of streaming.

Read Merck’s fireside chat with Chris at last year’s Artist Rights Symposium at the University of Georgia.

by Trichordist Editor

@mikehuppe on American Music Fairness Act #IRespectMusic

We’re still looking for the phalanx of industry leaders making this point about the irony of broadcasters enriching themselves at the expense of songwriters when they don’t pay artists–so far it’s just Mr. Huppe who has been here with us before. Complete Music Update has the story:  iHeartMedia confirms incoming $100 million pay day as a result of BMI sale

The boss of US record industry collecting society SoundExchange has used the news that iHeartMedia will make $100 million from the sale of BMI to again call for politicians to back the American Music Fairness Act.

SoundExchange CEO Michael Huppe wrote on Twitter: “The irony of a radio giant profiting millions while underpaying performers is yet another reason why the American Music Fairness Act is so vital for #MusicFairness”.

by Trichordist Editor

Selected Comments on the Copyright Office Proposed Rule on Termination Rights and MLC Operations: North Music Group

The Copyright Office has asked for comments from the public on important issues for rulemakings under the Music Modernization Act. This will potentially affect the operations of The MLC and related rights especially because the Copyright Office recently extended the scope of that rulemaking. The proposal drew a mixed response.

We will be posting selected comments that we think might be interesting to Trichordist readers. The project is a bit wonky, but important to stay informed on.

This comment to the Copyright Office from Abby North of North Music Group raises important issues including whether the MLC should have the ability to create disputes on its own, what happens to samples, interpolations and medleys, and the need for substantial consultations by the Copyright Office with rights holders large and small.

Abby’s thesis is:

The Supplemental Proposed rule is simply too broad.  Without customary Copyright Office consultations with industry working groups and roundtables to allow stakeholders to participate in the decision-making, the Office runs the risk of creating rules that are contrary to music publishing industry practices and costly to implement administratively. Further, without extensive consultation and revisions, it is nearly impossible to avoid unintended consequences as we are currently experiencing with the unreimbursed transaction costs imposed on publishers and songwriters of verifying and correcting data at The MLC.

Neither the first proposed rule, nor the supplemental rule addresses termination in the context of interpolations and medleys. If a work that has been terminated was included as an interpolation into another work prior to termination, the songwriter’s post-termination publisher or administrator should be able to terminate related to the interpolated work as well. 

There must be a mechanism for the songwriter and/or his/her post-termination publisher or administrator to notify The MLC of derivative interpolations/samples and medleys and become the royalty recipient for the applicable share of mechanicals generated by those works.

This proceeding raises the question of whether The MLC itself should have standing to initiate a dispute when no stakeholder has done so.  Due to the absence of rules and due process applicable to The MLC, it seems that The MLC should be prohibited from creating disputes on its own motion.  Alternatively, if The MLC is the party initiating a dispute, there should be some process and constraints applicable to its actions.  This might include limiting any review by The MLC to a fixed time to complete a review. The Office should define what that review entails; notice requirements so that copyright owners are made aware that The MLC is initiating a dispute on its own; under what circumstances The MLC is permitted to hold the funds of a copyright owner; where those funds are to be held (such as a segregated bank account); and how the MLC’s decision must be communicated to copyright owners and how copyright owners can appeal.  The MLC should not be allowed to interrupt the payment of royalties based on mere suspicion.  

Following is Abby’s entire comment.

Hon. Suzanne V. Wilson
General Counsel and Associate Register of Copyrights
U.S. Copyright Office
101 Independence Avenue, S.E.
Washington D.C. 20559-6000

Re: Termination Rights And The Music Modernization Act’s Blanket License: Response to Request For Public Comments Regarding Supplemental Notice of Proposed Rulemaking – The Applicability of the Derivative Works Exception To Termination Rights Under the Copyright Act To the New Statutory Mechanical Blanket License Established by the Music Modernization Act (“MMA”).

