Royalties

Spotify Ad Draws Criticism over How It (Under)Pays Musicians

11 April 2019

From TNW:

Spotify tweeted an ad for its new partnership with Hulu, along with a comment about “budgets.” Several people, including one particularly savage songwriter, pointed out the company shouldn’t be the one to talk about money when it offers such a paltry sum to the artists whose music it hosts.

The ad itself isn’t anything terribly insensitive. Spotify announced its new bundle a few weeks ago — which gives Premium users a free Hulu subscription — and the ad was promoting this. It shows two different shows and songs for “Payday” and “Rent’s Due,” and then says “Feel more of what you’re feeling.” The tweet itself says “What’s a budget, anyway?” which is a bit of an odd caption considering you’d think this deal would be perfect for those with a budget.

. . . .

But as several users responded, Spotify should really think twice before mentioning budgets, considering the price artists’ pay for the company’s low prices.

. . . .

As he pointed out, Spotify streams earn artists exceptionally little money. Spotify, in Lowery’s words, spends a great deal of its money on things such as its pricey offices, and it’s currently appealing the rates set by the Copyright Royalty Board in an effort to pay even less.

. . . .

Lowery and singer-songwriter Melissa Ferrick both sued Spotify in 2015 for distributing songs without paying the proper licensing fees. Spotify’s go-to defense at the time was that it was putting aside money to pay rightsholders — it just had insufficient information on who the rightsholders were in this case. The lawsuit was settled in 2017, with Spotify setting up a $43.4 million fund to pay for those whose rights had been infringed.

Link to the rest at TNW

I Was Paid £12,500 to Write My Book. Here’s Why I’m Revealing That

28 March 2019

From The Guardian:

I was paid a £12,500 advance to write my book, Open Up. Sharing this publicly, even as the author of a book about our emotional relationship with money, was initially petrifying, but I ended up revealing it in the book – it’s there on page 17. When I got the book deal, I’d excitedly tell people and they’d inevitably ask: “Did you get an advance?” And like most chats about money, the conversation would abruptly stop there.

I worried about telling people the amount for so many reasons. I thought it would compromise my publisher or my agent. I worried it would compromise the book, and that people would think: “Oh, that’s not a large amount, it can’t be very good.” The only book deals we hear about are the six-figure ones, and they can be misleading; a headline-grabbing “£100,000 four-book deal” is really only £25,000 a book, and if a book takes a year to write, that pays the author a below-average salary.

We’re fascinated by what other people earn not only because we’re nosey, but because the more we know about what other people earn, the more we understand our own circumstances. You can’t tell if you’re being under- or overpaid without knowing what other people in your industry earn. Since my book was published, two authors have been in touch to say: “Thanks for sharing your advance. I thought my publishers were low-balling me.”

. . . .

I am fed up with navigating a culture that obsesses over who has what but discourages any conversation about our own finances, which was why I printed my advance. Others are starting to do the same, and not only through anonymous money diaries. Last week, blogger Alex Stedman behind the Frugality revealed that she pays herself an annual salary of £30,000. (“I am 35 years old. I am the breadwinner. And I am the richest I have ever been,” she wrote.) Earlier this month, podcaster Aminatou Sou divulged her 2018 salary in an interview with the Cut: more than $300,000 (£228,000), from a book deal along with “public speaking, the podcast and sponsored ‘influencer’ stuff”.

Link to the rest at The Guardian

2018 Streaming Price Bible

29 January 2019
Comments Off on 2018 Streaming Price Bible

From The Trichordist:

This data set is isolated to the calendar year 2018 and represents a mid-sized indie label with an approximately 250+ album catalog now generating almost 1b streams annually. 2018 is the year we saw streaming truly mature as the dominant source of recorded music revenues.

In parsing the data provided we find that digital revenues are 86% of all recorded music revenues globally (RIAA Reports Digital Revenues as 90% of Total). Streaming is 80% (or more) of Digital Music Revenues. Downloads are about 20% of digital music revenues for the year, however if we isolate Q4, it would appear download revenues could be less than 15% of digital revenues. The transition from downloads to streaming is well beyond the tipping point and we wonder how long the major services (Apple, Amazon, Google) will continue to support the format.

