French government allocates €2 billion to support the creative sector

By Emmanuel Legrand

The French creative community has welcomed the announcement from Prime Minister Jean Castex to allocate €2 billion to the cultural sector as part of the country's €100bn recovery plan. "We believe that culture is an economic activity," said Castex, whose government identified the cultural sector as one of the ten core businesses in France that needed urgent economic support. 

  The purpose of the €100bn stimulus package is to "recreate the conditions for more robust, innovative, ecological and inclusive economic growth, by supporting the sectors most affected by the crisis, in particular tourism, sport and culture." 

  Part of the plan is to incite people to go back to movie houses, theaters and concert venues while respecting safety measures such as wearing of a mask. "We will make the systematic wearing of a mask compulsory," said Castex. However, the PM did not sanction an unconditional re-opening of venues and festivals. "Culture, sport, tourism, events, will retain access to partial activity until the end of 2020, when an assessment will be made," said Castex.

An unprecedented effort  

  Out of the €2bn, the film industry will receive €165m through the National Cinema Center (CNC), with €60m to cover a downfall in CNC's budget normally financed by a tax on cinema tickets, and €105m to be spread across various recovery initiatives throughout the whole film and TV industry chain. The French cinema theater sector is estimated to have lost some €500m in revenues since the start of the pandemic, according to Richard Patry, the president of the French exhibitors’ association (FNCF). 

  The bulk of the funding will go to the live and performing arts sectors (theaters, dance, music, among others). Castex and the Minister of Culture Roselyne Bachelot (pictured, below) met the representatives of the performing arts sector on August 28 and outlined specific measures such as the opening of venues, although the attendance level for for cultural and sporting events is set at 5,000 people, maximum, which rules out most festivals. 

  Bachelot said €432m will be allocated to support live entertainment, with €220m for the commercial sector, €200m for the subsidised sector and €12m for creators. The €220m for the commercial sector will be split as follows: €200m in credits for the music sector as a whole, the will be channeled through the newly created Centre National de la Musique (CNM), €10m allocated directly to the CNM to strengthen the organisation, and €10m for non-subsidised theaters. In addition, a €100m fund has been set up to compensate venues for their operating losses during the pandemic. Bachelot said it was "an unprecedented effort that I will lead to save a devastated sector."  

  Castex also announced that the government would be extending the tax credit for performing arts and the tax credit for phonographic production until the end of 2024, as well as a temporary relaxation the live sector tax credit conditions. 

A proactive plan

  The three main organisations representing the live sector (PRODISS, SNDTP and CAMULC) said the government plan gave "hope for a way out of the crisis." They added: "The sector had assessed it needed up to of €300m. We therefore salute the effort and the strong commitment of the Government, which will allow entertainment companies throughout France to reduce the risks of bankruptcy and start the recovery.” 

  The organisation for contemporary music SMA welcomed "the proactive plan in favor of the live sector," stating that its members would be "present to work on the implementation of these announcements in conjunction with the teams from the Ministry of Culture and the Prime Minister." 

  Independent record labels' body UPFI said the overall plan provided "structuring measure for the entire value chain." The extension of the music tax credits until 2024 "brings welcome visibility to production companies, allowing them to initiate investments that have recently been weakened by the reduction of their income in 2020." UPFI also welcomed the extra allocation of €210m to the CNM.

MidOcean Partners takes control of Music Reports

 

By Emmanuel Legrand

 

New York-based private equity company MidOcean Partners​​ has acquired Music Reports Inc (MRI), a Woodland Hills, CA-based company specialised in administering music royalties. ​​MidOcean bought out the shares owned by majority shareholder ABRY Partners and by co-founders Ronald Gertz and Douglas Brainin. Terms of the transaction have not been disclosed.

 

   Music Reports was founded in 1995 ​by Gertz and Brainin, who will both exit their respective positions of Executive Chairman and CEO, but will remain involved with the company as Senior Advisors. 

 

  MidOcean Operating Partner Dhruv Prasad ​h​as ​been appointed ​President and CEO​ of MRI. ​The new owners said the investment will be used to “accelerate Music Report's growth, both through organic product initiatives, as well as potential acquisitions.” MRI operates two databases: Songdex, described as "the world's largest registry of music copyrights" and Cuetrack, a cue sheet management and analytics platform. MRI's services are used by the likes of Netflix, Pandora, HBO, TIDAL, CBS, among others.