FR  Doc. 2023-20922
Docket No. 2022-5

Dear Associate Register Wilson:

I appreciate the opportunity to submit comments in response to the Supplemental Notice of Proposed Rulemaking regarding the applicability of the derivative works exception to termination rights under the Copyright Act.

I am a music rights manager who represents many estates and legacy songwriters and composers who have exercised, and plan to exercise their right to recapture their copyrights.

As interactive streaming has clearly become one of the biggest sources of royalty income for music publishers and songwriters, it is imperative that not only the derivative work exception be clarified related to the Section 115 Blanket Mechanical License, but further, the rules and processes The MLC follows in navigating distribution of royalties and dispute resolution after a termination has been perfected must also be defined.

ORIGINAL PROPOSED RULE VS. SUPPLEMENTAL PROPOSED RULE

The original proposed rule specifically addressed the issue of the Section 115 statutory blanket license not having a derivative work exception. Clarification is/was required, which the proposed rule provides.

The Supplemental Proposed rule is simply too broad.  Without customary Copyright Office consultations with industry working groups and roundtables to allow stakeholders to participate in the decision-making, the Office runs the risk of creating rules that are contrary to music publishing industry practices and costly to implement administratively. Further, without extensive consultation and revisions, it is nearly impossible to avoid unintended consequences as we are currently experiencing with the unreimbursed transaction costs imposed on publishers and songwriters of verifying and correcting data at The MLC.

RECIPIENT OF ROYALTIES POST-TERMINATION

For example, the Proposed Rule states that royalties under the blanket license should be distributed to the owner at the time of usage, rather than to the owner at the time of royalty distribution.  If the work has been claimed and matched to recordings by copyright owners, and there is a post-term collection period and the usage occurred during the term of that post-term collection period, the original grantee should receive the royalties. If the post-term collection period has ended, or there was no post-term collection period, the post-termination publisher should be the royalty recipient.

Once a songwriter/composer terminates his/her agreement with a publisher, that publisher no longer is the assignee of that songwriter’s copyrights, and consequently should not be the recipient of the songwriter’s mechanicals. While most publishers continue to distribute applicable post-term royalties they receive to songwriters whose agreements have terminated, they do so as a courtesy, but they may decide to stop doing so. If a songwriter ends a relationship with a publisher because the publisher exhibits weak administration skills or the business relationship was unfavorable, it is simply unfair to the songwriters to require them to continue a relationship with that publisher.

If the original grantee neglected to claim works and match to recordings during its term, but the post-termination publisher administers comprehensively and does claim and match, that post-termination publisher should be the recipient of the royalties once the post-term collection period has ended. Currently, the burden and cost to “play our part” is placed on the publishing administrators. However, because of the amount of time and resources (both human and tech) required to efficiently, accurately and comprehensively claim and register musical works and then match those works to all the recordings of the works, some publishers cannot afford to do the work. Often, larger publishers prioritize the highest earning works, simply because resources are limited even for them. If the post-termination publisher, who faces the same limitations in resources does put in the work, does register and claim the works that were not comprehensively and accurately registered or claimed, and does perform the very time-consuming process of manually matching recordings to those works to “play our part,” certainly that publisher should be compensated for its time and efforts.

SAMPLES/INTERPOLATIONS AND MEDLEYS

Neither the first proposed rule, nor the supplemental rule addresses termination in the context of interpolations and medleys. If a work that has been terminated was included as an interpolation into another work prior to termination, the songwriter’s post-termination publisher or administrator should be able to terminate related to the interpolated work as well. 

This language in 17 USC §304(c)(5) suggests that a voluntary agreement (such as an interpolation agreement) does not trump the right of termination:

 Termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.

There must be a mechanism for the songwriter and/or his/her post-termination publisher or administrator to notify The MLC of derivative interpolations/samples and medleys and become the royalty recipient for the applicable share of mechanicals generated by those works.

DISPUTE RESOLUTION

The Proposed Supplemental Rule sets forth three Dispute Resolution scenarios. Each of these attempts to facilitate resolution when the dispute is between or among rightsholders. The third scenario attempts to prevent disputed funds from being held indefinitely. If the parties to a dispute do not voluntarily agree on a resolution, the Proposed Supplemental Rule requires that the party initiating the dispute must commence a legal proceeding to maintain the hold. In my experience, copyright litigation will always arbitrarily favor the better funded party and should not be the default dispute resolution tool.

