By Emmanuel Legrand
The Mechanical Licensing Collective (MLC), which will administer the new nationwide blanket license system for mechanical rights in the USA as part of the Music Modernisation Act (MMA) provisions, has submitted to the Copyright Royalty Board (CRB) a proposal for the funding of the collective management organisation.
The MLC estimates that to carry out the statutory demands of bill, its start-up costs will be of $37.25 million and its annual admin costs in 2021 of $29m. The assessment for funding for the years post-2021 has been redacted in the public version of the filing on the grounds that it consists of "private commercial and financial information related to the MLC’s ongoing and future contract negotiations that would, if disclosed, competitively disadvantage the MLC in such negotiations."
The MLC is due to start operating on January 1, 2021. According to the MMA, the CRB judges are tasked with setting in an amount sufficient to cover the MLC’s total costs and that the funding be made through an “administrative assessment” on the digital services. The law mandates that the assessment will be wholly paid by the digital services, which are expected to argue about such expenses.
The MLC said that the the CRB submission was "the result of months of research on the most efficient and effective way to run this unprecedented new collective that will serve the needs of both the songwriters and their music publishers as well as the digital music services from Day One."
A reasonnable budget
It added: "The proposed assessment is the right one under the law, and the budget is very reasonable for digital companies to pay to receive the benefits the blanket license will provide them. The MLC’s operating budget and staff must be capable of comprehensively meeting and executing the extensive requirements and responsibilities of the Collective under the law in less than 15 months from now.”
The filing outlines the organisational structure of the MLC and its budget. All the details about budgets, salaries and other costs have been redacted in the public version of the filing.
The filing contains testimonies from Alisa Coleman, the Chair of the Board of Directors of the MLC, Chief Operating Officer of ABKCO Music & Records, and President of the New York Chapter of the Association of Independent Music Publishers, who addresses the MLC’s actual and estimated total costs associated with the numerous operations that will fall under the supervision of the COO of the MLC.
It also has contributions from Richard Thompson, a consultant for the MLC in the role of interim Chief Information Officer and former Chief Technology Officer of music services company Kobalt Music Group, who looked at “the cost estimates associated with the development, acquisition, implementation and maintenance of computer and information technology infrastructure and related technological and operational services deployed to fulfill the statutory mandate of the MLC.”
A full-service structure
Paul Kahn, the Executive Vice President and Chief Financial Officer of Warner Chappell Music, addressed the structure of the Proposed Assessment, and the “reasonable actual and estimated costs of the MLC,” while Danielle Aguirre, Executive Vice President and General Counsel of the National Music Publishers’ Association addressed “the reasonableness of the MLC’s legal costs incurred and budgeted, including for in-house and outside counsel, in connection with establishing, maintaining and operating the MLC to fulfill its statutory functions.”
The filing suggests that the headquarters of the MLC is expected to be located in Nashville, Tennessee, described as "one of the country’s cultural epicenters of the music industry."
The documents filed with the CRB outline the structure of the MLC, with a CEO and a COO, under which many of the operational functions will be reporting to. Operational divisions of the MLC include a Songwriter and Publisher Relations Group, a Licensee Relations Group, a Communications Group and an International Relations Coordinator.
One of the key units at the MLC will be the Rights management group, tasked by the statute "with building and maintaining a centralised database of musical works ownership, providing information to the public that not merely identifies the tens of millions of works that underlie the streaming offerings of digital services, but identifies the copyright owners of each share of each work.”
In addition, the MLC "must match each musical work to all of the sound recordings in which it is embodied." The task is vast since platforms like Apple Music or Spotify claim to have over 50 million recordings and that 40,000 new sound recordings are uploaded each day to Spotify.
Finding data partners
The MLC has launched a Request for Information process in order to gather information and scope out its technology needs. All leading vendors were contacted directly for participation, and the MLC received submissions from ASCAP, AxisPoint, BackOffice, BMI, BMAT, Consensys/HFA/Rumblefish/SESAC, Crunch Digital, DataClef/SOCAN, DDEX, Gracenote, IBM/SACEM, ICE, Music Reports, Open Music Initiative (OMI), SourceAudio and SXWorks.
In February 2019, a smaller group of participants “determined to be most likely to meet the high demands of MLC” were prioritised for movement into a Request for Proposal process, including ASCAP, BackOffice, Consensys/HFA/Rumblefish/SESAC, IBM/SACEM, ICE, Music Reports and SXWorks. But since then, three of the initial RFP participants — ASCAP, BackOffice and ICE —determined “that the aggressive demands of the statutory time line for the MLC conflicted with other business goals and removed themselves from the process,” leaving Consensys/HFA/Rumblefish/SESAC, IBM/SACEM, Music Reports and SXWorks as potential technology providers.
> The Songwriters Guild of America (SGA) has withdrawn its Petition to Participate before the Copyright Royalty Board. (Another petition by David Powell has been dismissed by the Copyright Royalty Judges. )
The SGA, which supported a competitor to the MLC, had petitioned the CRB to be included in the proceedings for determination and allocation of assessment to fund the MLC. In reaction, the MLC, with the acquiescence of the Digital Licensing Coordinator submitted a motion asking the Copyright Royalty Judges to bar SGA’s participation in the proceedings.
SGA explained its decision to withdraw its petition by its concern that “its continued activities in the Proceeding on an adversarial basis – rather than in its preferred role as a collegial music industry organisation that also serves as the copyright administrator for many of its members – will be counterproductive to the interests of the music creator community in this narrow instance.”
However, the SGA said remained “unconvinced that the presence on the MLC board of a small minority of music creators (no matter how diligent and well-meaning they may be) will be able to prevent the major music publishing corporations from attempting to successfully exert undue influence.”
In the petition, the SGA “respectfully implores” the Judges to make “the proper funding for MLC activities specifically designed to identify the proper owners of unmatched musical compositions [and royalties] wherever they may reside in the world... one of the highest priorities of these Proceedings.”