 

Need for specialised data providers

 

  Barrett Gilmer, Managing Director at MidOcean, commented, “The global recorded music industry is experiencing compelling growth driven by application development, smartphone penetration, and distribution. MidOcean identified an enormous need for specialised data and service providers to help navigate the incredibly complex web of rights, licenses, and payments. We believe Music Reports serves this need better than anyone in the world."

 

  "For twenty-five years, Music Reports, the company that we built together, has been helping clients navigate the complex landscape of music royalties, while building an industry-leading global rights administration platform," said Gertz and Brainin, in a joint statement. "We are excited for this next step in the company's growth trajectory and look forward to working with Dhruv to execute the company's mission to deliver best in class solutions to the greater media and music industries."

Pirate IPTV services in the US generate $1bn in revenues annually

By Emmanuel Legrand

Faced an an increasing amount of pirated video streaming content, operators of video streaming services have asked digital security experts Nagra Kudelski to estimate the revenue and the profit margins of pirate subscription Internet Protocol Television (IPTV) Services, which offer video streaming signals to consumers for a monthly subscription.

  Pirate subscription of Internet Protocol Television (IPTV) Services generate revenues of $1 billion annually in the US alone, according to the report titled 'iMoney for Nothing: The Billion-Dollar Pirate Subscription IPTV Business', released by the Digital Citizens Alliance in partnership with Nagra Kudelski.

 High profit margins business

  "The basic model for the operators of these services is not complicated," reads the report. "They take stolen content and distribute it via the internet directly to consumers. Since these providers pay nothing to the people who create and own the programming, this is, to quote the rock group Dire Straits, truly 'money for nothing'.” 

  The report estimates that since the providers of these services do not license programming, they operate with estimated profit margins that range from 56% (retailers) to 85% (wholesalers). According to Nagra Kudelski, there are an estimated 9 million fixed broadband subscribers in the US using a pirate subscription IPTV service. The market is served by at least 3,500 storefront websites, social media pages, and stores within online marketplaces that sell pirate subscription IPTV services to the US market.

  "At the heart of these activities – $1 billion in illicit revenue for subscription IPTV, diverted residential Internet connections, and banned content – is a well-organised and profitable industry with low entry costs and high margins, and, as an illegitimate business, one that pays nothing in federal, state, or local taxes," reads the report.

 

  The authors of the report note that they do not believe that all participants in this ecosystem "are knowingly engaged in illicit pirate activity," but instead raises the issue "of how payment processors, website services, hosting and CDN providers, and other legal businesses interplay with a billion-dollar illegal market."

 

Call for action

 

  They conclude: "Ultimately, the sheer scope and size of the streaming piracy ecosystem should trigger alarm among policy-makers, law enforcement, consumer protection groups, and the technology and financial services industries, and spark a serious discussion about what efforts are needed to diminish this growing problem." 

 

  The Digital Citizens Alliance is a Washington, DC-based nonprofit organisation focused on educating the public and policy-makers on "the threats that consumers face on the Internet." It is supported by health, pharmaceutical and creative industries as well as online safety experts and other communities focused on internet safety.

International efforts help take down movie piracy network Sparks Group

By Emmanuel Legrand

 

US authorities, in coordination with law enforcement units from 18 countries, have dismantled the Sparks Group, suspected of running a movie piracy network which has reportedly caused tens of millions of dollars in losses to film production studios.​ 

 

  Audrey Strauss, the Acting United States Attorney for the Southern District of New York, has charged Umar Ahmad, George Bridi and Jonathan Correa with copyright infringement for their involvement in the Sparks Group, described as "an international piracy group involved in illegally distributing movies and television shows on the Internet."

 

  Bridi, a citizen of the United Kingdom, was arrested in Cyprus on an Interpol Red Notice based on the US criminal charges. Bridi has also been charged with wire fraud. The US authorities said they will seek Bridi’s extradition to stand trial in the United States. Correa was arrested in Olathe, Kansas, where he will be presented in federal court, while Ahmad, a citizen of Norway, remains at large. The case is assigned to United States District Judge Richard M. Berman.

 

Servers taken down

 

  Copyright infringement carries a maximum penalty of five years in prison, while wire fraud conspiracy carries a maximum penalty of 20 years in prison. Bridi has also been charged with conspiracy to transport stolen property interstate, which carries a maximum penalty of five years in prison.