There needs to be a timeline imposed for the scenario in which the party collecting royalties does not respond to the dispute. If there is no response within a fixed period of time, such as 90 days, I recommend The MLC begin distributing these royalties to the party initiating the dispute, both retroactively and prospectively. This approach will help to incentivize parties to participate in the dispute resolution.

Further, this proceeding raises the question of whether The MLC itself should have standing to initiate a dispute when no stakeholder has done so.  Due to the absence of rules and due process applicable to The MLC, it seems that The MLC should be prohibited from creating disputes on its own motion.  Alternatively, if The MLC is the party initiating a dispute, there should be some process and constraints applicable to its actions.  This might include limiting any review by The MLC to a fixed time to complete a review. The Office should define what that review entails; notice requirements so that copyright owners are made aware that The MLC is initiating a dispute on its own; under what circumstances The MLC is permitted to hold the funds of a copyright owner; where those funds are to be held (such as a segregated bank account); and how the MLC’s decision must be communicated to copyright owners and how copyright owners can appeal.  The MLC should not be allowed to interrupt the payment of royalties based on mere suspicion.  

If the MLC fails to comply with these rules or cannot demonstrate good cause to continue to hold funds, or if the copyright owner appeals, The MLC should then release funds to the copyright owner or The MLC member with which it initiated the dispute and pay applicable royalties prospectively.

In conclusion, I acknowledge that some stakeholders in the music industry are anxious for resolution and would prefer not to have a protracted process. To that end, I recommend the Copyright Office finalizes the original proposed rule that specifically clarified the derivative works exception. However, The Copyright Office should pause the process related to the Supplemental Rule and its many very complex and nuanced elements that go beyond clarifying the derivative works exception. The industry must be given time and a process to evaluate and report on the impact of the Proposed Supplemental Rule. 

It is essential that the Copyright Office conducts a consultation on the Rule with a very substantial table with seats for many more voices that have experience in royalty distribution and dispute resolution. Experts and songwriter advocates must be given the opportunity to assist in the creation of the royalty distribution and dispute resolution processes and systems. It is crucial to take the necessary time to evaluate and prevent unnecessary or unintended consequences. To prevent complications, errors, and the need for even more clarifying Rules, we absolutely must get this right from the start.

I am thankful for the opportunity to express my views and concerns.

Best,

Abby North, North Music Group                   

by Trichordist Editor

BMI’s Insult that Keeps On Insulting! @hypebot: Radio doesn’t pay performers, but iHeart will get $100M from BMI sale to Google/Private Equity

[T Editor sez: Remember how we have all fought alongside #IRespectMusic, Blake Morgan and MusicFirst to get artists paid for radio play of their recordings on terrestrial radio? Remember how iHeartMedia and the rest of the National Association of Broadcasters used their lobbying muscle to block our heroes in Congress like Reps. Jerry Nadler, Ted Deutch, and Darrell Issa and Senators Marsha Blackburn and Alex Padilla from passing the American Music Fairness Act? And are blocking it to this day? Well, adding insult to injury, the broadcasters who apparently own BMI, the for-profit PRO, are making serious bank for selling their shares to Google and private equity fund New Mountain. You know, Broadcast(er) Music, Inc.? Thus screwing songwriters, but screwing artist/songwriters TWICE. Who are they? According to the most recent BMI annual report we could find they are probably the same companies with board seats which are these smiling faces:

Bruce Hougton at Hypebot fills us in on the details of just how profitable the sale for Google’s blood money really is for one stockholder owner of BMI, iHeart Media (formerly Clear Channel). iHeart is, of course, the largest radio station owner in the US and poster child for media consolidation and screwing artists. iHeart profits from blood money stealing from artists and then does it again stealing from songwriters. And if iHeart is doing it, the rest of the BMI owners are, too. Of course you can complain to your songwriter-board member of BMI…oh wait, you don’t have any. Unlike ASCAP and SoundExchange. Of course, the question is whether those Members of Congress who worked so hard on the American Music Fairness Act and its predecessors will exercise their oversight role and investigate the sale. As well as the series of moves that lead to Google acquiring songwriter personal data that we don’t think belonged to BMI in the first place. It may not just be insulting, it may also be illegal. And answer the musical question, how big is your black box?]