As we dig down into the physical revenues much of the gross is eroded by manufacturing, shipping and inventory costs of both CDs and Vinyl. In short, the recorded music business is now the streaming music business. Whatever charm there is to vinyl, it is at best still a truly niche business in terms of meaningful net revenues.

. . . .

The Top 10 streamers account for over 97% of all music streaming revenues. The Top 5 account for over 88% of all streaming dollars.

. . . .

The biggest takeaway by far is that YouTube’s Content ID, (in our first truly comprehensive data set) shows a whopping 48% of all streams generate only 7% of revenue. Read that again. This is your value gap. Nearly 50% of all recorded music streams only generate 7% of revenue.

. . . .

The Spotify per stream rate drops again from .00397 to .00331 a decrease of 16%. Apple Music gains almost 3% for an total global marketshare of about just under 25% of all revenue.

Apple’s per stream rate drops from .00783 to .00495 a decrease of 36%. We need to state again, that 2018 saw a massive shift of revenues from downloads to streaming and no doubt this expansion of scale, combined with more aggressive bundling (free trials) as well as launching into more territories was bound to bring down the overall net per stream.

. . . .

Apple Music still lead in the sweet spot with about 10% of overall streams generating 25% of all revenue (despite the per stream rate drop). Spotify by comparison has nearly triple the marketshare in streams than Apple Music but generates less than double the revenues on that volume.

Link to the rest at The Trichordist

The OP includes a chart with more numbers.

PG is always interested in the similarities and differences between the music business and the book business. He suggests printed books are the CDs and Vinyl of the publishing world and will end up with as little relevance to overall revenues.

Once again, PG is reminded of Monty Python:

 

 

Why American Artists Should Benefit from the Resale of Their Works

19 January 2019

From The Art Newspaper:

In the US, authors, musicians, actors, and others in the creative industries have royalties and residuals that reward their enduring stake in the redistribution of their intellectual property, when properly enforced. Yet while visual artists are entitled to royalties on commercial reproduction, there is currently little to no legal recourse for them to benefit from the resale of their work.

For a legacy interest to be codified across the US, legislation implementing a so-called droit de suite would have to pass Congress. And with a new Congress freshly seated on Thursday (3 January), an updated version of the S3488/HR6868 bill, otherwise known as the American Royalties Too Act (ART Act,) is expected to be reintroduced by incoming chair of the House Judiciary Committee, Representative Jerry Nadler (D-NY).

As the US art market continues to swell, the need for support for this bill becomes ever more necessary, especially when it comes to protecting artists with less established markets who can be more easily exploited. Case in point: demand continues to rise for works by many African American artists who have been undervalued and overlooked for decades; many are now finding success late in life yet reap no retrospective reward.

An active artist whose talent is recognized during her or his lifetime can often at least benefit from increases in fair market value, even if marginally. This is evident in the case of artists such as Kerry James Marshall, whose stratospheric rise has led to ceiling-shattering prices for African American artists. Yet when his painting Past Times sold for a record $21.1m at Sotheby’s New York in May 2018, Marshall realised nothing from its sale. Nevertheless, Marshall enjoys the benefit of high primary market sales.

The introduction of droit de suite legislation in the US would help rectify this inconvenience for well-known contemporary artists like Marshall but it would be an even bigger boon for historically disadvantaged artists who have been left out of the American canon of art for reasons of race, gender or other socio-economic limitations. This is especially true of the many artists who lack representation or a presence in the art market until the end of their careers or posthumously.

Consider the Gee’s Bend quilters of Alabama: with no access to the gallery system, many of their artworks were purchased by Atlanta collector William S. Arnett at a time when no viable market existed for their work. In 2010, Arnett donated over 1,300 artworks, including quilts and objects created by other artists, to create the Souls Grown Deep Foundation, dedicated to promoting these artists’ previously unrecognised talents.

