Tuesday, November 26, 2019

US music sector welcomes the AM-FM Act

By Emmanuel Legrand

Music industry representatives have applauded the introduction in Congress by Senator Marsha Blackburn and Rep. Jerrold Nadler of the Ask Musicians for Music Act (AM-FM), a bipartisan legislation that would require radio stations to remunerate performers and other rights holders for the use of recordings.

  Senator Blackburn (R-Tennessee) introduced the bill in the Senate while Rep. Nadler (D-N.Y.), who is Chairman of the House Judiciary Committee, introduced a similar legislation in the House of Representatives. Nadler noted that the United States "is an outlier in the world for not requiring broadcast radio to pay artists when playing their music, while requiring satellite and internet radio to pay." This situation is "is unfair to both artists and music providers," he added.

  The Ask Musician for Music Act of 2019 would give artists and copyright owners "the right to make a choice to allow AM/FM radio to use their work for free or to seek compensation for their work," explained Nadler. The bill would also allow them to negotiate rates with broadcasters in exchange for permission for it to be aired. Both bills provide special treatment by protecting small, public, college, and other non-commercial stations.

Compensate music creators

  Blackburn said: “When music creators share their wonderful gift with the world, we hear songs that inspire and unite us. We should encourage such thriving talent and ensure the music community is properly compensated for their work."

  The AM-FM Act is a response to the absence in the United States of equitable remuneration for the use of music recordings by terrestrial radio. It mirrors the bill known as the Local Radio Freedom Act, supported by the National Association of Broadcasters, which "declares that Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over the air, or on any business for such public performance of sound recordings."

  The NAB, through its President/CEO Gordon Smith, said it "opposes the AM-FM Act, which could decimate the economics of America’s hometown radio stations that have launched the careers of countless musicians and exposed legacy artists to a new generation of listeners." Smith explained that "a bipartisan group of 201 House members and 25 US Senators recognise this potential harm and have cosponsored the Local Radio Freedom Act, a resolution opposing any new performance fee on local radio."

Finding a holistic solution

  Smith added: "NAB’s door remains open to work with the record labels to find a holistic solution to this issue that reflects the enduring value to artists and labels of local radio to our hundreds of millions of terrestrial and digital listeners. Unfortunately, the record labels have shown little interest in having those discussions.” 

  For Michael Huppe, CEO of Washington, DC-based rights society SoundExchange, which collects royalties on behalf of performers and labels for the use of recordings by non-interactive streaming services, the AM-FM Act will ensure "that the people who make the music have a protected property right in their own work by requiring broadcasters to get permission before they transmit recordings over the air."

  Added Huppe: “It sets the table for meaningful marketplace negotiations and ends the current market distortion in our laws that forces artists to subsidise the multi-billion-dollar FM radio broadcast industry."

Give artists control

  Other industry comments include:

> Mitch Glazier, Chairman and CEO of the Recording Industry Association of America (RIAA): "By requiring broadcasters to get permission from music creators to use their music in the same way broadcasters are entitled to give permission for the use of their signal - the AM/FM Act addresses inequities in law that should be fixed. Introducing the AM/FM Act on the same day the House Judiciary Committee marked up the Satellite Television Community Protection and Promotion Act of 2019 (the “STCPP Act”) underscores a core principle: both broadcasters and creators deserve the same rights when it comes to the use of their property. The current state of the law granting broadcasters that right while denying it to creators is unjust and skews the market.”

> Daryl Friedman, Chief Industry, Government and Member Relations Officer at the Recording Academy: "The AM-FM Act will give artists control over what is rightfully theirs, their music. The legislation is about consent for use of content, a basic concept that the NAB is seeking for its own television members. We thank Senator Blackburn and Representative Nadler for their leadership on this issue, and ask members of Congress who recognise the importance of intellectual property to join them and pass this legislation."

> David Israelite, President & CEO of the National Music Publishers Association (NMPA): “Songwriters and music publishers support the AM-FM Act because music has value, and creators should be able to decide what is best with their intellectual property. For too long broadcasters have benefited from the lack of a sound recording performance right, as well as antiquated consent decrees that allow them to pay songwriters less than fair market value.”

European creative sector urges EU policy-makers to support Creative Europe

By Emmanuel Legrand

Ahead of the European Council discussions on the future EU budget, some 90 organisations from across Europe’s cultural and creative sectors have issued a joint letter calling on the Council and all EU Member States to support the European Parliament’s proposed budget for the Creative Europe Programme 2021-2027, which is the only EU framework Programme dedicated to cultural and creative sectors.

  "Today, Creative Europe represents a mere 0,15% of the overall EU Budget," reads the letter. "This is by no means proportionate to our sectors’ contribution to the EU economy, which stands at €509bn in value added to GDP and over 12 million full-time jobs (7.5 % of the EU’s work force)."

  The letter continues: "Our culture and our talents support artistic freedom and media pluralism, which are crucial for maintaining open, inclusive and creative societies. Yet, culture is low on the EU’s political agenda, and these sectors remain structurally under-financed. The financing gap for Europe’s cultural and creative SMEs alone is estimated to be somewhere between €8bn and €13bn."

