Royalties

Discussion in 'Music Corner' started by thnkgreen, May 23, 2020.

  1. elaterium

    elaterium Forum Resident

    Yes, in an equitable society with worker owned collectives that would be the case.
     
  2. thnkgreen

    thnkgreen Discography Junkie and Jazz Addict Thread Starter

    Location:
    Winston-Salem, NC
    Yeah McCartney was a bad example, I agree. I was just trying to think of an artist that was very wealthy. The way that you have worded this post is much more along the lines of what I am getting at. Thank you.
     
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  3. thnkgreen

    thnkgreen Discography Junkie and Jazz Addict Thread Starter

    Location:
    Winston-Salem, NC
    Thanks for your input. I was wondering how the digital system works compared to the days when I was overspending on cd's
     
  4. SpinalRecord

    SpinalRecord Active Member

    I would never, ever make the case that coal mining is anything but one of the most thankless, difficult, and dangerous jobs imaginable and the way they have been treated historically is abhorrent. Child labor laws, workers' safety and health, workers' rights, a non-entity (at least in the US. I know the coal-miners union was very powerful in the UK before Thatcher.)

    That being said, just because being a musician is easier than a coal miner doesn't mean it's easy. The people you see living in the limelight with all of the glamour, money, and attention are working their asses off and have basically no life outside of that. And those people are the .1%. It's a very fulfilling career for those who are passionate about it (which is why I chose that path), but it's a constant hustle. I live in the Washington DC area and practically all of the top musicians around are military, which makes sense--it is probably the safest, most stable way to make a living as a performing musician and actually has benefits. Still, every single one I know also runs a full studio of private students and gigs full time outside of their military performances because that's what it takes to live comfortably, even with perhaps the most stable career in the industry.

    But royalties have everything to do with intellectual property--they're not proportionate to hard work or glamor. It's ownership of an idea and it's an insanely obtuse area of law, even in the best of circumstances, when all of the contracts have crossed 't's and dotted 'i's. Paul McCartney is a very useful example, as the Beatles did something very unusual: they incorporated. Very generally speaking, the way record labels work is that an artist signs a contract with a label that will foot the bill for recording and ensuring the distribution of that recording, but they (not the artist) retain all rights to the music. Whatever the artist is entitled to in royalties is determined in the contract. Billy Joel didn't read his contract closely enough and has, to this day, made less than $1,000 of off Piano Man.

    The Beatles (or more precisely, their manager, Brian Epstein) set things up so that they retained total ownership of their music throughout most of their career. Their record label was, of course, Apple and all of their songs were copyrighted under Northern Songs (also them.) This is what allowed them to stop touring as well. Royalties generally account for a mere fraction of the money successful artists generate: touring and merchandise is where the artist makes their money. The Beatles didn't have to rely on that. Nor does Radiohead for that matter. Ultimately, I would argue that Brian Epstein's suicide was a huge factor in the Beatles breaking up (the fact that people blame Yoko is laughable), because all of the sudden the band, on top of becoming strained, had a huge business with no one to run it and it was starting to fail. McCartney lost his stake in Northern Songs and would no longer receive full compensation for others using his work--that money would be going to someone else (namely, for 1985-2009, Michael Jackson.)

    Bottom line: Royalties are super complex (and that's without even getting into fair use law). Do I think artists deserve to make a living off of their hard work and ingenuity? Of course. Do I think it's ridiculous that Madonna has demanded (and received) over $1,000,000 to license one of her songs? Absolutely. Does it suck that Hendrix's relatives are a bunch of money grubbing a-holes? You betcha.

    If you take issue with royalties and the way the music industry distributes profits, there is a way to hear new music and fairly support the artist whom you like without the BS, but it's pretty controversial: sail the seven seas, if you know what I mean and then buy physical media, go see shows, buy a t-shirt when you find bands you like.
     
  5. elaterium

    elaterium Forum Resident

    I find it a really interesting one. It points to questions of equitability.
     
