Digital Distribution and How to Get Dollars (Publishing) vs Fractions of a Cent (Streaming)

[GregB]

This is loooong report about my recent discovery of revenue being received from Performing Rights Organisations that far outstrips the pathetic micropayments from streaming platforms.  So skip reading if you already know the ins and outs or, if you can't cope with lengthy personal stories, simply jump to the summary.

 

WARNING:  My experiences are specific to the digital distribution channel that I use (CD-Baby) and, additionally, I’m in Australia which has its own Rights organisation (APRA), so don’t assume that everything I describe will also apply to you.  Also I'm a non-professional without any understanding of the 'industry'.

 

While the music industry has a long money-grabbing history at the expense of the creators, I would prefer to think that, rather than evil-doing intent by anyone along the chain, many of the issues arise from old paradigms and because the old paper-based admin world has yet to fully catch up with the rapid rise of digital distribution of music, and the complexities of interlinking many different ‘systems’.

 

Act 1. Story Setup.  A background on the modes of release for my four album

 

Pre-digital stores/streaming, I co-wrote, co-performed and released my first album Not All It Seems in 2002.  I found CD-Baby soon after and sent them some physical CDs for their online store.  We sold TWO, and the cheque signed by Derek Sivers sits on the wall as a fun memento (because it would cost just as much to cash an American check in Australia!). I soon after opted to go digital (they RIP’d the tracks on my behalf) and my records of digital revenues begin in August 2004. Apart from a very few album and track purchases, there have been continuous dribbles of streaming micropayments (usually $0.001 or less per stream) ever since.

 

A second, co-created and purely digital album Prescient was released in 2015 via CD-Baby, also as a ‘standard’ release. 

 

CD-Baby was proving to have been an excellent and lucky first choice at the outset ... stats were collated, distribution platforms increasing, they were tightly integrated with Spotify and Apple, the cut of revenue was  reasonable (9% I think), and the album set-up costs/hosting was a one-off (vs annual with some others).  It was all set-and-forget.

 

My third album The Flat White Album, a solo effort, was released in January 2020 via CD-Baby. This time however I chose the ‘PRO’ option as it was cheap and I thought it meant a more thorough (‘professional’) process.  Oh boy, what a klutz! 😊

 

My fourth (and last) album Not All It Seems REDUX was released in January 2021 via CD-Baby. And I again chose the PRO option.

 

Act 2.  Action and Twists. Discovering (by being punched in the face) the murky world of 'Publishing'.

 

This kicks off with an email I received in February 2022 from APRA, the Australian Performing Rights Association which looks after songwriters and artists in Australia, and with whom I had registered all 53 of my songwriting works (solo and co-writes).  APRA’s email indicated that my  “publisher”, a company called ST MUSIC ANZ PTY LTD, had claimed 50% of all my works for my fourth album (released January 2021).  An extract:

 

Monday, 28 February 2022

IPI:

00407183768

SUBJECT: ADVICE OF WORK REGISTRATION

Dear BARNETT GREG,

The following works have been registered with APRA AMCOS by your publisher

ST MUSIC ANZ PTY LTD.

You are not required to take any action if you agree with the information given below. If you

disagree with any of the details please contact your publisher directly or APRA AMCOS

at xxxxx@apra.com.au.

These works are viewable via your writer portal login.

Registered Work Details

Work Identifier

WorkTitle

Writers

Your Percentage share

GW28813469

HOME IS WHERE THE HEART IS

BARNETT GREG

50.00%

GW28813485

IN TWO MINDS

BARNETT GREG

50.00%

Etc:

Etc

Etc

Etc

*please note these shares represent payments from APRA AMCOS only. Depending on your signed

publishing agreement your publisher may be required to on-pay part of their collected share to you.

Please refer to your signed publishing agreement or contact your publisher to confirm.

 

I Googled ‘ST MUSIC ANZ PTY LTD’.  They appeared to be a shelf company, a registered business name without any physical address, phone, or any digital presence at all!

 

Seeing my rights go from 100% to 50% induced a white-hot rage in me. How the hell could:

·         A phantom company claim any ownership of my songs?

·         APRA accept any such claim without first querying it with me?

 

APRA’s response was that ST MUSIC ANZ PTY LTD was a subsidiary of SONGTRUST (www.songtrust.com) and that:

... it would appear you have signed up to CD Baby PRO and when you sign to them beyond their “digital distribution” service you are signing their PRO agreement which is an administration publishing agreement with them and you will be sub-published by ST-ANZ in Australia.  They re-register your work with us and claim a 50% ownership of your performance copyright and 100% of your mechanicals.

 

This was probably a greater shock to me than otherwise because:

a)       It was occurring more than 12 months AFTER THE ALBUM’S RELEASE, and

b)      I had never received similar contact/advice from APRA for my previous PRO album!

 

SONGTRUST replied to my email saying they had been appointed by CD-Baby as default PRO Publisher.  I was mightily confused because https://www.songtrust.com/pricing stated:

 

“You keep 85% of all royalties. We charge a 15% administration fee for all royalty types, from all global sources.”

