US coalition led by SoundExchange asks for 'national treatment' for American performers and owners of sound recordings

By Emmanuel Legrand

A coalition of US organisations representing labels and performers, led by Washington, DC-based neighbouring rights society SoundExchange, has launched the "Fair Trade of Music" campaign, asking for "national treatment" and "fair and equal treatment of music creators when their music is played in markets around the world."

  "Many countries currently discriminate against some non-native music creators by denying them royalties for the use of their work, despite royalties being otherwise paid to creators who are nationals of those countries for the exact same use," wrote the coalition in a statement.

  As part of the campaign, the coalition sent a joint letter to US Trade Representative Robert E. Lighthizer, urging him "to make full national treatment for sound recordings a priority in future trade agreements, particularly in the ongoing US-UK negotiations." In this letter, the music industry groups pledged to work with Ambassador Lighthizer "to achieve full national treatment for American music creators in all future trade agreements."

Losing $330m in royalties

  "Without national treatment provisions to ensure fair treatment, US music creators are losing millions of dollars in royalties," wrote the coalition. SoundExchange estimates that US music creators lose more than $330 million in royalties each year "without universal national treatment protection."

  This situation is rooted in the fact that many countries around the world, which have neighbouring rights provisions in their copyright law, i.e. equitable remuneration for the use of recordings by media and in public spaces, do not pay royalties to American rights holders (performers and record labels) on the basis that such rights are not recognised in the USA, as terrestrial radio stations to not remunerate for the use of recordings.

  In addition, since the US has not ratified the World Intellectual Property Organisation's Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations of 1961, many neighbouring rights societies are using the situation to decline royalties payments to US performers and labels for the use of recordings in their respective countries.

Call for equality

  The US system only recognises performance rights for recordings when music is played on non-interactive platforms such as iHeartRadio, Pandora or satellite-delivered service SiriusXM. These royalties are collected by SoundExchange and distributed to rights holders, including international rights owners.

  A source at SoundExchange acknowledged that the US do not have the full range of neighbouring rights, but noted that the US has a radio right which is digital and "generates much more money than terrestrial radio does in European countries."

  The source argued that the lack of rights' payment from terrestrial radio penalises first and foremost US performers and labels, who are as eager as anyone to see such rights exist in the US. "Nobody's getting these rights and SoundExchange has been arguing for the recognition of those rights," said the source. "These are two different issues. Europeans are not denied access to the rights collected in the US, but access to equitable remuneration in UK and other countries is denied to US artists. It is more about equality rather than the scope of rights."

End discrimination

  In February, SoundExchange filed comments with the US Trade Representative (USTR) asking for action to be taken against countries such as the UK, France, Japan, Germany, that refuse to give American recording artists and labels full national treatment. In March, Canada's Government implemented the US-Mexico-Canada Agreement, which granted national treatment protection to US music creators in Canada. As a result, US performers and labels will from now on be able to collect neighbouring rights monies from Canada.

   "Equal treatment is fundamental to international law, and this principle should extend to all music creators, no matter where they are from, who deserve to be paid fairly for their work," said SoundExchange President and CEO Michael Huppe. "Our goal is to end discrimination in the global trade of music. That should be a priority for our entire industry, including recording artists and labels on both sides of the Atlantic and around the world. The ongoing negotiations between the US and UK present an opportunity to make significant progress toward that goal."

  The coalition includes the American Association of Independent Music (A2IM), American Federation of Musicians, Future of Music Coalition, Gospel Music Association, Music Artists Coalition, Music Managers Forum-US, Recording Academy, musician's union SAG-AFTRA, and artists' advocacy group musicFIRST.

 The Fair Trade of Music website can be accessed here: https://www.fairtradeofmusic.com.

EU's Thierry Breton confirms ambitious regulatory agenda

By Emmanuel Legrand

Thierry Breton, the European Commissioner for internal market, has disclosed that he expects that the main guidelines on the new Directive on audiovisual media services, that will define the calculation methods for European works on digital streaming platforms, to be adopted in July by the Commission. Breton made the announcement in his keynote speech for the opening of the Cannes Film Festival's digital film market.

  Breton added that work on the guidelines is ongoing regarding the implementation of Article 17 of the Copyright Directive on the liability of platforms regarding infringing content, in particular with regards to cooperation between content sharing platforms and rights holders. "We plan to adopt these guidelines in the fall," said Breton.

  The Commissioner also said that he expects that by the end of the year the Digital Service Act will be presented "with a view to increasing the responsibility of platforms in all economic activities." He invited all stakeholders to participate in the current public consultation on this topic.

Need for ambitious investments

  Reflecting on these issues, Breton noted that "these regulatory measures are necessary to ensure a level playing field that is strengthened between all the players," but he added that legislation "will not be enough to preserve our cultural and linguistic diversity; our cultural sovereignty. There is a need for ambitious investments in digital technologies and skills."