Saturday, September 21, 2019
SGAE postpones its General Assembly to Jan. 2020; launches new AV division
By Emmanuel Legrand
The Board of Directors of Spanish rights society SGAE has once again postponed the Extraordinary General Assembly during which the new statutes of the organisation were going to be presented for approval by SGAE members. The meeting was scheduled for October 15 and will not take place “until the beginning of the year 2020,” according to SGAE.
The Board said the decision was due to what it described as "a legal paradox” and wanted to ensure that the vote could go ahead with the risk of facing a legal challenge. The paradox was raised when three international music publishers said they planned to withdraw their repertoire from SGAE, which according to article 27 of the current statutes of SGAE would prevent them from voting at the general assembly for the new statutes.
However, the Ministry of Culture has asked SGAE to “respect” the companies' decision while at the same time enforcing article 27. In order to comply with both requests, the Board decided to push back the general assembly to January 2020, once the three companies will have effectively left SGAE.
“With this decision, the Board of Directors intends to prevent the situation of legal uncertainty generated by the requirement of the Ministry,” said the society. SGAE's Board is also considering filing an administrative contentious appeal about the alleged interference of the Ministry. SGAE considers that the Ministry's requirement exceeded its powers and constituted “an overreach of the supervision functions that the Intellectual Property Law attributes to the Ministry of Culture.”
A 'historic' claim
Meanwhile, SGAE's Board of directors has given its green light for the creation of an Audiovisual Division within the organisation. The new division will regroup all the services that SGAE provides to the audiovisual authors in a single administrative and stand-alone unit and will offer “a comprehensive, autonomous, specialised and highly qualified service to the almost 12,000 directors, screenwriters and audiovisual musicians who represent more than 85% of the national repertoire.”
The division will cover all the processes related to audiovisual rights, including registration of works, contracts, documentation, distribution, fees, relations with partners and foreign companies, claims, market analysis and the development of proprietary tools to respond to the specificity needs of the sector. SGAE said the purpose of this organisational change was to “optimise the collection mechanisms, shorten the distribution deadlines and face, in a coordinated manner, the changes that are taking place in the film market, the television and the digital environment.”
The move responds to a “historic” claim from the Audiovisual College, which received support from SGAE President Pilar Jurado and the Board. The project was coordinated by the vice president of the Audiovisual College, Antonio Onetti and will be under the leadership of Fabia Buenaventura, currently manager of the Audiovisual unit at SGAE, reporting directly to the director general of SGAE.
The Board of Directors of Spanish rights society SGAE has once again postponed the Extraordinary General Assembly during which the new statutes of the organisation were going to be presented for approval by SGAE members. The meeting was scheduled for October 15 and will not take place “until the beginning of the year 2020,” according to SGAE.
The Board said the decision was due to what it described as "a legal paradox” and wanted to ensure that the vote could go ahead with the risk of facing a legal challenge. The paradox was raised when three international music publishers said they planned to withdraw their repertoire from SGAE, which according to article 27 of the current statutes of SGAE would prevent them from voting at the general assembly for the new statutes.
However, the Ministry of Culture has asked SGAE to “respect” the companies' decision while at the same time enforcing article 27. In order to comply with both requests, the Board decided to push back the general assembly to January 2020, once the three companies will have effectively left SGAE.
“With this decision, the Board of Directors intends to prevent the situation of legal uncertainty generated by the requirement of the Ministry,” said the society. SGAE's Board is also considering filing an administrative contentious appeal about the alleged interference of the Ministry. SGAE considers that the Ministry's requirement exceeded its powers and constituted “an overreach of the supervision functions that the Intellectual Property Law attributes to the Ministry of Culture.”
A 'historic' claim
Meanwhile, SGAE's Board of directors has given its green light for the creation of an Audiovisual Division within the organisation. The new division will regroup all the services that SGAE provides to the audiovisual authors in a single administrative and stand-alone unit and will offer “a comprehensive, autonomous, specialised and highly qualified service to the almost 12,000 directors, screenwriters and audiovisual musicians who represent more than 85% of the national repertoire.”
The division will cover all the processes related to audiovisual rights, including registration of works, contracts, documentation, distribution, fees, relations with partners and foreign companies, claims, market analysis and the development of proprietary tools to respond to the specificity needs of the sector. SGAE said the purpose of this organisational change was to “optimise the collection mechanisms, shorten the distribution deadlines and face, in a coordinated manner, the changes that are taking place in the film market, the television and the digital environment.”
The move responds to a “historic” claim from the Audiovisual College, which received support from SGAE President Pilar Jurado and the Board. The project was coordinated by the vice president of the Audiovisual College, Antonio Onetti and will be under the leadership of Fabia Buenaventura, currently manager of the Audiovisual unit at SGAE, reporting directly to the director general of SGAE.
Monday, September 16, 2019
New European Commission gives Margrethe Vestager a key role on copyright issues
By Emmanuel Legrand
The new college of European Commissioners led by Germany's Ursula von der Leyen as President-elect of the European Commission will have the task to steer the European Union through the challenges posed by changes in climate, digital technologies and geopolitics, according to the mission letter sent to all 27 Commissioners-designated.
The college of Commissioners now needs to be vetted by the European Parliament and will take over from the Junker Commission on November 1 for a period of five years.
Three key Commissioners will be mainly dealing with the creative sector, across issues such as copyright, technology and culture: Margrethe Vestager, Sylvie Goulard and Mariya Gabriel.
Vestager: ensuring the digital transition
> Primus inter pares is Vestager, the current Danish Commissioner in charge of competition. She is going to be one of the three Executive Vice-President of the Commission, and has been given the portfolio Europe Fit for Digital Age. In addition to competition, she will oversee the digital agenda, which was until now split between Vice President Andrus Ansip, who has chosen to become a member of the Parliament, and Mariya Gabriel, in charge of digital economy and society.