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  6. pocketcalculator

    pocketcalculator Well-Known Member

    Location:
    New York City
    If you think that no one - not just artists - should own a billion dollars (or the equivalent value in property), the solution is to have a marginal tax rate so that everyone owns less that that. Practically speaking, this would mean that someone like Jeff Bezos would need to divest himself of a large chunk of ownership of Amazon. Their are other practical implications that would affect our economies and, frankly, politics, which are worth exploring but it would have a dramatic effect on the way our societies are run.

    Essentially, people earn money off of two things, labor and property. At times there isn't necessarily a hard distinction between them, but basically what you get for labor is wages (or whatever the contracted for payment for is if you are not an employee), and what you get for property is the increase in value of that property, which includes dividends, and in some cases, royalties - payments which are made for the use of the property. If someone licenses your real estate for an oil well or copper mine, in addition to an upfront payment, you will likely receive a royalty based on the value of whatever is extracted. Likewise, if someone licenses your songwriting copyright, say, to broadcast it on the radio, or to make a phonorecord, or nowadays for streaming, you will also receive a royalty based on the number of "plays" or copies made.

    We have different kinds of property. The simplest form, personal property, is essentially something movable. In more "primitive" societies, this would be a knife or a spear. As societies "progressed", different kinds of things became property so that now we have real estate, money, business property (stock, partnerships, sole proprietorships), financial property (bonds, derivatives, insurance, etc.), and intellectual property (copyright, trademark, patents).

    Prior to the creation of copyright in the early 17th century, makers of creative works either received no compensation for it, or were paid by the patronage of some aristocrat or other rich person. Effectively, this meant that someone who, say, composed songs, either 1) had to be independently wealthy or make their money elsewhere, or 2) be dependent on pleasing someone rich or powerful. Copyright means that artists are less dependent on the wealthy or powerful, because they can receive payments based on the use and enjoyment of their work by the public.

    As a result, someone who creates works which are much more popular (are used and enjoyed much more by the public) makes much more money from royalties than someone who is less popular. McCartney has made a ton of money from royalties because his music is very popular, while, say, Robyn Hitchcock has not. I'm sure Robyn makes something from royalties, but I would guess that the bulk of his income comes from touring. When musical artists make more money from royalties, the less beholden they are to needing to do other kinds of work to survive. One reason ticket prices have gone up massively over the past twenty years is because many musical artists once were able to make a decent income from royalties, and so could charge less for tickets, but file-sharing and now legal streaming have cut the income from royalties drastically. Musicians who can tour can make up some of the loss from lower income from royalties, but people who are simply songwriters or composers are screwed by the tech industry.)

    As the fairness of all of this, it really comes down to the labor/property dichotomy. Your father spent a certain amount of time to dig a certain amount of coal and received one payment for it, because he didn't own the coal or the mine. A farmer who plants and cultivates an apple orchard which he owns doesn't receive a one time payment for the labor that went into it, but does receive income (from sale of apples) over the entire life of the apple trees. Likewise, McCartney spent a certain amount of labor writing his songs, for which he was paid nothing at the time (I'm leaving aside the complicated realities of publishing deals), but he receives income from those songs in proportion to how much people use and enjoy them until they go out of copyright.

    So, is it fair that Jeff Bezos and Paul McCartney are both billionaires, and any coal miner is not, though presumably they all work hard at what they do? It really comes down to how we as a society value things. The reason Bezos and McCartney are so rich is because they created something of value which continues to make money because it is popular. Your dad, presumably, was not rich, because the coal he made was consumed once, and, more importantly, he didn't own the mine. But you also have to consider that labor, in and of itself, is not necessarily valuable. You can spend an awful lot of work creating something that, in the end, nobody wants or values. Is that fair?

    We could create a society where everyone is compensated the same, regardless of whatever work they do and how much they do. This, in a very simplified way, is what communist society claimed to want to achieve, though in reality there were disparities in income and huge disparities in opportunities and power. Leaving aside the general trainwreck of communist economies and political censorship, great art was created under (and in spite of) them, but I think most people would agree that communist societies did not create the wide variety and sheer number of works that were created in capitalist societies in the same period. Political issues aside, the Beatles would never have been able to create the music they did in a Soviet Bloc country because the sheer popularity of their music created so much money that they could really do whatever they wanted.
     
