[Fmpro] Mechanicals

[Michael Leahy]

This is astounding. I'm also wondering if it's not a possible 
explanation why there is a general perception here that it's impossible 
to get money out of the US! If there's some sort of tit-for-tat 
situation involved, I think we know who ends up paying: the slobs that 
write the music.

However, two little remarks. 1) the situation of the European authors 
rights societies has changed radically over the past five years. They 
are now in effect in competition, and there is pressure from the 
European Commission and other bodies to streamline (ie, get rid of a few 
and consolidate). There must be room for bargaining there, doing a deal 
with one of them to handle mechanicals. 2) it's not that difficult to 
set up a company in places like Ireland, the Isle of Man or elsewhere. 
So if you feel there are mechanicals floating around, create your own 
European publishing company! And when you get offered a deal that 
includes Europe either you keep the European mechanicals or use the 
existence of your company to leverage a better advance. There are also 
good fiscal reasons for setting up in these two locations, by the way.

The last option - which is more expensive - is to use a royalty tracking 
company. It's what my partner recently did when trying to track down 
payments internationally (which for us means the US, principally). At 
the end of the day, this involves sending a large bill to the publishing 
or production company for the money that might be held up at the 
sub-publishers. They do not like this, even when the money is actually 
owed. Better to avoid this if possible.

Michael



Mark Northam wrote:
> On 9/24/07 12:12 AM, "Michael Leahy" <writestuff at chello.be> wrote:
>
>   
>> I know I tend to bang on about this, but I think it's worth repeating.
>> You do have mechanical rights in your music - in Europe. Mechanicals are
>> non-negotiable here. So no matter what you sign in the US, mechanicals
>> are being paid by someone to someone else in Europe. It would be nice to
>> have the opinion of a lawyer on the fine print, but waiving the
>> mechanicals is a choice not an obligation. In the latest synch contracts
>> I signed in the US, I stipulated that the fees paid cover the US and
>> that for any reproduction outside the US, the producer must contact the
>> relevant authors rights society. This is not just me being demanding.
>> The European authors rights society will go after any copies made
>> outside the US no matter what I sign. So by specifying this in the
>> contract, I'm just making an existing situation ultra-clear for the
>> producer.
>>     
>
> Sadly, the European rights societies have taken the "blanket" position (aka
> assumption) that all works from the US (at least film & TV) are works for
> hire, and generally do not pay the mechanicals to the US writers. The US
> writers' shares of mechanical royalties often end up going to the foreign
> subpublishers, and often end up in someone's pocket other than the writer's.
> Sadly, there is no US mechanical rights agency that writers can belong to
> (other than a couple of boutique shops that cater to publishers and
> copyright owners), so that doesn't exactly help either.
>
> But here's the key problem: it's absolutely wrong for Euro societies to, in
> the complete absence of a composer contract, take the sub-pub's "word for
> it" that the sub-pubs should always be paid the writer's share of
> mechanicals for Euro performances of US works. Yet this happens every day
> when local Euro sub-pubs locally "re-register" works written by US
> composers. It's as simple as checking a box. And this local re-registration
> overrides all other registrations and flows the mechanicals to the foreign
> sub-pub even if the writer happens to be a direct member of a mech rights
> society. How this can happen, when the writers have no contract with or
> fiduciary relationship with the sub-pubs is absolute astounding and a breach
> of basic business principles.
>
> This completely disrupts any chance of the US writer being paid their
> mechanicals directly, and the money goes into the bottomless pit of
> inter-society financial muck rarely to be seen again.  Of course, the Euro
> societies won't talk to US writers unless you're a direct member of each and
> every Euro society you want to communicate with, so that's another
> convenient way the societies avoid any accountability for what likely are
> millions in writers' mechanical royalties that never end up with the writer
> and are instead sucked up by various middlemen.
>
> Reps from SGAE (Spanish society) were shocked when they visited the US in
> the late 1990s (at the invitation of Les Hurdle, Mark Holden, David
> MacMurray and others - if you ever wonder why ASCAP hates them so much, this
> is part of the reason why) and discovered that many film and TV composers
> weren't getting their share of broadcast mechanical royalties from Europe.
> However, shortly thereafter, SGAE didn't want to talk anymore about the
> subject. Wonder why. To date, bringing up this subject is the quickest way
> to ensure the "cold shoulder" from any Euro society. So much for sticking up
> for writers, etc. All sales hype and empty promises dwarfed by the cronyism
> and good-ole-boy behavior they exhibit with their "fellow" societies and the
> publishers. Just like ASCAP's "accountability," "transparency," and "our
> books are open to all." Utter and complete BS designed to dupe the
> uninformed. 
>
> One can only wonder where those millions of dollars are going and into whose
> pockets. One thing for sure, the complicity of the Euro societies in the
> lack of willingness to pay mechanical royalties directly to writers and to
> accept the sub-pub's "word" in the complete absence of any evidence such as
> a contract that those writers share should be paid to the sub-pubs is a
> giant mess that nobody wants to talk about much less fix. Some enterprising
> Euro lawyer could probably make millions from a percentage of the recovered
> money though!
>
> In the US, film and TV composers only get their share of mechanicals if and
> when the sub-pub and the publisher decide to pay them, and in many cases
> that's never. A few writers walked in to publishers after the SGAE visit and
> walked out with checks representing years of unpaid broadcast mechanical
> royalties. But the massive amount of (apparently) unpaid mechanical and
> broadcast mechanical royalties from Europe to US writers is a pandora's box
> that I don't believe any European society wants to talk about, much less do
> anything about. It's a mess the publishers, sub-pubs and Euro societies
> don't want discussed, much less dealt with openly and transparently. I would
> imagine the decades of potential liability gives them little other choice.
>
> As with the US societies, any attempts to clean up the mess will only take
> money out of the pockets of those with the "hits on the radio" etc. and that
> will not be tolerated. There are some very good reasons that the decision
> has been made by the societies and their masters (the publishers) to not
> track music any "better" than it's tracked now.
>
> Best,
>
> Mark Northam
>
> P.S. Definition for those who haven't dealt with this yet - a "sub-pub"
> (subpublisher) from a US perspective is a local publisher in a foreign
> country that the US publisher has hired and pays to handle local society
> registrations and other music business in a foreign country. They collect
> foreign performing and mechanical royalties and wire them back to their US
> clients less a commission or charge. Most publishers collect their overseas
> performing rights royalties this way instead of waiting the months or years
> it takes them to flow back from the Euro societies to the US societies and
> finally be paid to the writers. The fact that the foreign sub-pubs can so
> easily intercept US writers' mechanical royalties is a huge problem.
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