"As Executive Vice-President, you will have a dual function," wrote Von der Leyen to Vestager in her mission letter. "You will chair the Commissioners’ Group on a Europe fit for the Digital Age. In addition, you will be responsible for the competition portfolio."
The letter continues: "The digital transition will have an impact on every aspect of our economy and society. Your task will be to ensure that Europe fully grasps the potential of the digital age and strengthens its industry and innovation capacity. This will be a key part of strengthening our technological leadership and strategic autonomy."
Vestager has been tasked with coordinating a new long-term strategy for Europe’s industrial future; maximising the contribution of investment in research and innovation in supporting our policy objectives; co-leading the work on a new SME strategy to support small businesses, entrepreneurs and start-ups; looking at how Europe can use and share non-personalised big data to develop new technologies and business models that create wealth for EU's societies and businesses; coordinating the work on upgrading liability and safety rules for digital platforms, services and products as part of a new Digital Services Act; and coordinating the work on digital taxation to find a consensus at international level by the end of 2020 or to propose a fair European tax.
Goulard: an IP regime fit for the digital age
> As proposed Commissioner for Internal Market, Sylvie Goulard, who was nominated by French President Emmanuel Macron, will be in charge of copyright issues and will also oversee e-commerce issues. "I want you to take a close look at our intellectual property regime to ensure that it is coherent, is fit for the digital age and supports our competitiveness," wrote Von der Leyen to Goulard.
Goulard will work under the guidance of Vestager and will oversee a new Directorate-General for Defence Industry and Space, as well as the Directorate-General for Communications Networks, Content and Technology and the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs.
Gabriel: promote creative industries
> As for Gabriel, she is now in charge of Innovation and Youth, which includes Education, research and innovation as well as Culture, youth and sport. Gabriel will oversee the Directorate-General for Research and Innovation and the Directorate-General for Education, Youth, Sport and Culture.
Von der Leyen has asked her to focus on ensuring the full implementation of the New European Agenda for Culture; developing ways to strengthen Europe’s commitment to preserving and protecting our cultural heritage, notably by making the most of digital technologie; promoting creative industries as a catalyst for innovation, jobs and growth and maximise the potential of an ambitious Creative Europe Programme; fostering cultural cooperation as a part of the Union’s partnerships with countries around the world.
Gabriel will work under the guidance of Vestager in matters relating to research and innovation, and with Margaritis Schinas, the Greec Vice-President for Protecting our European Way of Life in matters relating to education, culture, youth and sports. Schinas has been asked to "harness the full potential of culture and sport to bring our communities closer together."
Make culture visible!
However, many voices, including at the European Parliament, lamented the fact that the word culture had disappeared from the Commission's portfolios. France's rights society for drama authors SACD lamented the absence of culture in the attributions of Commissioners. "Culture is neither a dirty word nor a taboo word," wrote SACD's Director of public and European affairs Guillaume Prieur. "So, if the ambition to maintain the course of a Europe that protects its creators and supports its cultural creation in the digital age is there, the European Union must clearly show this political priority, not only in the missions of the commissioners but also in the organisation chart of the Commission. We must make Culture visible!"
Overall, representatives from creative industries, which have followed the nomination of the new Commission with interest and anticipation, have reacted positively to the new college. The allocation of the digital portfolio to Vestager, in addition to competition, could well mean that the tech companies, which have been regular targets of the antitrust department in Brussels, will be kept in check. "Copyright will be under Goulard, but overseen by Vestager. Somewhat comparable to Gabriel/Oettinger and Ansip previously. A hell of a big ask for Vestager," says a Brussels-based source.
"Trade, digital, competition and tech policy were central to our work under the Juncker Commission and these issues are only going to grow in importance," commented John Phelan, the Brussels-based Director General of ICMP, the International Confederation of Music Publishers. "For example, anti-piracy is now often tackled within the EU‘s trade agreements with the world, while EU digital policy is helping to ensure fair valuation for music online which in turn is creating a positive corollary in the US."
Big guns with gravitas
He continued: "We’ll be working most closely with President Von der Leyen, Executive Vice-President Vestager, Commissioners [Phil] Hogan [in charge of Trade], Goulard and [Paolo] Gentiloni [in charge of Economy]. Experience and pedigree are the attributes which strike me most about those responsible for music industry policy areas. Each one is long steeped in European and international politics. They are big guns and will have the gravitas to tackle the many thorny issues ahead. Let’s wait for the European Parliament’s approval process to see who’s in situ come November 1."
Indie music companies, represented by IMPALA, also had a positive view on the new Commission. "We look to the European Parliament’s views on the proposals made [by Von der Leyen]," said Helen Smith, the Executive Chair of IMPALA. "If accepted, Ms. Vestager would be responsible for digital and competition and we would look to her to continue to take a strong stance on digital gatekeepers and scrutinise the proposed sale of shares in Universal Music very closely. Now is the time to increase regulatory scrutiny of online platforms and rethink how strategic shareholdings are assessed in the EU."
Added Smith, "We also look forward to working with Ms. Goulard, who will be in charge of copyright and e-commerce under the internal market banner. Culture will be vital for this commission and it will be the responsibility of Ms. Gabriel. Culture has strategic importance for Europe and although culture does not appear in any of the commissioner-designates' titles, we expect the commission to take a real industrial policy approach to unlocking the full potential of Europe's cultural and creative sectors, one of the EU's main assets."
The EU as a bell-weather for the world
The work of the European Commission regarding the tech sector is now under more scrutiny than before since it has shown leadership in such issues as taxation or the liability of platforms. "The EU is increasingly a bell-weather for other jurisdictions we work in worldwide," said ICMP's Phelan. "For example, Canada and Australia have or are analysing Europe’s work on Safe Harbour and Value Gap, while New Zealand and Japan have recently felt the pressure of the need to harmonise copyright term duration."
