Ask Us Anything: what portion of licence fees collected goes overseas?

Thursday, 28 Feb 2019

You may spend hours in the studio, days at a piano, and months on tour, but by no means does being a songwriter, composer or musician excuse you from attending to the business of it all – invoices, agreements, BAS. Oh the glamour!

APRA AMCOS Ambassador Katie Wighton of All Our Exes Live in Texas, wrote a #mustread op-ed in the Sydney Morning Herald - Musicians are small businesses too - on this very topic, reminding the public that, yes, music creators are small business operators too, and it’s not an easy gig (literally/figuratively) with revenue streams waxing and waning due to industry trends, regulatory provisions and other market forces.

And, an important question has come up among the small biz chatter and one we thought we’d answer in an Ask Us Anything format: 

Q: What portion of licence fees collected ends up going overseas?

In other words, are we really just collecting songwriting royalties on behalf of songwriting royalty like Ed Sheeran?

The answer in broad terms is no, but we’ve gone to our Head of Member Services, Jana Gibson, to get into the specifics.

JANA: Around $6 in every $10 of APRA AMCOS licence fees collected are paid to local songwriters, composers and music publishers. It’s important to acknowledge this figure includes payments to local publishers for international works (i.e. the local publishers would then on-pay a portion of that revenue to another publisher overseas).

Nevertheless, that means in FY18 APRA AMCOS paid over $200m to domestic songwriters, composers and music publisher businesses. Some of those music publishing businesses are subsidiaries of overseas companies but they still employ Aussies and Kiwis, pay local tax on their revenues and invest in the local music industry through A&R, artist development, and active global promotion of their locally-signed writers.

In addition to that, we invest 1.75% of APRA’s distributable revenue, which equates to hundreds of thousands of dollars, through our cultural grants programs and educational activities, all of which support small businesses in the local music industry.

Ultimately, the amount of licence fees that we distribute overseas is determined by the amount of overseas music consumed in Australia, which is why we continue to advocate the use of Australian music on Australian media - like radio and broadcast content quotas and playlisting benchmarks for local artists on streaming services. It’s all related.

Thanks,
Jana


While you're here let's #factcheck a few other misconceptions about our distribution of royalties, and who can vote in Board elections.

Q: What portion of revenue collected from licence fees goes to rights holders?

A: The cost of administering licence fees collected last year was 13.6% of total APRA AMCOS revenue collected, which means around 85 cents in every dollar is returned to music right holders - close to world's best practice. We hold that money on trust and have a responsibility to you - our members - to manage this money cost effectively. 

Q: What data is used to distribute royalties? How do you know what music is getting performed/played?

A: We obtain performance information where reasonable. It would be unreasonable (and cost prohibitive to our members) for every business (retail shops, cafes etc) to report every song they play to us. In those cases we distribute royalties to proxy sources such as radio, streaming services and music recognition technology. 

Q: Is it true that only 10% of members earned royalties last year?

A: No. In the last financial year, almost 50% of our 100,000 members were allocated earnings by APRA. It's important to note, that our members engage in songwriting, composing and music publishing across a wide spectrum of activities and at different intervals. It's commendable that so many members earned money for their musical output last year. 

Q: Is it true that only 10% of members can vote in Board elections and AGMs? 

A: No. Full members who have earned royalties - even as low as one cent - in either of the last two financial years are eligible to vote. Therefore, as above, almost 50% of our members have the right to vote. This year we announced changes to voting entitlements to create a more democratic system and empower our lower earning members to have their say. Their single vote will now carry more weight than it used to, compared with higher earning members. 

Want to Ask Us Anything? 
Contact Writer Services with your question and we'll get on the case.

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