 

  The operation was coordinated by the office of the Attorney General, with Homeland Security Investigations, and the United States Postal Inspection Service, in coordination with law enforcement authorities in 18 other countries and supported by Eurojust and Europol. As a result, dozens of servers controlled by the Sparks Group were taken offline around the world, including in North America, Europe, and Asia. According to prosecutors, the Sparks Group "utilised these servers to illegally store and disseminate copyrighted content to members around the globe."

 

A pipeline for wholesale theft

 

  “As alleged, the defendants were members of an international video piracy ring that was sophisticated and widespread. The group allegedly circumvented copyright protections on nearly every movie released by major production studios, as well as television shows, and distributed them by way of a worldwide network of servers," said Strauss, who added that key members of the group were in custody, and that the servers "that were the pipeline for wholesale theft of intellectual property are now out of service.”

 
  Jan van Voorn, Executive Vice President and Chief of Global Content Protection for the Motion Picture Association (MPA) commented: “The MPA applauds the work of our global law enforcement partners for putting an end to the piracy operations conducted by Sparks. As the MPA continues to protect the entertainment industry and the creative works it produces, it is gratifying to see such a strong coordinated effort to dismantle one of the world’s largest piracy enterprises.”

DIMA's yearly report shows the strength of music streaming in the USA

 
By Emmanuel Legrand 

Streaming revenue is expected to top $15bn by 2024 and nearly $18bn by 2026 in the USA, according to the Streaming Forward 2020 report from the Digital Media Association (DIMA), produced by MIDiA Research. Streaming will likely account for nearly 90% of US recording revenues by 2026, from 77% in 2019. Looking at the future, the report estimates that over the next seven years" the streaming revolution will only grow more powerful.


 

  DIMA said its members — Amazon, Apple, Google, Pandora, Spotify and YouTube — contributed $10.3 billion (or $28.2m per day) to the US music industry in 2019, up 21% year-on-year. In 2019, there were 99 million paid subscribers, and nearly 117 million ad-supported listeners in the US.

 

  The number keeps growing year-over-year and the report estimates that "if the market stays on this trajectory, the value of subscriptions in the US alone will reach $11.6 billion by 2026, and the recorded music market will generate more than  $20 billion in revenues—an all-time industry peak."

  "The individual numbers tell a compelling story and the overall message is clear: streaming services have revitalised the US music industry, setting it squarely on a trajectory to achieve all-time highs for growth and revenue," wrote DIMA CEO Garrett Levin in the foreword to the report. For Levin, the report is aimed at showing the valuable contribution that music streaming has brought to the US music sector.

  "Less than a decade ago the music industry was locked in a multi-year cycle of declining revenues, searching for a way to empower fans to engage with — and pay for — music. The streaming revolution changed all of that, creating a new paradigm for how music is created, distributed, and enjoyed, to the benefit of artists, song-writers, copyright holders, fans, and the entire music ecosystem," wrote Levin.

A virtuous partnership

  The report focuses on all the changes that streaming services brought to consumers, from the unlimited access to music to trendsetting playlists, access to lyrics and the increasing availability of podcasts. It also looks at consumers reactions to recent innovations such as the rise and rise of smart speakers, car dashboard offering access to streaming services, or hi-fi sound.

  The number of smart speakers in the US has almost quadrupled over the past two years, with just more than 70 million speakers owned in 2019, boosting further the use of streaming services. "Music is the most-requested feature on smart speakers, with 90% of speaker owners listening to music via their speakers on a weekly basis," according to MIDiA's Mark Mulligan.

  "Globally, 27% of consumers now own a smart speaker, with 24% listening to music on one of those devices; the US has the highest penetration of smart speaker owners in the world at 29% of households. Accordingly, US households are the most fertile addressable audience for music subscriptions: 47% of US smart speaker listeners will pay for a subscription, compared to 21% of overall consumers."  

 "The music industry is more connected than ever: without music, streaming services would suffer, and without streaming services, creators and fans would suffer," concluded Levin. "The recognition of this virtuous partnership lies at the heart of our interconnected industry."

India's IPRS launches new portal designed by SOCAN's Dataclef

By Emmanuel Legrand

The Indian Performing Right Society (IPRS) has launched its new members's portal IPRS 2.0, designed by Dataclef, an affiliate of Canada's rights society SOCAN. The portal is designed to ensure that IPRS members will be able "to engage more and earn better in this rapidly evolving digitally-engaged world," according to the Mumbai-based society.

  The Dataclef-designed portal is expected to significantly improve IPRS’s royalty administration and distribution infrastructure. Through this association, IPRS said it aimed "to empower its members and provide transparency to writers, publishers and composers on payments and other related information bringing in greater transparency and interactivity."