For Phelan, one of the main battles fought in Europe over the last five years by the creative sector was "for fairer valuation of music across all forms of online platforms." He explained: "That will continue, for we are not there yet. However I think an additional challenge for this incumbent Commission will be securing more effective enforcement of copyright. Piracy is an online panther and Europe is in serious need of more robust, more modern and more efficient counter measures."
The new college of European Commissioners led by Germany's Ursula von der Leyen as President-elect of the European Commission will have the task to steer the European Union through the challenges posed by changes in climate, digital technologies and geopolitics, according to the mission letter sent to all 27 Commissioners-designated.
The college of Commissioners now needs to be vetted by the European Parliament and will take over from the Junker Commission on November 1 for a period of five years.
Three key Commissioners will be mainly dealing with the creative sector, across issues such as copyright, technology and culture: Margrethe Vestager, Sylvie Goulard and Mariya Gabriel.
Vestager: ensuring the digital transition
> Primus inter pares is Vestager, the current Danish Commissioner in charge of competition. She is going to be one of the three Executive Vice-President of the Commission, and has been given the portfolio Europe Fit for Digital Age. In addition to competition, she will oversee the digital agenda, which was until now split between Vice President Andrus Ansip, who has chosen to become a member of the Parliament, and Mariya Gabriel, in charge of digital economy and society.
"As Executive Vice-President, you will have a dual function," wrote Von der Leyen to Vestager in her mission letter. "You will chair the Commissioners’ Group on a Europe fit for the Digital Age. In addition, you will be responsible for the competition portfolio."
The letter continues: "The digital transition will have an impact on every aspect of our economy and society. Your task will be to ensure that Europe fully grasps the potential of the digital age and strengthens its industry and innovation capacity. This will be a key part of strengthening our technological leadership and strategic autonomy."
Vestager has been tasked with coordinating a new long-term strategy for Europe’s industrial future; maximising the contribution of investment in research and innovation in supporting our policy objectives; co-leading the work on a new SME strategy to support small businesses, entrepreneurs and start-ups; looking at how Europe can use and share non-personalised big data to develop new technologies and business models that create wealth for EU's societies and businesses; coordinating the work on upgrading liability and safety rules for digital platforms, services and products as part of a new Digital Services Act; and coordinating the work on digital taxation to find a consensus at international level by the end of 2020 or to propose a fair European tax.
Goulard: an IP regime fit for the digital age
> As proposed Commissioner for Internal Market, Sylvie Goulard, who was nominated by French President Emmanuel Macron, will be in charge of copyright issues and will also oversee e-commerce issues. "I want you to take a close look at our intellectual property regime to ensure that it is coherent, is fit for the digital age and supports our competitiveness," wrote Von der Leyen to Goulard.
Goulard will work under the guidance of Vestager and will oversee a new Directorate-General for Defence Industry and Space, as well as the Directorate-General for Communications Networks, Content and Technology and the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs.
Gabriel: promote creative industries
> As for Gabriel, she is now in charge of Innovation and Youth, which includes Education, research and innovation as well as Culture, youth and sport. Gabriel will oversee the Directorate-General for Research and Innovation and the Directorate-General for Education, Youth, Sport and Culture.
Von der Leyen has asked her to focus on ensuring the full implementation of the New European Agenda for Culture; developing ways to strengthen Europe’s commitment to preserving and protecting our cultural heritage, notably by making the most of digital technologie; promoting creative industries as a catalyst for innovation, jobs and growth and maximise the potential of an ambitious Creative Europe Programme; fostering cultural cooperation as a part of the Union’s partnerships with countries around the world.
Gabriel will work under the guidance of Vestager in matters relating to research and innovation, and with Margaritis Schinas, the Greec Vice-President for Protecting our European Way of Life in matters relating to education, culture, youth and sports. Schinas has been asked to "harness the full potential of culture and sport to bring our communities closer together."
Make culture visible!
However, many voices, including at the European Parliament, lamented the fact that the word culture had disappeared from the Commission's portfolios. France's rights society for drama authors SACD lamented the absence of culture in the attributions of Commissioners. "Culture is neither a dirty word nor a taboo word," wrote SACD's Director of public and European affairs Guillaume Prieur. "So, if the ambition to maintain the course of a Europe that protects its creators and supports its cultural creation in the digital age is there, the European Union must clearly show this political priority, not only in the missions of the commissioners but also in the organisation chart of the Commission. We must make Culture visible!"
Overall, representatives from creative industries, which have followed the nomination of the new Commission with interest and anticipation, have reacted positively to the new college. The allocation of the digital portfolio to Vestager, in addition to competition, could well mean that the tech companies, which have been regular targets of the antitrust department in Brussels, will be kept in check. "Copyright will be under Goulard, but overseen by Vestager. Somewhat comparable to Gabriel/Oettinger and Ansip previously. A hell of a big ask for Vestager," says a Brussels-based source.
"Trade, digital, competition and tech policy were central to our work under the Juncker Commission and these issues are only going to grow in importance," commented John Phelan, the Brussels-based Director General of ICMP, the International Confederation of Music Publishers. "For example, anti-piracy is now often tackled within the EU‘s trade agreements with the world, while EU digital policy is helping to ensure fair valuation for music online which in turn is creating a positive corollary in the US."
Big guns with gravitas
He continued: "We’ll be working most closely with President Von der Leyen, Executive Vice-President Vestager, Commissioners [Phil] Hogan [in charge of Trade], Goulard and [Paolo] Gentiloni [in charge of Economy]. Experience and pedigree are the attributes which strike me most about those responsible for music industry policy areas. Each one is long steeped in European and international politics. They are big guns and will have the gravitas to tackle the many thorny issues ahead. Let’s wait for the European Parliament’s approval process to see who’s in situ come November 1."
