Songtrust Battled Suspensions from PRS, SACEM, ICE Over Fraudulent and Problematic Accounts, Sources Reveal

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Songtrust Battled Suspensions from PRS SACEM ICE Over Fraudulent and | Richmcculley

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Downtown Music Holdings-owned Songtrust faced serious and extended suspensions from major rights societies PRS for Music, SACEM, and the collective ICE over a rash of fraudulent and problematic accounts, multiple sources have relayed to Digital Music News.

The suspensions, which robbed member songwriters and rightsholders of substantial royalties, or at least substantially delayed their delivery, appeared to have started in 2021 and were only resolved after substantial client purges and revamped processes were implemented.

Songtrust is a global music publishing administrator that counts more than 350,000 clients and oversees roughly three million songs. The company claims its global reach spans ‘215 countries’ and ‘65 global sources’ with US-based PROs ASCAP, BMI, and European organizations SACEM and PRS for Music listed most prominently in its marketing pitches.

Beyond PRS for Music, SACEM, and ICE, at least two other publishing rights organizations were also considering a freeze on Songtrust clientele, according to a Downtown executive who agreed to speak with DMN. The additional rights organizations paused any pending blocks after being satisfied by various account purges and structural changes, the source also relayed.

In all cases, the suspensions appeared to be prompted by serious causes of fraud or problematic song metadata, with Songtrust’s vetting process viewed as structurally inadequate.

It appears that Songtrust isn’t currently facing active freezes. But sources noted that Songtrust clients were not properly alerted to the freezes, even though the blocks would substantially compromise the ability of creators to collect global publishing royalties.

When asked about these developments, former Songtrust President Molly Neumann, currently CMO of parent Downtown Music Holdings, refused to discuss the matter directly with Digital Music News, though she did offer limited statements through New York-based PR agency Kite Hill Public Relations.

Via the intermediary, Neumann noted that “Songtrust is active with all of our partners,” but declined to answer whether suspensions had existed in recent months and years. When asked specifically about the PRS, SACEM, and ICE suspensions, Neumann’s PR representative only stated: “We stand by our original statement and have no further comment.”

The collecting societies themselves were also reluctant to confirm the suspensions. But they didn’t deny them.

In one conversation with ICE, head of marketing Gary Smith noted that Songtrust was currently an active partner, but resolutely refused to answer any questions about previous suspensions. “I’m sorry, but on this occasion, we can’t comment,” Smith told DMN after repeated questions on the Songtrust suspension. Smith did offer to “come back with something” by the following Monday, though no follow-up statement arrived.

Elsewhere, SACEM declined multiple inquiries and PRS for Music refused to discuss Songtrust details. “We do not comment on individual member accounts, but we can confirm that we are in regular dialogue with Songtrust,” PRS offered in a statement.

“We work closely with a wide range of industry partners, including Songtrust, to ensure the integrity of our copyright data and we continue to develop robust policies and tools to protect against fraudulent claims.”

In the case of PRS, email correspondence shared with Digital Music News revealed at least two suspensions — or ‘distribution holds’ — within the past two years.

One freeze was lifted in September of 2021, according to the emails, though another was initiated in August of 2022. In both cases, serious issues involving erroneous or fraudulent ISRC and PA (short for ‘Performing Arts’) information tied to songs were cited.

In one urgent email, whose date was not disclosed, Songtrust was warned of a ‘severe risk’ posted by serious fraudulent submissions and a review by PRS’ legal counsel. An immediate freeze was implemented while the legal review was initiated.

Improper identifiers threatened to pollute royalty-processing efforts with other songs because of overlapping ISRC codes and other improper identifiers, email threads further revealed. After the freeze was lifted on Songtrust-represented catalog, it was reinstated after just 11 months due to the emergence of tens of thousands of new violations.

PRS for Music executives also expressed concerns with sloppy, conflicting, or fraudulent ‘Recording Data Identifier Quality,’ ‘Catalogue Management,’ and ‘CWR Quality’ submission components.

The public stonewalling — by PRS for Music and other organizations — raises serious questions about why these rights societies are covering up for Songtrust, especially given their charters to prioritize songwriters and creators.

“ICE exists to ensure songwriters get paid,” the company prominently declares on its homepage. “Accurately, transparently, and at the right value.”

PRS for Music offers a similar mantra: “Music wouldn’t exist without the work of songwriters, composers and publishers,” the company proclaims on its homepage. “We’re here to represent them and ensure that they are rewarded for their creations.”

Meanwhile, the rash of suspensions appear to be forcing serious changes at Songtrust.

Just last month, Songtrust members were sent a lengthy email from Downtown Music Publishing president Emily Stephenson detailing a serious overhaul in submission processes. The correspondence was shared in full with DMN.

“We have restructured our rights management, technology and support teams with the aim to improve and evolve our client services and support levels,” the letter starts.

“You might have noticed slower registration timelines,” the letter continues (bold by Songtrust/Downtown). “Because of the necessity to ensure the integrity of the data we are sending to our income sources, each song we receive goes through a very extensive vetting process, which is a combination of manual and automated workflows.”

The company also confirmed new partnerships with Plaid, a company focused on ‘KYC’ compliance (short of ‘Know Your Customer’ verification processes), and Trolley, a payment processing platform. “We have implemented these additional process improvements to ensure that all metadata is correct and that your personal information is safe and secure.”

Songtrust also implemented a ‘prequalification questionnaire’ for all new registrations, while also pointing to a ‘new leadership and organizational structure” implemented at the onset of 2023, which includes an alignment of “back office operations with other publishing groups within Downtown Music Holdings.”

The revelations come at an inopportune time for the beleaguered Downtown Music.

Over the past few months, federal prosecutors have handed down lengthy prison terms to a pair of scammers at MediaMuv, a fraudulent YouTube rights management organization that generated millions in royalty scams while operating under Downtown division AdRev.

The MediaMuv duo, Jose Teran and Webster Batista Fernandez, are both behind bars, though former AdRev CEO Noah Becker avoided charges and has since departed the company. Per Downtown, Becker has been cooperating with federal authorities in their lengthy investigation, though he now operates in a completely different industry. In total, MediaMuv scammed an estimated $23 million in royalties by improperly claiming thousands of revenue-generating copyrights, with AdRev offering the cover of legitimacy that disguised the wrongdoing for years.

Downtown Music Holdings, founded by current executive chairman Justin Kalifowitz in 2007, also owns prominent music distributors CD Baby (acquired in 2019) and FUGA (acquired in 2020).