 

Yet ST MUSIC ANZ PTY LTD were claiming 50% of royalties!  Sheesh!  The website also declared other percentages as follows:

“Songtrust doesn’t take any copyright ownership of your songs or creative control, and we don’t require catalog exclusivity. This flexibility means you keep 100% of your songs “

 

But does the claim from ST MUSIC ANZ PTY LTD on “100% of your mechanicals” mean I’ll get no further dribbles from CD-Baby for streaming??  Not a clue.  The dribbles are currently continuing ... but I’m now in doubt. Will they stop?

 

So ...

 

I was now aware that CD-Baby’s ‘PRO’ actually meant Performing Rights Organisation.  A new term for me as I was not a music industry professional and also not American (APRA is an ‘Association’, not an ‘Organisation’).

 

However, during the album release process I had entered APRA as my registered ‘organisation’ and this is confirmed in the album’s current account info in CD-Baby:

 

It is also crystal clear from the above current screen grab (and which was my understanding at time of release), that any additional Royalty/Publishing payments would be collected by CD-Baby (as my Publisher).  I had assumed that these payments would either go direct to me (along with streaming payments via my CD-Baby account), or else go to APRA who in turn would pay me direct (as I have a Songwriter’s Member account with them).

 

The maddening uncertainty was compounded by APRA showing that ‘ownership’ of tracks remains the same as before, e.g.:

 

When ploughing through the multiple data-entry steps for my 3^rd and 4^th albums during CD-Baby’s ‘PRO’ submission process, I don’t remember at any stage being informed that CD-Baby used SONGTRUST, or indeed any sub-publisher!  

 

Act 3.  Various threads are pulled together, and A GOOD ENDING NONETHELESS!

 

It is clear to me that no-one in the ‘industry’ seems to know the complete picture of how revenues are collected and spread to songwriters and performers.  It’s bad enough that there are inconsistencies with the data that is available. For example:

·         Why are there multi-month lags between usage, reporting, collection and payment. 

·         Who audits the data for compliance and accuracy?

·         Who can identify the complete web of interconnected entities?

·         How would anyone know if data is MISSING, unreported or misreported. 

·         Who the hell ever gave Publishers a 50% cut as a standard fee, and how is this warranted in the new digital era when everything is supposedly calculated/connected/transmitted by computer and bulk processed, thousands of records at a time, 24/7.

 

HOWEVER ...

The take-home logline from this movie is that ... 50% of something is better than 50% of nothing!

 

I’ve so far only seen royalty payments for tracks from my third album (release Jan 1, 2020), and these payments only commenced around mid 2021 ... a lag of at least 12 months!  The 4^th album (Jan 1, 2021) was also released as PRO so, hopefully, if past experience holds true, there’ll be payments appearing in late 2022.  But who the hell knows?

 

On the evidence to date, Royalty payments FAR outweigh the dribble of micro-payments from streaming/downloads alone. 

 

The first graph shows ALL the reported revenue combinining ALL four albums. I’ve started the graph from 2017 to clearly show the sudden jump when royalties kick in for just the one album. I have not shown dollars ... I’m illustrating the relevant difference.  

 

The next graph focuses just on just the one PRO album which, so far, is the only album for which I’ve received Royalty payments.  APRA and PRO are the Royalties, Digital is streaming/downloads.

 

The next table + graph shows the actual number of streams (plays) for the one PRO album that is providing all Royalty payments so far. (In case you think the numbers are odd ... they ARE! Collection data is up and down, sometimes  backdated records several months prior. Just ONE track has been getting tens of thousand of hits on TikTok, but most of these get zero streaming payments - the field is BLANK, not even $0.0! - but perhaps they contribute to Royalties?  Who knows??

 

Using my one PRO album for which I’m receiving payments from APRA and CD-Baby PRO, Royalties form around 87% of total revenue for that album.   These Royalties over 12 months for just ONE album form approx 50% of ALL revenue for the four albums spread over August 2004-March 2022 (a combined 28 years of being available for streaming/download).

 

You may have gathered that I have only a partial understanding of what is happening.  In case things go awry, the get-out-of-jail card is that I can cancel the PRO Publishing deal with CD-Baby (and hence the downstream leeching by SONGTRUST and ST MUSIC ANZ P/L  any time AFTER the first 12 months of the contract. (Whether it’s easy is another matter!)

 

Having now just upgraded my second album to PRO, a positive for me at least is that ALL my 53 songwriting assets are now in the one reporting chain, and I can bequeath a single set of instructions about revenue and ownership to my sons.  Hopefully copyright will remain in effect for 70 years, and if just ONE of those tracks takes off or is used in Film/TV ... ?   Otherwise no way in hell could anyone else have picked their way through the many minefields involved.

 

Having now been through this myself, I’d like to know what happens to the millions/billions of dollars that are NOT being paid out to creators because the works-to-creator PRO publishing lines of accounting were never established.

