BMG has unveiled what it calls a “first-of-its-kind initiative” to speed up the payment of mechanical royalties to its US publishing clients when their songs are used on recordings released by BMG’s US artists.
The company says that mechanicals will now be paid within the same quarter rather than the “standard industry practice of at least three to six months later”.
BMG says that the new initiative is “a direct result” of its investment in a cloud-based royalties system that spans both music publishing and recordings.
This royalties system update means that all of the relevant publishing and recordings data required for the initiative is in the same system.
BMG notes that the change will directly benefit its songwriters who write for BMG-signed artists, but that it will be “particularly advantageous” for its clients who choose BMG to represent both their songs and their recordings.
Amongst those artists are Bush, George Harrison, Jelly Roll, Jennifer Lopez, LP, Mammoth WVH, Spiritbox, and Terrace Martin, and others.
BMG notes that the news of the update to the timeframe in which it pays mechanical royalties to its US publishing clients comes three years after the company revealed that it was eliminating so-called “controlled composition” clauses from its US record contracts.
The Controlled Composition clause is a provision in recording contracts that grants record labels a 25% reduction (and sometimes more) on mechanical royalties owed to a songwriter in the US for sales of their physical records.
BMG says that it continues to pay mechanical royalties on all releases in the US at full statutory rate.
“THIS IS A PRACTICAL BENEFIT OF BMG’S DECISION TO OFFER MUSIC PUBLISHING AND RECORDINGS OFF THE SAME INTEGRATED PLATFORM. NO CONVENTIONAL MUSIC COMPANY CAN DO THIS.”
SEBASTIAN HENTZSCHEL, BMG
BMG Chief Operating Officer Sebastian Hentzschel said: “This is a practical benefit of BMG’s decision to offer music publishing and recordings off the same integrated platform.
“No conventional music company can do this. It means that if two songwriters contribute to a BMG recording and one is signed to BMG and the other to another company, the BMG writer will get paid sooner.
“We believe passionately that artists and songwriters should benefit from the speed and efficiency modern royalty accounting can deliver. It is yet another reason I believe we are the best publisher in the world.”
“A GENUINE COMMITMENT TO SERVICE REQUIRES A SUBSTANTIAL INVESTMENT IN TECHNOLOGY BUT ALSO A TEAM WHICH IS COMMITTED TO GOING THE EXTRA MILE.”
ERIC SCOTT, BMG
Eric Scott, EVP, Rights Administration & Royalty Services, who leads BMG’s royalty team based in Nashville, said: “A genuine commitment to service requires a substantial investment in technology but also a team which is committed to going the extra mile.
“We believe it is the right thing to do. All the indications so far are that our clients really appreciate it.”
Elsewhere at BMG, last week we reported that Thomas Coesfeld, CEO of BMG, confirmed to staff that the company is reorganizing its global structure in pursuit of his strategic goal for the company to become “more efficient and more effective”.
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