Paying Twice For Your Treasured Records?

[Guest Morgen-Mantel]

A move is under way in the USA to pass a Bill that would see back royalties being paid to Artist that performed on Records, CDs, TV & Film but never got paid. This Bill would see artist being paid for "None Hit" recordings that demand a high value among Collectors both in the US and world-wide

However, interestingly-these payments would not be coming from Record Companies or Publishing Houses or indeed Central Government funds, but if the Bill is successful and is passed it would be us-the collectors and the owner of the purchased item that will be liable to pay the money to the artists! See article below

Proposed legislation to claw back artists performing rights money outside the USA

Since the statutory mechanical royalty rate payable to songwriters and music publishers has gradually increased over the past years (for example, in 1986 it was 5¢ per song in contrast to 7.55¢ in 2001), most record company contracts will provide that the royalty rate for a composition on a particular album or single will be frozen at the rate in effect on a particular negotiated date. In this way, the record company's mechanical royalty costs for songs written by its writer/artists will be fixed at a certain amount and will not be increased if the statutory rate goes up in the future.

For example, some contracts provide that the rate will be that in effect when the recording of an album commences; others calculate the effective date as the year in which the album is released; others use the year in which the record contract is signed; and still others fix the mechanical rate as of the date that an album is delivered to the record company. Sometimes the contract will provide that the earlier of either the actual delivery of an album or the date on which the album should have been delivered is the date that should apply.

Maximum Royalty Cap

In addition to the controlled-composition rate and the lock-in date for a particular album, the other important clause in the record company's controlled-composition provisions is that which determines the maximum amount of mechanical royalties a record company is willing to pay for all songs on a particular album. Here a writer/performer's lawyer must be not only a proficient negotiator of the legal aspects of an agreement but also an accountant and mathematician, since all these clauses work in concert with each other and cannot be considered independently of one another. If they are dealt with in isolation, financial disasters can, have, and will continue to happen.

The way these clauses usually work is that the record company dictates that no more than 10 times the controlled artist/writer rate of 75% times statutory (10 x 7.55¢ x 75% = 56.6¢) will be payable in mechanical royalties on any 1 album regardless of how many compositions are on the album or when sales actually occur. If the writer/artist records 12 or even 14 compositions on the album, the maximum album cap will still be 56.6¢, the same as for 10 songs.

In the case of the writer/artist recording only self-written compositions, the royalty calculation is a straightforward procedure. The tricky part occurs when the writer/artist writes a portion of the album and elects to include compositions by other songwriters.

For example, if the writer/artist records 12 compositions for an album, 5 of which are self-written and 7 of which are by outside songwriters, the writer/artist might receive only a minuscule mechanical royalty for each self-written song because of the mechanical payments made for the outside songs. If we make the assumption that the music publishers of the 7 outside songs all demand a 100% statutory mechanical rate (i.e., 7.55¢ per song in 2001), the record company will be obligated to pay 52.8¢ in mechanical royalties (7.55¢ x 7 = 52.8¢) for all the outside songs each time an album is sold. Since the maximum amount of aggregate royalties that the record company has agreed to pay per album is 56.6¢, there remains a total of 3.8¢ that can be paid to the writer/artist for the 5 self-written compositions, which means that the writer/artist will be receiving only 0.76¢ per composition (3.8¢ divided by 5 = 0.76¢) each time an album is sold. If the album sold 1 million copies in the United States, the writer/artist would receive $7,600 in mechanical royalties per song—a far cry from the $75,500 earned by each outside song licensed at the statutory rate.

If you have the bargaining power, a modification that has been negotiated is to have the royalty cap per album calculated on a rate of either 12 times 75% of the statutory rate or 10 times the statutory rate (rather than 10 times 75% of statutory)—or, in the case of CDs, which contain more compositions than cassettes, 12 to 13 times the statutory rate. Another variation is to provide that 1 or 2 compositions written by outside writers will be excluded from the cap calculations. These types of negotiated revisions give the writer/artist more leeway to pick outside songs to make the best album possible without being financially penalized for such a decision.

An amended Bill statute date 04/01/2010 we actively seek to gain payments from collectors both within and outside US territorial areas where by a new Federal agency will be formed to seek out hidden collections of rare and out of print 45s and Albums which fall within the new 60 year rule. A one off payment to cover the first 5 years is expected to be set at 22.5% of "Book valuation" payable 5 days after the collection has be assessed.

For example a collection that has been found and is valued at $10,000 would attract a spent royalty payment of $2,250.00 This would need to be paid within 5 days or the collection would be removed from the owners premises and sold on the open market to raise the necessary capitol. Collections with a value of $50,000 would attract a payment of $11,250 Plus a windfall payment of a further $10,000.

Dealers are also obliged to pay a straight 15% on "Stock carried" and supply lists of customers and their purchases in the last 3 years-failure to do so would result in fines or even imprisonment for those protecting wealthy customers.

© 2010 Jeff Brabec, Todd Brabec.

So its about time to start deciding which records you want to keep and which you are going to hide--more of a desperation tax on behalf of the US government against soft targets I think

MM

Edited April 1, 2010 by Morgen-Mantel

[Dave Moore]

April 1st. Nice try.

[Dennisoul]

Hehe

Edited April 1, 2010 by Dennisoul

[Rob Wigley]

As always an element of truth in this post Morgen

I got this from an artist via Facebook a few weeks ago:-

Yes, I traveled for a while but I am back in Detroit. Mike Terry died last year and Artie Fields died about six months ago. I know that my records are getting played over there. There is a bill that hopefully will be being passed through our congress where I will get paid when a record is played. So far, Artie and now his family have been legally making ALL of the money on me. They have never offered me anything except for less than ten records to sell once. Take a collection (lol).

