PayPal discontinues MassPay

Normally when someone who is evaluating DashBook asks why they cannot send out royalty payments directly via PayPal through our software, it is because they simply did not set it up.  It is a very quick and easy procedure consisting of logging in to one's PayPal account and requesting API signature information which provides the credentials that DashBook needs to communicate on behalf of their business account.

PayPal's MassPay does not work with personal accounts, so an upgrade to Business or Premier might be required.  Why does DashBook use PayPal's MassPay system for electronic payments?  MassPay is a great way to handle paying a handful or hundreds of royalty holders at once.  It also fits nicely in the business model, as the sender pays a fee that is comparable to or cheaper than mailing costs, and the recipient receives the full funds without additional fees removed.  Other methods of PayPal payments would have the royalty holder receive less than the royalties due.

PayPal MassPay has been a great system for DashBook users, who are primarily book publishers and music labels right now, although of course our system handles many more businesses interested in tracking royalties and licenses.  It is very simple and easy.  One screen shows all of the royalty amounts owed for the period chosen, and one click can fire off all of the payments and record that information into DashBook for account balance purposes.  Life is good.

So when one of our new book publishers started asking about her inability to use PayPal, the answer seemed obvious.  "Go to this PayPal website page to get your account information; paste it here in DashBook."  Ah, but not so easy this time! Her PayPal system didn't have MassPay activated, and calls to PayPal resulted in her telling us that PayPal has discontinued MassPay for all but huge corporations.

What?  Isn't PayPal for the little guys who don't already have large systems setup?  If your company is already large, wouldn't you have EFTS (Electronic Funds Transfer - like direct deposit) to handle all your needs?

Well, after spending hours on the phone with various PayPal personnel, it looks bad.  Whether their decision is due to "abuses" or "high risk" (their terms), they have indeed disabled MassPay from the majority of their accounts while leaving it intact for a handful of large multinational corporations.

This is huge news.  Why isn't there outrage everywhere today?  Maybe because they did this months ago, and perhaps our clients that use this feature only pay quarterly or semi-annually, etc.
[Edit:  It appears those using it regularly have been grandfathered.]

What did PayPal recommend that we do?  Trash our MassPay API program code, and rewrite it for their alternative Adaptive Payments style, which puts the burden on the recipient for the fees -- and those fees are much higher than the $1 USD cap that MassPay has.

If you've used MassPay, contact PayPal immediately to see if they will re-instate your account. [Edit: First go to your account, select Send Payment, select MassPay, and see if yours is disabled.]

If you have experiences about this, please reply to this post so that we can all learn.  Unfortunately, change is not always for the better.

Streams versus downloads

With DashBook, it is easy to setup one set of products that receive different types of royalties depending on the product's usage by using our Sales Channels feature.

For example, let's say that you pay 75% of U.S. mechanical for a particular song.  For a 5 minute song, a 9.1 cent mechanical would be $0.06825.  But if the transaction report you receive also has streams of this song paying you 2 cents, you'd lose over twice as much as you receive by paying mechanicals on streams!

So, in DashBook, you use Sales Channels such as "Sales" vs "Streams" to distinguish what happened with a song.  Your royalty arrangement can then be set to 75% mechanical for all transactions on a "Sales" order, but 50% on all transactions on a "Streams" order.

So whether you are paying songwriters, publishers, or the artists themselves, DashBook can handle it.

Music Master Royalties

DashBook 4.5 is on our website available for downloading.  One of the extensions of this version is the ability to specify a single master share percentage on a product.  Each royalty arrangement connected to this product will be multiplied times this master share percent.

This means that you can create fewer royalty arrangements for artists or royalty holders who have songs on an album, of which you may not even know how many other tracks are there.  If your song's share is 10% of an album, you can simply create the album product with a Master Share of 10% and point the royalty to a generic royalty for your artist.  That generic might be, say 20%, resulting in .2*.1= 2% royalties for your artist.

You no longer need to multiply the master share by the artist percent, as DashBook v4.5 can now do that for you.  By using a generic arrangement of 20%, that royalty can be used on many different products, each having a different master share.

We continue to enhance DashBook to make your work easier.  Please let us know how we can help you!

New Royalty System for Music and Books

DashBook version 4.4 has just been released!

Although there are many refinements in this version due to our great customer suggestions, one of the largest changes is the segregation of the book and music businesses, which will be especially helpful for those new to DashBook.

Now, when one chooses that they are in the Music Business from the DashBook setup wizard, our royalty software program will configure itself so that the terms "author" and "ISBN" are no longer used.  Music businesses will be able to see "artists" and "ISRC", etc.  Even though DashBook has handled music calculations well for over a year, this terminology improvement will make DashBook fit more like a glove so that record labels, publishers, and distributors can easily handle their royalties and licenses.

Likewise, for those in the Book Business, DashBook will no longer present questions about track length and mechanical royalties which could have been a bit confusing.

Additionally, we have added a field for License Number on the royalty arrangement screen so that you can tag your calculation with the information needed to communicate with other companies.

These changes make DashBook conform to your business better, so that you do not have to change the way you think in order to use DashBook.  If you have any further suggestions, please let us know.

