Music Creators Say Publishers Never Paid Them Shares of Unclaimed Royalties

Survey Shows 66% Didn't Receive Any Royalties and 31% Can't Tell from Statements

(New York, NY) - A survey of more than 100 professional songwriters conducted by the non profit organization MusicAnswers has revealed that less than 3% say they received any share of unclaimed royalty payments made to music publishers over the last several years by digital music providers (DMPs). These "black box" payments, estimated to be tens of million dollars of dollars in aggregate, are royalties earned from the streaming of songs and other musical compositions whose authors and owners were not identified by DMPs. They were made to publishers under private agreements, based on each publisher's market share.

The payments were first revealed in documents recently released by the United States Copyright Office, which provided no details of the agreements. In response to inquiries, several publishers have claimed that they paid songwriters under contract to them their share of these royalties. However, none of the publishers have disclosed the total of black box money they received, how they calculated songwriter payments, or why the source of the royalties was not identified on writer statements. Several have offered to explain their distribution formulas to writers on an individual basis, while others argued that they don't have the technical ability to make such distributions, raising questions as to whether or not royalties were actually distributed.

Not all publishers or DMPs participated in the private deals. Participants reportedly included all the major publishers as well as YouTube, Spotify, MediaNet, and Napster (formerly Rhapsody), but not Apple, Amazon, Pandora, or other DMPs.

"If these royalties had been allowed to accrue, they would have flowed through the new Mechanical Licensing Collective [MLC] established by the Music Modernization Act," says MusicAnswers Co-President Phil Galdston. "That way they would have been subject to at least some degree of transparency and oversight."

"The fact that these royalties were quietly paid to publishers based on market share with no accountability or transparency means there is no record of how, or even if, songwriters saw any part of them," says MusicAnswers Co-President David Wolfert. "Even if there is some future true-up, a lot of people got money they didn't earn and didn't deserve, and on top of that, apparently kept most of it for themselves."

Some publishers now assert that the private payments were made not for unclaimed royalties, but to settle potential infringement claims. As a result, the National Music Publishers Association is now demanding that the DMPs pay those unclaimed royalties all over again, an action publicly opposed by some members of Congress. The Copyright Office has sided with the DMPs for the moment, permitting them to deduct the royalties already paid from the amount they will transfer to the MLC, apparently hoping the dispute will go away.

According to the MusicAnswers survey, 99% of all writers believe that, whatever the true reason the DMPs made private payments to publishers, they are entitled to the same share they would have received if the monies had been paid through the MLC. But Galdston and Wolfert point out that the MLC is governed by a board of directors dominated by major publishers, who stand to retain a greater share of the unclaimed royalties under private agreements.

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MusicAnswers (www.musicanswers.org) is an alliance of nearly 4,000 songwriters, composers, producers, performers, and fans dedicated to informing about, protecting, and advocating for the rights of all music creators.