So there is something underway

Rob

Edited April 1, 2010 by Karen and Rob Wigley

[Dave Moore]

As always an element of truth in this post Morgen

I got this from an artist via Facebook a few weeks ago:-

Yes, I traveled for a while but I am back in Detroit. Mike Terry died last year and Artie Fields died about six months ago. I know that my records are getting played over there. There is a bill that hopefully will be being passed through our congress where I will get paid when a record is played. So far, Artie and now his family have been legally making ALL of the money on me. They have never offered me anything except for less than ten records to sell once. Take a collection (lol).

So there is something underway

Rob

There is a bill that hopefully will be being passed through our congress where I will get paid when a record is played.

That's a whole different mantra to 'tracking down secret rare record collections'.

Best hide that Van Gogh under the bed in case his Grandkids come looking for a % of the millions Sotherby's regularly get for it eh?

[Rob Wigley]

There is a bill that hopefully will be being passed through our congress where I will get paid when a record is played.

It would be an open door then Dave for "Wannabe DJs"

That's a whole different mantra to 'tracking down secret rare record collections'.

There might be a "Job opening" there for you Dave if it did get passed

Got anything for the Brid programme this year Dave ?

Rob

[Ljblanken]

As an American, something as ridiculous as this would not surprise me at all. The USA has become a communist dictatorship.

Good thing we at least all have guns! Ha ha ha - I would stack these tax collectors' bodies on my front lawn.

They will have to pry my 45s from my cold dead hands!

Don't tread on me!

Edited April 1, 2010 by ljblanken

[Rob Wigley]

As an American, something as ridiculous as this would not surprise me at all. The USA has become a communist dictatorship.

Good thing we at least all have guns! Ha ha ha - I would stack these tax collectors' bodies on my front lawn.

They will have to pry my 45s from my cold dead hands!

Don't tread on me!

You want to come and live in England mate-you'd be running back to the States within days !

but seriously

there are moves afoot on this Bill and there was someone on here last year trying to get money-percentage of sales-- on her dead husbands discs that were being sold on EBay FFS

Rob

[Guest Dante]

As an American, something as ridiculous as this would not surprise me at all. The USA has become a communist dictatorship.

Good thing we at least all have guns! Ha ha ha - I would stack these tax collectors' bodies on my front lawn.

They will have to pry my 45s from my cold dead hands!

Don't tread on me!

I luaghed my ass off at this one until I read the next line. You really need to get out and read a bit more. No offense meant, but I've you really think the USA is a communist dictatorship I think you should read a bit about communism and America

Anyway, back on topic. I wouldn't be surprised if the approved (or tried to) a bill like this. The music industry is going through its worst crisis and needs to found new ways to keep sucking money out off artists and consumers (see 360-deals)...

[Ady Croasdell]

As always an element of truth in this post Morgen

I got this from an artist via Facebook a few weeks ago:-

Yes, I traveled for a while but I am back in Detroit. Mike Terry died last year and Artie Fields died about six months ago. I know that my records are getting played over there. There is a bill that hopefully will be being passed through our congress where I will get paid when a record is played. So far, Artie and now his family have been legally making ALL of the money on me. They have never offered me anything except for less than ten records to sell once. Take a collection (lol).

So there is something underway

Rob

I wouldn't always take the word of the artist Rob. I don't know this specific case obviously, because no name is mentioned, but Artie was a decent bloke who had his studios trashed and the tapes destroyed by local hooligans. I don't think he had too many soul releases and of the ones he did I don't think he licensed any in Europe. At least one was bootlegged so perhaps that's the record in question and obviously Artie wouldn't have made anything from that. If it's a different case to the one I'm thinking of let me know, but i don't know of him licensing anything out, mainly because his tapes were trashed.

Ady

[Rob Wigley]

PM'd You Ady

Rob

[Ljblanken]

I luaghed my ass off at this one until I read the next line. You really need to get out and read a bit more. No offense meant, but I've you really think the USA is a communist dictatorship I think you should read a bit about communism and America

Anyway, back on topic. I wouldn't be surprised if the approved (or tried to) a bill like this. The music industry is going through its worst crisis and needs to found new ways to keep sucking money out off artists and consumers (see 360-deals)...

point taken, as the posting was a joke - but a bittersweet one at that.

the US is in a serious existential crisis. modern provision of government social services has moved far beyond anything intended by our founding fathers (even though these types of service provisions by the state - such as health care - may seem innocuous to a European) . So, beyond my personal opinion, (which is certainly and obviously freaked out) current US policy constitutes a radical departure for our country from its Jeffersonian (and even its Hamiltonian and Madisonian) roots.

[Rob Wigley]

point taken, as the posting was a joke - but a bittersweet one at that.

the US is in a serious existential crisis. modern provision of government social services has moved far beyond anything intended by our founding fathers (even though these types of service provisions by the state - such as health care - may seem innocuous to a European) . So, beyond my personal opinion, (which is certainly and obviously freaked out) current US policy constitutes a radical departure for our country from its Jeffersonian (and even its Hamiltonian and Madisonian) roots.

I have a close personal friend in the Southern States who has sold his vast Record collection recently to fund his new hobby

COLLECTING GUNS AND AMMO two countries separated by a common language

Rob