 In an ironic twist, iHeart Media, the largest owner of broadcast radio stations in the US, will receive $100 million from the sale of BMI to New Mountain Capital [and Google’s CapitalG venture fund]. The windfall is a result of iHeartMedia’s equity interest in BMI.

Read Bruce’s post on Hypebot

by Trichordist Editor

Selected Comments on the Copyright Office Proposed Rule on Termination Rights and MLC Operations: SpiritMusic

Spirit_COLC-2022-0004-0080_attachment_1Download

The Copyright Office has asked for comments from the public on important issues for rulemakings under the Music Modernization Act. This will potentially affect the operations of The MLC and related rights especially because the Copyright Office recently extended the scope of that rulemaking. The proposal drew a mixed response.

We will be posting selected comments that we think might be interesting to Trichordist readers. The project is a bit wonky, but important to stay informed on.

Spirit’s thesis:

We commend the US Copyright Office (USCO) for its highly regarded work in protecting rightsholders and their intellectual property rights. Your efforts have achieved great strides to prevent the misuse and abuse of music copyrights.

Although the [Notice of Proposed Rulemaking]’s original intent was to address the ambiguity in certain aspects of the Termination Right, the USCO’s extension of the scope beyond Termination Rights disrupts standard practices that have been long tested and put into practice by rightsholders. The administrators of copyrighted material are best suited to understand the most current and pragmatic business practices. As such, the administrators should be the ones to establish the day-to-day standards of copyright administration and to make the recommendations pertaining to the administration of copyrights and their respective payments at the MLC.

We believe the administrators’ standard practices and pragmatic solutions must be considered.

by Trichordist Editor

Must Read Post by @ednewtonrex on Why He Resigned from Stability AI Over Fake Fair Use Defense

I’ve resigned from my role leading the Audio team at Stability AI, because I don’t agree with the company’s opinion that training generative AI models on copyrighted works is ‘fair use’. 

First off, I want to say that there are lots of people at Stability who are deeply thoughtful about these issues. I’m proud that we were able to launch a state-of-the-art AI music generation product trained on licensed training data, sharing the revenue from the model with rights-holders. I’m grateful to my many colleagues who worked on this with me and who supported our team, and particularly to Emad for giving us the opportunity to build and ship it. I’m thankful for my time at Stability, and in many ways I think they take a more nuanced view on this topic than some of their competitors. 

But, despite this, I wasn’t able to change the prevailing opinion on fair use at the company. 

This was made clear when the US Copyright Office recently invited public comments on generative AI and copyright, and Stability was one of many AI companies to respond. Stability’s 23-page submission included this on its opening page: 

“We believe that Al development is an acceptable, transformative, and socially-beneficial use of existing content that is protected by fair use”. 

For those unfamiliar with ‘fair use’, this claims that training an AI model on copyrighted works doesn’t infringe the copyright in those works, so it can be done without permission, and without payment. This is a position that is fairly standard across many of the large generative AI companies, and other big tech companies building these models — it’s far from a view that is unique to Stability. But it’s a position I disagree with. 

I disagree because one of the factors affecting whether the act of copying is fair use, according to Congress, is “the effect of the use upon the potential market for or value of the copyrighted work”. Today’s generative AI models can clearly be used to create works that compete with the copyrighted works they are trained on. So I don’t see how using copyrighted works to train generative AI models of this nature can be considered fair use. 