Indie music companies, represented by IMPALA, also had a positive view on the new Commission. "We look to the European Parliament’s views on the proposals made [by Von der Leyen]," said Helen Smith, the Executive Chair of IMPALA. "If accepted, Ms. Vestager would be responsible for digital and competition and we would look to her to continue to take a strong stance on digital gatekeepers and scrutinise the proposed sale of shares in Universal Music very closely. Now is the time to increase regulatory scrutiny of online platforms and rethink how strategic shareholdings are assessed in the EU."
Added Smith, "We also look forward to working with Ms. Goulard, who will be in charge of copyright and e-commerce under the internal market banner. Culture will be vital for this commission and it will be the responsibility of Ms. Gabriel. Culture has strategic importance for Europe and although culture does not appear in any of the commissioner-designates' titles, we expect the commission to take a real industrial policy approach to unlocking the full potential of Europe's cultural and creative sectors, one of the EU's main assets."
The EU as a bell-weather for the world
The work of the European Commission regarding the tech sector is now under more scrutiny than before since it has shown leadership in such issues as taxation or the liability of platforms. "The EU is increasingly a bell-weather for other jurisdictions we work in worldwide," said ICMP's Phelan. "For example, Canada and Australia have or are analysing Europe’s work on Safe Harbour and Value Gap, while New Zealand and Japan have recently felt the pressure of the need to harmonise copyright term duration."
For Phelan, one of the main battles fought in Europe over the last five years by the creative sector was "for fairer valuation of music across all forms of online platforms." He explained: "That will continue, for we are not there yet. However I think an additional challenge for this incumbent Commission will be securing more effective enforcement of copyright. Piracy is an online panther and Europe is in serious need of more robust, more modern and more efficient counter measures."
Deezer plans to experiment user-centric payment model
By Emmanuel Legrand
Deezer executives said that if the experiment is successful in France, it would be rolled out around the world. So far, Deezer claims to have the support of a wide range of French indie labels such as Wagram, Because and Believe. The three major companies are not yet part of the plan, but Deezer executives says the goal is to have all the main labels on board.
"This is fairer than before, we have no other super intention than that,"said Deezer chief content and strategy officer Alexander Holland. "I think it's a better way and I think everybody should adopt it. But I do not reserve for myself to to tell other streaming companies what they should and should not do."
Added Holland: "If you use Deezer very actively, and you know that all the money that you spend on this goes to the artists that you love I think it gives you a much better feeling."
De Gemini said re-balancing the flow of revenues between mainstream and less popular genres is a major reason to push for a UCPS model. "We have started to take that mission to try and change the way the money is reallocated. It doesn't have any impact on Deezer turnover in France, nor globally. But we believe it has an impact in the way we impact creativity, hence, the music we will bring to our users in the future."
Deezer is planning to test a User Centric Payment System (UCPS) in France in early 2020, as part of a pledge to pay artists fairly. The current model used by streaming services works on a share-based system, where all the money goes into a pot and then divided, which tends to favour the artists with very high streams, whereas the UCPS model correlates royalty payments to the music effectively listened to by subscribers.
"With UCPS, the money you pay only goes to the artists you love and listen to," the music streaming service posted on its web site. The streamer said that while 18-25 year olds represent 19% of all Deezer subscribers, they generate 24% of total royalties. "UCPS helps us get rid of this imbalance," said Deezer.
Deezer executives said that if the experiment is successful in France, it would be rolled out around the world. So far, Deezer claims to have the support of a wide range of French indie labels such as Wagram, Because and Believe. The three major companies are not yet part of the plan, but Deezer executives says the goal is to have all the main labels on board.
"I think we're doing a good job of convincing even the majors that this makes sense," said Deezer France CEO Alexis De Gemini, speaking to Music Week at a media gathering in Paris.
A fairer system
"This is fairer than before, we have no other super intention than that,"said Deezer chief content and strategy officer Alexander Holland. "I think it's a better way and I think everybody should adopt it. But I do not reserve for myself to to tell other streaming companies what they should and should not do."
Added Holland: "If you use Deezer very actively, and you know that all the money that you spend on this goes to the artists that you love I think it gives you a much better feeling."
De Gemini said re-balancing the flow of revenues between mainstream and less popular genres is a major reason to push for a UCPS model. "We have started to take that mission to try and change the way the money is reallocated. It doesn't have any impact on Deezer turnover in France, nor globally. But we believe it has an impact in the way we impact creativity, hence, the music we will bring to our users in the future."
BMI posts record revenue and distribution for 2018-19
By Emmanuel Legrand
US music rights society Broadcast Music, Inc. (BMI) has registered record collections in the fiscal year ending June 30, with revenues up $78 million or 7% over the previous year at $1.283bn. Distributions to songwriters, composers and music publishers also reached an all time high at $1.196bn, up 7% year-on-year, with an admin rate of 10%. According to BMI, these results "mark the most reported public performance revenues and highest royalty distributions of any music rights organisation in the world."
Distributions included domestic and international royalties, as well as royalties from direct deals that BMI administers on behalf of its publishers. The latter grew $9m to $62m, and represented 5% of BMI’s total distributions.
BMI’s total domestic revenue, encompassing digital, media and general licensing, reached $943m, a 7% increase over the previous year.
BMI's digital revenues grew 22% to $262m, and are now the second biggest contributor to BMI's income at 28% of the total. The year was marked by new licensing deals with the growing video-on-demand streaming market, such as Twitch and Amazon Channels, as well as new licensees in the eFitness market, such as Peloton and Flywheel.
Champion the rights
Revenues from general licensing, for music played in bars and restaurants, hotels and other businesses, reached the record sum of $169 million, up 8% year-to-year, and representing 18% of BMI’s domestic revenue pie. The company said it added some 16,500 new businesses to its portfolio in this sector.
Revenue from cable and satellite accounted for 30% of total revenues, while traditional radio and television made for 24% of the domestic total. BMI’s international revenue also reached an all-time high of $340 million, up 7% over the previous year.
