Monday, November 19, 2012

Team GB picks up global rewards

(This story was initially published in One Movement for Music - Volume 3/Nov.-Dec. 2012)

by Emmanuel Legrand

It's been a stellar year for Team GB in music. As the country was getting ready to celebrate the 50th anniversary of the Beatles first single and paying tribute to the Rolling Stones ascent to global domination from a pub in Twickenham five decades ago, the Olympics' opening and closing ceremonies have reminded the world that the British Isles have been a formidable source of musical talent during the second half of the 20th Century.

Success has not been restricted to household names such as the Beatles, the Rolling Stones, Coldplay or Radiohead. For Geoff Taylor, the chief executive of music industry trade body the BPI, the past few years have seen the rise of a new generation of British acts. “British music is on the crest of a new wave, particularly in North America where Adele, Mumford & Sons and Coldplay have stormed the charts followed this year by the amazing Stateside performance of British boy bands The Wanted and One Direction,” said Taylor.

The success of this new generation of British acts can be measured by the findings of a recent report from the UK's authors' society PRS for Music, which showed that the British industry as a whole has experienced a decade of ongoing growth outside of its borders. According to the report, foreign royalties collected by PRS for Music on behalf of its members have jumped from £85 million in 2002 to to £188m in 2011, reflecting the global reach of the UK's songwriters, composers and performers as well as the dynamism of the local industry.

PRS for Music's
Karen Buse
In an interview with OMFM, PRS for Music director of international Karen Buse, explained that the continuous growth over the past decade was owed as much to increasing success from British acts as it was from PRS for Music's ability to chase and repatriate foreign royalties more efficiently. “It's a combination of both,” she said. “British artists have been very successful but we are also more on top of it. When I took over the international department here, it was a small team. We have a full team now, with automated tools, and we are much more pro-active – we are tracking repertoire where it is played, and we make sure [royalties] comes back to the UK. And our sister societies are also doing a better job at tracking repertoire.”

Nigel Elderton, president of peermusic Europe and managing director of peermusic UK, concurred, “Under the watchful eye and encouragement of PRS' International division many local PRO's are increasing their licensing and collection of UK repertoire while also making administrative efficiencies, which has resulted in more income flowing back to UK publishers and writer members.”

Buse said that the past decade was also characterised by an on-going development of new media outlets such as satellite and cable TV channels, as well as digital platforms, all of which have been revenue generators. Another increasing source of revenues is live music due to better collections from societies abroad. “In a lot of countries societies are now tracking not only the major tours but also concerts in smaller venues,” said Buse, who added that British acts have also benefited from the increasing number of festivals around the world.

The main sources of royalties abroad remain Europe and North America, although Buse considered that in the US, too many exemptions and legal challenges by broadcasters has made the situation “not as good as it would be, even though ASCAP and BMI are working really hard to grow licensing income.”

Buse said that streams from other parts of the world, like Mexico, Brazil or Russia, have also been growing and show great potential. Brazil's contribution to PRS's collection increased of £1.6 million in the last two years. However, Buse noted that two countries were still performing under-par, and these were the two most populated countries in the world – India and China. “Brazil is starting to grow,” confirmed Buse, “and we think that Russia has the potential to grow but we have seen no progress in India and China. Each country has its set of problems, and we are working [with PRS' sister societies] to help improve the situation.”

Another growing source of revenues for British songwriters is synchronization rights. According to Buse, some British tracks “have done very well on TV,” citing the series 'CSI' which boasts several tracks by The Who as theme songs ('Who Are You?' in 'CSI: Crime Scene Investigation', 'Won't Get Fooled Again' in 'CSI: Miami' and 'Baba O'Riley' in 'CSI: NY').

Offering an explanation as to why the UK has this continuous success, BPI's Taylor said it was down to on-going efforts from UK labels that “make huge bets on domestic talent – typically spending more than 20% of their revenues on A&R – and build on this with global digital and marketing expertise to help British artists break internationally.”

Songwriter Steve Mac
and peermusic's Nigel Elderton
For peermusic's Elderton, one of the UK's strength is its pool of songwriters and composers, whose works are performed around the world. He cited Steve Mac, a writer signed to peermusic UK before he recently signed to BMG Chrysalis, who picked up the ASCAP record of the year award for the 2011 most performed work on US radio with Cobra Starships's 'You Make Me Feel Good' as one among many UK writers who “have scored major hits across Europe, Japan and Australasia”. Explained Elderton, “These successes added to the catalogue of the UK's popular repertoire stretching back to the early 1920's continues to generate substantial royalty income for our writers from across the globe.”

The growth in international revenues can also been explained by a very pro-active industry, especially from the indie sector. Some of the biggest British successes in recent years were scored by indies such as XL (Adele) or Domino (Arctic Monkeys, Franz Ferdinand). Former Warner Music UK executive and founder of indie label Infectious Records Korda Marshall, whose act Alt-J grabbed a Mercury Prize award for their debut album 'An Awesome Wave' in early November, noted that “historically independent labels by virtue of necessity have had to make sure that they can sell as many records as possible overseas and have often used the advances from overseas licensees to underwrite the investment in the UK.”

“International business is – and always has been – a priority, almost whatever part of the UK music business you operate in,” added Julian Wall, current managing director of London-based One Media iP, and who worked previously as the director of members services for the BPI. As such, he coordinated trade missions for British labels and publishers to various locations such as Los Angeles, Japan or Australia. “Any individual or company that restricts themselves to simply domestic market activity is either very lucky to survive and prosper or at the other end of the scale, simply won't be competitive and/or around for too long.”

