Moderated by Michael Laskow
Live at the TAXI Road Rally, November 5, 2022
Michael Eames: Raise your hand if you’ve never heard of the MLC (Mechanical Licensing Collective) until just now. [Very few hands go up in the audience]. Okay, this is my issue, and Jeff and I are tag-teaming on this. I am not taking over from Jeff, but I came armed with a stat that I wanted to impress upon everyone. If you’ll allow me, I’ll throw out the stat.
So, your hands confirm my own informal market survey that I do, which is I have a recording studio in our office, and a lot of independent artists come in to co-write with our clients, because they can use the studio for free. I go in there, introduce myself and ask every single one of them if they have ever heard of the MLC, and eight out of 10 have never heard of it. I’m on what’s called the MLC, Mechanical Licensing Collective. There is a board of directors, then there are several committees under it. I’m on what’s called the Unclaimed Royalties Oversight Committee. You might appreciate that we call it UROC for short—just throwing it out there. But our job is to come up with policies to present to the MLC board to, number one, explain why royalties are going unclaimed, and then how to go about fixing them, but also how to go about figuring out who owns all of this stuff. You guys might have seen a headline in February of 2021—because the MLC started in January of 2021—but in February of 2021, all of the digital streaming services that were holding on to all the money Jeff was just talking about were forced by law to deposit that money with the MLC so the MLC can figure out where the money goes. That amount was $424 million. By the way, that’s only in the U.S. Imagine the rest of the world.
Does the MLC make a little taste on the top?
Michael Eames: No. The fantastic thing with the MLC, honestly, of how it was set up in the Music Modernization Act that Trump signed in October of 2018—best thing he ever did, if you ask me, but we’re not here for politics… The digital services are paying for the MLC. It is 100% commission-free; no songwriter, no publishers incurring any costs for the MLC to do its job.
What has happened since then… And all of this is public and available on the MLC website, so I’m not saying anything that isn’t available publicly. But on average, every month since the establishment of the MLC in January of 2021, there is probably an additional $10 million to $15 million a month that is unclaimed that then gets added on to the same pool of the $424 million that came in in February of 2021. So, our committee was pushing the MLC to give as much analysis as we could about who is this? Where is the money? Where is it coming from? Let’s see it by genre, let’s see it by country of origin, or whatever. There are lots of issues.
The stat that blew us away on our committee a couple months ago was that—having nothing to do with $424 million—but all of the money that has started to accrue since the MLC started, there is, don’t quote me on the number, but roughly it is around $15 million to $20 million. It is sitting unclaimed, and every single song that is comprised in that pool has earned less than $3. So, we all knew the long tail existed; it turns out the long tail is a hell of a lot longer than any of us ever imagined.
I’m so glad Jeff brought this up because he also then checked off one of the items that I had emailed Michael [Laskow] as part of the things that we’re gonna bring up today. You know, the problem we’re all struggling with is… And it’s entirely possible that some of you that raised your hands are part of that group that is less than $3, but just put yourself for a moment in the mental state of maybe you get informed that you are one of those. Whether you have 10 songs on your record… Let’s just say, because the math is easy… Let’s say you’ve earned $2 on every song at the MLC, and you had 10 songs on your record, so you are owed $20. Do you want to sign up with an account and set up your account, and all of your banking information, and then register all 10 individual songs with the MLC? The answer should be yes, but unfortunately, with human nature, everyone is like, “Nah, that’s kind of a pain in the butt. I don’t really know how to do it.” So your money is going to sit there, and enough people have taken that position where it’s now grown to this massive pool of money.
The way the MLC is set up, the way the law was set—and this is a worldwide problem, not just the United States—is that technically the MMA says that after money is held for three years without anyone claiming it, it’s gonna be distributed by market share to everyone who did register and claim and get paid through the MLC, right?
I’m fillin’ that stuff out now. [audience laughs]
Michael Eames: Well, that’s why I wanted to come in with this stat—to scare everybody! To say whether you have $100 sitting there, or you have $5 sitting there, please go register and register your songs, and tell everyone that you know to register their songs. Now, mind you, our committee as well as the Copyright Office has told the MLC that it needs to be a minimum of five years before any of the $424 million that we talked about can ever be distributed by market share. But we on our committee are determined that no money gets paid out by market share, because it’s all gonna go to the majors, because that’s what the concept of market share is all about. So please register all of your stuff. I can’t stress it enough. I wanted to alarm everyone. It’s crazy amounts of money.
Question from the audience: Was YouTube part of that?
