by Dennis Dreith, Executive Director AFM & SAG-AFTRA Intellectual Property Rights Distribution Fund
Background and Beginnings
The AFM & SAG-AFTRA Fund was initially established as a joint project of the AFM and AFTRA (prior to its merger with SAG) for the purpose of distributing royalties stemming from various statutory provisions in US copyright law, and agreements with foreign collectives. Specifically, in the US, the passage of the Audio Home Recording Act (AHRA), the Digital Performance Royalty Act (DPRA), and the Digital Millennium Copyright Act (DMCA) established, for the first time, a royalty for both featured and nonfeatured performers in sound recordings.
While these royalties are applicable to digital media only, and exempt terrestrial radio, they represent a dramatic first step forward in providing US performers royalties similar to what those performers in virtually every other civilized country in the world have been receiving for decades. Prior to the passage of these provisions, only the songwriter and the publisher received performance royalties in the US. Moreover, the existence of these laws in the US makes it possible for the Fund to enter into reciprocal agreements with foreign collectives to collect royalties in their territories for performers on US sound recordings.
Clearly, the absence of a performance right in the US for terrestrial radio still inhibits us from collecting significant foreign and domestic royalties, and has delayed implementation of digital radio here in the US. But these laws, nonetheless, provide substantial royalty payments to US performers. It should be noted that the laws that made collection of these royalties possible were passed, in large part, due to the vigorous lobbying activities of the AFM and SAG-AFTRA, in cooperation with the record labels and related trade organizations.
Then and Now
The Fund certainly had a humble beginning. However, it has experienced massive growth in size and scope since first being activated in the final months of 1999. When I first took the reins of the Fund, it had less than $250,000 to distribute, no office, and no employees. I immediately hired one employee who occupied a corner of the Film Musicians Secondary Markets Fund, using what amounted to hand-me-down equipment and borrowed office space. That one person was the entire research department, the allocations department, the participant services department, and whatever else that was needed department.
Now, the Fund has 44 employees with an independent research department, as well as accounting, IT, software development, participant services, administrative, and legal departments. The Fund recently purchased its own building. Last year, it collected in excess of $42 million on behalf of session musicians and background vocalists (nonfeatured performers).
Show Me the Money
Presently, the Fund receives relatively small amounts of private copy remuneration pursuant to the Audio Home Recording Act (AHRA), with the largest share of royalties generated from the Digital Performance Royalty Act (DPRA) and the Digital Millennium Copyright Act (DMCA). The latter are collected from SoundExchange on behalf of nonfeatured performers, and include royalties from digital subscription services, webcasting, and other digital services.
To date, the Fund has 28 reciprocal agreements with collectives in foreign territories (with several other negotiations in progress). These include active agreements in the UK, Japan, the Netherlands, Portugal, Germany, Spain, Hungary, Poland, Romania, the Czech Republic, and many others. The majority of these agreements are for private copy remuneration and digital broadcasts. However, the Audiovisual Department and its initial agreement with the Spanish rights collective AIE holds tremendous promise. It covers motion pictures and television films containing performances of AFM and SAG-AFTRA members exhibited in Spanish cinemas and broadcast on Spanish television. In fact, audiovisual distributions, for the past two years combined, amount to just under $7 million.
We have just concluded negotiations with German rights collective GVL for an audiovisual agreement covering similar exhibitions in Germany. As with the audiovisual agreement in Spain, this covers performances of the underscore, as well as sound recordings licensed for use into motion pictures and television films, and makes distributions to both featured and nonfeatured performers.
Union vs Non-union
An area that seems to have generated a bit of confusion is the question of whether or not union membership is required in order for the Fund to collect royalties on behalf of a performer. The answer is actually yes, and no!
For royalties collected pursuant to US copyright laws (e.g., domestic royalties from private copy, digital subscription services, webcasting, etc.), the Fund is required under federal statute to distribute to union and nonunion members alike. The situation for foreign royalties is quite a different matter, and the laws of most foreign territories mandate that royalties can only be collected on behalf of members. I can’t overemphasize the importance of this fact. Simply put, we cannot make a claim to collect foreign royalties for anyone who is not a member of the AFM and/or SAG-AFTRA.
I have also been asked if a performer can join a foreign collective (such as PPL or GVL) to have them collect their foreign royalties, and still collect domestic royalties from the Fund. This is a complicated matter, and while it may in fact be beneficial for some individuals (especially those with dual citizenship), it may, in many other situations, delay your foreign royalty payments due to mandate conflicts, or in other cases, preclude you from receiving certain royalties altogether, such as audiovisual royalties. As this is a complicated issue, I strongly suggest you contact the Fund to discuss your individual circumstance prior to making a determination.
The AFM & SAG-AFTRA Fund has recently updated its website and included many new features, such as a private area access where you can view and print current and past statements, and manage other personal information (direct deposit information, beneficiary designations, and more). I strongly urge you to visit the website www.afmsagaftrafund.org and register for the private area access and sign up for direct deposit, if you haven’t done so already. The direct deposit option will ensure that you receive your royalty payments in a timely and secure manner, and minimize the possibility of lost checks. Plus it is good for the environment! You can also contact the Fund by writing to: AFM & SAG-AFTRA IPRD Fund; 4705 Laurel Canyon Blvd. Suite 400; Valley Village, CA 91607 or by calling the participant services hotline: 1 (818) 255-7980 #2.