Promote European values

  The signatories "welcome" the European Parliament's proposal to increase the Creative Europe budget to €2.8bn and call on the Council "to support this much-needed boost to the future of Europe’s arts, culture and heritage, and the values they promote."

  The letter concludes: "Our common values and our unique cultural diversity lie at the center of our collective European project and are the best ambassadors for the EU’s global influence in the world.  Investing in our culture is investing in our future. Let’s show a high level of ambition and shape a brighter future for Europe."

  Signatories include o
rganisation representing:

> Artists/creators (AEPO ARTIS, ECSA - European Composer & Songwriter Alliance, FERA - Federation of European Film Directors, EWC - European Writers’ Council, UNI - Media, Entertainment & Arts, FIM - International Federation of Musicians, FSE - The Federation of Screenwriters in Europe, IAO - International Artist Organisation of Music, IMMF - International music managers forum).
> Creative industries (CEPI- European Audiovisual Production, EFA - European Festivals Association, EGDF - European Games Developer Federation, EMEE - European Music Exporters Exchange, Eurocinema, The European Network of Independent Film Publishers and Distributor, EIFB - European and International Booksellers Federation, FEP - Federation of European Publishers, GESAC - European Grouping of Societies of Authors and Composers, ICMP - International Confederation of Music Publishers, IFPI - International Federation of the Phonographic Industry, IMPALA - Independent Music Companies Association, IMPF - Independent Music Publishers International Forum).
> Media (AER - Association of European Radio, EBU - European Broadcasting Union),.
> Culture advocacy groups (ECCD - European Coalition for Cultural Diversity), among others.

US legislators launch probe into the ticketing industry

By Emmanuel Legrand

US legislators have launched an investigation into practices in the live event ticketing industry, looking into "potential unfair and deceptive practices in the live event ticketing industry.” 

  The probe is targeting companies such as Live Nation, Anschutz Entertainment Group (AEG), StubHub, Vivid Seats, TicketNetwork, and Tickets.com

  The initiative came from the House of Representatives' Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-NJ), Ranking Member Greg Walden (R-OR), Oversight and Investigations Subcommittee Chair Diana DeGette (D-CO), Subcommittee Ranking Member Brett Guthrie (R-KY), Consumer Protection and Commerce Subcommittee Chair Jan Schakowsky (D-IL), and Subcommittee Ranking Member Cathy McMorris Rodgers (R-WA).

Deceptive practices

  In letters to companies from the live sector, they requested detailed information and documents pertaining to the ticketing policies and practices of the companies, as well as a briefing, from the companies.

  The letters reads: “The Committee, which has broad jurisdiction over consumer protection issues, is concerned about potentially unfair and deceptive practices occurring in the primary and secondary ticket marketplace, many of which have been documented in consumer complaints, press stories, and government reports.”

  In 2016, the House of Representatives passed H.R. 5104, the Better On-line Ticket Sales At of 2016, which prohibits the use of computer software to purchase tickets by circumventing security measures of ticketing websites. A similar legislation was passed by the Senate and H.R. 5104 became law in December 2016. 

Lack of transparency

However, the Committee noted in the letters that “despite ongoing bipartisan efforts by the Committee, as well as federal agency action to better understand the current ticketing marketplace, consumers still face a host of troubling practices and trends in the ticketing industry.”

  The Committee added: “Many of these issues relate to a lack of transparency and fairness, which places purchasers at an unfair advantage when attempting to buy tickets in the current marketplace.”

British music biz contributed £5.2bn to the UK economy

By Emmanuel Legrand
The UK music industry contributed £5.2 billion ($6.71bn) to the British economy in 2018, according to the latest 'Music By Numbers 2019', published by cross-industry organisation UK Music. The report measures the health of the music business each year the by collating data from various partners about the industry’s contribution in goods and services, known as Gross Value Added (GVA), to the UK’s national income or Gross Domestic Product (GDP). 
  “Our report reveals firm evidence that the British music industry is in great shape and continuing to lead the world," said UK Music CEO Michael Dugher. “The figures are hugely encouraging and show that, as well as enriching the lives of millions of people, music makes an incredible contribution to the UK’s economy."
  However, noted Dugher, "this is not a time for complacency. We face many challenges to ensure we keep our music industry vibrant, diverse and punching above its weight. We need to do more to protect grassroots venues by helping them combat soaring business rates. We need to nurture the talent pipeline, including by reversing the decline of music in education, so that children from every background have access to music."
The impact of Brexit
  He continued: "We need to make sure that creators get fair rewards for their content and are not ripped off by big tech. And we urgently need to ensure that the impact of Brexit doesn’t put in jeopardy the free movement of talent, just at the time when we should be looking outwards and backing the best of British talent right across the world." 
  Key facts from the report include:
> The Live Music sector made contribution of £1.1bn in 2018, up 10% from £991m in 2017 and employment in the Live Music sector rose by 7% to 30,529, up from 28,659 in 2017. 
> The Recorded Music sector contributed £568m in Gross Value Added (GVA) to the UK economy, which is a rise of 5% on £535 million in 2017. Label revenues rose 3% in 2018, representing the third year of consecutive growth.
> The total Export Revenue of the music industry was £2.7bn in 2018. The Recorded sector contributed £478m, an 8% increase on £452 million, and Publishing £618m.
> Employment in the industry hit an all-time high of 190,935 in 2018.
> Music tourism alone contributed £4.5bn spend to the UK economy in 2018, up 12% from 2017. Overseas visitors to UK shows and festivals surged by 10% from 810,000 in 2017 to 888,000 in 2018.  
 New methodology
  The report, produced in partnership with Oxford Economics, identifies five sectors: 
> Music Creators (musician, composer, songwriter, lyricist, singer, producer, engineer); Music Retail (retail of musical instruments, manufacture of musical instruments, digital music retail, physical music retail); 
> Recorded Music (recorded rights holders, record labels, physical manufacturing & distribution, digital distribution, recording studios); 
> Music Representatives (collective management organisations, music managers, music trade bodies, music accountants, music lawyers); 
> Music Publishing (publishing rights holders, publishing companies)
> Live Music (music festival organisers, music promoters, music agents, production services for live music, ticketing agents, concert venues and arenas).
  UK Music introduced a revised methodology this year, designed to give "a sharper and more detailed picture of the economic contribution and importance of the UK music industry." However it means that the direct, like-for-like comparisons with the data we collected in previous years are not possible to make.
  The report now includes music accountants and music lawyers in the sub-sector of music representatives. It also captured recording studio data and classified it under Recorded Music.