But for all their talent and hard work, Marshall pointed out to a more cultural reason explaining the success of Brits: “Possibly the 'celtic effect' – music is more engrained in our culture than many other countries as fundamentally we like to drink, party, dance and listen to music all the time.” Someone had to say it!

Friday, October 19, 2012

Tronc Gives Sacem 'Shock Treatment'

(This story was initially published in One Movement for Music - Volume 2/Oct. 2012)

By Emmanuel Legrand

Jean-Noel Tronc cuts quite an unconventional figure for someone who runs one of the world's biggest authors' societies. The moment you are ushered into his office on the sixth floor of a modern building in one of the posh suburbs of Paris, the chief executive of France's Sacem starts the meeting by showing off a book about punk visual art and genuinely enthusing about some of the posters or record covers from that era. Not your expected table book in such an environment...
Jean-Noel Tronc (Picture: Jean-Baptiste Millot) 

Sacem is among the top five rights societies in the world in terms of revenues collected (€819m in 2010 or $1,062m) and it plays a central role in the French music industry. But it has the reputation of being a society slow to change and managed in quite a conservative way. So maybe having a punk attitude to drive change was part of the job description (“Gimme Gimme Shock Treatment,” would sing the Ramones!).

"Why Sacem?” reacts Tronc when asked why he took the job. “For a start I've always loved music, and working with one of the most important societies in the world, which is also at the heart of France's music eco-system, was an exciting prospect. I have utter respect for creators and publishers, and I hope that, with my background, I can contribute to a new, fresh vision to the challenges faced by authors' societies and the music industry in today's digital world."

Tronc, 46, is only the third chief executive of the society in over 50 years. The job was long held by Jean-Loup Tournier, who took over the society in 1961 and stayed at the helm until 2001 when he was replaced by diplomat Bernard Miyet, who stepped down in June 2012. Tronc held various positions in telecom and media companies such as pay-TV group Canal+ and Orange, France's leading phone operator. He also had a stint as advisor on digital issues to the Socialist then-Prime Minister Lionel Jospin between 1997 and 2002.

Sacem board members who were involved in the process of searching for a new chief executive were looking for someone with experience in other fields, especially media and telecoms, who could bring a new vision. "Miyet’s eleven-year tenure coincided with a remarkable stability with regards to Sacem's income,” explained Bruno Lion, MD of peermusic France and a board member of Sacem who was involved in the search process for Miyet's successor. “But we thought the times required a high-level manager with a different background. Tronc goes fast and appears, first of all, as a problem solver and a leader. I feel he will be an asset to Sacem's members and to the music community, in France and abroad.”

Going fast is what Tronc appears to be doing, indeed. After only four months on the job, he has refigured Sacem's management structure, accepted a pay cut compared to what his predecessor was earning, and swiftly pushed the society into the digital world. It is not that Sacem had not embraced the new digital world (it has licensed more than its share of digital services, including streaming service Deezer at a very early stage), but for Tronc it is more about positioning the society to be fully competitive, digital compliant and efficient, both at the service of its members and of its users.

“Service” is a word that comes high up in Tronc's vocabulary. “My main priority is to increase the level of service that Sacem can offer to our members and to the community of users in France and elsewhere," said Tronc. "If at this stage it is too soon to be specific, suffice to say that we are engaged into deep and significant reforms.”

In addition, Sacem also has to deal with changes imposed by the European Union in the form of a Directive (a legally binding document that applies across the Union) on collective management, which is likely to impose new rules on transparency and governance, and a new approach with regards to multi-territorial licensing. Tronc is aware that the new situation will create competition among societies to attract artists and publishers - and he wants Sacem to be at the forefront of the movement.

"With the new market configuration in Europe, societies like Sacem have to be prepared to face competition from other societies,” said Tronc, “and Sacem, which is already among the leading societies in Europe, will have a lot to offer. The new framework for rights societies as outlined by Brussels is going to be challenging but will also create a new, level playing field in Europe for which I do believe that Sacem will be well-positioned.”

As OMFM was leaving, Tronc pointed to the sad, worn-out old-fashioned green visitors' seats outside of his office that have been there since the dawn of time and joked that here, too, change was in motion as his team was digging into the Ikea catalogue to find new furniture. Sometimes the revolution is in the details!

Monday, October 15, 2012

The emancipation of Lemar

By Emmanuel Legrand

If you look at the past ten years, the legacy of shows like 'Pop Idol', 'X-Factor', 'The Voice', and many others, is quite poor – regardless of the countries where TV reality shows have blossomed thanks to the gang of Simons (Cowell and Fuller).

Most of the artists that have been “revealed” by these shows have fallen into the deep abysses of show biz, sometimes after just a single, if lucky, and few have managed to make a career that would last. One of the rare examples of longevity is British R&B/pop act Lemar. It is now ten years since he graduated from the BBC's 'Fame Academy', and he is still around. A new album, his fifth studio effort, 'Invincible', is coming out this week.

Last week, at the invitation of Nanette Rigg and as part of the London City Showcase programme, I did an hour-long Q&A session/workshop with Lemar, talking about about his vision of the business of music. I had never met Lemar before and was never into his music although I did acknowledge his hits. But I was interested in meeting him because he seemed to have a can-do and work-hard approach to his craft.