Michael Eames: I’ll do a very quick answer. The short answer for now, because I don’t want to derail where we’re going, is that the only part of YouTube that is covered by the MLC are what are called Art Tracks. There’s no video, it’s just a static artwork that sort of gets played on YouTube. Those are the only elements that get paid through the MLC. Everything else that is related to the video and sharing an ad revenue is a separate process. But I don’t know if we’re gonna go down that rabbit hole just yet.
Jeff: And I would sign music even if you’ve already put it up on YouTube. So, if you’re asking, “Would it preclude me from signing your compositions and masters?” No, I’m not worried about that, and actually, I wouldn’t even ask you to take it down. We have a relationship with a company that sends out little spiders and collects and monetizes all of that. Actually, the more successful it is, the more money that we would ultimately make, so it wouldn’t bother me at all if your stuff was already up on YouTube. I recommend putting music up on YouTube. People go down these worm holes, and it’s a way that people do find music. I don’t think there’s anything wrong with having it up there. And you might get lucky, and it’s a crapshoot, but you might actually start getting some volume on it.
Michael Eames: YouTube unfortunately is the worst-paying streaming service. So that’s the only issue in the industry — they don't pay much.
I want to get back on track, but I want to bring this up because people really need to understand this, and they don’t because it can feel daunting. Number one: “I just want to create. Can’t I just call a company and give them 10% for taking care of all this stuff for me?” And that company doesn’t exist, because all these disparate laws and procedures and things exist. So, it’s like this company takes care of this for you, and another company takes care of that for you. It confuses me, and I hang out with people like you guys [on the panel, and I still don’t get it.
“It’s such an incredibly important thing that TAXI provides for all of you, which is to help you not be a newbie and need your hand held once you get a deal on one of your songs or tracks.”
Which leads me to Greg’s next point, which is acting like a newbie, not doing your homework. And the most important thing, which is requiring too much handholding... This a classic example of somebody who sat in this room today, heard what we just talked about regarding the MLC, they get offered a deal from a library and they say, “Can you explain that to me?” And the library owner is going to want to put a gun in their mouth (figuratively speaking) or not do a deal with that person, because they just don’t have the time and the bandwidth to explain all that.
Greg: Right. It’s such an incredibly important thing that TAXI provides for all of you, which is to help you not be a newbie and need your hand held once you get a deal on one of your songs or tracks. As these guys can attest, they’ve got to do that. Michael [Eames] doesn’t need to explain all that to everybody that he deals with; Jeff doesn’t need to go hunt down all that stuff. So, you need to know this stuff and deal with it ahead of time so that you can be the best person that they would have to deal with; then they’ll keep coming back to you for more music. You know what you need to know, and do what you need to do, and you save them time and effort, then you’re the person they want to come back to, because you aren’t a big overhead for them as compared to someone else.
It just comes down to asking questions. Can you never ask anybody a question? No, of course you can ask someone a question. If someone offered you a deal and you read it, right? Read every line of the deal; definitely you should. I’m not a lawyer, but you probably should use one, or at least consult with other people who sign deals. So, can you get a deal from somebody and read it over and maybe something’s not clear, or two or three things are not clear. Go to your peers, look at the TAXI Forum, and try to find some answers like that. And then, if you really don’t have 100% clarity, can you go back to someone and ask them one question? Yes. Can you ask them this question and then they respond to you, and then you ask another one and they respond to you, and then you ask another one and they respond to you, and you ask another one and they respond to you, then you ask another one and then they stop responding to you, and you say, “Hey, why didn’t you respond to me?” And then that’s it. Again, that’s the end, because you are just being a pain in the butt. So don’t do that! Know what you need to know upfront. It’s like a football thing: You get to the end zone, you know, don’t do some crazy celebration dance; act like you’ve been there before, even if it’s your first time.
That was great. Thank you.
Michael Eames: One quick comment I just sort of thought of, because it’s happened to me. I don’t know if it’s happened to you, Jeff. It’s sort of like if you send an initial email inquiry about something like, “Hi, this is who I am, and this is the music that I do,” don’t send an email and 10 minutes later call on the phone, Because I can tell you if you do that with me, I’m never gonna respond, because that pisses me off beyond belief.
“The constant bombardment of emails and phone calls… sometimes the squeaky wheel gets the grease, but more often than not, the squeaky wheel just gets replaced.”