“BMI values the trust our affiliates place in us, and we are gratified to once again generate record revenues on their behalf," said BMI President & CEO Mike O’Neill. "Our achievements are a direct result of the unrivaled creativity of the songwriters and composers we represent and the worldwide popularity of their music. We always strive to do better, and we will continue to work hard to champion the rights of our creators and protect the value of their copyrights.”
US music rights society Broadcast Music, Inc. (BMI) has registered record collections in the fiscal year ending June 30, with revenues up $78 million or 7% over the previous year at $1.283bn. Distributions to songwriters, composers and music publishers also reached an all time high at $1.196bn, up 7% year-on-year, with an admin rate of 10%. According to BMI, these results "mark the most reported public performance revenues and highest royalty distributions of any music rights organisation in the world."
Distributions included domestic and international royalties, as well as royalties from direct deals that BMI administers on behalf of its publishers. The latter grew $9m to $62m, and represented 5% of BMI’s total distributions.
BMI’s total domestic revenue, encompassing digital, media and general licensing, reached $943m, a 7% increase over the previous year.
BMI's digital revenues grew 22% to $262m, and are now the second biggest contributor to BMI's income at 28% of the total. The year was marked by new licensing deals with the growing video-on-demand streaming market, such as Twitch and Amazon Channels, as well as new licensees in the eFitness market, such as Peloton and Flywheel.
Champion the rights
Revenues from general licensing, for music played in bars and restaurants, hotels and other businesses, reached the record sum of $169 million, up 8% year-to-year, and representing 18% of BMI’s domestic revenue pie. The company said it added some 16,500 new businesses to its portfolio in this sector.
Revenue from cable and satellite accounted for 30% of total revenues, while traditional radio and television made for 24% of the domestic total. BMI’s international revenue also reached an all-time high of $340 million, up 7% over the previous year.
“BMI values the trust our affiliates place in us, and we are gratified to once again generate record revenues on their behalf," said BMI President & CEO Mike O’Neill. "Our achievements are a direct result of the unrivaled creativity of the songwriters and composers we represent and the worldwide popularity of their music. We always strive to do better, and we will continue to work hard to champion the rights of our creators and protect the value of their copyrights.”
Monday, September 9, 2019
Google under Congressional fire about the way Content ID affects 'small' creators
By Emmanuel Legrand
Alphabet's Google has come under the scrutiny of a bipartisan group of US policy-makers regarding its efforts to curve copyright infringement on the platform through its Content ID system, which they claim puts smaller creator "at a significant disadvantage."
In a letter to Google CEO Sundar Pichai, eight members of Congress — including Jerrod Nadler, chair of the Judiciary Committee at the House and the Committee's ranking member Doug Collins, as well as Senators Thom Tillis and Christopher A. Coons as chair and co-chair, respectively, of the Judiciary Subcommittee on Intellectual Property, Marsha Blackburn and Dianne Feinstein — wrote about their concern that "copyright holders with smaller catalogs of works cannot utilise Content ID, making it more difficult or impossible for them to effectively protect their copyrighted works from infringement and, ultimately, impacting their livelihoods."
They continued: "We have heard from copyright holders who have been denied access to Content ID tools, and as a result, are at a significant disadvantage to prevent the repeated uploading of content that they have previously identified as infringing. They are left with the choice of spending hours each week seeking out and sending notices about the same copyrighted works, or allowing their intellectual property to be misappropriated."
Senator Blackburn said she was concerned that Google's policy puts "talented creators, including Nashville’s songwriting community, are disproportionately at risk of infringement."
Content ID under the microscope
The lawmakers have asked Pichai to participate in a roundtable with Congressional offices and members of the creative community to discuss the following questions and issues:
- In general, how does the Content ID technology work?
- Compared to other available mechanisms for rights holders to identify potentially infringing works on Google’s platforms, how much day-to-day involvement of rights holders is needed?
- How do the user and Google work together to identify and block illegal material?
- To what extent is Content ID dependent upon user engagement and interaction?
- Please describe generally which types of rights holders currently are permitted to use Content ID, including how Google assesses whether a rights holder owns a “substantial body of original material” and whether such material is “frequently uploaded.”
- How often does a piece of content need to appear on YouTube in order to be considered a “frequently uploaded” work?
- Is “frequently uploaded” an absolute or relative measure?
- Please describe any terms and conditions related to the use of Content ID.
- Other than YouTube, on what Google platforms is Content ID used to identify and block infringing material? For example, do you use it to block the distribution of infringing material on Blogger, Google Photos, and Google Drive, among others? If not, do you plan to implement Content ID or similar safeguards on these platforms?
- Does Google plan to provide access to Content ID to a larger number of rights holders? If so, when? If not, what challenges prevent you from doing so?
The letter closes by asking Pichai to respond by October 30th, 2019 with a date for this roundtable, which should take place "no later than the end of the 2019 calendar year."
> In related news, the Senate Judiciary Committee’s antitrust panel will gather on Sept. 24 to discuss the acquisition strategies of rival start-ups and by tech giants, such as Google, Facebook, Apple or Amazon, and determine if it is affecting competition, according to Reuters. Senator Mike Lee, the chairman of the Judiciary Committee’s antitrust panel, said the Subcommittee "is interested in soliciting input from policy analysts, market participants, and other stakeholders on whether legislative action relating to such mergers is needed to ensure digital markets remain competitive."
The ranking member on the panel, Democrat Amy Klobuchar added that the companies’ acquisitions “have raised serious competition issues.” Capitol Hill scrutiny of tech giants coincides with the Department of Justice's antitrust division broad investigation into major tech firms, to determine if they engage in anti-competitive practices. The Federal Trade Commission is also investigating Amazon and Facebook.
> Over 30 US state attorneys general plan to announce a probe into Alphabet’s Google for potential antitrust violations, according to a report from Reuters. The group of AGs, led by Texas' Ken Paxton, should announce the investigation on September 9. “We continue to work constructively with regulators, including attorneys general, in answering questions about our business and the dynamic technology sector,” Google representative Jose Castaneda told Reuters.