Wednesday, November 20, 2019

Rights holders and streaming platforms agree on MLC's funding

By Emmanuel Legrand

The creation of the Mechanical Licensing Collective (MLC), the collective management company created in the United States as part of the Music Modernisation Act (MMA) adopted in October 2018, has just reached what is described as "a landmark achievement" by reaching an agreement with music streaming platforms guaranteeing the organisation's funding.

  The MLC, which is scheduled to be operational from January 1, 2021, will be responsible for negotiating with digital services and managing mechanical rights licenses on behalf of authors, composers and music publishers. Under the terms of the agreement, filed with the Copyright Royalty Board, streaming platforms, represented in the Digital Licensee Coordinator (DLC), a non-profit organisation, have agreed to pay $33.5 million for start-up costs and an initial $28.5m for 2021's budget.

  The DLC includes AmazonAppleGooglePandora and Spotify. The accepted budget is virtually in line with the requests of the MLC, which detailed the organisation's launch and structure costs in a document published in early September ($37.25m for the launch costs and an annual budget of $29m).

The necessary resources

  The MLC was awarded by the Copyright Office in early 2019 to the project supported by the National Music Publishers Association (NMPA), supported by various authors/songwriters associations and the subject of broad consensus in the music community.
  In addition, the MLC and the DLC announced the creation of a new budgeting committee, made up of an equal number of representatives of rights holders and platforms, whose function will be to continuously assess the operating costs of the MLC. 

  “Today’s agreement between the MLC and the DLC represents a landmark achievement for every facet of the music industry," said MLC board chair Alisa Coleman and DLC board chair James Duffett-Smith in a joint statement. "As a result of this accord, the central feature of the Music Modernisation Act will be able to commence operations with the resources necessary to help ensure its success."

  They added, “Overall, this agreement is a great step forward for all of us within the music community and clearly builds off the tremendous progress we made with the passage the Music Modernisation Act. With this phase behind us, we will now continue our work together to finalise the operations and other requirements under the law as we prepare to help songwriters get the royalties they are owed.”

A good head start

  For NMPA President and CEO David Israelite the deal is "an important step forward for our industry." He added, “We are pleased the digital services met the budgetary requirements to ensure the success of the MLC’s mission. The Music Modernisation Act contained ambitious requirements and this agreement will give all parties a good head start on achieving its goals.”

  Garrett Levin, CEO of the Digital Media Association (DiMA), which regroups all the main digital platforms, said the agreement was "a watershed moment in music licensing and a win for the entire music community" and a major step in "establishing a fully functional MLC that can fulfill its mission." 

  Said Levin: “At the heart of the MMA is the potential to establish a system that works better for songwriters and allows streaming services to continue innovating on behalf of fans and creators. The streaming services have been committed to building that better system, which is why we were able to come together and reach this agreement today.”

[The agreement between the MLC and the DLC is effectively a major step towards the establishment of a fully functional MLC. When the MLC filed in September with the Copyright Office its financial requirements, there was concern that the bill would be hard to swallow for the music streaming sector. 

The agreement, which calls for start-up costs of $33.5 million and an initial budget of $28.5m for 2021 is slightly lower than was was asked for by the MLC (respectively $37.25m and $29m) but will still give the new structure enough funds to build from scratch the tool that the whole music publishing community finally expects to solve once for all the thorny issue of mechanical licensing in the US. 

Unlike most western countries that have adopted long time ago the collective management system to license and administer mechanical rights, the US market continued to have the most byzantine system, and not a very effective one. For music streaming services, this agreement is also a good deal, far cheaper than the risks of facing class action lawsuits for failing to license mechanical rights. 

