Black Box Royalties Myths, Common Misconceptions Debunked at Music Biz 2018

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While many are up in arms about the U.S. Copyright office allowing digital services to bulk file notices of intent (NOIs) that allow them to play music but not pay for it if they can't find the music publishers owners and license the music directly, Harry Fox Agency and Music Report Inc. executives say the issue isn't a big a financial problem as critics of the system make it out to be.

On Tuesday (May 15) at the Music Biz conference in Nashville -- which runs through Thursday -- they told an audience that while millions of NOIs now can and are electronically filed, any songs with a lot of plays gets claimed and paid out fairly quickly.

"NOIs is not about trying to avoid making payments," Music Reports VP and general counsel Bill Colitre said during the panel on black boxes -- unclaimed royalty payments where the rightful owners are not known. "Its extremely expensive and time consuming to file those NOIs; its easier to pay the royalties if you know who gets it."

The other apparent myth that the process' critics try to spread is that services use NOIs as a mechanism to avoid paying for music they are playing where they can't figure out the owners. 

"All the services that I deal with will pay those royalties when the songs are claimed," said Harry Fox Agency senior VP of client services John Raso

So what if a songwriter hasn't filed a song with the copyright office until July 2017, two years after a service has been playing that song? 

Raso said, "I don't know of any client who will take the stance that they only owe for plays made since July 2017."

Colitre agreed, the correct policy is to pay retroactively when the song is claimed. "Its the fair thing to do."

"When those on the panel talk about black box we are talking about the aggregate of unclaimed royalties that occur because of any number of factors," and not just limited to one service or one collection society, explained moderator Dae Bogan, CEO of TuneRegistry.

But one of the main reasons that black box royalties accumulate is that many DIY artists don't think of themselves as business owners and instead focus on being an artist. 

The curse of the DIY is you have to do all the work yourself and initially most of these musicians aren't thinking about publishing, they may think of themselves as a writer but not a publisher, said Raso. But if artists are putting their music into the marketplace, they should make sure that they attach their metadata to it.

The other thing that happens early on is that the DIY artist doesn't make a lot of money so they say to themselves, why should I spend all of this time and energy chasing $25? But forget about doing it for the money, you should put the effort in because its your creative work so you might as well sign it, Colitre said.

Music Reports Inc.'s online comprehensive Songdex database is now launched that links publishing data to all the masters and allows creators to add and fix their data. But its also has songs from all levels of publishers from the majors, to the major independents to the mom-and-indie publishers. 

"There are many publishers with different levels of technological solutions and for those who need to send the song information in on the napkin, we can handle that too, as we have 45 researchers who will figure it out," said Colitre.

Not all royalty revenue falls into black box; a lot of time accuracy of payment remains an issue when a writer leaves a publisher and the publishing reverts to them or when copyright termination comes into play. That is a separate issue than black box, Colitre said.

Some organizations hold the money until the publishing adds up to 100 percent, which means that those songwriters and publishers who have given their fractional information have their royalties held hostage while they have to wait for the laggard to give in their information. Colitre added, "We don't think that is right."

Another common mistake that Raso and Colitre said they see often is when songwriters register a song and fail to mention a co-writer in the registrations. Often that results in two listings for the song, with each co-writer claiming the song, which means that payment may be paid to only one or held up while it gets sorted out.