Like many artists, the value of the quilt makers’ works has increased over time. But many of the artists have either passed away or are no longer producing works, and thus an improved market came too late to benefit them in their prime. One could cite many examples of this discrepancy throughout history, but the case of the Gee’s Bend quilters feels especially urgent given the artists’ dire economic circumstances in the rural South.

. . . .

By permanently transferring their remarkable artworks to dozens of leading art museums through a gift-purchase model—a process started in 2016 and actively continuing—the foundation can both alter the narrative of American art history to include them and dedicate funds raised to improving the living conditions of artists and their heirs in the African American South.

Artist resale rights are already observed in over 70 other nations in accordance with the Berne Convention for the Protection of Literary and Artistic Works. In the European Union, such royalties are payable for up to 70 years after the artist’s death. France introduced the royalty in 1920; a recent French Supreme Court decision has shifted the burden for paying the royalty to the buyer.

In the US, however, only 31 states currently recognise the right for visual artists to receive royalties from their first sale. The only legislation on the books offering droit de suit protection law is California’s Resale Royalties Act (CRRA) from 1977. Perennially ineffectual, the CRRA is not only limited in scope—royalties must be paid to any descendant within 20 years of the artist’s death—it was effectively struck down in July 2018 by the Ninth Circuit Court of Appeals, which noted that federal law would need to change for such a royalty scheme to be feasible.

Link to the rest at The Art Newspaper

 

Alamy Cutting Commission from 50% to 40% for Its Stock Photographers

5 December 2018

PG thought this item, relating to a rough equivalent of an ebook publisher in the photo world, was troubling and hoped indie authors would not find themselves in similar circumstances in the future.

From PetaPixel:

Alamy announced in an email to contributors today that the commission rate for stock photo sales is being slashed from 50% to 40% starting in February 2019.

Here’s what the email said:

In February 2019 the Alamy contract will be changing to reflect a new commission structure. The commission contributors receive for direct sales will change from 50% to 40%.

This email is to give you advanced warning of this upcoming contract change. You will receive another email in January 2019 signalling the beginning of the standard 45 day notice period before the new contract comes into effect in February 2019.

Alamy is a popular stock photography agency that, since launching back in 1999, has remained a private company through all the mergers and acquisitions that have occurred in the stock photography industry.

While it was originally known for offering a majority of each sale to contributing photographers (even as high as an unheard-of 90% in the beginning), Alamy dropped the 60% commission to 50% back in 2010-2012 citing a need to invest in R&D, new products and services, and new marketing initiatives.

Now the 50% commission is being cut further to a minority share of 40%.

. . . .

“It’s kind of a significant move away from where we have been historically, which is to be on equal footing with our photographers, and in fact our origin was to always pay the lion’s share of royalties,” West says.

West calls Shutterstock, Getty Images, Adobe Stock (formerly Fotolia) “tier 1” agencies with revenues north of $150 million. He places Alamy in the “tier 2” level with revenues of $30-$60 million, saying Alamy is essentially the only “tier 2” agency that’s not an outright microstock agency.

West also says Alamy started with the unusual approach of paying contributors a much higher royalty than anyone else in the industry, which brought Alamy early success.

“The thing that we got wrong — and I was pretty naive about with hindsight — was the royalty split,” West says. “I thought we could charge a fraction of that of our competitors and so we started it paying contributors 90% royalties with some transaction fees on top of that.”

. . . .

“If we hadn’t reduced the royalty as we did in 2010, we would not have been able to invest in the things that led to ultimately the results we’ve achieved in the last 3 years,” West says.

. . . .

After the change, Alamy will still be offering a higher commission than its competitors, West says, adding that he believes this may be the last commission rate drop Alamy will need to do.

Link to the rest at PetaPixel

PG suggests you may wish to view the video in the OP and read some of the comments.

PG’s observation is that the video is not reassuring for photographers and doesn’t reflect a proper level of preparation on the part of the presenter.