Our discussion confirmed that Lemar is far more grounded than most of his peers, and also a bit more attuned to the intricacies of this business, which could explain his longevity (he certainly does not seem to have lived the same life as, say, Pete Doherty). He also has a good sense of humour. And unlike most of the other contenders that were on TV reality shows, the big machine (not Florence's) did not eat him, chew him and spit him out.

He said he owed this unusual longevity to several factors. First, the thing about Lemar is that he was not an instant success. He was 24 when he came third at the Academy (which probably saved him from the oblivion where the winner and the runner-up must currently reside), but before that, he had been in the business since the age of 17, learning the ropes, playing gigs in shitty places, building up his songwriting skills, and understanding the business he was in. And more than once, he was tempted to call it a day, but there was always something that brought him back into the game.

Secondly, he did not win, so he did not get priority treatment from Universal. He had to wait patiently for a call from them, and then they passed! Which allowed him to see elsewhere and he found in Nick Raphael at Epic the champion and the A&R executive that he needed. He was also solidly managed by Richard Griffiths at The Firm. (He no longer is managed by Griffiths)

Thirdly, he was not simply a performer of songs written by others – he was also a songwriter, who could make decisions about the direction he wanted to go. This has also earned him much valuable income from publishing (one of the things he understood from a very early age was the importance and value of publishing).

Fourth, he is a natural-born performer. He loves the stage and he's been able to build a following that went just beyond the public watching a TV show.

So today, after a hiatus to see his kids growing, Lemar is still in the loop and he wants to be there on his own terms. After a decade with a major company he's gone indie, which is at the same time commendable and dangerous. But then, these are the right times for the emancipation of artists.

He has now his own label, Angelic Media Limited, which looks more like a boutique rather than an vanity label. With his pal from the early days, Terry Brown from 2beinspired, he picked a few partners (EMI for the distribution), a plugger and a touring company, and off he went, recording and releasing new songs. He will be hitting the road in December. His music may not be cutting-edge but he makes no bones that he is in the pop business.

As he said during our conversation, being independent represents is a greater financial risk for him, but there is also a greater financial reward. His royalty share is much higher than it used to be, and, more importantly, he controls the whole process. So if he gets it wrong, he's got no one else but him to blame. Good luck to him!

Wednesday, September 19, 2012

Renzer has new ambitions with Saban

By Emmanuel Legrand

[An edited version of this story was originally published in the first issue of One Movement for Music]

David Renzer
David Renzer, one of the most experienced global music publishing executive, is back in an active role with a little help from 'Ninja Turtles' and assorted 'Power Rangers'. During the summer, the former chairman/CEO of Universal Music Publishing Group has joined Saban Capital Group, the private investment firm set up by media entrepreneur Haim Saban, as president of music ventures.

“I have been two months with the company and I am very pleased with how things develop,” said Renzer at the end of August, speaking to One Movement from his Saban offices in Los Angeles. “There is a serious commitment at Saban and I really enjoy being part of a team looking into new ventures.”

In his new role Renzer will oversee the group's music-related portfolio that he will be tasked to build from scratch. But he will not build it without ammo: He will rely on Saban's deep pockets and on Saban Brands, a division which exploits TV production properties such as children’s television shows like 'Power Rangers', among others. “We create new copyrights all the time,” said Renzer.

Renzer already knew Saban from his Universal days, as UMG was negotiating the acquisition on Univision's music assets, which included publishing catalogues. “Saban is run by one of the most successful media investors who also had a very successful and active career in the music industry,” said Renzer.

A native of Egypt, Saban immigrated to Israel at the age of 12 and in 1975 he moved to France where he created a successful record label. He relocated to the US in 1983 where he established a media group around such franchises as 'Teenage Mutant Ninja Turtles', and 'Mighty Morphin Power Rangers'. Saban sold its music publishing catalogue in 2010 to Bug Music, which was later acquired by BMG Rights Management.

Throughout all of his career, Renzer worked in music publishing – for Zomba, MCA and Universal – and was eager to continue to do so. Renzer left UMPG in 2011 after 15 years with the company with his position at UMPG was filled earlier this year by UMG COO Zach Horowitz, whom he used to report to. Renzer said he enjoyed a “very close relation” with Horowitz.

During the interview, he remained tight-lipped as to the reasons he departed from a company he grew into being the market leader after the acquisition of BMG Music Publishing. “Let me just say that I felt it was time for me to leave,” he answered when pressed to explain why he parted ways with UMPG. He then took a few months off to travel the world with his wife and started looking at new ventures and at ways to raise capital to invest in music publishing.

That's when serious discussions with Saban kicked in. Renzer welcomed the opportunity to have, again, an active role in the music publishing business. Most of all, he relished the idea of joining a group of people with an entrepreneurial spirit and money to invest. And the fact that he could have equity in the company was a good reason, too.

Renzer said he wanted to develop Saban's music publishing division as a “boutique publishing” unit. “Our vision is not to manage millions of copyrights,” he explained. Renzer said that he had already targeted a series of potential companies and assets and that he hoped to close deals within the next few months. “It is important to be capitalised but we will invest wisely in catalogues and writers,” he added, suggesting that Saban had the potential to invest “hundreds of millions of dollars” in new assets.

We will make deals that are justified and we will be opportunistic and entrepreneurial,” he said about his investing strategy, which he sees as not too dissimilar from BMG Rights Management's: “If you look at BMG, you can say that they have been disciplined in terms of multiples and prices.”

The acquisitions will provide Renzer with the existing structure upon which he will build his operations. “Our goal is to be a full-service publishing company, with all the various departments necessary to be a serious player in the field,” said Renzer. “My main focus at the moment is to build the infrastructure.”