There's still a long way to go before the MLC gets fully functional, not least the creation of a database of music works, but this major hurdle has been passed and both rights holders and digital platforms can breathe a sigh of relief.
  — Emmanuel Legrand]

SOCAN and RE:SOUND JV Entandem collected CA$5m since its July 2019 launch

By Emmanuel Legrand

Canadian collective management organisations SOCAN and RE:SOUND have disclosed that they have signed over 3,300 businesses using music and collected jointly CA$5 million in music-licensing revenue since they launched their joint venture Entandem in July 2019.

  Entandem delivers joint licenses covering the compositions represented by SOCAN on behalf of songwriters, composers and music publishers, and the recordings, represented by RE:SOUND on behalf of record labels and performers.

  The two societies said the early successes of their JV have demonstrated "its effectiveness in making it convenient for Canadian businesses to use music ethically, legally, and responsibly, while ensuring the creators and owners of the music receive fair compensation for the use of their valuable work."

A positive development
  Entandem is a not-for-profit entity co-owned by SOCAN and RE:SOUND. It is headquartered in Toronto with a branch office in MontrĂ©al, and employs 35 full-time staffers. Entandem provides music licenses in a single transaction. It mirrors the similar joint venture in the UK between PRS for Music and PPL to issue single music licenses.

  "The businesses we work with clearly appreciate the convenience of completing both RE:SOUND and SOCAN music licenses at once," said Entandem Licensing director Amadou Tall. "Not only is this great for business, it's a positive development for rights holders. The fair royalties they have earned allow them to maintain and build their careers and keep bringing us the music we love."

MIC Coalition calls for a 'comprehensive, reliable and searchable' database of musical works

By Emmanuel Legrand

The MIC Coalition — whose members include businesses licensing music content — have filed with the US Copyright Office submission asking for "a comprehensive, reliable and searchable database of musical works" necessary order to ensure that the music licensing ecosystem is "rational, sustainable, equitable and transparent."

  The submission was made as part of the Copyright Office’s notice of inquiry regarding the ‘Music Modernisation Act Blanket License Implementation Regulations' as part of the Orrin G. Hatch–Bob Goodlatte Music Modernisation Act (MMA). The MIC Coalition regroups organisations representing restaurants, bars, hotels, movie theaters, local radio and television broadcasters, digital music services, among others.

  MIC said it provided these specific recommendations so that they "should be included in the Mechanical Licensing Collective’s database of musical works in order to fulfill the MMA’s promise of improving the music licensing ecosystem and ultimately creating a more equitable system for artists, producers, songwriters and consumers alike."

Right to know what they sign for

  For the Coalition, "licensees have a right to know precisely what they are (and are not) licensing and to decide whether a particular blanket license actually fits their needs BEFORE they purchase that license."

  The MIC Coalition calls for a system that would:
- Mandate one comprehensive database, publicly accessible and easily searchable;
- Ensure that the data in the database is reliable in order for licensees to make informed licensing decisions and be protected from the threats of statutory damages;
- Ensure that the Copyright Office would make the database publicly accessible, in its entirety and without charges, and is updated on a real-time basis;
- Limit the remedies available to a copyright owner to bring an infringement action if the right owner failed to provide or maintain the minimum information required in the database;
- Include basic music ownership and licensing information such as: author(s), publisher(s), associated Performing Rights Organisation, record labels, names of recording artists or artists featured in the work, identity of all the owners and licensors of the copyright in the work, and standard identifiers for the music work (ISWC) and recording (ISRC).

  The MIC Coalition wrote, "Congress directed the creation of a ‘database containing information relating to musical works,’ not merely a ‘mechanical rights’ database. Any data solution must not only encompass mechanical rights, but also provide information regarding public performance rights, including PRO affiliation and splits of performance rights (which sometimes differ from splits of mechanical rights).” 

Modernise the licensing process

  It added, “A database that only provided data for mechanical rights would leave in place a balkanised system, with no central authoritative repository with information about all the musical works rights that need to be cleared by digital music providers and other licensees. This fragmentation would be inconsistent with the goals of Congress.” 

  For the MIC Coalition, "the creation of a single comprehensive, searchable and publicly accessible database will modernise the licensing process, finally making possible for businesses across the country to easily determine which rights they need to license in order to play music in their establishments and ensuring that artists are paid what they are owed." 

"Providing accurate, complete and transparent information on music ownership would "create a more equitable system for artists, producers, songwriters and consumers alike," wrote the MIC Coalition.

Tech companies urge USTR to use trade deals to push for 'innovation-oriented' copyright framework

By Emmanuel Legrand

The Computer & Communications Industry Association (CCIA) and the Internet Association have warned the US government that new copyright legislation around the world, including the EU Copyright Directive, could impact the businesses of digital companies. In their respective filings with the US Trade Representative (USTR), in response to a request for comments in preparation for the USTR's yearly report on foreign trade barrier, both organisations list several potential threats to their activities. 

  “Countries are increasingly using outdated Internet service liability laws that impose substantial penalties on intermediaries that have had no role in the development of objectionable content. These practices deter investment and market entry, impeding legitimate online services,” wrote the CCIA, which counts AmazonCloudflareFacebook, and Google among its members. The CCIA lists countries such as France, Germany, India, Italy, and Vietnam whose copyright legislation cause problems.

