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Christmas tunes are out of season. Calculators are in?
The performers behind holiday and other songs can’t cash in without the help of a little-known and specialized type of accountant who serves as a behind-the-scenes guardian for musicians and other creative types in the complex field of royalty accounting, Mark Maurer reports. Their main job is to make sure musicians get paid accurately, and the work involves all the basics of accounting and audit work one would expect.
“Everybody thinks accounting is boring, but really, at the end of the day, everyone wants to get paid,” said Donna Budica, chief operating officer at TEN2 Media, a content distribution and marketing firm focused on artist rights on YouTube. “And the artists are the ones that get screwed if the accounting is misreported and misattributed.”
Some nuts and bolts: Music royalties span uses in areas such as radio, commercials, films and streaming. When a consumer streams a track, for example, the streamer pays the rights holder, including the distributor, for use of the sound recording. The streamer also pays a nonprofit called the Mechanical Licensing Collective royalties for reproduction and distribution, and pays performance royalties to groups like Broadcast Music Inc., or BMI, and the American Society of Composers, Authors and Publishers, or Ascap.
I caught up with Mark, who said that in reporting the story, he learned what a music distributor does. A distributor is the liaison between a record label and a retailer or streaming service. They're the supplier to the retailer or streamer. What makes the major labels "major" is the fact that they own their own distributor—they self-distribute. Meanwhile, independent labels go through a distributor they don't own. Each individual label doesn't negotiate with each retailer or music service. The distributors do that.
For example, “when Universal Music Group negotiates with Spotify, it is as a distributor on behalf of the labels it owns and distributes and as a music publisher,” Serona Elton, a professor and chair of the University of Miami’s music industry department, told Mark.
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