  He concluded: "Admittedly, this requires significant collaboration and dialogue between the various links in the value chain. These elements should allow the emergence of a common vision capable of carrying ambitious projects on a European and global scale. You can count on me to carry out this task with all of you. The upcoming media action plan will be a key part of this shared vision."

House music artists Mr Fingers and Robert Owens sue Chicago label Trax Records for unpaid royalties

By Emmanuel Legrand

Electronic music artists Larry Heard (a.k.a. Mr Fingers) and Robert Owens, supported by TaP Music Publishing, have filed a lawsuit in the the United States District court for the Northern District of Illinois against Chicago-based indie dance music label Trax Records, the self-proclaimed "original home of the house", and the label's President, Rachael Cain, for alleged unpaid royalties. Heard and Owens released various musical compositions and sound recordings in the 1980s through Trax Records and claim that they have been underpaid.

  According to the lawsuit, Trax Records has been “building its catalogue by taking advantage of unsophisticated but creative house-music artists and songwriters by having them sign away their copyrights to their musical works for paltry amounts of money up front and promises of continued royalties throughout the life of the copyright."

  Trax Records was co-founded in 1983 by Larry Sherman, who died in April this year, aged 70. According to the suit, Cain was one of the first artists signed by Trax Records and performed under the moniker of “Screamin’ Rachael.” She eventually married Sherman and became his business partner, and she now President of the company.

Absence of legal counsel

  Around 1985-1987, Heard said he signed four documents with “Precision/Trax Records” which, according to the lawsuit, was "at the time, was not a formal legal entity, but rather a trademark utilized by Sherman." Heard did not have legal counsel when he signed these documents, one of which assigned or transferred to Precision/Trax 100% “of all publishing rights and all right, title and interest in and to the copyrights" then possessed by Heard in the musical compositions 'Can You Feel It', 'Washing Machine', and 'Beyond the Clouds'.

  On several similar occasions, Heard signed documents assigning his copyright to Trax. "At best, the Precision/Trax Documents were ambiguous. At worst, they constituted unconscionable contracts of adhesion which would result in decades of revenue streams flowing only to Trax/Precision (or other entities formed and operated by Sherman and Cain), with Heard deriving virtually no economic benefit from their exploitation by Defendants," reads the lawsuit.

   Because of Defendants’ "deceptive acts or practices," Plaintiffs are asking for actual damages "in an amount to be determined at trial but believed to be greater than $1,000,000." In addition, Plaintiffs are asking for attorney’s fees and costs, and interest on its damages at the legal rate.

Seeking justice and fairness

  Billboard quoted Trax and Cain's attorney Rick Darke of Duane Morris saying that Cain had been fighting for 15 years to get artists like Heard and Owen their royalties. Apparently, a Canadian investor, Casablanca Trax Inc., obtained the rights and licenses to music from artists like Heard, and later transferred the rights to another entity. These rights have yet to be paid.

  "Rachael Cain has been fighting for a long time to get these artists paid," Darke told Billboard. "She just hasn't received the monies from the parties responsible in order to pay them."  Darke added that, since 2002, Trax Records "has had no control over the Trax classic catalogue which we intend to rectify. I would like them to know I have not been in control of the classics and have been fighting to get them paid."

   Reflecting on the legal procedure, Heard said: “After doing several releases independently, it was so disappointing that my earliest ventures into the music business was with a label in the community that turned out to be dishonest, like with many other artists that we hear about all too often. We are simply seeking justice and fairness. Maybe, our efforts will shed light on the many predatory practices that have been in place for a long time in this industry.” 

Disregard for artists

  Owens added: “Trax’s treatment of those artists on its label is notorious to those in the electronic world. Many of my friends and fellow artists have been similarly treated. Hopefully this lawsuit will end Trax’s reign of non-payment. I’m grateful to TaP for their support in bringing this long overdue claim.”

  Ben Mawson, co-founder of TaP Music, said he and co-founder Ed Millett "are delighted to be able to support their claim against Trax Records who have behaved abominably over the years to many artists signed to them. We would ask any such affected artists to reach out to us and we will endeavour to support them however we can. Hopefully those in control at Trax now decide to do the right thing, after many years of shocking disregard for their artists."

rightsHUB integrates data delivery feeds with Gracenote, DJ Monitor, Soundmouse, BMAT, Yacast and Jaxsta

By Emmanuel Legrand

Music rights data and asset management platform rightsHUB has integrated data delivery feeds with six leading music recognition technology (MRT) companies: Gracenote, DJ Monitor, Soundmouse, BMAT, Yacast and Jaxsta.

  rightsHUB said the integration with Nielsen-owned entertainment metadata specialist Gracenote, dance venues' tacking system DJ Monitor, music tracking company BMAT, cue sheets data supplier Soundmouse and French radio and online music tracking company Yacast into the first stages of the metadata supply chain will allow the platform to deliver "a key part of the toolkit to tackle issues around mismatched metadata and royalty payments."

  rightsHUB added that its new ability to easily register songs with MRTs prior to release "will mean that rights holders are supplying accurate and rich metadata to their partners early on; thus assisting PROs and CMOs in reporting."