Renzer intends to develop a publishing business making the best of Saban's ties with the TV and film sector in Hollywood. “As we know this is one of the few areas where we can grow copyright – film and TV are really key to building publishing catalogues,” he explained.

Outside of the film/TV area, Renzer said he will have a close look at Latin music, production libraries and international. “It is fun to figure out what makes sense [to invest in],” smiled Renzer, but it was “a bit to early” to outline his international set up, which will also depend on the structure of the companies Saban will acquire. “All I can say is that we will have a combination of foreign offices and sub-publishing relationships,” he revealed.

Renzer accepts that it is not the best era to be in the music business, and that music publishing has also its own set of challenges. “Our industry has long term question marks as we go more into streaming. Plus, there's pressure on synch and performance income is challenged. That's why we will be very strategic in our investments,” he explained.

However, during the interview, Renzer sounded buoyant and genuinely excited about being back in business with such partners. “It reminds me of the days when I used to work for Zomba with an entrepreneurial and visionary executive. I really welcome this opportunity to continue to play an active role in this industry.”

A new magazine for the music community

The first issue of One Movement for Music, a new B2B magazine for the global music community, is now available.

This free online publication is the brainchild of Musexpo organiser and founder of A&R Worldwide Sat Bisla and his team in Los Angeles.

In this first issue you will find interviews with IFPI CEO Frances Moore and with former UMPG chairman/CEO David Renzer and much much more.

I will be covering the music publishing business and copyright issues for OMFM.

We hope you will enjoy the reading.

Sunday, September 2, 2012

A tribute to legendary lyricist Hal David

By Emmanuel Legrand

The news of Hal David's death this Saturday at the age of 91 will sadden all those who like good songs and who have been enjoying his works, especially those he penned with his main partner in songwriting, Burt Bacharach. Together, they have certainly given the world more timeless songs than most, securing their place in the Pantheon of great songwriters.

In the world of lyricists, David was in a league of his own. His lyrics were apparently simple, but you could detect serious craftsmanship behind them because they would always fit perfectly the song. Words were meaningful but never pompous, and there was never a word in the wrong place. There was also a perfect combination between the lyrics and the melodies. It flowed without glitches.

David was also an activist on behalf of the songwriting community: in 1974 he joined the board of US authors' society ASCAP and eventually became its president from 1980 to 1986. With his ASCAP relentlessly walked the corridors of power in Washington, DC, representing the voices of thousands of songwriters. Unfortunately, he had been unable to attend earlier this year a reception in the honour of Burt Bacharach and himself at the White House, during which President Obama presented them with the GershwinPrize, recognising what Obama described as “two kings of songwriting”.

Last year, Hal David was celebrated at the ASCAP Awards in London. David was frail but was there in person, his wife always by his side, as he was receiving with good grace and modesty all the proofs of respect and, dare I say, love from the audience which consisted mostly of fellow songwriters.

He regaled the crowd with anecdotes of his first trip to the UK, straight out from the Brill Building, meeting the likes of Tom Jones, who was going to perform 'What's New, Pussycat?'. Even if he spent his career putting his words in other people's mouths, he came across as a great story teller and he received a well deserved standing ovation.

That evening, I was introduced to him by Karen Sherry from ASCAP. I congratulated him on his achievements and told him that his songs meant to all of us in the room. I could not resist telling him that we had at least one thing in common – our day of birth. He was very gracious and said that was a very good birth date! I could not disagree with him.

[Typed while listening to 'The Love Songs Of Burt Bacharach' (Universal)]

Monday, August 27, 2012

Madonna, Live Nation and the Olympia fiasco

by Emmanuel Legrand

Madonna live at the Olympia in Paris was supposed to be the hottest gig of the summer. And it turned out to be a PR disaster.

Think of it: One of the world's biggest stars was going to perform at an “intimate” concert venue of 2,000 seaters rather than the stadiums she usually fills (or tries to). The Olympia, home to such artists as Edith Piaf, Jacques Brel and one of the most iconic concert venues in the world would be Marge's for a night. And what a night it promised for Madonna's fans. That's what you'd call a hot ticket. Fans lined-up to get the best seats, some of them sleeping overnight to be closer to their star, and paid from €80 to 270 for the privilege.

On July 26, after keeping the crowd waiting for a few long hours, Madonna eventually took the stage at about 11pm, and before midnight, everything was wrapped, the artist had left the building, not even saying bonsoir to the audience, after an eight-song “concert” lasting less than 50 minutes, and streamed live on YouTube.

As roadies were starting to pack, a subdued audience stayed, asking for encore, and when nothing happened, they started shouting and yelling and asking for a refund. Check this video on YouTube, kindly titled 'Suicide of Madonna', in which you can clearly see the roadies emptying the stage while the crowd yells “Remboursez” (refund). Eventually, the public was asked to leave the building.

That could have been the end of it. But in this time and age, the outrage to fans quickly made the rounds and the blogosphere went on fire. Greed and disrespect were among the words that were used by fans to qualify the attitude of the artists.

Meanwhile, Madonna, not at her best, declared that the boos were the expression of a few “thugs”. The explanation that the screams were started by followers of right-wing politician Marine Le Pen, whom Madonna criticised during her French concerts, does not really hold. Once again, check this video, and you won't see that many thugs, but mostly a good pack of disgruntled fans who make a lot of noise because they are simply not happy with the way they are treated.

