THIS COULD HAPPEN TO YOU
By Derek Wadsworth
In my experience, many writers (even veterans) although aware of how revenue is generated through performances, CD sales and suchlike, remain ignorant of how funds emanate from the licensing and broadcasting of their work when incorporated in a film.
Whilst it is easy to see how tactile CDs and DVDs are mechanically manufactured and marketed to the public to earn cash, it is not quite so easy to comprehend the more abstract concept of how licensing a TV broadcast does the same.
Nevertheless, a programme produced in one area and sold on for transmission in another warrants the term “duplication” which in turn becomes subject to the matter of “restricted acts” and thus requires a bought licence to allow the secondary broadcast to take place. This process earns massive returns for global publishers and production studios but these days the rewards are rarely shared by the contributors for whom the process was largely intended – the creative composers.
Here is how the licensing system works:
A typical scenario might be that a composer has written a score for a production and, as is the norm these days, has been “invited” to assign the mechanical rights in the work to the publishing house who serves the production company.
The composer is paid a fee for the work which normally includes the assignment of 50% of the performing rights (I do not say PRS here as publishers mostly use other foreign performing rights agencies in situ around the world for overseas collections – a practice some composers have wised up to) and 100% of the mechanicals (ditto). In other words, as I have said before, three-quarters of the royalties and usually for a modest payment and with no traditional publishing being undertaken..
Now having full controlling rights in the work, the publisher can enjoy their half of performance royalties and is additionally able to administer licensing for the mechanical usages. This can include CDs, DVDs and the like if appropriate, which, being a highly visible aspect should involve a provision to the writer. What is not always so visible however is the licensing through the continued marketing of the original programme.
With a popular programme, the marketing division of the production house will sell on the programme wherever it can. When a sale is made, a contract is drawn up between the buyer (licensee) of the programme for which a lump sum will be paid up front.
A separate licence is then requested from the music publisher, often by way of the MCPS or foreign equivalents, for the music content. The MCPS, or foreign equivalent, or the publishers directly themselves, will issue an invoice to allow the music to be included in the sale. The MCPS method of calculation is rather complex but is based upon 17% of the full price of a USA sale, and 8.5% of a world sale. This is then subjected to various calculations based upon the number of 30″ units in the programme, different territorial weightings and so on. The resultant payment will go to the publisher (who may feed a proportion back to the producers) and the writer will get none of it.
The reason this sad state of affairs exists is not a result of any Law of England but simply the Law of the Jungle.
When I entered the business in 1960, television composers (and there were only a few) were wealthy indeed by virtue of full receipts from their performance and mechanical returns. This fact did not go unnoticed however and it was only a matter of time before publishers and producers were demanding some share in the action. By the time I got my first major commission, a clause had been brought into the contract demanding 50% of the mechanicals as well as the 50% PRS share. This involved assigning 100% control of mechanicals with a provision to account 50% to me on a six-monthly basis. It could be argued that this was not unfair because my music was being marketed in tandem with the films themselves, gaining exposure and earnings.
At the time, and unlike today, the concept was clear that the mechanical aspect was an asset to be bargained with. Advertising agencies, who had had no machinery for administering royalties, expected the composer to bill them separately for a “mechanical buyout”.
Somehow, and perhaps because the publishers’ demand for 50% had been all too easy, the 50% became a 100% which is how it stands today. Basically, composers had shot themselves in the foot. Being in an intensively competitive domain, some writers in an effort to undercut had decided that 50% of performance fees alone was better than someone else having the job.
Today, the basic payment for a job is so low, and royalty returns erratic and widespread that we are probably the worst paid writers in the major countries. Americans do not get mechanical royalties but at least earn a meaningful buyout.
So what can be done to improve the British composer’s lot?
Well for a start, it would help if the Union did not go around giving the impression that it is expected for a publisher to take 100% of mechanical licensing royalties, and at the same time seeming to keep the subject on a low profile. It would help greatly if any attempts to air the subject were encouraged.
With my involvement a much improved writer contract has been assembled by the MWS and its usage should be monitored to assess its success because there will be a vigorous resistance to its acceptance in the publishing world. Where a composer succeeds in retaining a portion of the mechanical rights then the marketing divisions of TV programmes ought to be contractually obliged to supply the composer with sales information which would greatly enhance the composer’s opportunity to check that royalties of all types are being properly accounted. At the very least, a realistic buyout could be a contractual option.
The government, in recognition of the great value to the country of earnings from the entertainment industry, has pledged substantial funds to music education in the belief that it will help generate future jobs. It should be made aware of how unfavourably prospects of profits are weighted against the composer. Does the government want to create more music jobs or more publishing jobs?
Multi-media productions are big, big business these days and it should not be assumed that this is a fringe activity compared to the pop record world.
As for my own 50% contract earlier described, I can say that in typical corporate fashion the company involved was bought out time and time again to arrive in the possession of the current owners who believe that I have no rights to mechanical receipts from the programme’s continued successful sales even when I am able to show them the contract.