Radio – play and no pay

Have you ever heard musicians complaining that they have heard that their music is being played on the radio but that they never seem to get paid. Maybe this is called play and no pay.
One problem is that in Brazil about 50% - yes 50% - of the radio stations in Brazil do not pay a performance royalty for the music that they play.
It is very disrespectful of those non-paying stations towards the composers and artists.
The stations use the music to attract listeners but do not want to pay for the music. They should be paying a small licence fee which is paid to ECAD, and then is shared between the recording artist, the songwriters, the musicians, the record company and the publisher.
The record company receive a share because they have sometimes paid for the recording of the music, and have sometimes paid for the promotion of the record and sent it to the station.
The record company may have paid the station to play the music. If and when this happens, the payment is often charged back to the artist against royalties. This will be covered in another commentary.
The musicians receive a small fee because they played on the recording of that piece of music.
The publisher receives their share because they represent the songwriters and composers and collect on their behalf. If the composer is based in another country then the publisher collects and pays the share to a publisher in another country who works with that composer. And of course the composers receive their share because without the composer, there would be no music.
Piracy is always in the news. But surely this non-payment by the radio stations is piracy as much as illegal downloading or manufacturing pirate cds are piracy?
Why are we seemingly powerless to make the radio stations to pay?
We will write about this in the next commentary.
Thanks for reading.
john@basementbrazil.net
19 maio 2008

Thank you to Bruno and Eduardo for the opportunity to write some notes about music publishing and the music business in general. I will attempt to be easy to understand and follow for any newcomers to the music business, but at the same time I will try to pass on an understanding of the business to those who are already familiar with some of the terms.
The first topic I am going to discuss is a Mechanical Royalty. What is this?
It is the royalty for the copyright that is incorporated in the music that is written by the songwriter/ composer / author. This copyright is different to the copyright in the master recording that is owned by the recording artist, or the record label if the label has paid for the recording to be made. This royalty should be paid when a cd, tape, vinyl record, dvd, ringtone, etc is sold.
A publisher issues a contract (that they have written, or copied from another publisher) to grant an Authorisation to the artist or label for the right to use the music in a recording. The Authorisation specifies the Artist name, record label, catalogue number, album title and name of the companies involved in the agreement, as well as the song details including the writer and publisher names. The percentage due to be paid for each song is listed and is currently at the rate of 9.17% of the wholesale price for the whole record. This is divided by the number of tracks on each record. However the major record labels do not want to pay this percentage and there is a court case in progress regarding the 9.17%. The majors will not pay the 9.17% until the case is settled.
A lot of the major publishers (who are incidentally owned by the same corporations who own the major labels.. BMG/ Sony / EMI/ Universal/ Warners) ask for a very high advance payment from the independent labels who wish to include music controlled by the major publishers. This advance would be recouped against future mechanicals.
This can have a couple of effects.
The label may decide to not use that particular song. This results in the song not being heard and the composers of that song not receiving anything. Sometimes that song may be a key song in the repertoire of the artist.
The record release may be delayed while the label tries to negotiate with the publisher or asks the artist to use another song. This can mean that the record is not released at a time to coincide with other activities such as a tour or marketing possibilities.
Does the fact that the same corporations own the major labels and publishers have any influence on asking for an advance? If the independent labels have less money to spend on marketing, or indeed are driven out of business by having to pay advances to the major publishers, then would the major labels be too upset at losing competition?
We do not do this. We only ask for payment and accountings when the records are sold. I believe in encouraging the independent labels and artists.
In the 3 years since Basement Brazil opened its doors for business, only 4 labels have not paid the mechanicals that they owe to Basement. These are SUM, Ouver, Hellion and ST2. SUM and Ouver are no longer in business. There is no excuse for labels to not pay mechanicals to songwriters unless the label is in financial difficulties. After all, songs and songwriters are the basis on which the music business is built.
I have a very poor opinion of labels that do not pay, and would never recommend anyone to sign any agreement with a label that does not pay the songwriters of songs used by the label.
That is it for this month. More soon.
Please email me with any questions or comments.

John Telfer