PG further suggests that the OP and video may serve as a caution for indie authors to be mindful about keeping their options for licensing and selling their books open to the greatest extent possible. All of the terms and conditions promulgated by Amazon and other online ebook publishers and/or distributors via click-to-accept agreements which PG has reviewed include the right for the publisher or distributor to change the terms of the business relationship, including the financial compensation for the author at any time, often without advance notice.

While PG is not an expert on royalty agreements between photographers and stock photo agencies like Alamy, his review of Alamy’s Terms and Conditions disclosed more than a few provisions which are, in his photographically humble opinion, not fair to creators. PG reviewed the Terms and Conditions appearing here.

If, as the video and OP imply, Alamy is (or has been) considered an enlightened photo agency, it appears to PG that photographers may be treated worse than authors are treated by traditional publishers in more than one respect. However, as usual, PG could be wrong.

Why Do Authors Feel Hard Done By?

14 November 2018

From Publishing Perspectives:

I was struck by a comment on my last column about measuring commercial success in publishing. It came from Ryan Jones who is, I imagine, an author. He wrote: “Publishers pull in billions of dollars yearly and yet few writers can even make a living. What’s wrong with that picture?”

I thought it might be worth examining this widely held sentiment.

Of course he has a point, and I’m sure the various organizations supporting and representing authors would agree. There was a recent spat between the UK’s Society of Authors, the Authors Licensing & Collecting Society, and the Publishers Association, about this very subject.

. . . .

Per Saugman was a distinguished medical publisher, the force behind Blackwell Scientific Publications, the sale of which to Wiley is the reason that the UK still has a high-quality academic and trade bookselling chain, Blackwell Retail, in spite of the many challenges. Saugman explained to an author why he would not increase his royalty rate: “I’m not paying you the royalty, the purchasers of the book are. The higher the royalty rate, the more we shall have to charge and the less enthusiastic they will be to reward you.”

The royalty system is a fair one. It links an author’s income not to any abstract notion of worth but to how much the reading market will pay for the author’s efforts. Successful authors are hugely well rewarded and I’m sure would prefer the current system to any other. JK Rowling, Danielle Steele, Stephen King, and many others have built fortunes from their books and frequently are able to deploy those fortunes generously and properly.

And then one should consider why writers write. It’s not always (or even usually) for money. There are many motivations.

For instance, a lawyer might want to write the ultimate book on her subject of expertise. It’s a way of establishing her credibility and hence the value of her professional practice. A few hundred or thousand dollars either way will be of little consequence but what she wants is a publisher whose brand carries weight, whose editorial support systems and marketing reach are first rate.

. . . .

The main complaints seem to come usually from so-called midlist authors whose income is almost certainly in decline. But that’s not from publishers taking more. It’s simply the case that general fiction (the bulk of this sector) is more widely split than ever between the bestsellers and the not-so-good sellers. Public library sales, which were the bedrock of midlist hardback sustainability, are in decline. Paperback sales have been eroded by lower-price ebooks. Fewer retailers are willing to dedicate space to any but the top 100 or so novelists. Self-publishing has created a tsunami of digital fiction, thus deflecting sales from the traditional market.

None of that is of any comfort to the professional writer seeing his or her income decline. Nor does it help that publishers seem willing to pay large advances to unknown new authors in the hope of finding the next big thing after a massive twelve-way auction. The trouble is that every now again the next big thing is the next big thing and it is the big things that keep general publishers in business.

. . . .

Yes, the publishing industry is big. A survey conducted by the World Intellectual Property Organization and the International Publishers Association estimated total global sales of US$41.9 billion in 2016.

. . . .

The industry also employs many millions of people worldwide. And pays taxes. And creates markets.

But as I said in my previous column, sales don’t represent profits.

Publishing is highly competitive. Margins in certain sectors at certain times can be high. An unexpected bestseller can transform a business. Finding a new niche or a new market can generate profit and cash, but in the normal course of events, a publisher is happy to make a 10-percent return on sales (trade authors typically receive 10 to 20 percent of the publisher’s sales) and to generate enough cash to stay in business.

