Shocking Facts for Featured Recording Artists
Income from streaming is treated as a sale despite the labels granting only licences to streaming services:
Featured artists receive a different royalty percentage according to the kind of revenue. For example, from broadcasts they receive at least 50% via a CMO and they may receive as much as half the money where their recording is included in a film. But for sales of records they are usually paid between 2% and 25% of the wholesale price depending on the age and nature of the record contract. However, when streaming revenue is allocated to the recording artist by the label they are almost always paid according to their SALES royalty – so streaming will only pay them a maximum of around 25% – the balance being retained by the label!
The labels deduct packaging costs from streaming income:
An artist’s royalty is calculated by reference to the wholesale price of a recording after the deduction of certain costs such as taxes and the costs of packaging – ie the CD insert and case. These deductions are routinely made from streaming revenues despite a streaming service needing only one of the recordings to supply the streaming service, without the need for packaging!
Licence fees are kept secret by those to whom the recording artists have granted their rights for administration:
Licences between online music services and the labels we have entrusted with our rights, are shielded behind Non-Disclosure Agreements so the artists do not know how, or how much, the labels are being paid and how much they are sharing with the talent.
The identifiers for recordings and songs that show authors and performers are not linked:
Recordings have metadata attached that identifies the artist, the copyright owner etc. Songs have metadata allocated that shows the songwriters. These two sets of metadata CANNOT communicate, there is no link between them. This makes it much easier for labels to keep the money because remember, each dollar or euro must be “directly and identifiably” matched to the actual work.
US heritage acts are not being paid for their recordings:
In the USA there is no federal copyright in a sound recording produced before 1972 so heritage artists, at the end of their lives when they most have need of support, are not being paid for their work.
The label can squirrel away lump sums because the artist is not paid unless the label can match the money exactly to the track:
In a performer’s contract there will be a clause that says the label only has to share revenue if it is “directly and identifiably” attributable to the artist’s work. This provision serves as a built-in disincentive for the label to keep accurate data about the recordings and who played on them. If they cannot match the money to the track exactly, the label can keep it!
UK record labels keep 100% of the money from broadcast of music videos:
In the UK, where recording artists are paid for the broadcast of their work, a quirk of UK copyright law means that when their work is in a music video and that music video is broadcast, the label keeps all the money even though the artist has to recoup from royalties some of their cost of production! Multiple recording identifying systems operate across the industry and there is no central resource of recordings, who performed on them and who owns them.