A spokeswoman for Madonna explained that the Olympia show cost close to a million dollars to produce and despite that she tried to keep the costs at a low level. So what? If that's a reason to only play 45 minutes, then these are 45 very expensive minutes...

Some concert-goers pushed their luck a bit further and claimed that since it was advertised as a concert, not as a showcase to be streamed on YouTube, they were entitled for a refund. But adding insult to injury, the producer of the concert, Live Nation, replied in a letter to a concert-goer asking for a refund (authenticated by press agency AFP and disclosed last week), that the claims were “unfounded”.

Live Nation said that the show was “of an exceptional nature due to the intimacy of the venue” and that if it did not carry the same characteristics as other tour dates, it offered an intimate show, where fans could be close to the artists. With high-quality stage, light and sound props, the event required “unprecedented heavy logistics” and the use of important manpower. Live Nation even insisted that there were real musicians and dancers at the gig! Based on these facts, Live Nation discarded the claim for refund, and said that no contractual fault could be pinned on the company.

But the damage is done. The reputation of Madonna has been tarnished and Live Nation does not come as a consumer-friendly company. It will be very interesting to see how Madonna's next tour in France will fare.

Madonna is not the first superstar to play “intimate” gigs at the Olympia. The Rolling Stones did it, so did David Bowie, or Sting. But these were “real” concerts, lasting close to two hours, and enhanced the status of these artists.

Madonna's last song at the Olympia was a rendition of Serge Gainsbourg's 'Je T'Aime, Moi Non Plus'. For many fans that night, it's the 'Moi Non Plus' that they will remember.

[Typed while listening to a bootleg concert of David Bowie 'Live at the Olympia – 2002' (also available as an official DVD)]

Sunday, July 29, 2012

Zelnik, Grainge and the damage done to indies

by Emmanuel Legrand 

You have to give it to Lucian Grainge – he's a master strategist. He's managed to destroy the united front of indie labels opposing the acquisition of EMI Recorded Music by Universal Music Group by offering a few tokens. And in the process has left scars within the indie movement that will be tough to heal.  

As soon as Grainge made his intentions public, interested parties started to express interest for bits an pieces of what used to be the EMI empire: Daniel Miller said he wanted to buy back Mute, Laurence Bell at Domino, Ministry of Sound and Kenny Gates at PIAS said they would consider bids, BMG Rights Management wanted Parlophone. But even before Grainge made his move, Patrick Zelnik said mid-July that he wanted Virgin, with a little help from Richard Branson, and that he supported the deal (in his July 16 FT op-ed, he wrote: “I can see that in the right circumstances this merger could create a more competitive industry, while offering stability to EMI’s artists.”)  

No wonder why Helen Smith, executive chair of Impala, said in an internal memo to the members of European indie labels' organisation, revealed by the NY Times, that this had been “one of the most trying weeks of Impala’s life.” In Brussels, Impala re-affirmed its opposition to the merger through a vote of its board (although a majority of its members voted for), but Zelnik's announcement that the deal would not be against the interest of indie labels created confusion. Suddenly, the champion of the cause was backing the wrong horse. To add insult to injury, Zelnik called Impala a "bureaucratic organisation" in an interview with Billboard.

Zelnik combines a deceiving Woody Allen look with an impressive intellect and is very good at winning difficult battles. When he set up Virgin Stores in France, he fought tooth and nail to win the authorisation to open his flagship store on the Champs-Elysées on Sundays. Conversations with him can be a bit disjointed as he jumps from one thought to another but they are always stimulating.

After setting up Virgin in France, he launched Virgin Stores and later created Naive, a independent music company (for the record, he signed Carla Bruni long before she met French president Nicolas Sarkozy). He has been a towering figure at Impala, alongside Beggars' Martin Mills and PIAS' Michel Lambot. In terms of split of duties, Zelnik was the ideologist, Mills the strategist and Lambot the spin doctor.

It is fair to say that his efforts in 2001 and the way he rallied the independent movement behind his opposition to the proposed merger of EMI and Warner was a defining moment for the indie community. It was, he said then, a matter of principle to avoid the creation of a dominant player that would change the balance of the marketplace. During his crusade he was some sort of loner against the armies of lawyers and executives that his opponents would line-up in Brussels – but eventually his views prevailed and the merger was soon off the table.

Zelnik also challenged the Sony/BMG merger, but was not successful in preventing it. Throughout these processes, Zelnik was always a passionate and articulate voice in outlining the dangers of a market concentrated into too few hands. So what happened? Can someone change opinion so radically and trade a bag of principles for a little more than a lentil stew?

A cynical top Warner executive dismissively told me a few years ago that everybody has a price and that he understood too late that if they had negotiated beforehand with Zelnik, Mills and Lambot and agree to sell them bits and pieces of EMI, he would have won their support, and the merger would have been cleared. (And how different would things have been for the music sector...)

In the aforementioned Billboard interview, Zelnik said that "Only fools never change their mind!". A source with good knowledge of Zelnik believes that Zelnik is looking for a way out from a business perspective since Naive is in a shaky financial situation. A joint bid Zelnik/Branson for Virgin (which, it must be noted, does not appear in the list of assets that Universal plans to divest from that EMI CEO Roger Faxon listed in a memo to staff) would allow Zelnik to merge Naive with Virgin and after a few years sail away in the sunset.

Whatever the outcome, damage has been done, and it will take more than a few lentil stews to pacify the sector. 