  7. dubious title

    dubious title Forum Resident

    Location:
    Ontario
    Many here think musicians shouldn't even expect to make a living making music. See any streaming thread. It's just awesome that one gets to make music. No money from touring now, streaming, crappy deals, why not take a look at royalties? Should our educators, civil servants get an indexed pension? Should we take a look at that too?

    To quote someone else here "this is a really ignorant thread"
     
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  8. thnkgreen

    thnkgreen Discography Junkie and Jazz Addict Thread Starter

    Location:
    Winston-Salem, NC
    This is one of the most well written posts I have read on any of these forums, and I really appreciate your insight. Thanks!
     
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  9. elaterium

    elaterium Forum Resident

    Great post.
     
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  10. thnkgreen

    thnkgreen Discography Junkie and Jazz Addict Thread Starter

    Location:
    Winston-Salem, NC
    This is NOT an ignorant thread. You obviously do not understand the question either.
     
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  11. wildstar

    wildstar Forum Resident

    Location:
    ontario, canada
    Correct. He had top notch business managers/investment advisors (not to mention Linda's father and brother were respected New York entertainment lawyers).

    Plus most of his earning have NOT come from The Beatles.

    He doesn't own his Beatles publishing (nor his solo publishing up to IIRC 1973).

    He doesn't own the Beatles masters.

    He owns ALL his solo publishing post 1973.

    EMI owned all his solo masters up until IIRC January 1976. Due to his massive mid 70s success he was able to negotiate retroactive ownership of his solo masters 1970-75 when negotiating a new EMI solo contract when the existing 1967-76 Beatles recording contract expired. So he now owns his entire solo catalog, which he carries with him from label to label (and is able to use as a bargaining chip when negotiating new recording contracts - ie "Not only do you get to release the new albums you will contract me for, but you will also get to release all my previous albums on your label as well for the duration of the contract").

    He made FAR more from his solo career than he did from The Beatles due to terrible business deals that were made on his behalf early on.

    Plus his lucrative solo touring...and his non-musical business/financial investments (ie his money making money)....and his family of lawyers who obviously aren't out to screw him over/rip him off.

    So the complaint shouldn't be that he made too much money for his Beatles work. If anything it should be that he made too much money for his comparatively mediocre post-Beatles solo work!

    But then why complain at all? I haven't heard of him poisoning the planet or destroying any lives to amass his fortune. Multi-national corporations and Wall Street have far more to answer for than Paul McCartney does.
     
  12. elaterium

    elaterium Forum Resident

    Agreed. It’s so refreshing and welcome when someone writes an intelligent post that actually has proper spelling and grammar too. All too rare.
     
  13. elaterium

    elaterium Forum Resident

    No kidding!
     
  14. thnkgreen

    thnkgreen Discography Junkie and Jazz Addict Thread Starter

    Location:
    Winston-Salem, NC
    Fair point :righton:
     
  15. BluesOvertookMe

    BluesOvertookMe Forum Resident

    Location:
    Houston, TX, USA
    Now we are leaving music as a subject and heading dangerously towards politics, which is not what this forum is for, but if someone brings joy to billions of people, it makes no sense to me why anyone would want to limit what an artist makes from that. The only people that think that way are record companies.
     
  16. eric777

    eric777 Astral Projectionist

    Location:
    Tennessee
    It’s just the way it is whether it’s fair or not. Songwriters like Paul McCartney are not getting paid hourly. They get paid by what they can produce. The way the system works is done through negotiations between the songwriters and the powers that be. I don’t know why, it’s just how it is.
     
  17. pocketcalculator

    pocketcalculator Well-Known Member

    Location:
    New York City
    There are certain professions, notably artists, athletes, and teachers, where many people look at the work being done and say to themselves, "that looks like fun", or "that looks fulfilling", and therefore, "why should those people get paid X for it?" The fact is whether you are a musician playing Madison Square Garden or on the street for tips, whether you are a MLB player with a million dollar salary or a journeyman AAA player, or whether you are a first grade teacher making $36K or a Harvard professor making $200K, there is a tremendous amount of work that goes into doing those things. The people complaining don't see that work, so they think it's a matter of showing up and having fun, but the fact of the matter is that they are ignorant and don't want to learn about how other people actually live. They feel sorry for themselves for having, presumably, a job they don't enjoy which doesn't pay what they imagine someone else as making, but they are unwilling to do the minimal research to see what it takes to do these jobs. This may be unfair, but I also imagine that in addition to being intellectually lazy, a lot of these people are also lazy in general, and it gets their goat that someone who works hard at something is better compensated than they are.
     