Alphabet's Google has come under the scrutiny of a bipartisan group of US policy-makers regarding its efforts to curve copyright infringement on the platform through its Content ID system, which they claim puts smaller creator "at a significant disadvantage."
In a letter to Google CEO Sundar Pichai, eight members of Congress — including Jerrod Nadler, chair of the Judiciary Committee at the House and the Committee's ranking member Doug Collins, as well as Senators Thom Tillis and Christopher A. Coons as chair and co-chair, respectively, of the Judiciary Subcommittee on Intellectual Property, Marsha Blackburn and Dianne Feinstein — wrote about their concern that "copyright holders with smaller catalogs of works cannot utilise Content ID, making it more difficult or impossible for them to effectively protect their copyrighted works from infringement and, ultimately, impacting their livelihoods."
They continued: "We have heard from copyright holders who have been denied access to Content ID tools, and as a result, are at a significant disadvantage to prevent the repeated uploading of content that they have previously identified as infringing. They are left with the choice of spending hours each week seeking out and sending notices about the same copyrighted works, or allowing their intellectual property to be misappropriated."
Senator Blackburn said she was concerned that Google's policy puts "talented creators, including Nashville’s songwriting community, are disproportionately at risk of infringement."
Content ID under the microscope
The lawmakers have asked Pichai to participate in a roundtable with Congressional offices and members of the creative community to discuss the following questions and issues:
- In general, how does the Content ID technology work?
- Compared to other available mechanisms for rights holders to identify potentially infringing works on Google’s platforms, how much day-to-day involvement of rights holders is needed?
- How do the user and Google work together to identify and block illegal material?
- To what extent is Content ID dependent upon user engagement and interaction?
- Please describe generally which types of rights holders currently are permitted to use Content ID, including how Google assesses whether a rights holder owns a “substantial body of original material” and whether such material is “frequently uploaded.”
- How often does a piece of content need to appear on YouTube in order to be considered a “frequently uploaded” work?
- Is “frequently uploaded” an absolute or relative measure?
- Please describe any terms and conditions related to the use of Content ID.
- Other than YouTube, on what Google platforms is Content ID used to identify and block infringing material? For example, do you use it to block the distribution of infringing material on Blogger, Google Photos, and Google Drive, among others? If not, do you plan to implement Content ID or similar safeguards on these platforms?
- Does Google plan to provide access to Content ID to a larger number of rights holders? If so, when? If not, what challenges prevent you from doing so?
The letter closes by asking Pichai to respond by October 30th, 2019 with a date for this roundtable, which should take place "no later than the end of the 2019 calendar year."
> In related news, the Senate Judiciary Committee’s antitrust panel will gather on Sept. 24 to discuss the acquisition strategies of rival start-ups and by tech giants, such as Google, Facebook, Apple or Amazon, and determine if it is affecting competition, according to Reuters. Senator Mike Lee, the chairman of the Judiciary Committee’s antitrust panel, said the Subcommittee "is interested in soliciting input from policy analysts, market participants, and other stakeholders on whether legislative action relating to such mergers is needed to ensure digital markets remain competitive."
The ranking member on the panel, Democrat Amy Klobuchar added that the companies’ acquisitions “have raised serious competition issues.” Capitol Hill scrutiny of tech giants coincides with the Department of Justice's antitrust division broad investigation into major tech firms, to determine if they engage in anti-competitive practices. The Federal Trade Commission is also investigating Amazon and Facebook.
US recorded music market posted a robust 18% growth rate in the first half of 2019
By Emmanuel Legrand
The US recorded music market has experienced a double digit growth rate during the first half of the year, with total income up 18% to $5.4 billion at retail ($3.5bn at wholesale value, up 16% year-on-year), according to statistics from the Recording Industry Association of America (RIAA).
For RIAA Chairman and CEO Mitch Glazier, the half-year report card shows that the "streaming economy continues to accelerate, strengthen, and mature."
Added Glazier in a blogpost: "Our mid-year report tells a great story and highlights how the music industry’s embrace of new platforms and technologies has fueled a huge amount of growth and excitement — and a gusher of great new options for fans everywhere."
Revenue growth was driven by paid subscriptions, with for the first time the total number of subscribers to music streaming services exceeding 60 million users, at 61.1 million (up 30% year-on-year). Revenues from streaming music grew 26% to $4.3bn, with subscription revenues up 31% to $3.3bn.
Rise of paid subscriptions
"Paid subscriptions alone made up 62% of overall industry revenues, and they accounted for 77% of US streaming music revenues for the first half of 2019," explained RIAA SVP, Research & Economics Joshua Friedlander. "The continued rapid increase in the number of paid subscriptions was the biggest driver of growth."
However, while streaming revenues continued to increase, sales of digital downloads fell 18% in 1H 2019 to $462m. Individual track sales revenues were down 16.4% year-over-year to $225.6m, and digital album revenues declined 23% to $205.6m. The category accounted for just 8.6% of total industry revenues in 1H 2019.
Net revenues from physical products grew 5% to $485m in 1H 2019, with vinyl albums up 13% to $224m (8.6m units, up 6%), but still only accounted for 4% of total revenues in 1H 2019.
The US recorded music market has experienced a double digit growth rate during the first half of the year, with total income up 18% to $5.4 billion at retail ($3.5bn at wholesale value, up 16% year-on-year), according to statistics from the Recording Industry Association of America (RIAA).
For RIAA Chairman and CEO Mitch Glazier, the half-year report card shows that the "streaming economy continues to accelerate, strengthen, and mature."
Added Glazier in a blogpost: "Our mid-year report tells a great story and highlights how the music industry’s embrace of new platforms and technologies has fueled a huge amount of growth and excitement — and a gusher of great new options for fans everywhere."