  "We are collaboratively working with IPRS to design a more robust platform from which members can transparently and easily access data, aligning to the vision defined by IPRS. It is great to see a society actively investing in its staff and infrastructure to ultimately empower its members," said Jeff King, CEO of Dataclef, who added, “India is an expanding market with great potential for the music industry, it is essential that this growth continues to be supported by a strong collective society."

 

Bring greater transparency

  IPRS 2.0 will provide state-of-the-art license administration and intelligent royalty tracking. It will incorporate the management of the deals with digital platforms such as YouTube, Facebook, Spotify, Amazon Music, and ALTBalaji. "With these deals in place, author, composer and publisher members of IPRS now have access to a new revenue stream should their compositions be used on any of these platforms," said IPRS.

  Javed Akhtar, Chairman of 50-year-old IPRS (pictured, below), said IPRS 2.0 is "a momentous step forward in keeping pace with the changing times." He said: Our focus is clear and two-fold, on one hand we want to bring in greater transparency and on the other, we want to leave no stone unturned and leverage every opportunity to ensure our members are able to reap all benefits possible of their hard work and creative acumen. Our aim to create a more engaged eco-system where we continue to grow and flourish as a community driven by our shared passion and drive.”



  Achille Forler, former MD of Universal Music Publishing India, and adviser to IPRS, said the project was completed after two years of work and was "the most ambitious technology project in the history of any Asian Copyright Society." He added that the front portal will be be launched soon and that the next phase, which will be delivered next year, will include distribution components for cue-sheets and foreign income.

 
  For IPRS CEO Rakesh Nigam the new portal will "bring in a high level of transparency into our operations where our members can view and check their repertoire at their own convenience. This will help eradicate obvious errors that occur due to wrong IPs, duplicate submissions, etc."

 

Build authoritative database

  Mandar Thakur, the COO of Times Music, a division of media company The Times of India Group, and a board member of IPRS, told Creative Industries Newsletter that IPRS 2.0 was "a major upgrade of its operating system and services." He added: "With IPRS’s authoritative database of close to a million musical works and unlimited scalable processing capacity, the new system will provide the best-in-class monetisation capacity for the Society's members. It will also allow international publishers and societies, with multiple authors, to register their works as per the global standards and processes followed by societies across the globe.”  

 Thakur said the new system will bring several new benefits:

  > Sort out the characters/languages used to enter songs documentation. In India, creations are in multiple native languages, but data is represented in Anglo Saxon characters. The new technology "will enable Indian members to sort out complex usages of nomenclature in Indian words, surnames, names, film-names and song-names. Identifying duplications with the right grammatical corrections and intonation was very critical for the Indian market and the system allows that."

  > Dealing with high volume of data and transactions. IPRS’s collaboration with Dataclef "will drive efficiencies in data management enabling it to function as per the industry grades-equivalent to other international societies."

  > The member portal will allow the authors, composers and publisher to transfer from the earlier "back-office dependent" system to a "Self-Serve portal" enabling them to conveniently handle their personal information, access list of works, request modifications, submit new registrations, view a detailed royalty tracking and history of royalty payments.

  > IPRS 2.0 also includes state-of-the-art license administration. With its scalable system, IPRS can accurately process quadrillion lines of metadata and claim royalties across all broadcast and digital platforms with greater efficiency.

  > Improving IPRS’s royalty administration and distribution infrastructure.

Incorporate best practices

  IPRS said the new developments are part of the on-going partnership with the International Confederation of Societies of Authors and Composers (CISAC), the international trade body representing collective management organisations in the world, which had re-admitted IPRS as a member after the society made significant changes in governance and in processes. "CISAC has been working with IPRS to monitor, guide and help the society improve its operations and align it to global best practices in corporate governance, transparency, licensing, collections, and distribution of royalties," said IPRS.

  IPRS distributed royalties worth INR 64.5 Crores for Q2 2020 (€7.4 million) and has also initiated disbursement of relief funds, worth INR 3.46 Crores (€400,000), for its members impacted adversely by the pandemic. IPRS counts more than 5,000 authors, composers, and music publishers as its members.

US appeals court sends rate setting determination back to the Copyright Royalty Board

By Emmanuel Legrand

Two years ago, the US Copyright Royalty Board (CRB) determined after a lengthy process that mechanical royalties paid by digital streaming services to songwriters and publishers would incrementally raise between 2018 and 2022, resulting in a whopping 44% rate increase over five years. Publishers rejoiced and streaming services Amazon, Google, Spotify and Pandora took the matter to the courts and appealed the ruling (Apple Music abstained).

