David Lowery has written to the New York Attorney General Eric T. Schneiderman to seek an investigation into unpaid mechanical royalties. Lowery, a former professional musician and now an advocate for artists’ rights, referred to reporting by The Wall Street Journal (paywall) about how some streaming services handle the payment of publishing royalties. He compared the current licensing and royalty situation to a case that the New York AG’s office pursued in 2004. That situation focused on record companies that had not paid royalties to performers after losing contact with them; that case led to $50 million in unclaimed royalties being returned to performers.
“I see no difference between the 2004 situation regarding record companies and the 2015 situation involving digital services,” Lowery wrote. “I think that highly sophisticated and well-funded high-tech digital services like Spotify and Google should be held to at least the same standard as the record companies regarding unpaid royalties if not a higher standard — if licensees don’t know who to pay, then why are they using the music in the first place?”
This fall has seen some heated debate about licensing payments in the streaming music economy. In October, independent music companies Victory Records and Another Victory Publishing saw their catalog removed from Spotify after making claims that the streaming company owed them publishing royalties on thousands of tracks. The claims were based on an audit by Audiam, a new data and licensing specialist that works to recover full royalty payments. “The problem is the interactive streaming services built no systems to license and pay songwriters,” Audiam CEO Jeff Price told RAIN News of the case. “They outsourced this to third parties who also cannot do it.”
The big takeaway of these exchanges is that the current system of royalties and licensing has huge swaths of obscurity for many of the involved parties. With this type of black box situation, it’s possible for payments to be missed, intentionally or accidentally. Jim Griffin, media technology and legal policy expert, and other thought leaders have proposed a registry system for royalties. The consensus seems to be that the current approach to royalties is not tenable and requires more transparency.