Dutch Music Collection Society Loses Artist Royalties In The Stock Market

from the good-job,-guys dept

The various music collection societies keep insisting that they're just the important middlemen helping make sure artists get the royalties they're due. Except, for some reason, they keep getting caught not actually giving that money to artists, but hanging on to it themselves. Billboard reports that the Dutch collection society, Buma/Stemra, is happily telling people that revenue rose by 2% last year -- though, oddly, the Billboard report leaves out one rather interesting detail. Reader Marcel de Jong notes that Buma/Stemra invested a bunch of the money it collected for artists into the stock market and then lost a chunk of it, so it's paying artists less money than it collected for them. What's unclear is if Buma/Stemra would have paid out more if it had made money... and also why it's gambling on the stock market with money it supposedly collected for artists.

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  1. icon
    PrometheeFeu (profile), 29 May 2009 @ 7:57am

    Time-Value of Money

    Now, it seems to me that B/S cannot deliver the income as soon as it comes in. They probably have a payment schedule. However, between the moment they receive the money and the moment they distribute it, it would be somewhat silly to stick it in a checking account at 0.04% wouldn't it? So it makes sense that they would invest it. It's not gambling, it's just logical. Whether they were prudent fiduciary or not however cannot be determined from the information here. Though if they lost 10%, I would imagine that they were way too heavily invested in equities...

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