Publishing is a good business and an important one for all sorts of reasons, but publishers are not the greedy sharks they’re sometimes portrayed to be, nor are their companies out to prosper at the expense of authors. If authors’ incomes are in decline, the solution is to find a larger cake, not to argue about the size of the slices.

And Stanley Unwin’s famous quotation still holds true: “The first duty of any publisher to their authors is to remain solvent.”

Link to the rest at Publishing Perspectives

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Are Electronic Course Packs Fair Use?

28 October 2018

From The Authors Guild:

For the past ten years, in the Cambridge University Press v. Albert case, publishers have been battling with Georgia State University over whether the University’s providing its students with digital course packets that include excerpts (often full chapters) of books constituted “fair use.” Under court rulings in prior cases, the law was clear that providing photocopied course packs without a license was not fair use. In this case, however, the district court has already twice sided with Georgia State University, finding fair use on all but a few excerpts, and now the appeals court has again sent the case back down to it. On October 19, 2018, the Eleventh Circuit Court of Appeals vacated the district court’s second decision that the vast majority of Georgia State University’s digital excerpts were fair use, with instructions for how to get it right this time.

. . . .

This case has been closely watched by authors, publishers, and universities as a measure for when excerpts for classroom use need to be licensed or not. In the intervening decade, many universities appear to have stopped paying for these types of electronic classroom uses. Authors who used to regularly receive licensing income from classroom use report that that revenue source has dried up in recent years. A favorable outcome in this case would put universities on notice that they should start paying for those uses again.

. . . .

One of the major errors that the Eleventh Circuit failed to correct is the district court’s analysis under the fourth factor. The law describes the fourth factor as: “the effect of the use upon the potential market for or value of the copyrighted work.” As such, a fair use is one that should not replace a current or potential market for the work. The Supreme Court instructs courts conducting this analysis to look at the impact on current and potential markets if the use were to become widespread and unrestricted.

Instead, the lower court looked at whether the publishers already had electronic licenses available to universities in 2009 for excerpts for the specific works—an extremely narrow view of an existing market.

. . . .

Moreover, the court’s rule that the taking must be so great that the copyright owner no longer has the incentive to write or publish was created out of thin air and would make pretty much any particular use fair use. Few individual uses will be so great that they will be the deciding factor in whether to publisher or not (or write for that matter); it is the cumulative effect of these free uses that makes it increasingly hard to publish material that is not highly commercial.

Of greatest concern to authors and other creators is the fact that the Eleventh Circuit failed to remind the lower court to consider the impact on potentialmarkets from widespread use, and to remember that the relevant market to be considered is broader than a particular format. Whether the publishers had already made the particular works available for e-licensing for e-course packs should be irrelevant – yet the district court chose to focus on that point. Under the court’s analysis here, uses of copyrighted material that eliminate potential markets entirely—and thereby eliminate potential income for the authors as well as the publishers—may qualify as fair uses.

Link to the rest at The Authors Guild

Fat horses & starving sparrows

28 October 2018

From Overland:

In the last major survey, conducted by Macquarie University researchers in 2015, Australian authors were found to earn an annual average of just $12,900 from their writing work; the median, at $2,800, is even more concerning. In the UK, which has better longitudinal data, earnings of professional writers have dropped 42 per cent in real terms between 2005 and 2017, according to the Authors’ Licensing and Collecting Society. In that same time, the proportion able to make a living solely from writing work fell from 40 per cent to 13.7 per cent. The jobs at newspapers and magazines that used to so often be relied on to bolster book earnings have largely evaporated. Many of us know people who have lost their writing jobs, or who are just barely clinging on.

. . . .

Let’s start with ‘free is not fair’, the catchy slogan of a campaign led by the Copyright Agency, which has been used to argue against the proposed adoption of a ‘fair use’ exception to copyright. For those who haven’t been following, there has been fierce debate over whether Australia ought to adopt a flexible exception to copyright infringement that would permit, without payment, any kind of use, so long as it’s ‘fair’. This is already the law in countries such as the US, with ‘fairness’ determined by taking into account all relevant factors, including the effect of the use on the potential market for or value of the copyright material.

