FlowSongs: Why Paying Royalties Is “Complicated”
A Graphic Illustration of Music Industry Madness.
The concept behind the new Pure owned, cloud-based music service FlowSongs is pretty straightforward. You hear a song on the radio and want to buy it, but have to wait until next time your logged onto iTunes or maybe in a store. The company hopes to amend this disparity by allowing users to purchase songs off the radio immediately—if they wish. This is where things get a little tricky though, because once the music is bought…
How do you determine who gets paid?
At the launch of FlowMusic, CEO Hossein Yassaie shared this slide below, in an attempt to show the kind of outright insanity he had to deconstruct in order to pay out royalties to the various parties involved. Reportedly, “this one slide took three hours to be explained to him.” One commenter lamented that, "a picture of a bowl spaghetti would have made more sense than the slide." I have to say that I agree.
View the chart:
Click image to enlarge.
Image Source: PCPro
This is very true (ultimately it works pretty much like that) and very ridiculous at the same time: as a DSP, Flowsongs doesn’t have to ‘see’ most of the boxes in this slide…
In the UK, it has to pay PRS, PPL and aggregators/record labels but that’s all…
This is not that impressive. Yes, you need to obtain some rights in order to sell digital tracks, but using this chart in the process is like navigating your car a few blocks using a globe for reference. If Mr Yassaie allows himself to get confused by the management agreement between an artist and his manager, og by the licensing agreement between PRS and a cinema, he reveals an inability to sort out and ignore what’s irrelevant to his problem.
US record labels and terrestrial radio have been battling for years now about royalty payments. When satellite radio struck a deal with the record industry a few years ago to pay royalties to the owners of master recordings in addition to the performance royalties paid to music publishers, the clock started ticking.
Read more here – http://www.themusicvoid.com/2010/08/radio-ga-ga/
I found a great article on the terrestrial radio royalties struggle on this
Music Blog at http://www.themusicvoid.com