[Typed while listening to 1969 vintage soul by Barbara Lewis ('The Many Grooves of Barbara Lewis' on Stax) and Marconi Union's 'Different Colours' (Just Music) and keeping an eye on the Olympics]

Who cares what Simon Cowell thinks about search engines?

By Emmanuel Legrand

Last week it was quite amusing to read a letter sent to British Prime Minister David Cameron signed by Elton John, Andrew Lloyd Webber, Tinie Tempah, Robert Plant, Simon Cowell, Pete Townshend and Brian May highlighting the role that search engines can play in giving people access to illegal copies of music files.

I have no idea who is behind this initiative (and I do not want here discuss the relevance of the issue, which is relevant), but hasn't recent times taught lobbying powers that having a bunch of millionaires, no matter how talented they are, take such a stand could be a counter-productive move? And frankly, who wants to side with Simon Cowell? 

A friend who has been active in UK lobbying circles (and thus would like to remain unidentified) wrote to me the following: "Seriously, this letter could have been written in 2001. And even then it would have been a stupid, credibility-bursting idea. It does nothing but confirm prejudices laid out by Ian Hargreaves about the industry ('lobbynomics') and potentially besmirches the name of some good artists (and Simon Cowell, not that anyone cares about him). With the exception of Townshend (who knows his digital onions) imagine if any of those signatories were put on the spot about Google's takedown policy." 

For those who missed it, here's a graf from the Hargreaves Review of IP: "Lobbying is a feature of all political systems and as a way of informing and organising debate it brings many benefits. In the case of IP policy and specifically copyright policy, however, there is no doubt that the persuasive powers of celebrities and important UK creative companies have distorted policy outcomes."

[Typed while listening to The Yellow Dogs' 'Upper Class Complexity' (Neverheard)]

Sunday, July 15, 2012

A manifesto for the new music industry in the digital age

by Emmanuel Legrand

Last week, Universal Music Group chairman/CEO Lucian Grainge said that he would propose a “manifesto for the new music industry” that would define his company's relationship with other stakeholders in the new digital environment.

Since Mr. Grainge is certainly a very busy person, I thought I could give him a hand and help him by drafting the “manifesto” below.

A manifesto for the new music industry in the digital age:
  1. Artists are entitled to equitable and fair contracts reflecting the realities of the digital age.
  2. Artists should not be coerced into giving away their rights (especially their publishing rights) to gain a recording contract.
  3. Recorded music contracts with record labels should only be for a limited period of time, with the full rights to the masters automatically reverted to artists after a period of 15 years.
  4. Music companies that have a domestic or international market share of 5% cannot be involved in artist management services.
  5. So-called 360 deals can be tolerable if, and only if, they are 'real' deals, providing services in all the areas that the artists have handed their rights, and all these services should be offered at acceptable market rates.
  6. Labels, publishers and collective rights management organisations will approach all new digital music service with openness and will provide quick and flexible licensing schemes.
  7. Digital music services, labels, publishers and collective rights management organisations will provide quick, accurate and transparent royalties reporting and payment.
  8. Music companies will not ask for equity in digital music services.
  9. Licensing deals with digital music services should be equitable and fair for all players, should not involve advances paid by the services and the terms should be transparent for all stakeholders, especially artists and their management.
  10. Artists and songwriters should be entitled to a share of the financial transaction if the recorded or publishing company they are signed to is sold. Equally, shareholders of digital services that have benefited from music content to harness the value of their services and then sell then with massive profits should also chip some money back to the creative community without whom they would have not been able to develop their project.

Let's go into the details of the manifesto.

The new Universal-EMI entity will have a greater market share than any other competitor (in the same way that Sony/ATV + EMI is a real powerhouse in publishing), and this is bound to give the new combined entity a tighter grip on the talent market and more clout in its dealings with the rest of the eco-system.

It is therefore important to balance that power by asserting certain rules. The idea with this manifesto is to provide open, transparent and simple principles that should ensure the growth of the digital music market in a equitable way for artists, music companies and digital services. By the way, these principles should not only apply to Universal but to all music companies, majors and independents, and to all digital music services.

Point 1 to 4 are about re-balancing certain contractual aspects of the relationship between music companies and artists in favour of artists. Artists are asked to sign 360 deals or give away their publishing rights if they want to get a recording contract. This should not happen, even though it is understood why music companies would do it, unless there is a trade out, such as better conditions, better services, etc. Too often, artists are not in a position to bargain, and that is the definition of abuse of dominant position.

The reversion of master rights to artists is about fairness. Fifteen years is already a long period of time for labels to recoup their investments. A few years ago, when Jay-Z took an executive position at Universal's Island Def Jam in the US, fellow rapper Chuck D from Public Enemy was asked at Midem if there was anything he wanted to ask Jay-Z. “Give me back my masters,” fired Chuck D. And many artists would probably concur.

The 5% market share limitation to set up artist management services would prevent major operators to also become artists' managers but would allow small operators in genres such as dance, jazz or world music to continue to cover multiple aspects of a creative project (management, production, distribution, touring, etc).

Points 6 to 9 would ensure a level playing field between music companies of different sizes and digital music services. It would also create the conditions for quicker and more transparent dealings.

Both rights holders (from music publishers and record labels to collective rights management organisations) and digital services would benefit from abiding by these principles. Digital services would have quicker deals, allowing to launch and develop more rapidly, while rights holders would see their repertoire offered on a wider scale in a dynamic competitive market. It would also cut through the crap of hearing digital services claiming that they cannot get licenses fast enough. It would not prevent all parties from negotiating terms, nor limit the scope of deals, but it would make it easier to close deals.