But setting aside the fair use argument for a moment — since ‘fair use’ wasn’t designed with generative AI in mind — training generative AI models in this way is, to me, wrong. Companies worth billions of dollars are, without permission, training generative AI models on creators’ works, which are then being used to create new content that in many cases can compete with the original works. I don’t see how this can be acceptable in a society that has set up the economics of the creative arts such that creators rely on copyright. 

To be clear, I’m a supporter of generative AI. It will have many benefits — that’s why I’ve worked on it for 13 years. But I can only support generative AI that doesn’t exploit creators by training models — which may replace them — on their work without permission. 

I’m sure I’m not the only person inside these generative AI companies who doesn’t think the claim of ‘fair use’ is fair to creators. I hope others will speak up, either internally or in public, so that companies realise that exp

by Trichordist Editor

The Videogame Industry is Larger Than Film and TV Combined, Why Aren’t They Paying Musicians Fairly?

The videogame industry is larger than the film and tv industries, combined. Despite this, most if not all of the composers creating original videogame music are not paid the same as they would be doing the same work for films and tv shows. Here’s why.

Composers who create the music for your favorite films and tv shows are paid a fee which generally covers the actual hard costs of writing, producing and recording the music for that show. Most of the time that fee doesn’t leave a lot for the composer to live on after the hard costs listed above. However, film and tv composers also typically receive a royalty in the form of an additional payment when the film or show is broadcast or streamed.

This is called a public performance royalty. In most countries the composers are also paid in the same manner for theatrical exhibition (the United States is one of the few countries that does not pay this).

In addition to the public performance royalty most countries also pay a mechanical reproduction royalty. Both of these royalties may vary slightly from territory to territory but both are long established norms for the composer as the songwriter, and hence the creator of the copyright of the original music.

It is these royalties that have long been established as an essential form of compensation that allows composers to actually make a living. Videogame Composers however do not receive these long established payments that their film and tv composer counterparts receive.

To be fair to the videogame industry the early distribution methods of games and gameplay operated in a very different manner than that of film & tv. Even in the 90s for example, games were still distributed on cartridges and music was written for the hardware chipset of each console (or standard pc soundcard).

Since that time the videogame industry has evolved significantly with emerging technologies bringing the gameplay closer to traditional media in user experience and workflow. In fact the videogame industry has grown so large, that its annual revenues now exceed those of the film & tv industries combined. Unfortunately for videogame composers, they are still being compensated under a business model that is half a century old, where music was played by a chipset, not a live orchestra (and the commercial internet was in its infancy).

Game composers are now working under many of the same requirements and expectations as film and tv composers, delivering massively epic scores recorded at major studios with large classical orchestras. In fact, the process of writing music for videogames is a larger and more complex process and requires writing much, much more music due to the scale of the games.

The distribution methods of games has changed as well with many now streamisng in real-time multiplayer modes across a range of consoles, computers, phones and tablets. Some streaming games are free to play, but generate billions of dollars from in-game purchases. Videogame Composers do not participate in any of these revenues created by the new distribution technologies (both downloads or streaming).

The current labor strikes in Hollywood by Writers and Actors highlight and underscore the changing economic realities for creatives presented by these new distribution technologies such as streaming media. A similar situation affects the videogame industry who are transitioning from physical transactional sales to various types of streaming models. Streaming equals broadcast. Broadcast requires both public performance and mechanical reproduction royalties (although these may differ slightly from territory to territory). Streaming is not a transactional model. Streaming is a real-time broadcast and delivery of the media. This is not controversial. Even audio only interactive music streaming services are also bound by these same long established standards and norms.

There is talk of SAG (the Screen Actors Guild) extending the reach of their strike from traditional linear media to video game production. It should be noted that film & tv composers are barred from unionizing and have no collective bargaining power. It is against this backdrop that Videogame Composers recognize their need to advocate for the same royalties that have been long established by traditional media which are currently being reevaluated and updated for the streaming era.

In conclusion, now is the time for this fundamental and long overdue misaligned inequity to be addressed and resolved. A healthy industry is one the invests in itself, its talent and its next generation of creatives who will continue to ensure the growth of the business.

by Trichordist Editor