Better identification of data

  In addition, the integration of Jaxsta, which operates the world’s largest database of official music credits, will help ensure that rightsHUB user's repertoire will be properly accredited.

  “It’s vital that rights holders take responsibility for registering their rights with MRT companies in the same way as they do with their distributors, CMOs and PROs," said rightsHUB CEO Lee Morrison. "With the correct data, revenue can flow to the rightsholder as it should. We have to give the MRT companies the data as early as possible into the promotional cycle so that performance can be identified."

  Added Morrison: “By offering this service for free to clients we hope rights holders will earn more revenue in the long term. In the past, this has not been possible for rights holders directly, due to them not having the technical capability. With rightsHUB, data can be delivered to all B2B partners at the touch of a button, reducing the need for multiple manual data delivery points”.

Blockchain-centric music and entertainment platform Bitfury Surround makes inroads in North America

By Emmanuel Legrand

Fabian Alsultany

Bitfury Surround, the Berlin-based blockchain-centered music and entertainment company, is building a business in North America, with the hiring of music and tech executive Fabian Alsultany (pictured) as Director of Business Development North America. Based in Los Angeles, his task is to grow the company's presence in the region. Alsultany was most recently Director of Business Development for the blockchain platform, RChain Cooperative, where he focused on the development of music technologies related to the future of streaming, micropayments, and digital identity.

  Alsultany will work with Surround’s Berlin-based team "to lay the groundwork for a new approach to music rights management and creativity in the US and Canada." Stefan Schulz, CEO and co-founder of Surround said Alsultany's "expertise in music and blockchain will prove invaluable as we roll out what we believe will be a transformative technology for music creators and stakeholders.”

  Bitfury Surround, founded in January 2019, is the music and entertainment unit of Amsterdam-based Bitfury Group, a global company specialised in the cryptocurrency and blockchain space. “Our platform will significantly change the way artists and their teams get paid," said Alsultany. "The market for music, videos, tickets, stems, digital collectibles, and digital assets is receiving a significant upgrade. Bitfury Surround will allow the creative forces in the entertainment industry to maximize revenue and ensure payment distribution in an innovative manner. The software stack and marketplace we are creating will be a game-changer to everyone in the music and entertainment ecosystem.”

Downtown taps Mike Smith to run its global music publishing division

By Emmanuel Legrand

US independent music company Downtown Music Holdings has rejigged the leadership of its music publishing division, with the appointment of former Warner Chappell UK MD Mike Smith to the newly created position of Global President of Downtown Music Publishing, effective September 1, 2020.

Mike Smith

  As a result, Downtown Music Holdings CEO Justin Kalifowitz , who had led the music publishing unit from the outset, will relinquish day-to-day operations at Downtown Music Publishing to focus on the overall strategy of the company that has grown over the past years to incorporate rights management company Songtrust, indie distributors CD Baby and FUGA, as well as services units Soundrop, DashGoSM and AdRev. In recent weeks, Downtown acquired South Africa's Sheer Publishing Africa and set up in London Downtown Neighbouring Rights. Smith will be based in London and will report directly to Kalifowitz.

The craft of songwriting

  “Since its founding in 2007, we’ve carefully built Downtown Music Publishing, writer by writer, guided by an appreciation for the craft of songwriting, a focus on creative partnership, and a belief that a global music company for the modern era should be rooted in an understanding that the song is a foundational element to everything else in the music business. The addition of Mike Smith as Global President of Downtown Music Publishing is in complete alignment with these principles and I know under Mike’s stewardship our publishing business is in the best of hands,” said Kalifowitz.

  Added Smith: "Downtown’s ability to build a formidable, twenty-first century music publishing company unencumbered by the baggage of the past has made them an impressive and compelling proposition for songwriters and composers, and I am delighted to become part of their vision."

SACEM's Jean-Noel Tronc elected President of GESAC

By Emmanuel Legrand

SACEM chief executive Jean-Noël Tronc has been elected President of GESAC, the European groupment of societies of authors, during the organisation's annual General Meeting. Tronc will serve for a two-year term. He replaces José Jorge Letria, President of Portuguese society Sociedade Portuguesa de Autores (SPA), who remains on the board of GESAC.

  Tronc said his mandate will focus first and foremost on the impact of the Covid-19 pandemic on the creative sector. “For authors, composers and music publishers that GESAC is fighting for, the COVID crisis strikes two times: they have lost massive direct revenues with confinement, they will lose major authors’ rights revenues in 2021, because of the delayed impact of 2020 losses for the users of their works, be it shops, media, live concerts, movie theaters, physical sales or exhibitions," said Tronc.