As a prerequisite for a new digital music market, labels would end requesting services to pay them advances or music companies taking shares in services (this would also apply to collectives such as Merlin for indies). However, this would not prevent music companies to set up their own platforms like Universal and Sony did with Vevo or Yves Riesel in France, who operates the label Abeille and launched the hi-fi download site Qobuz.

The whole eco-system would benefit from more transparency and this would create a level playing field between majors and indies. Add to that quicker and more transparent royalties processing and payments and you have a digital market truly geared towards the future.

Point 10 will probably be seen as a “communist” clause... There is something normal in the capitalism system to see music publishing assets or record labels being sold with (hopefully) a profit for the shareholders (even though it could be an open question with the Citi/EMI situation). However, it was the creators's works that built the company's value in the first place, so not seeing the artists or the songwriter earning any additional reward from the sale looks unfair.

It seems that a little payback to the creative souls who are the foundation of the value of these companies would be a good and fair gesture. If you look at it from a capitalistic perspective, it certainly does not seem natural, but can labels and publishers pretend to have the interests of the artists at heart and continue to use their works for financial benefits without compensation for creators when these deals take place?

Similarly, when digital services use content like music to create value and then sell for a wide profit (think for example), wouldn't it be normal to have some of this money back to rights holders? Billy Bragg build a case in 2008 in the NY Times after music site Bebo had just been sold by its founder for a huge amount. “The musicians who posted their work on are no different from investors in a start-up enterprise.” wrote Bragg. “Their investment is the content provided for free while the site has no liquid assets. Now that the business has reaped huge benefits, surely they deserve a dividend.”

This still rings true today, and needs to be addressed.

And unfortunately, there is much to bet that this manifesto will remain a work of fiction!

[Typed while listening to France's new electronica/dance sensation Gesaffelstein (his recordings are out on his own label Zone and on Bromance and Turbo) and Beak>'s new album '> >' (Invada Records).]

Tuesday, June 5, 2012

A million copyrights! What is it good for?

By Emmanuel Legrand

At the game 'Who wants to be a millionaire in music publishing' there's a new winner on the block and its name is BMG Rights Management.

The Bertelsmann operation, backed by VC group KKR, announced last week that through its aggressive acquisition policy, it has grown in just a few years from zero to over a million copyrights. They are now part of this very exclusive club of millionaires that includes Sony/ATV + EMI Music Publishing, Universal Music Publishing and Warner Chappell.

So champagne for Hartwig Masuch and his team is de rigueur! Or is it?

BMG Rights Management CEO
Hartwig Masuch
On the one hand, Masuch has impeccably rolled out a strategy devised with his German shareholders alongside KKR, and has now earned the right to be taken seriously. Its success challenges the status quo among the majors. Time will tell if they really manage to build a publishing house for the 21st Century.

But it was done at a cost. There's that incredible business philosophy (not sure the two words go together well but that'll do for now) in music publishing that what matters is scale and volume, and that stacking up compositions will provide huge streams of revenues. Under a million copyrights, you're worth nada. In the capitalistic world of music publishing, there's now an obsession with size and scale.

The only reason why size has started to matter in music publishing was due to the newfound interest from Wall Street and the City in what they saw as assets delivering long term steady returns. The belief in financial circles is that is that catalogues are worth a lot of money because of big numbers. The fact that copyright to compositions is awarded in most countries for 75 years post-mortem gives investors a potential large window to recoup their investments.

But is size all that matters? Music publishing is a strange industry. It is a penny business, as the new market leader Marty Bandier likes to say. But it is also a business with multiple facets. Yes, catalogues are worth money because they deliver steady revenues. But the bulk of revenues come from new works, new songs from new or established songwriters.

Publishers never disclose the breakdown in revenues between recent works and heritage works. And also what is the share of their active works. There is much to bet that most of works on the million-plus catalogues are dormant (sources suggest than less than 10% of the big catalogues are active, with 3-5% accounting for the bulk of revenues).

There's many reason to that: a lot of these compositions no longer fit the times, are too old or not relevant any more (although the concept of relevance can vary: who would have thought that mambo had any value until Lou Bega had a worldwide hit with 'Mambo No.5'?). But there is also a very human reason to that: the lifeblood of publishing is with new signings, and teams prefer to spend time and energy on new writers than dig into the vaults. And there is also the limit to the number of compositions and songwriters that teams can work for and with.

It is fascinating to hear stories about how much these big publishing units are unaware of what constitutes their catalogues. A publisher was telling me last week of the case of an American composer whose royalties were sent by the British rights society PRS for Music to... Australia. There was a homonym Australian composer registered to Australian society APRA, but the British publisher (a major company) of the original composer had not even noticed the snafu since it was only a minor stream of revenues, which mattered to the composer, but was not big enough to fly over the radar of the publisher.

Where scale makes a difference is in the capacity to sign new songwriters. Independent publishers are squeezed out of the deals with the hot new composers and lyricists because they cannot compete with the cheque book. And that's why the big publishing houses tend to also be the publishers of the latest hit-makers.

Another publisher – who sold his company to... BMG – recently told me he had no plans to relaunch an independent publishing company and build it through acquisitions. The reason? “Money too expensive and sellers unrealistic.”

The wave of fresh VC money that fell upon music publishing has allowed companies like Imagem or BMG to grow significantly in a just couple of years, but has also created a rise in the value of catalogues and has almost shut the door to other publishers who were not as significantly capitalised (and also created a culture of selling assets since a lot of publishers prefer now to cash in while there is money and sell their assets).