  18. andypandy65

    andypandy65 Forum Resident

    Location:
    Rochdale
    I think Dr Dre is up there too - with a very large chunk coming from his headphones rather than music.
     
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  19. Earscape

    Earscape Well-Known Member

    Location:
    USA
    The solution to income equality isn't "Let's start stealing intellectual property from creators." Rather, the coal miner should belong to a co-op that owns the mine. He should get paid a portion of the mine's total profits on top of his salary, as should all the workers who are co-owners.

    This thread really suffers from The Grass is Greener on the Other Side of the Fence syndrome.
     
  20. optoman

    optoman Forum Resident

    Location:
    London. UK
    To use the example of the coal mining person. If that person invented some mining process to make the work more efficient and if he owned the rights to this invention, then both him and his children and grandchildren would still benefit from royalties for owning the rights to the invention.
    The songwriter is the same.
    Obviously, this explanation is far too simplistic but I think that it makes sense (until a lawyer comes along and kills my lovely analogy)
     
  21. poisonedhangman

    poisonedhangman Forum Resident

    Location:
    Cascadia, USA
    I think as long as the song hasn't fallen into public domain, it's fine. But at some point an an intellectual/artistic property becomes a public work otherwise Shakespeare's relatives would be suing everybody who tried to put on a showing of King Lear. Get as much as you can and use your lawyers to keep the copyright as long as possible. Garth Brooks not wanting his new works sold in record stores that sold his used CDs (without giving a secondary royalties) was stupid. And quite understandably, blew up in his face. But I am almost always for the artist. It's their graft. Their name. Their likeness. And in many ways, the industry is shrinking day by day. Get that $$$.
     
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  22. Ryan Lux

    Ryan Lux Forum Resident

    Location:
    Toronto, ON, CA
    Life needs to be more fair, there's no question. Having said that, humans aren't equal in the sense that we're not the same. No one has yet created a system that totally from every perspective. We need to be rewarded for hard work, perseverance and risk taking. At the same time, societies shouldn't allow those that are clever enough to do so well at the expense of the general good. The almighty dollar has a little too much power at the moment IMHO
     
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  23. ATR

    ATR Senior Member

    Location:
    Baystate
    You do understand that the issue of whether an artist or their estate should continue to be paid every time a recording is bought or a song played on the radio is completely different from whether any one person should possess a billion dollars. Popular music superstars are only the tip of the iceberg of recording musicians who depend on royalty payments to bring them a small amount of income every time their music is enjoyed.
     
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  24. SpinalRecord

    SpinalRecord Active Member

    Also, not to split hairs, but Paul McCartney is neither a billionaire, nor does he make most of his money off of royalties. His net worth of $1.1 billion includes that of his wife, the VP of her family's transportation conglomerate that pulls in ~$300 million annually. Additionally, he's still going on tours that bring in $50-$60 million. Even the man who owns the most expensive songbook in the world makes more off of touring than lazing around collecting checks. We are talking very large sums of money and I don't see debates regarding deservedness ending well, but it is worth making note of, I think.
     
    Last edited: May 23, 2020
  25. elaterium

    elaterium Forum Resident

    A somewhat relevant story I hope: My mother’s now deceased partner had a billionaire son, a hedge fund manager. This person, who I met a number of times, was a real piece of work: arrogant, insensitive, rude, treated others poorly etc. I once asked my mother how she thought such a person deserved to have so much wealth? Karmically speaking. She replied “he worked very hard for his money”. I replied “no mom, he learned how to manipulate markets and gamble with other people’s money. You know who works hard? Nurses, school teachers, bus drivers...”. I don’t think she got my point because she places great value on money. I think the OP probably has a similar idea in mind. I’m not implying that McCartney is a bad person in any way BTW. If anyone deserves to be rich it’s him.
     
    Last edited: May 23, 2020
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