  The DC Circuit Appeals Court has now given them a win by sending the parties back to the CRB, with the notification that the CRB “failed to provide adequate notice of the rate structure it adopted, failed to explain its rejection of a past settlement agreement as a benchmark for rates going forward, and never identified the source of its asserted authority to substantively redefine a material term."

  The Court noted that the appellants "disagree on multiple fronts with the Board and with each other. As a result, many issues devolved into Goldilocks’ arguments, with the Streaming Services protesting that the rates are too high; the Copyright Owners objecting that they are too low; and the Copyright Royalty Board saying they are just right."

The CRB failed to provide fair notice

  The ruling goes on: "Having considered all of those arguments and the extensive administrative record, we affirm in part and vacate and remand to the Copyright Royalty Board in part because it failed to give adequate notice or to sufficiently explain critical aspects of its decision-making. Specifically, the Board failed to provide adequate notice of the rate structure it adopted, failed to explain its rejection of a past settlement agreement as a benchmark for rates going forward, and never identified the source of its asserted authority to substantively redefine a material term after publishing its Initial Determination."

  “In sum," it continues, "because the Copyright Royalty Board failed to provide fair notice of the rate structure it adopted, that aspect of its decision must be vacated and remanded for further proceedings. If the Board wishes to pursue its novel rate structure, it will need to reopen the evidentiary record."

  In practical terms, the Court of Appeals gave the CRB a framework in order to proceed with the rate setting process. It did not crush the rates themselves, but objected to the way they were reached by the CRB. For David Israelite, CEO and President of the National Music Publishers’ Association, which was one of the appellants in the appeals procedures, alongside the Nashville Songwriters Association International (NSAI), the Court of Appeals decision is based on "technicalities."

Not a rejection of the rates

  In a statement, Israelite said the Court of Appeals "made its determination which supported the rate increase granted by the CRB to music publishers and songwriters, agreeing that writers have been underpaid and that the rate increase start date is January 1, 2018."

  So for Israelite, the Court of Appeals "did not reject the top line rate increase for songwriters" but instead asked the CRB "for further explanation as to why it had rejected one particular supposed benchmark" and also explain "its authority for modifying ‘service revenue’ in regards to music bundles."

  "We believe these things are easily done by the CRB," said Israelite. “We are heartened that the Court understands and supports the fact that songwriters are grossly underpaid by streaming services. It is shameful that Spotify and Amazon have now spent millions of dollars – money which could’ve been paid to songwriters – on attempting to deny them a raise based on technicalities.”

Ruling against songwriters

  He concluded: “We will continue to fight back against Spotify and Amazon’s brazen attempts to cut songwriter’s royalties and look forward to quickly resolving the procedural issues raised by the DC Circuit Court of Appeals in order to uphold our hard fought rate increase.”

  Songwriter, performer and activist David Lowery believes the ruling "clearly goes against songwriters." In a blogpost on The Trichordist site, Lowery wrote that "there is little chance this will not lower your royalty rates in the subsequent rehearing." Analysing the ruling, Lowery found that the Court of Appeals "all but directs the CRB to put the cap back on 'total content costs'. This clearly will have a depressive effect on the alternate mechanical royalty calculation."

  Secondly, he added, the court "seems to be fundamentally uncomfortable with the fact that songwriters get a (phased in over 5 years) 40% raise. Like everyone involved in the proceedings so far, no one seems to understand the initial rate was arbitrary. It was picked out of thin air when no one knew what streaming meant."

Parties need now to reach a solution

  He added: "Finally it’s totally depressing to see a federal court reiterate the notion that the federal government can not put a streaming service out of business by raising songwriter rates too high. It’s not the governments job to save companies that have bad business models. If the streaming services can’t pay fair rates to songwriters perhaps they should charge their customers more, not pay songwriters less. Why do the federal courts think songwriters have to subsidise the streaming business? All in all a depressing read."

  For Jim Griffin, a principal at digital consultancy company OneHouse, the appeal "raises as one core issue a remarkable 'achievement' for songwriters in the rate decision at issue: An 'uncapped' total cost content 'prong' combined with significantly increased rates. It is easy to see why this contested decision provoked glee at the NMPA. The music services, however, successfully argued that this was not addressed on the record and that they have a right to do so that was unjustly foreclosed by the imposition of this rate-setting protocol (uncapped) after the close of the record."

