At her last public event as boss of British indies trade body AIM, Alison Wenham has revealed that independent labels will be getting a significant windfall from changes in the way collecting society PPL distributes ‘black box’ money from 2017 onwards.
The question of how such income – gathered by societies but held in escrow due to insufficient data to pay it out to the correct rightsholders – has been a contentious issue since AIM was founded in 1999.
“I am going to say this out loud and I am going to say this in this room – but I am going to say that this hasn’t been approved yet – but we have won a major turnaround with regard to collection societies in the UK,” said Wenham at the BIME conference in Bilbao yesterday. “We have been banging on, for as long as AIM has been in business, about the splits of the black box income.”
According to Wenham, PPL will now be paying through the larger share of this money to independent labels rather than, as has been the case until now, to major labels.
“What we have persuaded PPL to do now is to move away from the proxy system, which was about giving all this money out to the people on a market share model,” said Wenham, adding that the new methodology will start in January 2017.
“Basically you [were] rewarding the biggest companies with the largest share of this black box income, but it is completely counterintuitive as you are rewarding the most organised with the money that belongs to the least organised… We got them to do the numbers and we found that what was historically an 85/15 split in favour of the majors will, from the new year – or there is going to be blood on the carpet – become a 65/35 [split] in favour of the independents, not including the top five independents.”
Wenham praised PPL for taking the initiative and for listening to the indies’ concerns. She was speaking as part of a wider panel on new business models and digital transparency, which also saw Cooking Vinyl owner Martin Goldschmidt talk about black box income.
“There is black box money in the system and that is a pot of money that is hard to account,” he said. “It just gets given to things and as soon as that happens it’s like flies around a piece of shit; everyone is trying to steal their little bit. There are pockets of black box money in the industry and that is an interesting issue for transparency – watching everyone trying to steal it.”
Goldschmidt used equally colourful language to discuss wider issues of transparency within the music industry, and label deals with artists.
“If you look in the record industry historically, royalty accounting, in my opinion, has been about making a really shitty deal with the artist and about really confusing the artist, finding ways to take far more of their money without them realising it that you should – rather than accurate and transparent accounting,” he said.
“You have a system designed to confuse and it’s the opposite of transparency: making things muddy […] You can do anything with technology when a system is not based on honesty and transparency.”