I’ll remember that when I invite you to the next panel. [audience laughter]
Jeff: Related to that, my days are so busy I don’t know if I’m coming or going half the time. Seriously, I mean, I come into work, there are usually already three or four music searches that I need to do for clients, sometimes more, and I am working straight up to lunch. Our team tries to have lunch together every day so that there is like a social component to what we do and we can feed off ideas off each other. And then, after we get our mail, it’s like right back into the grind. So, the constant bombardment of emails and phone calls, sometimes the squeaky wheel gets the grease, but more often than not, the squeaky wheel just gets replaced. [everybody laughs]
“We don’t really mind explaining some deal points, but we’re not really interested in a prolonged negotiation over a library cue.”
That makes sense. I’m gonna put that on the front door to TAXI: “The squeaky wheel gets replaced.” I love it.
Michael Eames: And I think that related to contracts, understanding the contract is extremely important. If we are talking about library music specifically, that’s kind of a non-negotiable contract. I would say that that’s like a boilerplate thing that is gonna be… Every single library writer for APM is basically signing the same APM contract. That might look a little bit different if you’re talking about an elaborate administration deal for a catalog of music, or whatever. To me, it’s really just like yes or no, and does it make sense for you, and do our goals align, and if they do, fantastic, let’s do a deal. And if not, we’re gonna move on and we’re gonna work with somebody else. So, we don’t really mind explaining some deal points, but we’re not really interested in a prolonged negotiation over a library cue, because it’s a saturated market. It’s a buyer’s market.
You know, that brings me to a career-killing thing. I recently spoke to a member that said, “I walked away from a deal from one of the companies you connected me with, because I talked to my lawyer and he told me they were ripping me off by taking 100% of the publisher’s share.” And I said, “Your lawyer doesn’t know anything about this part of the industry.” If they were in the record industry, that would be a discussion. In this part of the industry, it’s standard, almost all lawyers… There are a few exceptions, Erin Jacobson being one, and I’m sure there are a couple others that understand library business well enough to know that that is the norm.
So, yeah, if you are gonna use a lawyer, don’t use your Uncle Bob the real estate lawyer in Cleveland, use a music attorney. And the first thing you ask them is, “Do you have extensive experience working with independent production music libraries?” If they say yes, hire them. If they say, “Well, I’ve worked with some record labels, blah, blah,” say, “Thank you. Have a nice day.”
“That’s how you make a career in music. It doesn’t come from one thing; it comes from all these things.”
Jeff, I was talking about this one with Greg right before we started the panel: Lying about the era music was recorded. Now this is pretty specific to you in the vintage.
Jeff: Yeah, I could speak to this briefly, and then I might want to pivot to something else that sprung from that… Just for us, we sign a lot of authentic period recordings, and we always tell TAXI, “Look, we don’t want you to do a lot of filtering, we just want to listen to it ourselves because we might hear something specific that we like even if it wouldn’t fit for like a normal listing that TAXI would run.” So we’re more than happy to take the whole kit and caboodle and go through it ourselves. And specifically, as to vintage music, when somebody’s representing that the music is from 1968, I mean, there are some sure signs that it’s not from 1968. Like nobody in 1968 was talking about, “I’m hangin’ out on Haight and Ashbury and Janis Joplin walked by.” And you can hear it through certain reverbs that are used. So, there’s a lot of stuff that doesn’t pass the sniff test, and then that’s just kind of a waste of everybody’s time. And actually, Jacob Nathan, who is creative director of A&R at our company, keeps a list of TAXI members that he will not reach out to because they’ve already wasted his time. We get a lot of music from TAXI—I mean like a lot—and he just knows not to reach out to certain people, because they’ve already wasted our time [trying to pass something off as vintage when it’s not].
Having said that, can I say something else instead, because I think it’ll be really good. How many people here perform original music like in bars or whatever? OK, awesome. Keep your hands up. Of those people, how many are registered with either BMI or ASCAP? OK, and of those people, how many are registering their performances with ASCAP Live or BMI and are collecting money for performing their own original music in bars and clubs? OK, so the hands just went down significantly. So, you are missing out on free money if you’re not registering your live performances with BMI and ASCAP, and you can only register your original music. But essentially, BMI and ASCAP have deals with these clubs, so that permits them to play music in those bars and clubs, and that money goes out to the songwriters. So, you are literally leaving money on the table if you’re not registering those performances, and it adds up. I mean, it’s hard to make a buck in the music industry. It’s gonna have to come from more than one source. So, imagine if you had the MLC money coming in and then you have the BMI and ASCAP Live money coming in, and maybe you get a sync here and there, so you’re getting some performance royalties. That’s how you make a career in music. It doesn’t come from one thing; it comes from all these things.
Don’t miss part 4 of this panel in next month’s TAXI Transmitter!