The growth of BMG is certainly commendable if just for financial reasons (as is the acquisition of EMI Music Publishing by Sony/ATV), but it happened at the expense of market diversity. 

This concentration is extremely dangerous for the music industry's eco-system. There is a need for healthy small and mi-size music publishing companies to play the role of incubators of talent. There is a need for multiple sources of A&R development. And there is a need for some kind of level playing field in terms of investments.

[Typed while listening to a selection of Patti Smith's songs. That's one catalogue that is ageing quite nicely.]

Sunday, May 27, 2012

Eurovision? Call it Euro-porridge!

By Emmanuel Legrand

A senior politician in France once crushed all attempts from the local music industry to be treated seriously by telling a room full of executives that “the film industry has Cannes and music has...the Eurovision Song Contest”. And he did not mean it nicely!

The irony is that this weekend, we had both Cannes and the Eurovision. And it was not too difficult to see that the politicians' remark had not aged. Cannes had Ken Loach, Michael Haneke and Alain Resnais while Azerbeijan hosted The Hump, Roman Lob and Anggun. No disrespect to these artists but it is not the same league.

As Ken Loach said when he accepted his Jury Prize in Cannes, cinema is "not just an entertainment, it shows us who we are”. The problem with the Eurovision Song Contest is that it is just entertainment, and does not show us anything but, as CNN described it, the geopolitical state of affairs in Europe. It is an entertaining evening and sometimes a good laugh, but it not an elevating evening, and it certainly does not say much about the state of Europe's music scene (or if it is the case, then we are doomed!).

Creatively, the Eurovision celebrates the lowest common denominator between 45 countries. Rather than highlighting the creative differences between these countries, and therefore enrich us, entrants look for songs (and arrangements) that can please audiences from Baku to Kilkenny, Tromso to Amalfi. Consequently, the end result sounds like Euro-porridge, gooey and thick. It makes Pop Idol and The Voice look like beacons of avant-garde music.

If Ireland were to send U2, France Daft Punk, Germany Rammstein and the Brits Adele, they would not win (OK, Adele would win!). Let me rephrase: if countries were to send artists with talent, depth, inventiveness, style and substance, they probably would not go far in the competition.

But isn't time to try to be different? Isn't it time to try to break the mould or, as some voices already suggested, withdraw? And isn't is time for the organisers of the event to make significant changes in order to make more room for more musical diversity (why are Europop or Eurodance the dominant genres?)? 

One simple change could be that artists participating in the contest must have performed live in at least three of the countries part of the Eurovision. 

Entrants would not even need to be famous: on the same night the Eurovision Song Contest took place, Jools Holland was featuring in 'Later...' a new talent, previously unheard, I suppose, by most viewers, Jake Bugg, an 18-year-old from Nottingham. Alone with his acoustic guitar, he performed one of his own folky songs, and he was good, eye-catching and engaging. He would have made a perfect representative from the country that gave the world the Beatles and Adele. He would have had my votes!

PS: This year's winning song, Loreen's Eurodance track 'Euphoria', is another triumph for Sweden's songwriting and production teams. How do they do it? As far as porridge goes, they are doing quite well, aren't they?

Monday, May 21, 2012

The dual legacy of Robin Gibb

by Emmanuel Legrand
Gibb with Javed Akhtar
(Photo by Michael Chia)
Robin Gibb was above all a songwriter. On his own or with his brothers, that’s what the thrived for -- writing the best songs that would be endorsed by the wider public. Having achieved global stardom at an early age, he never lost sight of his songwriting roots. And until his very last forces, he did write songs.

It was easy to mock the Bee Gees’ dress code or their unbelievable haircuts in the late 70s, but it was impossible to deny them a unique talent to write catchy songs, from ‘How Can You mend a Broken Heart’ to ‘Tragedy’. When asked a couple of years ago by The Guardian what he considered his greatest achievementGibb’s answer was straight and simple: “Having the most successful catalogue of songs in the world, alongside Lennon and McCartney.”
In 2007, Gibb became the president of CISAC, the International Confederation of Societies of Authors and Composers. As the conference programme manager of the World Copyright Summit, organised by CISAC, I’ve had the privilege to see him “at work” and had the opportunity to witness first hand the impact of star power. And when it came to star power, Gibb was A++.
Gibb with European Commissioner
Michel Barnier at the
World Copyright Summit 2011
(Photo by Michael Chia)
His name would open doors, his statements could swing situations (like when he took a stand in favour of changes in India’s copyright law and supported the efforts made by fellow writer Javed Akhtar to get the country’s policy-makers recognise the rights of songwriters), and his signature at the bottom of a letter could catch the attention of the most austere politician.
At the Summit, Gibb would usually deliver a couple of speeches and he would also make himself available for the countless policy-makers and fellow creators eager to meet with him (and get their picture taken with him!), something that he would always do with patience and charm. He came with a very limited entourage, usually consisting of his secretary and sometimes of his wife Dwina.
He was probably more at ease singing on stage rather than giving speeches, but he knew that his speeches would set the tone. He liked to remind the world that creators were the foundations of the whole creative industries, and that they were usually the weakest element (hence also his support for collective management organisations). 
Gibb will have a dual legacy -- the one linked to his songwriting and performing talents, with a body of work that has few equivalents in the world; and one as ‘the voice of creators”. In both cases, it will be a long lasting legacy.