Saturday, October 17, 2015

Traxsource to pay out withheld mechanical royalties

Written by Tom Pakinkis — Digital retailer Traxsource has announced that it will be paying back any extra money previously withheld for copyright royalty payments to every label and artist it's ever worked with in its 11-year history.

Throughout the analogue age, record labels received the money from music sales and were responsible for paying mechanical royalties copyright societies and/or publishers. With the introduction of digital downloads copyright societies demanded to receive publishing royalties from download sales directly from the retailers as opposed to looking to the record labels as was the case with CD and vinyl sales.

This forced digital retailers like Traxsource to withhold and pay into escrow a percentage of the payment to labels in order to cover whatever the new mechanical royalty fees would be. It was not entirely clear for several years what the exact amount to be paid would be and for this reason digital retailers had to withhold based on a reasonable estimate of what percentage of sales proceeds would be payable to the copyright societies and publishers.

After years of negotiating licenses, Traxsource entered into licenses where possible around the world to establish an actual percentage payable for copyright licenses. As a result, Traxsource can now give the extra money held in escrow back to the labels and music makers.

Going forward, Traxsource’s focus will be on working with the labels and publishers with clarity and transparency.

"We are extremely happy to finally be in a position to reduce our mechanical withholdings and provide partial refunds to our partners," said Traxsource co-founder Brian Tappert. "Our ultimate goal continues to be to do everything possible for the benefit of rights holders and content providers equally.”

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