  He added, “The authors societies that GESAC represents will be also financially more fragile because of the fall in collections that will weaken their resources. We need to rethink EU priorities and make Culture and creation a vivid priority for the recovery plans and the EU Commission, Parliament and Governments agenda. In that perspective, GESAC carries and important responsibility: it represents creators from all arts and all origins; non profit collective management of rights is a European invented model where European authors societies still play a worldwide acknowledged leading role."

  Tronc will be chairing the GESAC Board, alongside three new Vice-Presidents, who were also elected at the meeting: Victor Finn, CEO of Irish authors’ society IMRO, András Szinger, CEO of Hungarian authors’ society Artisjus, and Harald Heker, CEO of German authors’ society GEMA. The GESAC Board also includes: Gaetano Blandini, CEO of SIAE (Italy), Karsten Dyhrberg Nielsen, CEO of STIM (Sweden), Gernot Graninger, CEO of AKM/Austromechana (Austria), and Carine Libert, CEO of SABAM (Belgium). GESAC regroups 32 of the largest authors’ societies in the European Union, Iceland, Norway and Switzerland.

Europe starts probes into Apple's potential violations of anti-trust rules following complaints by Spotify

By Emmanuel Legrand

Apple has said that the decision by the European Commission to open two antitrust investigations into the tech giant's practices was “disappointing” and that the firm intended to provide a robust defense to “baseless” accusations by competitors such as music streaming service Spotify.   

  Apple was reacting to the decision by Commission's antitrust division, headed by Commissioner in charge of Competition and Executive Vice-President of the Commission Margrethe Vestager, to start two formal procedures into Apple's conduct and business practices. The first one will look into Apple's proprietary mobile payment solution Apple Pay and the second on Apple's rules for app developers on the distribution of apps via the App Store. In both cases, the Commission will assess whether these practices violate EU competition rules. 

  The first investigation concerns “Apple's terms, conditions and other measures for integrating Apple Pay in merchant apps and websites on iPhones and iPads, Apple's limitation of access to the Near Field Communication (NFC) functionality (“tap and go”) on iPhones for payments in stores, and alleged refusals of access to Apple Pay.” 

  The latter investigation concern in particular “the mandatory use of Apple's own proprietary in-app purchase system and restrictions on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps," according to the Commission. The investigation is a follow-up on separate complaints by Spotify and by an e-book/audiobook distributor on the impact of the App Store rules on competition in music streaming and e-books/audiobooks. 

A 'gatekeeper' role

  "Apple sets the rules for the distribution of apps to users of iPhones and iPads,” said Vestager. "It appears that Apple obtained a 'gatekeeper' role when it comes to the distribution of apps and content to users of Apple's popular devices. We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books. I have therefore decided to take a close look at Apple's App Store rules and their compliance with EU competition rules.” 

  The Commission said it will investigate in particular two restrictions imposed by Apple in its agreements with companies that wish to distribute apps to users of Apple devices: 
  (i) The mandatory use of Apple's own proprietary in-app purchase system “IAP” for the distribution of paid digital content. Apple charges app developers a 30% commission on all subscription fees through IAP. 
  (ii) Restrictions on the ability of developers to inform users of alternative purchasing possibilities outside of apps.

  The Commission noted that “while Apple allows users to consume content such as music, e-books and audiobooks purchased elsewhere (e.g. on the website of the app developer) also in the app, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper.” 

Distorting competition

  The probe follows a complaint filed on 11 March 2019 by music streaming provider, Spotify, competitor of Apple's own music streaming service Apple Music, about the two rules in Apple's license agreements with developers and the associated App Store Review Guidelines, and their impact on competition for music streaming services. 

  Vestager's division ran a preliminary investigation the Commission which showed “concerns that Apple's restrictions may distort competition for music streaming services on Apple's devices.” According to the Commission, Apple's competitors have “either decided to disable the in-app subscription possibility altogether or have raised their subscription prices in the app and passed on Apple's fee to consumers. In both cases, they were not allowed to inform users about alternative subscription possibilities outside of the app.”

  Another complaint was filed on 5 March 2020, by an unnamed e-book and audiobook distributor, raising “similar concerns to those under investigation in the Spotify case but with regard to the distribution of e-books and audiobooks.” 

Penalties and undertakings

  The Commission has informed Apple and the competition authorities of the Member States that it has opened proceedings in these cases. The Commission's investigation will eventually determine if these practices “may ultimately harm consumers by preventing them from benefiting from greater choice and lower prices.” If proven, the practices under investigation “may breach EU competition rules on anti-competitive agreements between companies and/or on the abuse of a dominant position.” Penalties can include fines and/or undertakings by the company investigated if found guilty of breaking competition rules.

