Those DMX music licences: some clarification of the issues

Following the recent post concerning DMX's music licensing activities by Deep Larynx and the response from DMX's Lorne Abony, the 1709 Blog has received a rejoinder from Deep Larynx which, we hope, will both clarify the position and reduce the temperature of the dialogue.  It reads as follows:

Lofty Larynx is happy to clarify that no malice whatsoever was intended towards DMX and its vast US music operation. Distilling this complex issue into one page was never going to be an exact science – but it does appear to have worked well enough to engage the attention of Britain’s songwriters and composers – which was the purpose of the text. Concern was solely that revenues for US public performance get through to writers –as opposed to the “trickle up economics” all too prevalent in today’s creative industries.

One can agree without reservation with DMX that:

“When DMX enters into a direct license with a music publisher, the music publisher assumes the obligation to pay the writer’s share of any performance royalty directly to the writer(s) of the licensed composition. Those payments are governed by the contracts entered into between a songwriter and a music publisher ... the writer is also dependent upon their music publisher to accurately and faithfully remit all funds due under applicable contracts.”

So, US writers’ royalties first:

All should welcome DMX’s urging writers to check their statements to check for the “proper allocation of royalties”. Is DMX filing detailed usage data for US writers whose works they play so the publishers can pay the US writers in those directly licensed catalogues? Perhaps Lorne Abony can reassure US writers. Why? Because, sadly, writers are exposed to the risk that they may never see this licence revenue – it being highly likely that their contractual entitlement to be paid arises when usage is "directly and identifiably" attributable to their works.

One cheap and easy riposte from publishers might be to allege deficiencies in the statistical analyses by the societies to inform distributions. Aside from the maxim that smashing up other people’s furniture seldom makes one’s own furniture look any nicer, surely the societies’ administrative function is preferable, even if only as a matter of policy? It seems unfair that writers have to fund publishers’ generous executive salaries and bonuses and dividends to shareholders out of their earnings. Collecting societies, by contrast, are not-for-profit organisations whose senior executives are remunerated well below the levels of the major music companies. And writers sit on societies’ boards, can influence and monitor policy, tariffs and distributions.

Questions about the data relating to the performance by DMX of UK writers’ works, however, are largely academic because regrettably one cannot see how DMX can have been granted a valid licence as the US publishers do not have the UK writers' performing right to grant (though it may be useful to determine losses if any legal action were to ensue). Why?

The writer’s assignment to the publisher is customarily "subject to" the writer’s assignment of the broadcast and public performance right exclusively to PRS for Music. This exclusive grant by the writer is a personal contract (the Membership Agreement) between each writer and PRS for Music. A music publishing contract presupposes a writer's membership of PRS - clarifying the position in terms whereby, should a writer resign from PRS for Music, the performing right will vest with the publisher. But only where the writer resigns their membership. 

One by product of this arrangement is that a publisher cannot compel a writer to resign from the society without exposing themselves to allegations of tortious interference ie inducement breach a contract which, under English law, is a tort. 

There is no question of the PRS issuing licences in the USA. The UK writers’ rights pass exclusively to the PRS and then onward to societies in the US - not to the US publishers. It is interesting to see how many more members of the public than was first thought receive DMX's service – 120 million listeners per day. That’s quite a reach and, as writers are the basic building block of DMX’s supply chain, one begins to be sympathetic to their position – playing some music that they were assured was granted under a valid licence. One hopes they will discuss their difficulties with their purported licensors.

In the meantime, UK (and Canadian, Australian, and Continental European) songwriters, composers and lyricists should be entitled to expect their revenues to be paid to them by PRS for Music, the body that, by contract, they authorised to act as their exclusive licensors – money arriving in Blighty from the USA via ACSAP, BMI and SESAC".