 

 

This was a long and twisty story and I may well have sown confusion through lack of clarity and logical steps.  If anything is unclear ... just ask.

 

Cheers,

Greg

[Paul Hayworth]

I quit AKM in Austria, Facebook, do not pay for Digi distro or anything as it's a case of everybody making the artist pay for exposure, now including royalties. Clicks online can and are bought.

[GregB]

Hi Paul.

 

Different strokes for different folks. From your profile picture, you look like a gigging musician, so you probably have exposure and a fanbase.  By contrast, I'm a nobody from nowhere who just records at home, so I need some way of getting my music heard.

 

8 hours ago, Paul Hayworth said:

I quit AKM in Austria

 

For general interest, why use a service in Austria when you're in the UK?

 

Cheers,

Greg

 

 

[Paul Hayworth]

People move about dude, and are members of different royalty collection services for each territory they play. I too just record at home again after 3y in a semi famous band. But I think in answer to your question about ever increasing costs to digitally market effectively and get paid well, I'd say the internet market doesn't work that way, if at all. Take TV advertising as an example. If everyone buys into showing ads at certain times the price for that slot increseases relative to the audience. Now with internet marketing where there is no time slot or peak time to catch your customer, and with everybody being told to digitally market through e.g. CD baby etc nobody stands above the crowd whilst all creators pay for these services. This leaves the situation where everybody pays for plays but gets no reward because let's face it they have Ed Sheeran and need no more new music or development as this is the shit that sells, no more genre progression, no more creativity or talent and nothing else as created by the established industry. People do not want to be marketed to, especially not badly for something they never wanted. It has 0 to do with your music either because it's brand awareness.

Edited April 5, 2022 by Paul Hayworth

[GregB]

Hi Paul

 

... members of different royalty collection services for each territory they play

 

The single 'PRO' contract for one album I had with CD-Baby/Songtrust has so far led to Royalty payments over the last six months from: Australia, Canada, France, Germany, India, Netherlands, Spain, Sweden, South Africa and USA.  I couldn't bear the thought of managing multiple memberships for every collection agency in the world.

 

I'm not condoning the 'system', simply saying I'm now getting payments that are additional to and surpasss streaming revenue. This was done with a single one-off payment and revenue appears to be growing with no further effort from me.

 

Although puzzled by its internal complexity and lack of clarity, I'm not unhappy with the current setup as it has led unexpectedly to regular pocket money.  This was never meant to be a new career.  I never anticipated any big bucks ... and I was right!  

 

As long as no-one tries to take ownership of my songs!

 

I certainly wish you the best with your own journey and goals.

 

Greg

[Paul Hayworth]

I was caught up in the old model, CD baby etc. is the new model, where they make deals with each organisations territories. Instead of a lifetime fee you get 1y is it, making them diddle you in the end.

Edited April 5, 2022 by Paul Hayworth

[GregB]

On 4/5/2022 at 7:42 PM, Paul Hayworth said:

Instead of a lifetime fee you get 1y

 

Hi Paul.

 

I've just re-read your last reply.  Of course I don't know your own history of transactions, services etc..

 

All I can do is advise of my own experience ....

my Standard and PRO albums with CD-Baby were each a one-off cost (i.e. there have been NO annual payments, and I'm now into the third year of my first PRO release).

 

This set-and-forget low admin at an acceptable price has been the major reason I've remained with CD-Baby rather than use one of the many recent distributor services like TuneCore.

 

Greg

[Clay Anderson Johnson]

On 4/4/2022 at 3:14 AM, GregB said:

This is loooong report about my recent discovery of revenue

Great post!

[john]

You can do it either way, though there are pros and cons with each.

 

You don’t need to be a member of royalty collection agencies for each country you play in or your music is played in. Most PROs have reciprocal agreements with foreign PROs specifically to avoid the need for this. The idea is simple. Say you are a member of ASCAP and your music plays in the U.K.. PRS for Music (U.K. PRO) will collect U.K. earned royalties and send those fees to ASCAP for distribution.

 

That said, there can be huge delays in foreign territory collections. If you are a member of ASCAP and want to deal with PRS directly, you simply join PRS, and sign some paperwork with ASCAP to opt out of royalty collection in the U.K.

 

This option was available pre-internet, though there were less reciprocal agreements in place. Probably more of an issue in each country was the effectiveness of collection as reporting was a manual process. Some countries still rely upon manual reporting. The trouble is that that manual reporting affects the collection of fees etc. no matter who you are registered with. This is because the foreign PRO collects the money no matter if registered with them directly or they are doing it to honour a reciprocal agreement. Distribution, however, is a very different matter. Every company has different policies.

 

There’s a lot who swear by their local collection agency, and a lot that go by territory specific PROs, but I don’t know that there is a universal right way to do it. It kind of depends on who your home PRO is and who the foreign PRO is.

 

… and I agree with Clay, great post.