Digital revenue has been an intense topic for discussion for quite some time now, with online streaming services like Pandora and Spotify gaining popularity on one hand and online stores like iTunes outshining traditional CD stores on the other. These services have made it easier for new artists to gain quick footing in the music industry, providing crucial initial exposure. However, amidst all the hype, producers, mixers and sound engineers – people who are just as indispensable for music production, tend to get overlooked.
The Allocation for Music Producer Act, or AMP Act (H.R. 1457), formally introduced by congressmen from both sides of the aisle: Reps. Joe Crowley (D-New York) and Tom Rooney (R-Florida) looks to ensure that these producers, mixers and engineers get their fair share of the digital royalties gained by their produced music.
The Act also allows this group of people to negotiate royalties from artists for work done pre-1995, when the 45% royalty rate was established. If left pending for more than 4 months, a collective will weigh in on the request. If approved, the artist will be obligated to pay 2% of the 45% received royalties to the producer, mixer or engineer. In case of more than one requests, the 2% will be distributed evenly.
The concept of allotting a percentage of digital royalties received for the studio professionals is not entirely new. “The Letter of Direction” development is a process that lets artists put in a requisition to redistribute a portion of the 45% royalties to their producers, mixers and/or engineers. The AMP Act would simply make this voluntary process a part of the Law.
At present, artists receive 45% digital royalties. The AMP Act will ensure that 2% of the royalties earned are distributed to producers, mixers and engineers. If passed, the payments will be handled by SoundExchange – a nonprofit entity that collects and distributes digital performance royalties for artists. SoundExchange is partnering with The Recording Academy to push for the passage of this groundbreaking new legislation.