  The EU's new Copyright Directive is directly in the line of fire of the CCIA. “[T]he recent EU Copyright Directive poses an immediate threat to Internet services and the obligations set out in the final text depart significantly from global norms. Laws made pursuant to the Directive will deter Internet service exports into the EU market due to significant costs of compliance,” reads the CCIA filing. “Despite claims from EU officials, lawful user activities will be severely restricted. EU officials are claiming that the new requirements would not affect lawful user activity such as sharing memes, alluding to the exceptions and limitations on quotation, criticism, review, and parody outlined in the text.” 

Conflict with US law

  For the Internet Association — which represents such companies as MicrosoftTwitter, Google, Spotify, among others — the Copyright Directive is also a threat. “The EU’s Copyright Directive directly conflicts with US law and requires a broad range of US consumer and enterprise firms to install filtering technologies, pay European organisations for activities that are entirely lawful under the US copyright framework, and face direct liability for third-party content,” wrote the IA. 

  The AI said that in the current context, the USTR should use trade deals to push the agenda of US tech community and strong-arm countries to adopt a copyright regime similar to that of the USA, in particular wide "fair use" protections. "There’s a global race to set the rules for the digital economy," wrote the AI. "USTR should use trade deals to fight for adoption of America’s digital framework across the world and at the same time defend against attacks on US technology leadership. Other countries are adopting policies that threaten the success of the US digital economy both in the US and abroad, and these countries are also actively pressuring their trading partners to adopt such policies."

Streamlined procedures

  AI added: "USTR should focus on the inclusion of the free-flow of information, intermediary liability protections, a strong and innovation-oriented, copyright framework, and streamlined and simplified trade facilitation and customs procedures in future agreements."

  For TorrentFreak, new regulations such as the Copyright Directive "aim to help copyright holders, often by creating new obligations and restrictions for Internet service providers that host, link to, or just pass on infringing material. Rights holders are happy with these developments, but many Silicon Valley giants and other tech companies see the new laws as threats."

> The Artist Rights Alliance, which regroups artists and songwriters, sent a letter to the Chairs and Ranking Members of the House Judiciary (Jerrold Nadler and Doug Collins) and Energy & Commerce (Frank Pallone, Jr. and Greg Walden) committees, thanking them for "re-examining the decades old 'safe harbour' laws that have so profoundly shaped the internet" and their related efforts "to ensure the current safe harbours are not included in new trade agreements in order to preserve your ability to update and improve them."

  The Alliance notes that over the last two decades, the safe harbour laws "have worked in some important ways, helping internet platforms grow and thrive and establishing a vital baseline of free expression and openness online." However, while the Alliance does not believe the safe harbours "should be abandoned or repealed," the organisation added that these laws "have clearly failed." 

  These laws, according to the ARA, "must be updated and reformed to help us create a fairer, safer, and more secure internet for our times — and for the next generation."

Monday, November 11, 2019

CISAC members report record collections of €9.65 billion in 2018

By Emmanuel Legrand

Boosted by digital growth, global royalty collections for creators of music, audiovisual, visual arts, drama and literature reached a record €9.65 billion in 2018, up 1% year on year, according to the latest figures supplied by the International Confederation of Societies of Authors and Composers (CISAC) in its 2019 Global Collections Report. If not for the strength of the Euro, global collections would have posted a 4.4% growth rate in constant currency terms. Over the five years since 2014, global collections by CISAC member societies were up 25.4%. 

  The most significant figure in the report relates to royalties from digital sources, which jumped 29% to €1.64bn, and now account for 17% of collections compared to 7.5% in 2014. The increase in digital revenues collected by CISAC members reflects the global expansion of music and subscription video on-demand (SVOD) services.

  “Digital is our future and revenues to creators are rising fast,” wrote French electronic music artists Jean Michel Jarre and CISAC President in his foreword to the report. “The subscription model has brought wonderful benefits. As the report shows, in some territories, like Mexico, South Korea and Sweden, digital collections make up a large tranche of creators’ income. These digital 'champions' are a snapshot of future potential.”

  While major markets experienced significant growth in digital collections – notably the United States, France and Japan – the digital revolution impacted all countries and regions. The Asia-Pacific region has emerged as a digital leader, with a share of digital revenues of 26.3%, twice that of Europe at 13.3%. Countries like Brazil, Mexico or China have all seen a massive surge in digital income over the past five years with, respectively, 1800%, 1220% and 480% growth rate.

  “This Report provides many reasons for optimism about our sector,” said CISAC Director General Gadi Oron. “Digital revenues show an impressive increase, have nearly tripled in the last five years and have enormous potential for further growth. More markets are seeing digital income taking the top position of all revenue streams, which is an extremely positive sign. In a landscape of fragmenting income sources, the role of authors societies in generating monetary value for millions of creators has never been more vital.”