Music royalties for publishers and artists (percentage of sale price)

Two blog entries ago, I wrote an article about using DashBook for U.S. mechanical rights interest calculations. With a little setup, DashBook makes this calculation automatic as you continue to sell, even if the rates change.

This time, I'll briefly discuss a very similar feature now -- the ability to specify a royalty on a track as a percentage of the sale amount. By setting up the royalty agreement as a percentage of the sale price, typically of net sales, DashBook will calculate the royalties using this percentage each time that this track is directly sold.

But what if the album is sold?

Well, DashBook now has the ability to use the price of the album (gross or net) divided by the number of tracks on that album -- automatically!

To see how to enter album products that contain tracks, I recommend that previous post.

There is one more thing about handling music or other royalties that I don't recall writing about:  advances and recoupments.  That'll be the subject of a future article, but feel free to email us if you'd like to know more about it now.

And don't forget that you can download a free trial of DashBook here.

Music mechanical royalties for publishers and artists

Calculating music royalties can get to be a very large task, as there are many little things that need to be handled. If an album is sold, a royalty for not just the album but for each track needs to be calculated. Many people think that a song pays 9.1 cents in mechanical royalties, but that is an over-simplification. If the song is longer than 5 minutes, the rate is higher. If it is sold in a different year, the rate may be different, because this rate goes up over time.

DashBook makes it easy to calculate the statutory U.S. mechanical royalties on music, and to handle sales of both individual tracks and entire albums, whether they be physical sales or electronic downloads.

Here is one common scenario. I'll explain how to use DashBook to calculate mechanical fees owed to artists or publishers.

First, I recommend adding or changing the Product Types to include "tracks" and "albums" so that you can easily distinguish them later. (Setup->Products->Types) When you are on the product screen, you can set the product type to tracks or albums.

If an album has 13 tracks, create each track as a product in DashBook, specify the track or song length on the Measurements tab, and add anyone needing to be paid as authors for this track. A common retail price for a track is $0.99, so go ahead and use that. Now hit the Apply to save these changes, then click the Royalties tab on the first page of the product. If you press the "New" hyperlink, a new royalty will be created with this track and the next author not having an existing royalty agreement. Choose Mechanical Royalties, and type in 100% in the percentage field. Of course, you can choose 50% or any other ratio. Press OK to save these changes, and Apply on the product, and repeat for each track. DashBook has a royalty agreement copy feature, but this method is very easy. Oh, it might be a good idea to choose the non-stocking warehouse for the default for tracks, since you won't be interested in maintaining inventory.

After you have all 13 tracks defined as products, create one more product for the album itself. On the Components tab, simply select the tracks belonging to this album. If we are only concerned about mechanical rights, then this product does not need a royalty and the author/contributor column isn't necessary as well.

Now when you create an order that indicates the number of each track and album sold or downloaded, the royalties will calculate automatically. If the mechanical rate changes in the future, a simple update to DashBook (automatic internet download) will have the future rates updated with no changes required by the user. In fact, if you wish to input CD sale dates from 5 years ago, you'll notice that DashBook will use an older and smaller mechanical fee. Automatically.

Speaking of automatic, you don't actually have to enter the sales manually. For instance, you can create a customer called Apple, and ask DashBook to import your iTunes csv reports that you download from your iTunes account. (File->Import Sales Reports->iTunes) When importing reports for sales occurring in other countries, simply enter the currency conversion rate. DashBook will create the order/invoice for you, and leave it in an open state for you to review before closing it.

Even though you already own a spreadsheet program, you just can't afford to keep messing with it when DashBook is so easy and so cheap.

Tracking music royalties

We have received a number of questions about tracking royalties on music.

Music royalties can get very complicated, and you can use DashBook to simplify your work. Typically, each song has a multitude of musicians and composers to pay. One person may get a fixed dollar amount for each song, plus a percentage of the sale. Or another gets ten cents each time her artwork is included. Additionally, each royalty receiver may get a different amount based on what happened to that song.

For instance, perhaps the royalty contract dictates that the musician gets a different royalty depending upon whether the song was sold as an electronic download vs. played on the radio. You can quickly see that there are many venues and media types that can be broken out as a special royalty amount or rate.

In DashBook, you can create many different arrangements having the same product and author/musician. If the music media or royalty event is vastly different, you may enter it as a different product. Alternatively, you could use a feature we call Sales Channels. This allows you to make one order that says all items of this order are using a Sales Channel called "MP3 download", whereas another order might be for a Sales Channel of "Radio Plays over 30 seconds". You can have an unlimited number of sales channels. In your royalty agreement, you can list a different royalty percentage for each sales channel. This reduces the number of products that you need to maintain.

Once you have a myriad of options listed, DashBook does allow you to easily see all of the royalty arrangements for either a product/song or a musician/author/royalty rights holder. And of course, view reports showing either totals due or every transaction that resulted in a royalty.

And one of the features I love -- you can go to the Pay Authors screen to see all amounts that are due for all musicians, and mark them paid with a single click if you do not wish to make individual adjustments.

If you have any questions about how to handle your royalty situation, please email us at support@financialsoftworks.com.