A royal(ties) affair

There’s a not-so-secret scandal in sg that everyone involved pretty much agrees not to talk about: unpaid royalties. Not exactly Whitewater or Watergate, but non-payment of royalties does affect real people (mostly songwriters, whose livelihood often depends on royalty payments) and puts an asterisk beside sg as a whole. It’s a complicated issue, so let’s start at the beginning:

When a group records a song, that group’s record company is responsible for administering sales, which includes paying out royalties on those sales to the songwriters whose songs are on the project (if artists do not have a recording company, then the artists themselves are responsible for seeing that royalties get paid). But in sg, some record companies often allow themselves to get grossly behind on their royalties payments. This lack of payment usually comes in a coupla different flavors:

The most popular variety is the songwriter who’s owed money by a recording company responsible for managing the sales of a project. The songwriter may be someone in the group that recorded the song (Rodney Griffin, for instance, who earns money off the sales of songs he writes that GV records) or a writer unaffiliated with any artists.

Another variety is the songwriter who’s owed money by the group that recorded the songwriter’s songs. This usually happens when a group records its own project independent of a recording company’s input, supervision, or financing (table projects, these are called in the jargon), or when a group does a video to accompany a recording project. In these cases, it often ends up being much more difficult for the songwriter to get paid unless the songwriter pursues the collection of royalties on his or her own time. Because table projects and a lot of videos are handled directly by the group, without the intermediary services of a recording company that would normally handle the collection and payment of royalties, collection can get a lot hairier than when a recording company is involved.

The latter scenario is common, but Variety #1 is by far the biggest offender. One songwriter I’ve spoken to who works with a major sg label told me that at one point several years ago she was owed more than $50,000 in unpaid royalties by a record company. She never received the money. How could this happen? There are many factors, but perhaps a case study will suggest the kind of thinking and behavior that would, in part, make all this possible.

Case study 1: Let’s say Big Record Company (BRC) is administering royalties for several big groups the label represents, and BRC drags its feet paying royalties - and sometimes this can go on for a year or two or more. Letters are exchanged, gentle phone reminders of increasing intensity are made until finally BRC pays up, but only after having been pressed long and hard enough by the people owed money (these people can either be songwriters or a company who works with a group of regular songwriters and collects royalties on their behalf).

One effect of all this is that talented songwriters who could and would write only sg music look for work in other genres. Which, in addition to being really too bad, is also sardonically amusing, when you think about how quick and ruthless some hardcore sg fans and business people are to ostracize and rain down cries of heresy upon anyone who writes for other Christian music genres. But even if songwriters weren’t genuinely interested in writing songs for other genres, the financials of the matter would seal the deal to defect. Why?

Case study 2: You’re a pretty good and fairly regular sg songwriter with whom established and well-known groups want to work. Problem is, it’s pretty likely that when one of those groups calls you up and asks for new songs, you might have to say that group, “Sorry: I can’t pitch to you because your record company is behind on their royalties to me.” The group apologizes and in a week or so, you get a check from that recording company that catches the company up on its unpaid royalties. NOW you can pitch your new songs to the group. You get some of your money, but only because one of the label’s big names got in somebody’s face. Is this really an industry you want to rely primarily on for your financial and professional well being?

The instructive and disappointing part of this case study is that the group has to apply pressure to its own record company to do something that should be part of regular business. This doesn’t have to be (and in other genres often isn’t) the way it is. But too many sg recording companies don’t show regular signs of thinking about royalties as an operating expense, even though royalties, of course, are (or ought to be considered) just as tangible as the light bill or studio musicians. The problem is simply the lack of accountability in the “good ole boy” world of sg. So the record company doesn’t pay its royalties? The insular and interrelated nature of sg makes it such that the person or group owed the money is disincentivized from pushing for the money they’re owned because the implicit (or explicit) threat of retribution always exists: if you get too pushy about your royalties, I won’t book your group back on my annual singing event next year, or I won’t put in a good word for you on the NQC board, or I won’t remain silent about why your tenor really left the group and so on. Incestuous business, thy name is sg.

On top of all this, there’s the cutthroat nature of the songwriting business itself, which just compounds the royalties problem: for every songwriter who boycotts an artist (the one’s who do table projects) or recording companies for non-payment of royalties, there are 20 aspiring writers standing in line just dying to get the cut, with not thought of royalties or expectation of asking for them. So the companies don’t really have much of a reason to care until pushed by the artists to take care of business. Aside from the fans (who are denied the talent and contribution of many great songwriters who would be able to pitch more great new songs were it not for unpaid royalties), the real people who lose out from this dynamic are the independent songwriters who are responsible for collecting their own royalties. Even for songwriters who work for a major label or publishing company, it’s a daunting and involved process. For people who aren’t highly organized and don’t have the persistence of the Little Engine that Could, it can seem like an impossible mountain to climb just to get the money they’re owed. And finally, for every step forward, there’s a couple of steps back: though companies exist within sg to calculate and disperse royalties for groups, the people that own these outfits are sometimes the very same people who are already in arrears to songwriters. All of which makes for a discouraging mix: anyone who addresses the issue in a public or insistent way is often branded as a troublemaker. And even if you’re willing to withstand the punishment, the legal fees to pursue non-payment of royalties are often so much greater than the amount in question that it’s impossible for the songwriter to do more than just be a constant nag and refuse to pitch to artists when they call and ask for songs. In another post to come, I’ll take up the issue of under-appreciated songwriters. But for now, suffice it to say that the (un)payment of royalties counts as one of the darkest blots on the sg industry.

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