In the most recent Celebrity Access feature, In the Hot Seat with Larry LeBlanc, global music titan Merck Mercuriadis tackles a thorny and often unspoken issue that plays into creators getting the short end of the stick in the so-called ‘value gap’ chain in a lengthy interview that offers a fresh perspective on the bankability of copyrights.
… Here’s what is not being said. When we look at the past 5 years of reporting, it would be fair to summarize it as neither Spotify nor Apple pay enough. That, to the greatest respect to the music industry, is not the full truth. Of course, we believe what Spotify pays currently or what Apple pays currently (for songs) is anemic to where we want it to be. But that’s not the truth.
In terms of the songwriting community, the truth is that Spotify and Apple are keeping 30% of the money in exchange for the service that they provide. That is not a bad price to pay for the service that they provide. What is not fair is the split between recorded music and songs. And what is not fair is the influence that Sony, Universal, and Warner, as the three big recorded music companies, have over (their affiliated publishing companies).
Sony, Universal, and Warner which should be the three biggest advocates for songs because they are the three biggest song companies, but they cannot advocate to the degree that they should because they are owned by recorded music.
With recorded music (companies), you have 4/5th of the money going that way. They make a huge margin and, in general, they own the act (their recorded catalogs) in perpetuity; and then on the song side of the business, you’ve got 1/5th of the money going that way. They (affiliated major publishers) make a small margin in relative terms, and they don’t own the assets in perpetuity.
– The complete interview can be found online here.