  Continues Griffin: "What's going to happen? They're going to re-open the record and address it for the first time. What do I think should happen? I think the parties should meet and confer — if necessary, with benefit of mediation — and reach a solution that works for everyone to resolve this old issue. It will not be repeated, at least not this way, because this rate adjudication occurred under a now abandoned four-part test (A, maximize access to works; B, fair return and income; C, relative roles of owner/user in opportunity; D, minimise disruption on industry structure and practice) that is replaced going forward under the Music Modernisation Act: 'Establish rates and terms that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller'."

PRS for Music members adopt new 'historic' governance rules

 By Emmanuel Legrand

 

PRS for Music will change its governance rules following the approval by the rights society's AGM on August 18 of a series of proposals that will make more room for diversity and efficiency. The new Articles of Association and the Rules and Regulations put to the votes follow an 18-month review of its governance rules, undertaken by expert consultants such as Mazars and lawyers.

  The recommendations of this independent review had been put to the PRS board, which has endorsed them in its majority and now they have been adopted by the membership. "The new governance will make PRS more flexible, more fleet-of-foot in our decision-making process and more cost-effective," said PRS for Music CEO Andrea C. Martin, who held her first AGM after one year in the job.

More efficient and cost-effective

  The proposed governance changes include:

  - The PRS Board will be renamed as the Members’ Council, with a renewed focus on member engagement, and ensuring the views of the membership are reflected in decision making process. It continues to approve the corporate strategy, annual budget and accounts and the appointment of its CEO and Board members. The Audit Committee, the Nominations Committee and the Remuneration Committee report to the Council.

  - The Members’ Council will be smaller than the current President, although there will be a small increase in the number of independent non-executives, "in order to be more efficient and cost-effective." Council Members will be reduced from 11 to eight in each category. This will be implemented gradually from 2021 to 2023.

  - The new Members’ Council will appoint a Writer President who will champion PRS and its membership. The Writer President of the Council will be appointed from the Writer Council Members. The Presdient will be appointed for a two-year term with a maximum of two terms.

  - PRS will continue to have a Chair of the Member Council, whose role is to set the Member Council’s overall agenda, chair Council meetings and make sure the Council and its committees run successfully, chair the AGM. The Chair will be assisted by one deputy chair (reduced from the current two). The Chair and deputy chair will always be one writer and one publisher.

  - Directors will be subject to a limited number of terms on the Council, with up to five three-year terms. This is meant to encourage new blood and diversity.

  - The election of Writer and Publisher Council members will be changed to collegiate voting. Writer members will vote for Writer candidates, and Publisher members will vote for Publisher candidates. This was established to make sure that each constituency controlled those who were to represent it, said PRS.

  - Out of the eight publisher member seats on the Council, three seats will be designated for the highest earning Publishers, which means that representatives from Sony/ATV, Universal Music Publishing Group and Warner/Chappell will have de facto a seat at the board. These reps will be able to be on the Council without going through the ballot process, but they will not be able to participate in the ballot or appointment process for the other Publisher seats on the Council.

Full accountability to the Board

  In addition, PRS for Music's Executive Board, will simply be named the Board, with "a renewed focus on strategic delivery and commercial operation, empowering PRS’ Executive Leadership Team to manage the business with full accountability to the Board."

  The Executive Board comprises 13 directors drawn from the PRS Board with the PRS Chairman being an ex officio member. Its purpose is to oversee all decisions except those made by the PRS Board. The members of the Board will be drawn from the Members’ Council.

  Each term appointment is three years (against four previously) and there is a limit of three terms in total. It was made up of: four writer and four publisher (two independent and two of the three highest earning publisher member) directors; four independent directors (one of whom is the Chairman); one executive director (the CEO of the society).

Historic changes

  Legal and business affairs executive Alexander Kassner has been newly appointed as a Publisher Director of the PRS for Music, alongside Roberto Neri, Executive Vice President and Head of Business Development for Europe  at Downtown Music Publishing, and Jo Smith, International Director of Society and Industry Affairs at Warner Chappell Music, who have been re-appointed to the Board as Publisher Directors. John Truelove has been re-appointed as a Writer Director. 

