Amazon demands refund of overpayments for streaming music (Chris Castle)

Now that the Copyright Royalty Board has set streaming royalties, Amazon has sent demand letters to force refunds of allegedly overpaid amounts to music publishers and artists.

from CHRIS SCHLOSS music technology policy

You may have noticed that Sliced ​​Bread is in close competition with Fire and the Wheel for second place behind Greatest Human Accomplishments – both of which have to yield to streaming mechanical royalties in Phonorecords III’s remand. Yes, the so-called “Headline Rates” in Phonorecords III (or “PR III”) are a Nobel-worthy achievement. At least according to press representatives.

And yet something strange happened. I was told that Amazon, through its agent MRI, posted what was essentially a request letter on the MRI user portal. This warning letter asks publishers who have licensed songs to Amazon to pay for an overpayment of streaming mechanisms due to the adjustment of the new Phonorecords III refund fees, which definitively set the streaming mechanisms rates for the industry. Something similar could happen at the MLC; We’ll come back to that in a moment.

As evidence of how loopy the Copyright Royalty Board system really is, when there are pesky participants who flout all sorts of issues, the PR III remand affects royalties paid from 2018 to 2022. That’s right – the beginning six years ago. This is largely due to the publishers’ failure to obtain a waiver of the PR III decision as a bargaining chip when they gave away the rest of the farm in Title I of the Music Modernization Act, but is primarily due to desire After digitalization, music services – the largest corporations in economic history – are being returned to destroy the songwriters’ kitchen tables.

And when it comes to the services that are crushing the little people, money doesn’t matter, even if they spend more on litigation than increasing royalties would have cost them. Obviously, the sadistic psychological benefits far outweigh the costs.

But now Amazon has figured out that despite all the shenanigans with PR III, it looks like they paid too much and now they want it back. That’s right – Amazon wants you to write them a check. Because a market value over $2,000,000,000,000 is simply not enough.

This is what it looks like:

A few questions come to mind. First, understand what Amazon says. Apparently they billed publishers for Phonorecords II rates when the PR III rates were appealed. The PR III tariffs should be a improvement above the PR II tariffs. At least according to the clamor that accompanied the announcement. In fact, the PR III recusal rates where it all ended were themselves intended to be an improvement, which meant the publisher had to be paid more under PR III than under PR II.

So if this is true and Amazon was paying PR II rates during the PR III complaint, then why is there one now? Overpayment by Amazon? Wouldn’t you expect the True Up promotion to result in publishers getting one? credit for increasedPrices? Especially when the number of streams and total number of subscribers remained the same in these previously published statements? (Not to mention that this may be the case with other services too.)

These statements predate the formation of the MLC and the “License Availability Date” for the 2021 blanket license established under Title I of the MMA. That is, if you or your publisher had a direct contract with Amazon during the PR III Tariff Period, there may be overlapping periods come in which the MLC has taken over Amazon’s accounting.

It has long been standard industry practice for overpayments to simply be deducted from your license account. Nobody is asking you to write a check.

This is especially true for publishing administrators. If a service were to charge an administrator’s account, this could result in the administrator having to spend out of pocket to pay its publishers the amount of the claim.

But great news! Amazon will give you an interest-free short-term loan so you can pay off your new debt within six months.

Now about the MLC – it’s entirely possible that Amazon, under the legal license, pulls the same trick. However, it appears that MLC is doing what normally happens in such situations and making debits and credits when necessary. If you have concerns, it’s worth checking the MLC and asking for an explanation.

However, it does not change why an overpayment occurs in the first place. If ever there was a situation that calls for intensive royalty compliance scrutiny, this is it. It’s hard to believe that this back-and-forth hasn’t resulted in errors in your license payments across multiple plans in multiple billing cycles. Not a crime, it’s complex. Amazon must provide publishers with at least a detailed breakdown of how the refund was determined, as well as an explanation of where the rates changed that led to the overpayment.

For this reason, Amazon and all other similar services should welcome comprehensive scrutiny. In fact, the MLC should simply include truth-telling in its already announced audit of Amazon.

This slice of life shows once again how useless the Copyright Royalty Board system is for streaming mechanical royalties.