Returns on Investments

People are often unaware that they might benefit from industry- or union-sponsored funds or participate in class-action settlements. In early January, we were notified of a fund for session musicians with over $3 million still unclaimed, and of a procedure enabling consumers to collect a small share of the payout from the "MAP" (minimum advertised price) lawsuit that was settled by the music industry last year.

Musicians who have done studio work in the US or Canada can benefit from the "Sound Recording Special Payments Fund," a fund that has paid out almost $15 million to date, according to Meighan McFalls of the trans-Atlantic public relations firm Brown Lloyd James. Originally established after a two-year strike by professional musicians against the recording industry in the early 1940s, the fund provides continuing compensation for session musicians who work under American Federation of Musicians (AFM) contracts.

A musician who earned over $12,000 in scale wages over a five-year period could receive approximately $6,500 in additional compensation, according to a press release authored by Enex Steele, executive director of the fund. Payouts are not tied to radio airplay, and apply to recordings that were never released as well as to blockbuster hits. The music industry pays into the fund from profits earned on sales of recordings; the fund in turn pays musicians, provided they have followed union procedure in filing reports for studio dates. Steele points out that it's very important to keep the union apprised of your current address, to insure delivery of checks. The 60-year-old fund is "still going strong" but remains largely unknown, McFalls noted.

Musicians can contact the Sound Recording Special Payments Fund by email, by phone at 866-711-3863 (ask for the Musician Information Department), or by fax at 212-310-9481.

In late September, the music industry's "Big Five" (Bertelsmann Music Group, EMI Music Distribution, Warner-Elektra-Atlantic Corporation, Sony Music Entertainment, and Universal Music Group) and three large music retailers (Trans World Entertainment, Tower Records, and Musicland Stores, a unit of Best Buy Co., Inc.) settled a class-action suit over "minimum advertised pricing." As it developed, the suit was joined by attorneys general from 41 states, and was resolved without any admission of wrongdoing by the defendants, with the final settlement estimated at $143 million.

Most of the settlement will be delivered in the form of compact discs given to schools and public libraries in proportion to the populations of the states involved. Approximately $67.3 million in cash will be distributed to individual consumers who bought CDs from 1995 to 2000, the period in which MAP was applied to retailers in an attempt to prevent them from selling recordings as loss leaders.

Consumers can sign on for their share of the proceeds, which will vary from $5 to about $20 per person depending on how many apply. Full information about the payout and an application form are available at the settlement website. The site's home page also states that you may request and complete a hard-copy Claim Form by calling the toll-free number (1-877-347-4782) or writing the Claims Administrator (PO Box 1650, Faribault, MN 55021-1650). Claim Forms must be filed electronically or signed and postmarked no later than March 3, 2003.

Money for nothing: The music industry may be suffering through one of its longest sales droughts, but "ring tones" are beefing up its coffers to the tune of almost a billion dollars annually. Those annoying little riffs—everything from Beethoven's 5th to Metallica's "Enter Sandman"—are programmed into cell phones worldwide. Royalties from ring-tone sales totaled $71 million in 2002, according to a January 15 report by Reuters correspondent Bernhard Warner. Analyst Simon Dyson of London's Informa Media Group said the royalty figure indicates that "the overall market is over $700 million annually, and quite possibly as high as $1 billion. "In 2002, ring-tone sales were up 58% over the previous year.

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