  Commented Nigel Elderton, Chairman of PRS for Music and MD of peermusic UK and Europe President for peermusic: "I am incredibly pleased to see that our proposed governance changes have been approved. These historic changes will allow us to deliver more engagement, efficiency and transparency for our members. Furthermore, we anticipate the approved changes will lead to more opportunities for members to join the Board and by association we hope for greater diversity on the Board in the future."

Australian government will propose a draft copyright legislation by the end of 2020

By Emmanuel Legrand

After two years of consultation with stakeholders, ​Australia's government ​has unveiled the framework of the new copyright legislation that will introduce "changes to provide a more flexible and adaptable framework that will better support the needs of Australians to access content in an increasingly digital environment." 

  The government will propose a draft legislation later this year that will be presented for public consultation. The proposal takes into account copyright recommendations made by the Productivity Commission four years ago​. The government's proposals were welcomed by tech companies, but representatives from the creative sector worry that the scope of fair use and exemptions included in the proposal will have an adverse effect on rights holders. 

  The proposed legislation is expected to focus on a series of reforms to the copyright law, including: setting up a scheme to allow the use of material if the copyright owner cannot be found; introduce a fair dealing exception for non-commercial quotation; simplify and update copyright exceptions for educational and cultural institutions; and streamline the government statutory licensing scheme.

Unintended effects

  However, the government said it would not endorse the mandatory take-down code proposed by the Australian Communications and Media Authority (ACMA) citing concerns from both major copyright owners and users, and "the potential unintended effects of a code across a diverse copyright market." 

  The government added: "Australia's copyright system is critically important to our economy and our creative industries ... enforcing copyright against digital platforms can be challenging." Instead, the government will consult with copyright stakeholders, digital platforms, and consumer groups "to determine how best to reduce the availability of infringing material on digital platforms."

  “The reforms follow two years of extensive industry consultation and will finalise the Government’s response to copyright recommendations in the Productivity Commission’s 2016 Intellectual Property Arrangements report,” said Minister for Communications, Cyber Safety and the Arts Paul Fletcher. “The need for change has been further highlighted during COVID-19, with schools, universities, cultural institutions and governments moving more services online. The reforms will allow the reasonable and necessary use of copyright materials online while also removing administrative burden, meaning these organisations can continue to deliver their services online."

A more flexible and adaptable system

  Fletcher added: “Australia’s copyright system underpins our creative economy and these reforms provide clear and reasonable public interest access to copyright materials, while maintaining the incentives and protections for content creators. This builds on the Government’s previous work on improving access for the disability, education and cultural sectors and reforming safe harbour legislation, and demonstrates our ongoing commitment to a copyright framework that is fit for the digital age.” 

  The announcement was welcomed by the Australian Digital Alliance (ADA) and the Australian Libraries Copyright Committee (ALCC). "We support proactive copyright amendments that will mean educational, cultural organisations and government agencies are better able make use of modern technologies to support all Australians, wherever they are," said ADA Chairperson Derek Whitehead. "The need for copyright reform to better facilitate online access to cultural, educational and government content has been made especially apparent during the COVID-19 crisis."

  "With the impacts of coronavirus continuing to disrupt the activities of libraries and archives across the country we are thankful the government has signaled its intention to make the copyright system more flexible and adaptable," said ALCC Chairperson Margaret Allen. 

Time to support creators

  Dean Ormston, CEO of Australia's music rights organisation APRA AMCOS, said the government's proposal failed "to recognise the significant impact COVID-19 has had on local songwriters, composers, music publishers and artists." 

  He added: “It always seems like music creators and performing artists are the ones continually asked to make concessions to those that use their content, even during the worst crisis to ever hit the music industry. The recent announcement by the government fails to recognise these concessions and pursues an argument that users of creators’ content have been denied access to that content over the last six months. We challenge that proposition." 

  He concluded: “We agree there are important steps to modernise copyright in Australia, but it really is past time for music creators to be better supported by any proposed reforms.”

US Department of Justice puts an end to the Paramount consent decrees

By Emmanuel Legrand

A ​US District Court ​judge has lifted the so-called Paramount consent decrees that were preventing since 1948 Hollywood studios to own movie theater chains​. In her 17-page decision, Judge Annalisa Torres acknowledged that market conditions have significantly changed since 1948.

  “As internet movie streaming services proliferate, film distributors have become less reliant on theatrical distribution,” wrote Torres. “For example, some independent distributors, relying on subscription, instead of box office revenues, currently release movies to theaters with either limited theatrical runs or on the same day as internet movie streaming services.”