  The Commission did not indicate how long the investigation will last since “there is no legal deadline for bringing an antitrust investigation to an end" and that the duration of an antitrust investigation “depends on a number of factors, including the complexity of the case, the extent to which the companies concerned cooperate with the Commission and the exercise of the rights of defense.”

Apple's harmful impact

  Reacting to the announcement, Spotify’s Head of Global Affairs and Chief Legal Officer Horacio Gutierrez, called the announcement of the probe “a good day for consumers, Spotify, and other app developers across Europe and the world.” He said he was encouraged to see that the Commission recognised “the harmful impact of Apple’s actions.” 

  Gutierrez said the investigation will be “the opportunity to prove how Apple has used its gatekeeper position to stymie competition and favour Apple Music at the expense of consumers and competitors.” 

  He added: “This case is about making sure companies like Spotify can compete fairly on a level playing field so that consumers can access the content they want through the service they prefer without being penalized economically. However, this case is not just about Spotify. The commission’s decision to take on the case against Apple is an important first step towards developing new rules, rules of the road that will govern the conduct of online platforms for years to come.” 

Baseless complaints

  He explained that Spotify was not seeking “special treatment or a free ride” but rather a “fair treatment and the opportunity to compete without artificial obstacles put in our way.” 

  Apple spokesman Josh Rosenstock commented: “It’s disappointing the European Commission is advancing baseless complaints from a handful of companies who simply want a free ride, and don’t want to play by the same rules as everyone else. We don’t think that’s right — we want to maintain a level playing field where anyone with determination and a great idea can succeed.”

  He added: “Throughout our history, Apple has created groundbreaking new products and services in some of the most fiercely competitive markets in the world. We follow the law in everything we do, and we embrace competition at every stage because we believe it pushes us to deliver even better results.”

French rights society SACEM anticipates a 25% drop in collections in 2020

By Emmanuel Legrand

French rights society SACEM is anticipating a 25% drop in collections in 2020, according to CEO Jean-Noël Tronc (pictured, below), speaking after the performance rights society's Annual General Meeting. Tronc said that while 2019 was marked by a new record in terms of collection and distribution of royalties, 2020 will be "the worst year in our history with an estimated average drop in our revenues of around 25% with much higher loss levels for certain categories of collections, particularly for general rights." 

  In such a context, the management of SACEM has proposed to the AGM to adopt an exceptional modification to the statutes of the society by authorising a deficit higher than the 5% allowed by the statutes of SACEM. The anticipated losses "will mechanically lead to a very significant fall in the funding of the company" since this funding is provided mainly by an administrative fees on royalties collected. 

  Since SACEM is a non-profit company, it does not have the right to make savings or profit. As a result, members approved a waiver on deficit for the year 2020 in order to avoid having to increase admin fees.

A two-year recovery plan

  Tronc said SACEM has also put measures in place to mitigate the impact of the crisis, but said the society will need to "undertake for at least the next two years a recovery plan, which will necessarily be gradual."

  Said Tronc: "All the efforts made since 2012 have resulted in a very significant improvement in SACEM's operational performance. It is on the strength of this assessment that we are going to go through this crisis of unprecedented violence, through a global action plan already under way, notably with our emergency measures plan for our members and our economy plan for 2020. This crisis illustrates more than ever the vital importance of the collective management model in defending the rights of authors, composers and music publishers.”

Adapt to the times

  During the annual meeting, SACEM members renewed a third of its Board of Directors. The 20 board members are elected by their peers (authors, composers and publishers) for three years (one year for authors-filmmakers), a third of which are renewed each year. Joining the board are music publishers Thierry Perrier (Passport Songs Music) and Caroline Molko (Warner Chappell), authors Frédérique Alie and Brice Homs, songwriters/composers Wally Badarou and Dominique Dalcan, and author-filmmaker Anne Dorr. The Chair of the Board is chosen by the new Board of Directors for a renewable term of one year. The Board chose to re-elected Bruno Lion as President, who already served a one-year mandate. Lion is MD of peermusic France.

SACEM board members

  The General Meeting has also approvedthe decision of the Board of Directors to grant exceptional advances to any SACEM member who generated more than €2,700 in royalties in 2019. These exceptional advances will be repayable over five years from January 2022.

  “The decisions of the General Assembly confirm both our constant desire to adapt to our times and our ability to react to the crisis," said Lion. "What SACEM is today is a force for authors, composers and music publishers as the main impact of the lockdown still remains to come."

BPI welcomes the first round of US-UK trade talks but rejects any 'harmonisation' of copyright frameworks

By Emmanuel Legrand

British trade body the BPI has welcomed the completion of the first round of trade negotiations between UK and US governments, but rejected the idea that there should be a "harmonisation" of the two country's copyright systems. 

  The negotiations, involving the UK's Department for International Trade and the United States Trade Representative (USTR), were conducted by video conferencing due to the coronavirus pandemic. In a position paper published before the negotiations started, the government outlined its framework for the creative sector.