Many people claiming that ‘free is not fair’ know a lot about copyright. They know that our law has permitted, for over a century, fair use for purposes such as research, criticism/review and news reporting. And, unless you think you should pay for every use of every copyrighted thing – for example, every time you access a webpage, use a search engine, forward an email or retweet a photo – you know free can be fair. The slogan even contradicts itself, since under a fair-use exception, if the use of a work for free is not fair, it wouldn’t be permitted. That is the entire point. Thus ‘free is not fair’ is textbook bullshit.

. . . .

However well intentioned these claims might be, they sell authors short. The reasons why can be found in the two fundamental rationales for granting copyright in the first place. The first is to incentivise the creation of works, thus helping achieve the social benefits that flow from widespread access to information and culture. On top of that, copyright aims to reward authors: to secure them an additional share of the benefits arising from their creations, in recognition of their contributions of personality and labour.

To give effect to these aims, authors and publishers should be able to share between them the rights necessary to incentivise their investments in creating and distributing cultural works. But the rewards share – everything beyond that – is justifiable only for authors: the people who actually created the work.

Right now, Australian copyright law is designed to make it as easy as possible for investors to extract the entirety of authors’ copyright interest – not just the incentives component, but the additional rewards part as well. We call this a laissez-faire approach, French for ‘let people do as they choose’, but here better described as the freedom to sign away your rights, before anyone knows what the work is worth, often in exchange for not much at all.

I know a woman, ‘Kate’, who recently sold her book to a Big Five publisher for less than $1,300. The publisher extracted every right to every payment, worldwide, forever, leaving the author with zero entitlement to future royalties (even if the book becomes a surprise bestseller), or any licensing fees that might be paid for use of the book in schools or universities. Kate even lost her statutory right to compensation for use in libraries, since one’s claim to these payments depends on having an ongoing right to royalties.

That such a deal would be offered and agreed to won’t surprise anyone who has worked in or studied creative labour markets. As cultural economist Ruth Towse explains, commercial players in creative industries take advantage of the structure of artists’ labour markets and exploit their willingness to create. A surplus of creatives, coupled with a culture of short-term, project-specific contracts, puts artists in relatively poor bargaining positions when dealing with investors. All this explains how such a big share of copyright’s rewards can end up being transferred to others.

We see from all this that authors have a moral entitlement to the fruits of their labour, but a hard time holding on to them. Outside Australia, many countries have taken steps to even the playing field. In France, publishers have an ongoing obligation to market their books: if they fail to do so, authors can readily regain their rights. They can also terminate an agreement if, at least four years after publication, no royalties have been paid for two years in a row (publishers are required to provide accurate royalty statements too). Canada automatically reverts rights to heirs twenty-five years after an author’s death (as did the UK until 1956 and Australia until 1968). Authors can terminate their contracts in the US after thirty-five years. The Netherlands and Germany both have ‘bestseller’ clauses, entitling authors to a bigger share of the windfall gains that come from unexpected commercial success.

. . . .

Australia’s current approach to protecting authors is a manifestation of trickledown economics, that theory of horses and sparrows: feed the horses enough oats and some will fall through to feed the birds. There are plenty of oats. By 2016, according to their own publicly released data, publishing behemoths Penguin Random House and Simon & Schuster had seen their profit margins grow to 16 per cent. Yet a recent study, The Contribution of the Publishing Industry to the UK Economy, estimated that just 3 per cent of earnings went to the authors from whose minds sprang those rivers of gold. In other words, we have fat horses and starving sparrows.

. . . .

We should also be demanding greater transparency around the distribution of revenue from the statutory licences that pay for uses in schools and universities. Those are the revenues that, in Australia, are collected by the Copyright Agency. Australia’s schools pay far more to use copyrighted works than their overseas counterparts – almost $17 per student, compared to around $3 in the UK and NZ. This would be laudable if that money went to supporting authors, but as far as we can tell from the Copyright Agency’s reporting, publishers again take the lion’s share.

Link to the rest at Overland

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