Revenue growth was driven by paid subscriptions, with for the first time the total number of subscribers to music streaming services exceeding 60 million users, at 61.1 million (up 30% year-on-year). Revenues from streaming music grew 26% to $4.3bn, with subscription revenues up 31% to $3.3bn.
Rise of paid subscriptions
"Paid subscriptions alone made up 62% of overall industry revenues, and they accounted for 77% of US streaming music revenues for the first half of 2019," explained RIAA SVP, Research & Economics Joshua Friedlander. "The continued rapid increase in the number of paid subscriptions was the biggest driver of growth."
However, while streaming revenues continued to increase, sales of digital downloads fell 18% in 1H 2019 to $462m. Individual track sales revenues were down 16.4% year-over-year to $225.6m, and digital album revenues declined 23% to $205.6m. The category accounted for just 8.6% of total industry revenues in 1H 2019.
Net revenues from physical products grew 5% to $485m in 1H 2019, with vinyl albums up 13% to $224m (8.6m units, up 6%), but still only accounted for 4% of total revenues in 1H 2019.
Music sector contributes $1.2bn to India's economy
By Emmanuel Legrand
Deloitte's figures were obtained by aggregating the value of all the various components: recorded music sales, live music revenues, TV broadcasting, FM radio, streaming services, films and rights management organisations.
The report shows that India's music market is positioned for growth, thanks to the development of music streaming consumption, which accounted for 70% of music industry revenues in 2018. "Digital audio streaming has been rising on the back of increasing smartphone use and decreasing data costs. In India, more than 4,440 million monthly streams are running across leading audio OTT players (including JioSaavn, Gaana, and Wynk)," reads the report.
India's music-related industry was worth 8,660 crores, or $1.2 billion (8.1 times the size of the recorded music industry) in 2018, and employed over 36,800 people, according to a recent report from audit and consulting firm Deloitte.
Deloitte's figures were obtained by aggregating the value of all the various components: recorded music sales, live music revenues, TV broadcasting, FM radio, streaming services, films and rights management organisations.
"India is the world’s second-most populated nation and seventh-largest economy," noted Jehil Thakkar, a Partner at Deloitte India. "It has a rich cultural heritage, including a long history of diverse and engaging music. However, India stands 15th in the world in terms of music industry size. This is not in sync with India’s economic or cultural position in the world, and represents a gap – but also an opportunity to grow. Music is a powerful tool to expand India’s influence and spread awareness of many things Indian – be it yoga, tourism, or made-in-India products."
Positioned for growth
However, to realise its full potential, Deloitte listed a series of challenges that the local industry needs to overcome if it wants to achieve sustainable growth:
> Fix the piracy epidemic, in particular online piracy.
> Address the increasing value gap by adapting India's copyright regime to international standards.
> Achieve legislative and regulatory changes to achieve fair value, in particular putting an end to the statutory licensing of sound recordings.
> Obtain from music users full compliance in paying performance rights to rights holders.
> Accelerate the transition from piracy to music streaming usage, in particular towards subscription-based models.
"Addressing the above challenges, initiating government-funded music-centric grants and export schemes, and seeding a performing centre ecosystem into the next blueprint of India’s smart city initiatives are some of the measures that can put the music industry on a faster growth trajectory. This, in turn, could unlock the associated amplification effects in the broader economy," concluded the report.
Tuesday, September 3, 2019
European Commission launches stakeholder dialogue on Article 17 of the Copyright Directive
By Emmanuel Legrand
While discussing best practices, stakeholders should take into account "the need to balance fundamental rights and of the use of exceptions and limitations."
Interested parties invited to the dialogue include representative organisations of stakeholders, such as EU level representatives of rights holders, of online content-sharing service providers and of consumers, users and fundamental rights organisations.
The Commission said the goal of the first meeting will be "to start mapping out existing practices related to the use of copyright-protected content by online content-sharing service providers in cooperation with rights holders, as well as to gather user experiences."
The European Commission is organising a stakeholder dialogue with interested parties on the application of Article 17 of the Directive on Copyright in the Digital Single Market. The objective of the dialogue is "to hear stakeholders’ views and to discuss possible practical solutions for the application of Article 17, including actions to be taken by online content-sharing service providers with regard to unauthorised content, taking into account the interests of all relevant parties and the safeguards for users," according to the Commission.
The organisation of a dialogue was required by Article 17 itself, which codifies the use of protected content by online content-sharing service providers. Paragraph 10 of Article 17 concludes that the Commission, in cooperation with the Member States, shall organise stakeholder dialogues "to discuss best practices for cooperation between online content-sharing service providers and rightholders and also issue guidance on the application of this Article."
While discussing best practices, stakeholders should take into account "the need to balance fundamental rights and of the use of exceptions and limitations."
Mapping out existing practices
Interested parties invited to the dialogue include representative organisations of stakeholders, such as EU level representatives of rights holders, of online content-sharing service providers and of consumers, users and fundamental rights organisations.
Article 17, formerly known as Article 13, was one of the most contentious and hard-fought provision in the proposed Copyright Directive voted by the Parliament and adopted by the Council of Europe earlier this year. Article 17 calls for so-called “Online Content Sharing Service Providers” (OCSSP) to obtain proper licenses from rights holders for content. OCSSPs are now liable if they make copyrighted content publicly available for profit via their services, although Paragraph 4 of Article 17 introduces several safeguards for OCSSPs.
The dialogue is coordinated by the Copyright Unit I.2 within DG Connect, in charge of the Commission's policy in the area of copyright and related rights. The Commission will hold the first meeting of the stakeholder dialogue on October 15, in Brussels (the deadline for applying is September 18). The outcome of the discussions will feed into the preparation of the Commission’s guidance on the application of Article 17.
The Commission said the goal of the first meeting will be "to start mapping out existing practices related to the use of copyright-protected content by online content-sharing service providers in cooperation with rights holders, as well as to gather user experiences."
Further meetings will be organised until the end of 2019 or early 2020.
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