  For Marcelo Castello Branco, Chair of the CISAC Board and CEO of Brazil's society UBC, the 2019 Report bodes well for the future if CISAC members continue to harness the potential of the digital revolution. “Looking ahead,” he wrote in the report, “our mission is to leverage and license all sources of future growth, without giving up the traditional pillars of income. I firmly believe that we can drive collections to new records in the upcoming decade. Some territories are already showing spectacular digital growth, demonstrating the potential for others.”
  CISAC counts 232 member societies in 120 countries, representing over four million creators in all creative repertoires.

Other highlights from the report include: 

> Traditional income streams stay strong. 
  TV and radio remain the main source of income from CISAC members. Although revenues from broadcasters have declined 2.4% year-over-year, they still account for 39.2% of all revenues. Live and background rose 0.5% in 2018 and makes for 28.6% of all revenues. Income from CD and Video (mainly mechanical rights) was stable at 6.8% of total revenues, as was private copying (3.8%).  

> Music as the leading repertoire. 
  Music accounted for 88.0% of total collections, with a 1.8% growth in 2018 at €8.49bn. Audiovisual comes second with collections reaching €605m in 2018, followed by Literary (€199m), Dramatic (€186m) and Visual Arts (€168). All repertoires except drama have seen strong 5-year growth. According to CISAC, back payments made in 2017 led to downward adjustments in 2018.  

> Europe as a rights powerhouse. 
  Europe has confirmed its position as the largest region for collections, accounting for 56.4% of all collections, followed by Canada/USA (22.6%) and Asia-Pacific (14.8%). All regions posted growth in 2018 except Latin America, impacted by declines in Brazil and Argentina. With collections of €1.93bn in 2018, the USA is the largest market with a 20.1% share, ahead of France (€1.31bn, 13.6$ share). Six European countries (France, Germany, UK, Italy, Spain and the Netherlands) are among the top 10 markets for collections.  
  The strength of the European market can also be highlighted by the fact that 14 out of the top 15 countries in terms of collections per capita are European, lead by Denmark, Switzerland and France. Australasia is the only non-European in the Top 15.
  Europe is also dominant when taking into account collections as percentage of the GDP, with 13 out of 15 European countries in the Top 15, led by France, Denmark and Finland. Argentina and Saint Lucia are the only two non-European countries in the Top 15.

> Sweden as the digital champion. 
  Of all the countries, Sweden – home of music streaming service Spotify – is the one with the highest share of digital revenues, at 39.8%, followed by South Korea (33.4%). With Canada, Denmark and the UK, five countries collecting over a quarter of their income from digital sources. Of all the regions, Asia is the one with the largest digital share (26.3%), with Japan, China, Korea and Australasia all seeing rapid growth. Europe has the lowest digital share, at 13.3%.

Sony Music and Rhapsody launch in Japan hi-res streaming service mora qualitas

By Emmanuel Legrand
Sony Music has entered the business high resolution music streaming with the launch in Japan of ​mora qualitas​, a new service powered ​by Napster. The project is a joint venture between Sony Music Entertainment (Japan) and Seattle-based Napster parent Rhapsody International. The service offers Japanese consumers access to stream FLAC (Free Lossless Audio Codec) files at a standard of 24-bit/96kHz (Hi-Resolution) or 16-bit/44.1kHz (CD quality) through a variety of hardware devices.
  ​In addition to Sony Music, multiple labels and distributors​ will provide audiophiles hi-res music, including Victor Entertainment, Universal Music Japan and Warner Music Japan. Subscription to mora qualitas in Japan will cost 1,980 Yen a month (around $18.50).
  “Sony is taking high resolution sound quality to new heights. We’re building on the success of mora, our original high res download service in Japan, and after six years we’re in tune with what our customers want from their streaming audio provider,” said Shigeki Tanaka, Senior Vice President of SMEJ. “We chose Napster as our trusted partner because they have the global music experience, sophisticated API and passion to help us launch Japan’s new premier service.”
  “With the introduction of mora qualitas, music and audio fans in Japan can easily stream their favorite music in high resolution audio​," said ​Rhapsody Executive Vice President and General Manager​ for the ​Asia Pacific Region Brian Ringe​r. ​

Qobuz, the French hi-res music service that launched in the US in February, announced that it was "completely eliminating" its MP3 streaming tier to concentrate exclusively on its hi-res offer. Qobuz plans now include a $14.99 offering (or $149.99/year) with unlimited access to its entire hi-res and CD loss-less catalogue and its Sublime+ plan, now priced at $249.99/year, which includes all the streaming offerings, plus a substantial discount on Hi-Res download purchases from the Qobuz store.

Spotify edges on profitability with positive operating income of €54m in Q3 2019

By Emmanuel Legrand

Spotify is showing increasing signs that it is close to breaking even. The music streaming service has posted for the third quarter of 2019 a positive operating income of  €54 million, against losses of €3m the previous quarter.

  The company pointed out that in the third quarter, "business met or exceeded our expectations" with "accelerating" monthly active user (MAU) growth, and "better than expected" subscriber growth, gross margins, and operating profit.

  Total revenue reached €1,731m in Q3, up 28% compared to same period in 2018, with premium revenue up 29% at €1,561m, while Ad-Supported revenue was up 20% €170m. Spotify said premium revenue outperformed expectations while the Ad-Supported business "under-performed."