  "The UK’s world-leading creative industries sector will benefit and be supported by copyright provisions that link to an effective and balanced global system," reads the document. "We will establish frameworks for the industries of the future, with a focus on agreeing advanced digital trade provisions that promote an eco-system for businesses of all sizes across the UK to thrive."

Need for a strong copyright regime

  Details of the state of negotiations were not unveiled but the BPI stated that with regards to IP-related issues, "there should be a clear recognition that a strong copyright regime, that protects and encourages creators, will result in the greater creativity and economic growth that will strengthen the UK’s music sector as a whole."

  But the organisation representing the British major record companies and indie labels added that "it is important to recognise that the US and UK have distinct legal and rights frameworks which should be respected for the way in which they are – by and large – suited to the characteristics of the markets in each territory."

  The statement continued: "As such, while there are potential areas for reciprocated changes to be made, the starting point should not be to seek harmonisation. The UK copyright regime fundamentally functions well for the music industry – and the US recorded music industry accordingly looks more to the UK as a model to follow than the reverse.It is the BPI’s firm view that the UK’s existing rights and enforcement framework should be protected and strengthened in the course of trade negotiations – a view shared by our counterparts in the US."

Respecting differences

  Geoff Taylor, Chief Executive BPI (pictured, below), suggested that British policy makers "should be rightly proud of the UK’s outstanding copyright framework which is referred to internationally as a gold standard of copyright." He said this framework was one of the key drivers of the success of the UK’s creative industries, contributing £111 billion annually in GVA.

  "As trade talks continue, the ambition should be to work with our partners in the US to ensure there is no dilution of that framework, respecting the differences between the UK and US markets, and learning from best practice where relevant," said Taylor. "Given how hard the global Covid-19 emergency has hit the UK music sector, it’s vital our government ensures we have the strongest possible IP regime to underpin our economic recovery. We look forward to engaging further with government as the talks progress into the second round.”

National treatment for US performers

  One of the issues that is on the agenda is the request from US neighbouring rights society SoundExchange to obtain "national treatment" for US performers and owners of recordings in the UK for the collection and distribution of performance rights for sound recordings. At the moment, noted SoundExchange in February filing with the USTR, American performers "are denied full national treatment in the UK. They are only paid for certain digital streaming services but denied traditional broadcast and public performance royalties (e.g., uses in bars and restaurants), unless their recordings were made in the UK or other Rome Convention territories."

  The UK's neighbouring rights society PPL said the foundation for the payment of royalties was based on "reciprocity," and since the US did not ratify the Rome Convention and does not have performance rights for sound recordings played by terrestrial radio or TV, US-based performers claiming equitable remuneration from PPL for recordings made in the US only receive royalties for certain simulcasting and webcasting services.

  SoundExchange asked the USTR to "prioritise this issue in trade agreement discussions, and make compliance with full national treatment principles an essential element of US trade policy regarding intellectual property rights." 

  Recently, Canada agreed to give "national treatment" to US performers and copyright holders as part of the US-Mexico-Canada Agreement (USMCA).

South Africa President sends controversial copyright bill back to Parliament

By Emmanuel Legrand

South African President Cyril Ramaphosa has decided on June 16 to refer back to Parliament the controversial Copyright Amendment Bill and Performers' Protection Amendment Bill for reconsideration. The President's office said questions of constitutionality have been raised regarding certain provisions in the text. 

  “My office received submissions against the signing of the two bills into law as well as submissions in favour of my assenting to the two bills,” said Ramaphosa in a letter to National Assembly speaker Thandi Modise. “In considering the numerous and varied submissions made and the process followed in parliament to pass the bills, I have a number of reservations as to the constitutionality of the bills. These reservations lead me to conclude that in its present form, the bill may not pass constitutional muster and may therefore be vulnerable to constitutional challenge." 

Insufficient hearing on fair use

  Blind SA, an organisation that advocates for the rights of blind and visually impaired people, had referred President Ramaphosa to the Constitutional Court for failing to perform his duties by not enacting the law. In a correspondence to Blind SA, the State Attorney listed the specific constitutional reasons Ramaphosa sent the bill back to Parliament: Incorrect tagging of the Bill; Retrospective and arbitrary deprivations of property; Insufficient public hearing on Fair Use; Impermissible delegation of legislative power to the Minister; and Copyright exceptions and limitations that are in conflict with WIPO Copyright Treaty and the WIPO Performance and Phonograms Treaty.  

  The bills have been awaiting for the presidential seal since March 29, 2019 and have been a source of debate and controversy, with rights holders complaining that the bills were making too much space to fair use and exceptions, while proponents of the text such as Blind SA were were urging the President to sign it into a bill.

The future of the creative sector

  Ramaphosa's decision has satisfied the coalition of rights holders that have been asking for a more in-depth debate on the impact of fair use and exceptions to copyright on their businesses. Ramaphosa specifically indicated in his letter to the Speaker that the sections of the bill related to “fair use” had not been put out for public comment before the final version of the bill was published. 

