Monday, October 13, 2008

A Statement from Beatport on Witheld Mechanical and Performance Royalties

We will keep you posted on how this specifically affects GrooveSource artists. Right now we anticipate no change in terms of the way your statement works, as all this takes place prior to reaching us. But we'll let you know how it all plays out.

Team Groove

"Dear Labels, Artists, and Songwriters

Under the threat of litigation from various European music publishing rights
organizations (PRO’s), Beatport must begin to withhold mechanical and performance
royalties from the payments made to Labels and make those payments directly to the
PROs. These withholdings will begin on Beatport’s next quarterly payout Q4 2008 in
connection with sales made in Q3 2008 on The amount withheld from the
labels next payout will be determined by:

1) The territory in which a track was purchased, and
2) The percentage of the sales price that the particular PRO charges in connections
with sales into that territory

These music publishing royalties will be held in escrow until the appropriate PRO’s have determined which songwriters and tracks are represented by them. Even if you are not a member of a PRO, the PRO must audit the sales data and determine based on their database which songwriters are members of their societies.

We anticipate this initial audit with the various PROs to take roughly two quarters. Once the PRO’s have determined which songwriters they represent, Beatport will payout in one of two ways:

1) For tracks cleared of any society involvement, Beatport will release the full
amount of the funds to the labels, in their next quarterly payment, as usual.
2) For tracks where the PROs have claimed songwriter representation, the funds will
be released to your PRO immediately upon notification. To determine when you
(the songwriter or music publisher) will receive your portion of the payment you
will need to contact your PRO directly (typically 12 to 18 months).

Any payments made to the PRO’s will be fully documented within Baseware. If a label or songwriter disagrees with a PRO’s songwriter claim, they will need to address this directly with the PRO in question. Beatport is in no way affiliated with any of these PROs and cannot negotiate on your behalf.

Moving forward, Beatport will be extremely proactive to capture publisher and
songwriter information when the tracks are delivered to Beatport. This will let Beatport better serve our label partners and the PRO’s to make sure that the music publishing royalties get back to the proper songwriters and music publishers. Additionally, once these initial audits are complete, retrieving additional information on track delivery should let us move towards releasing funds to non-PRO songwriters in a much more timely manner.

Also, please note that the end result of these payments to the PROs is that with respect to the tracks and the sales into those countries where Beatport has paid the PRO, the Labels will not be required to pay the music publishers and songwriters as Labels have been required to do in the past.

This message is a public announcement, so please forward this to all your songwriters/artists so they are aware of Beatport’s plan to comply with the PRO’s requests.

For more information on PROs and societies, please see:"

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