  Total monthly active users grew 30% year on year to 248 million. However the grow seems to be slowing down since MAUs only grew by 7% to between Q2 and Q3 2019. Ad-supported MAUs grew 29% year-on-year to 141 million. Premium subscribers grew 31% year on year to 113 million and 5% quarter to quarter.

 Accelerating growth in Latin America

  "Net Subscriber growth exceeded our expectations and was led by strong performance in both Family Plan and Student Plan," said the company in its financial filing. The company said developing regions are significant driver of growth, with Latin America accelerating sequentially for the second consecutive quarter and Southeast Asia remaining Spotify's fastest growing region (excluding India).

  The filing offered a significant insight into how Spotify sees its performances compared to other competing streaming services. "We continue to feel very good about our competitive position in the market," said the company, adding that based on publicly available data, Spotify is "adding roughly twice as many subscribers per month as [Apple Music] are."

  Regarding Amazon, Spotify said its estimates "imply that we continue to add more users on an absolute basis than Amazon." Spotify's data also suggests that Amazon’s user base" skews significantly more to ‘Ad-Supported’ than ‘Premium’, and that average engagement on our platform is approximately 3x."

Podcasting 'outperformed expectations'

  On the podcasting front, Spotify said revenue from this segment "outperformed expectations" with strong year-over-year growth but remains "a relatively small slice of the total Ad-Supported business at less than 10% of total ad revenues" or less than €17m. The USA accounted for the largest share of podcast streams but share of listening is higher and growing faster in several European countries. Spotify now has more than 500,000 podcast titles available on the platform.

Podcasts were access by 14% of its MAUs, representing 33.7 million users. "Spotify has established itself as an important player in the global podcast marketplace but is far from a dominant player yet (it will likely hit 5.5% of global podcast revenue market share by year end 2019)," wrote analyst Mark Mulligan from MiDIA Research, who also noted that podcasts are "still a tiny part of Spotify’s business." However, Mulligan said Spotify’s podcast strategy is motivated "not just by growth ambition but also as a defensive strategy for maintaining its audience’s attention."

  For the last quarter of the year, Spotify expects total MAUs in the range of 255-270 million, with total Premium Subscribers around 120-125 million. Revenue should hit €1.74-€1.94bn with Operating Loss between €31-€131m.

> Spotify executive Barry McCarthy will be stepping down as the music streaming company’s CFO on January 15, 2020. He will be replaced by Paul Vogel, who is currently Spotify’s VP of FP&A, Treasury and Investor Relations. The company said he played "a pivotal role in Spotify’s listing and helping to establish Spotify as a public company." Pending shareholder approval, it is expected that McCarthy will be re-appointed to the Spotify Board of Directors, a role he held prior to joining the company as CFO.

PRS for Music launches new dashboard to help members follow their royalties' flow

By Emmanuel Legrand

British rights society PRS for Music has unveiled a new dashboard that will "revolutionise the way we interact with our royalty data,” according to PRS Deputy Chairman Simon Darlow. The new tool, available to every member through their PRS for Music account, will allow users to have access to comprehensive analytics, data and insights into how their songs and compositions are performing across every revenue stream and international territory at a glance.

  PRS said the new dashboard, which was designed with the input of members, covers streams, downloads, broadcasts, public performances in businesses, and live performances around the world. Users will be able to build "a comprehensive picture of when and how royalties are being generated".

  PRS for Music Director of Membership Claire Jarvis said the new analytics service "enables our members to interrogate the global usage of their music in an innovative way."

  PRS tracks trillions of uses of music every year from streaming services, downloads, public performance, broadcast and live shows in over 150 countries. Over 500 set lists from live performances are submitted to PRS every single day. In 2018, over 500,000 new songs and compositions were registered with the organisation.

SoundExchange's portal provides new tool to help resolve copyright disputes

By Emmanuel Legrand

US music neighbouring rights society SoundExchange has introduced a new tool to help resolving ownership claims for sound recordings. The 'Overlaps & Disputes' feature, available on the society's client portal SoundExchange Direct (SXDirect), sends instant notifications to rights owners when other parties make competing ownership claims. SoundExchange said it should enable rights holders "to resolve overlaps as they occur" and eventually "result in fewer royalties being held up by disputes and thus faster payments."

  "We are committed to raising the bar for the industry by providing innovative solutions for music creators," said SoundExchange CEO Michael Huppe. "Music creators deserve to be paid fairly and accurately, and these new capabilities ensure they receive their royalties faster, too."

  SoundExchange also introduced the 'Submit Recordings' tool which provides rights owners with a dashboard in SXDirect where they can add new sound recordings by inputting the International Standard Recording Code (ISRC) and related metadata. Once entered, the data receives immediate validation and gets immediately added to SoundExchange's Repertoire Database.

Spirit of collaboration

  New SXDirect features also include: 'Associated Recordings', which displays all sound recordings currently associated with a music creator's account and the claim percentage for each track; 'Search & Claim' through which users can search SoundExchange's complete database of sound recordings; and 'Upload History', which provides music creators with a history of files that have been uploaded to SXDirect.

