By Jeff Price
This is a fun lawsuit that illustrates two major points:
1) What happens when there is no transparency
2) How songwriters/publishers are involved in suing other songwriters/publishers without knowing it
First, a year ago, BMI sued one of its publisher members named Deyon Davis, claiming he falsified “cue-sheets,” which resulted in BMI paying him more money then he was actually owed.
Follow me on this one: each and every time a song appears in a TV show that is broadcast, the songwriter/publisher gets paid for the “Public Performance” of the song. If you wrote the theme song to “Friends,” you get paid a LOT of money for these Public Performances.
The way BMI determines how much the songwriter/publisher gets paid works more or less as follows:
1) When someone becomes a member of BMI, that person gives BMI the right to collect his/her Public Performance money and take a % of what they collect as a service fee before BMI pays the remainder to him/her.
2) In regards to TV, each TV network makes a pre-payment to BMI for the upcoming years’ Public Performances (referred to as a “blanket license fee”). This is a negotiated amount of money between BMI and the network, and no one is saying what is being paid; it’s a secret.
As an example, let’s say on January 1st, NBC pays BMI $25 million dollars for the right to broadcast (i.e. publicly perform) on its network all of the music written by songwriters who have granted BMI the right to negotiate and collect their public performance fees.
None of this money is owed to BMI, it is owed to the members of BMI. (However, BMI gets to sit on its undisbursed members’ royalty money, and earn interest on it, that it does not share back with its members.)
3) Over the next year, BMI gets “cue sheets” from the TV broadcaster. A “cue sheet” is literally a piece of paper filled out and handed/faxed/emailed to BMI that provides the information as to what date, time, etc., a song was played in a TV show .
BMI then looks at all the cue sheets that list what song was played on what show, what the audience reach is, and what dates it aired, and then they use their voodoo to decide who gets paid what percentage of the money that is left over after BMI takes its percentage of the network’s $25 million dollars.
Therefore, if a cue sheet is not turned in by the network, if information is left off a cue sheet, if Doofus the intern screws something up, the songwriter/publisher doesn’t get their money (but BMI does, as it takes its percentage off the top before anything is paid out).
The more cue sheets turned in, the more money the songwriter/publisher makes.
Now back to our story, Deyon Davis, a member of BMI, was sued by BMI for submitting falsified “cue-sheets.” That is, BMI claims he called someone at the TV network and got them to send in inaccurate cue sheets stating his music was broadcast more frequently than it actually was.
If he did this, it would mean he got paid more money than he should have.
Davis recently countersued.
First, he denied BMI’s charges. Next, in his legal countersuit he states:
“Metaphorically speaking, BMI is a bully. BMI deceptively lures unsuspecting songwriters and publishers into its playground (BMI’s performing rights licensing and royalty system) with the promise of fun (the fair calculation and payments of royalties) and then spends the day bossing them around, beating them up and taking their toys.”
He then states that BMI “deliberately employs an unclear royalty calculation system for tracking public performances in order to decrease the amount of royalties it must pay to its affiliates.”
And finally he states that BMI has created a system that steals from songwriters and publishers.
You can view BMI’s lawsuit here and Davis’ countersuit here (this one is more fun as it has name calling in it).
I have absolutely no idea if Mr. Davis did what BMI says he did. You can read about the whole thing here.
But, here is my take on the entire thing:
First, this lawsuit and countersuit would not be possible if there was TRANSPARENCY in how rates are calculated, and if what is being paid via the stone-age days of tracking TV broadcast via cue sheets were recognized as being as outdated as an abacus.
BMI was never perfect, but cue sheets and BMI was the best solution to track public performances on TV when TV was broadcast in analog. Now TV is digital (it’s even against the law to broadcast TV in the U.S. that is not digital).
As soon as it’s digital, it can be tracked by computers and software, not via Skippy the intern faxing over a piece of paper that he had to fill out by hand (and we all have to hope to god he entered the data correctly). On top of that, the two entities—the broadcaster and the PRO (BMI)—involved in this exchange have NO reason to care if the money makes it back to the right people.
For example, NBC pays its flat rate of $25 million at the start of the year. Game over. Who gets the money after that is moot to them.
BMI takes its percentage off the top regardless of whom they give it to. Game over for them too.
If the money does not make it into the right hands, it has no impact on either of them.
And the way the system is built, there is no way for any member (i.e. songwriter/publisher) of BMI to audit and prove that someone screwed up.
So here we are with an incredibly inaccurate system with no impetus to assure it’s accurate either from the payee or the collection agency.
With all due respect, WTF?
No wonder this lawsuit is happening. The question is, why are more of them NOT happening?
Technology already exists right this second that tracks public performances on TV; ever hear of TuneSat? This is what they do, and they’ve been doing it for years. They literally track hundreds of TV stations around the world, every show on every station, every second of the day, and, using a fingerprinting system, match the music appearing in the TV show with music in their database.
A user can log into his/her account, see REAL TIME information (it actually updates minute to minute) as to which TV station broadcast one of his/her songs, at what time/date, the duration and more. They even have a little button you can click on, so you can listen to the actual freaking broadcast that includes your song in it – verifiable proof that it happened.
For the life of me, I cannot figure out why in the world BMI/ASCAP/SESAC (and every other agency like them in the world) would not be using this technology to track this stuff on TV. The only thing I can come up with is they don’t want the accurate information as it allows them to do things with the money its members might not want them doing.
And here’s the other point: for all of you who are members of BMI this is YOUR money being used to sue Mr. Davis.
You may like that, or not like that, but the point is, you get no say as to how they use YOUR money. And in some cases, they actually use your money to assure you make less of it.
At the very least, can’t they let their members opt in to these sorts of things?
Very soon this whole system is going to come crashing down; it’s not a matter of “if,” it’s a matter of “when.” You simply cannot have a system built for analog TV and AM/FM radio survive in a digital world of YouTube, Netflix, Pandora, iTunes, Spotify and Amazon. It just will not work. At some point someone else will get the info, confront the system, and have the proof and data to peel back the layers of obfuscation. All the old system can do is applaud and support the fact that things are getting better for the songwriter/publisher or fight against that change to save their own hides.
Sadly, I think it’s the latter, but I would love to be proven wrong.