  Collen Dlamini, chairperson of the Copyright Coalition of SA, stated that sending the bill back to parliament was "the best course of action for the country.” He added, “We have maintained all along that the bill was unconstitutional because, if passed into law, it would have arbitrarily deprived SA artists and creatives of their intellectual property. By sending the bill back to Parliament, President Ramaphosa has shown that he cares about the future of our creative sector." 

  Blind SA said its legal team will study the State Attorney’s letter and will be looking at its options going forward. "Blind SA is satisfied that the action instituted in the Constitutional Court has at least resulted in the President now complying with his duties under Section 79 of the Constitution," said the organisation.

EY study: Covid-19 will cost French music sector €4.5bn in lost revenues in 2020

By Emmanuel Legrand

The French music sector has estimated that the Covid-19 crisis will result in €4.5 billion in lost revenues in 2020, down 43% on the €10.2bn it was planning to generate during the year, according to a study commissioned by cross-industry organisation TPLM to EY.

  The study found that core music businesses will lose some €3bn, while associated businesses such as retail and digital distribution, instrument manufacturing and sale of audio material will suffer a €1.5bn loss in 2020.

  The breakdown for the main core sub-sectors is the following: 
  • €2.3bn for the pop live music sector, down 83% on projected turnover in 2020; 
  • €384m for the classical live music sector; 
  • €250m in music copyright shortfall, down 23% on forecast revenue; 
  • €239m in revenue losses for the recorded music sector; 
  • €134m in losses from export revenues; 
  • €46.8m in losses for performers from royalties, private copying and equitable remuneration.

Music pays a heavy price

  "We can confirm that, unfortunately, the music sector as a whole will pay a very heavy economic price, from authors to the live sector, including publishers, producers, instrument manufacturers, broadcasters, distributors," explained EY's Marc Lhermitte and Hugo Alvarez, the authors of the study.

  To respond to the urgent needs of the music sector, TPLM has unveiled a list of 10 proposals that it hopes will be implemented by the government and policy-makers in order to "protect creators, support the structures and businesses that accompany them, and save the 257,000 jobs that keep music alive."

10 measure to keep the sector alive

They include: 
  • Live sector: Bring more clarity and timing in the ways concert venues and festivals will be able to resume operations and develop "specific public aid" to compensate for the additional costs and loss of income "linked to the sanitary measures that will be imposed on concert venues and events.” 
  • Implement social and fiscal support adapted to the scale of the crisis. 
  • Ensure that all the support schemes and subsidies are “examined, voted, validated and paid as quickly as possible.” 
  • Renew in 2021 the measure allowing collective management organisations to devote part of the 25% from the revenues from private copying to emergency measures. 
  • Open discussions between representatives of venue owners and operators of venues on rents relating to the time during which concerts were not possible. 
  • Organise a conference with all stakeholders, in particular the government, to agree on a multi-year policy plan for reviving the sector, “endowed with resources corresponding to the scale of the destruction of value at work since mid-March.” 
  • Ensure that the National Music Centre (CNM) benefits from new, significant and long-lasting fiscal resources. 
  • Transpose “as soon as possible the three European directives adopted in Brussels in 2019 (copyright,cable-satellite and audiovisual media services). 
  • Urge radios stations, television channels, digital platforms and businesses using music to broadcast and programme as much French production as possible. 
  • Adopt measures to support the demand for cultural goods produced in France.

Create conditions for the recovery

  “Our 10 proposals aim to respond to the urgency of a greatly weakened sector, on the one hand, and, on the other hand, to create the conditions for recovery,” explained TPLM President Jean-Christophe Bourgeois (pictured, below). “This is essential to support the sector over time. The urgency is, first of all, to put in place specific aid measures for the performing arts which are fighting for their survival, and to extend the systems put in place at the heart of the pandemic, the removal of which could be the final blow for already weakened companies."

  Bourgeois continued: "We need also to preserve the company's cashflow, in particular by strengthening the existing tax credits and by creating the tax credit that music publishers have been asking for for years. Finally, we need to ensure that unemployment benefits for intermittent workers in the creative sector plays its full role so that creators can be protected."

Beatchain launches Hypelinks

By Emmanuel Legrand

Beatchain, a new data science and digital marketing platform, has released its most recent tool, Hypelinks, which allows independent artists to manage multi-platform distribution and share their music on every major platform — Apple Music, Spotify, Tidal, Amazon, YouTube, Google Play, and more — with one simple smartlink. Hypelinks can be set up in minutes through the Beatchain app.

  The company said that the data from a Beatchain Hypelink "allows independent artists to know where to focus their distribution and find their fans," while providing a "treasure trove of data analytics." This new service adds to various tools provided by Beatchain to help artists build a fan base and deliver music, content, tickets and merchandise.