  "By introducing this portal update, SoundExchange is once again demonstrating they are the vanguard on transparency in the music industry," commented Rob Gruschke, Vice President of Global Collective Rights at Beggars Group. "Combining this with their powerful new self-service features, empowers sound recording copyright owners to submit ISRCs, make new claims, and resolve overlaps faster to maximise their royalty streams with a spirit of collaboration." 

US government launches probe into ByteDance's acquisition of TikTok

By Emmanuel Legrand
The US Treasury Department, ​through its Committee on Foreign Investment in the United States (CFIUS), has launched a national security review of China's Beijing ByteDance Technology Co, which owns and operates popular video-sharing app TikTok, according to a report from Reuters. Under review is the $1 billion acquisition two years ago of US social media app Musical.ly by ByteDance, which re-branded the app TikTok. TikTok has 26.5 million users in the US alone. ByteDance's various apps have 1.5 billion monthly active users.
  CFIUS normally reviews deals by foreign acquirers for potential national security risks but ByteDance did not seek clearance from CFIUS when it acquired Musical.ly. “While we cannot comment on ongoing regulatory processes, TikTok has made clear that we have no higher priority than earning the trust of users and regulators in the US. Part of that effort includes working with Congress and we are committed to doing so,” a TikTok spokesperson told Reuters. 
​  The news comes as TikTok is facing increasing scrutiny from US lawmakers. In October, US senator Marco Rubio asked CFIUS to review ByteDance’s acquisition of Musical.ly. Senate Minority Leader Chuck Schumer and Senator Tom Cotton have asked Joseph Macguire, the acting director of national intelligence, for a national security probe on TikTok focusing on the app's usage of user data and concern that it could censor content seen by US users. Schumer ​called the probe a “validation of our concern that apps like TikTok...may pose serious risks to millions of Americans and deserve greater scrutiny.”
  ​In addition, the National Music Publishers' Association (NMPA) has written to Sen. Rubio asking for Congress to investigate TikTok over concern that the Chinese-owned social network app was engaging in or allowing potential copyright infringement. The app is mostly unlicensed despite having a strong music content.

Sunday, November 3, 2019

Creative community mourns the passing of entertainment lawyer Jay Rosenthal

By Emmanuel Legrand

The creative community has paid tribute to Washington, DC-based entertainment and copyright lawyer Jay Rosenthal who passed away on Nov. 2. The cause of death is unknown.

  Rosenthal's career included a long span at the National Music Publishers' Association (NMPA), where he was senior vice president and general counsel.

  "The music publishing and songwriting industry lost a true friend and champion today. Jay Rosenthal dedicated his professional life to fighting for the rights of creators," said NMPA President and CEO David Israelite on Twitter. "As [NMPA] General Counsel, Jay was instrumental in protecting the copyrights of all songwriters and publishers. As my friend, I have never met a man more kind, gentle and patient. Everyone loved Jay. He always had a smile and a positive outlook. He was a dedicated husband, father and law professor. We will miss him dearly.”

  Added Mitch Glazier, Chairman and CEO of the Recording Industry Association of America: "A devastating loss for the music community. Jay Rosenthal was a wonderful guy — funny, smart and caring — he dedicated himself to creators. Grieving his loss with love to his family and friends..."

  The leadership of the Association of Independent Music Publishers — Teri Nelson-Carpenter, national chair and Los Angeles chapter president; Alisa Coleman, New York chapter president; and John Ozier, Nashville chapter president — said: "The AIMP mourns the loss of a true friend to independent songwriters and music publishers. Jay Rosenthal was more than an attorney to most of us. He passionately represented the causes for independents championing the way on major issues that deeply impacted the community. Jay was an important educator providing detailed knowledge at our Washington roundups and his experience and expertise to our executive board. He will be deeply missed by family, friends and the community of songwriters and music publishers."

  In 2015, after leaving the NMPA, Rosenthal joined as a partner law firm Mitchell Silberberg & Knupp. At MSK, he represented artists, such as wrestler-turned-actor Dave Bautista ('Guardians of the Galaxy'), as well as industry organisations. 

  Bautista tweeted: "We lost a 20 year member of our team today. He was very loved. He is irreplaceable. He was our brother. He was my attorney and when I was down he worked with me for free. He believed in me from day 1. Me, Meisner, Rosenthal..OG #TeamDreamChaser #RIPJay."

  In addition to his "day job" Rosenthal had a long association with Washington, DC-based electronic band Thievery Corporation and he has worked with many of the nation capital's artists from the go-go scene. Rosenthal was also an adjust professor of law at Georgetown and George Washington University.

  He is survived by his wife Rae and children Evan and Shira.

[I met Jay a while ago when I was working with the International Confederation of Societies of Authors and Composers to put together the World Creators Summit in Washington, DC in 2009. He was a force of nature, always keen to offer ideas and advices. He was funny and sharp. He always had good stories to tell, and he was a very patient teacher trying to explain to me the complexities of US copyright law. Jay was having fun representing Bautista and working on his Hollywood contracts. He once told me that the main difference between the film and the music industry is the number of zeros on the cheques! I will miss our long conversations and I will always remember that he was the one who introduced me to sazerac when we were at a conference in New Orleans... RIP Jay.