  "Too many smartlink offerings have limited analytics and high running costs,” said Luke Mendoza, CMO of Beatchain “We saw this as a great opportunity to use our expertise with music tech to help level the playing field for independent artists."

  Beatchain offers three plans: Basic, which is free but with limited services; Premium at $14.99 per month; and Superstar at $19.99 per month, allowing unlimited Hypelinks and other features.

AI-powered platform AIVA gets seed funding from China's tech giant NetEase

By Emmanuel Legrand

Luxembourg-based start-up AIVA Technologies has raised €1.5m in seed funding from Chinese entertainment, gaming and digital platform NetEase. AIVA operates an artificial intelligence-powered platform which composes soundtracks for video games and films.

  AIVA was co-founded in 2016 by Denis Shtefan (CTO), Pierre Barreau (CEO) and Vincent Barreau (COO), with the goal to provide an Artificial Intelligence service "capable of composing emotional soundtracks for films, video games, commercials and any type of entertainment content."

  AIVA said the funds will be used for engineer recruitment, international expansion, and the development of dedicated solutions for NetEase in the Chinese market, in particular working with NetEase's video games subsidiary NetEase Games.

Collaboration on NetEase's games

  “We started discussions with NetEase in December 2019,” AIVA CEO Pierre Barreau told news platform Silicon Luxembourg. "Their teams contacted us to discuss a collaboration for one of their new products in China and coincidentally, the discussion led to them investing in our company."

  Based in Luxembourg, AIVA is among the tech companies that have received funding from the Horizon 2020 programme of the European Union. It also received initial backing from Kima Ventures and the government of Grand-Duchy of Luxembourg.

  The site allows users to pick the genre of music they are searching for and then lets the users compose music pieces with the support of AIVA, using preset styles or influences. The company offers three plans: a Free Plan, where users can use tracks that are created for non-commercial purposes, with the copyright of the tracks created owned by AIVA; a Standard Plan (€14 p/month), which is similar to the Free Plan apply, except that users do not need to give AIVA credit and own the copyright of the tracks they created; and a Pro Plan (€39 p/month), where all of the pieces created under a Free or Standard plan will have their licenses upgrade to "Full Copyright."

Downtown expands into the neighbouring rights market with Justin Bieber and Tori Amos as initial clients

Downtown's Dean Francis

By Emmanuel Legrand

US independent music company ​Downtown​ Music Holdings​ has ​set up Downtown Neighbouring Rights, a new stand-alone unit dedicated ​to the collection and distribution of performance royalties​ for sound recordings​.  ​Dean Francis (pictured, above) has been named General Manager of the new unit, which will be based in London.

  Downtown said the new structure will have direct affiliations with more than 50 collection societies and performance rights organisations around the world and will provide "global scale and transparency to maximise the income due from its clients’ performances on sound recordings." Initial clients include Duff McKagan of Guns N’ Roses, Justin Bieber, Kimbra, Koffee, Nikki Sixx of Mötley Crüe, OneRepublic, Ryan Tedder, Tori Amos, and Young T & Bugsey, among others.

  Francis joined Downtown in 2018 to take charge of neighbouring rights collections for Downtown Music Publishing. Before that, he spent more than a decade with British neighbouring rights collection society PPL.

Extension of clients' interest

  ​Downtown said the move to create the new division followed ​"​significant expansion of and client interest in the neighbouring rights capabilities offered as a service within Downtown Music Publishing and to label clients through FUGA​." FUGA is a digital distribution and rights management company based in the Netherlands that was acquired in January 2020 by Downtown Music Holding​s​.​

  FUGA's neighbouring rights capabilities will be integrated into Downtown Neighbouring Rights throughout the remainder of 2020​.​ ​Downtown guaranteed that the services offered to both Downtown Music Publishing and FUGA clients ​"​will remain unchanged by the new unit's establishment.​"​

  “With revenue from touring and live performance dramatically reduced, artists and record labels are bringing added scrutiny and focus to important income sources like neighbouring rights,” said Andrew Sparkler, Executive Vice President of Global Business Development for Downtown Music Holdings. “By centralising the neighbouring rights expertise from across Downtown-owned companies into a single business unit, and with oversight by an executive with deep industry knowledge of the space, we can more efficiently support our clients who want the same kind of professional management and transparency available through other Downtown companies.”

Advising careers

  Francis added: “We have a bespoke approach and a more involved relationship with our clients. Though our principal role is maximizing their neighbouring rights collection, we are also uniquely positioned to play a broader advisory role in their careers — utilising our comprehensive understanding of publishing and distribution as well as the technological solutions that Downtown’s multifaceted portfolio of innovative businesses provides.”

  ​The global neighbouring rights markets is estimated to be north of $3 billion a year, with the US being the leading market, followed by the UK, France, Japan and Germany. Some 50% of the world's neighbouring rights collections are taking place in Europe.