  The Court concluded that the Government has “offered a reasonable and persuasive explanation” for why the termination of the Decrees would “serve the public interest in free and unfettered competition.”

  Following the judge's decision, the US Department of Justice's antitrust division issued the following statement: "This antitrust action concerns consent decrees known as the Paramount Decrees, which ended the motion picture horizontal distributor cartel of the 1930s and 40s and have regulated aspects of the movie industry for the last seventy years.The Antitrust Division of the United States Department of Justice moves to terminate the Decrees effective immediately, except for a two-year sunset period on the Decrees' provisions banning block booking and circuit dealing."

  Observers do not expect the termination of the Paramount decrees to change fundamentally the balance between movie studios and theater chains. However, WIRED suggested that the AMC chain could be a target for Amazon.

  > The US Department of Justice held a virtual two-day public workshop this summer on the ASCAP and BMI consent decrees, offering stakeholders the possibility have their say in the discussion. Views expressed during the hearing were not different from the dozens of submissions to the DoJ.

  In a nutshell, ASCAP and BMI are not asking for the decrees to be terminated but are rather suggesting an adaptation of the decrees to allow for more flexibility so that it would still offer music users stability but would give more latitude the PROs. ASCAP and BMI have set four conditions that would make the situation acceptable for all parties.

  Publishers via the NMPA are asking for the right to selectively withdraw rights from PROs, while songwriters are not too keen on it and would like to see more flexible decrees.

  Meanwhile, the National Association of Broadcasters (NAB) is against any change on the grounds that a system that is not broken and has worked well for 70 years does not need to be fixed. All in all, the hearing did not really offer new perspectives but clearly highlighted the divide between the various proposals. 

  At this stage, the DoJ has not given any indication as to when it plans to rule on the decrees.

Here's a series of quotes lifted from the workshop:
  Assistant Attorney General Makan Delrahim: "This week’s proceedings underscored that liberty in free markets is important to our country, and it’s important to the music industry. As the Antitrust Division considers the appropriate path forward, we will strive to find the one that best supports this critical industry.”
  LeAnn Rimes, singer/songwriter: "It doesn’t take a lawyer to see that these laws have not kept pace with how dramatically the music industry has changed since 1941." 
  Elizabeth Matthews, CEO, ASCAP: "Facebook, Apple, Amazon, Google they are smart, savvy, and all lawyered up and widely unregulated. I have yet to sit in a negotiation with one of these licensees and not feel that songwriters’ hands were tied behind their backs due to the consent decrees. It is crazy to think that in 2020, songwriters are more regulated than Facebook."
  Michael O’Neill, President/CEO, BMI: "Some organisations are using this moment to their advantage. Unregulated parties and licensees are using this review of our consent decree to try to increase regulations on BMI and ASCAP, not for the benefit of songwriters and composers, but we believe for their own benefit. Frankly, this is just amazing to me and completely contradictory to what the DoJ is trying to do overall with consent decrees."
  David Israelite, President/CEO, NMPA: "[Tech] companies are nothing like the fledgling broadcast industry of the 1940s, yet they benefit from the same protections."  
  Gordon Smith, President/CEO, NAB: "The ASCAP and BMI consent decrees have effectively prevented significant harm to licensees, songwriters and consumers, and ensured that radio and television broadcasters are able to fairly, efficiently and transparently license musical works to the benefit of their audiences. For these reasons, the Department of Justice should not terminate, sunset or change the decrees at this time."
  Pharrell Williams, singer/songwriter: "The people need songs to sing, and those are written by songwriters. Let’s protect them too."

Authors, publishers and booksellers want Congress to act against Amazon's 'anti-competitive' practices

By Emmanuel Legrand

In a joint letter to the chairman of the House Antitrust Subcommittee, Rep. David Cicilline (D-R.I.), Maria Pallante, president and CEO of the Association of American Publishers, Mary Rasenberger, executive director of the Authors Guild, and Allison Hill, CEO of the American Booksellers Association, have urged Congress to act swiftly to curve what they describe as Amazon's anti-competitive methods such as "engaging in systematic below-cost pricing of books to squash competition in the book selling industry as a whole.” 

  “Amazon no longer competes on a level playing field when it comes to book distribution, but, rather, owns and manipulates the playing field, leveraging practices from across its platform that appear to be well outside of fair and transparent competition,” reads the letter. The signatories "believe that Amazon acts anti-competitively in multiple ways, dictating the economic terms of its relationships with suppliers so that publishers, their authors, and the booksellers who sell on Amazon pay more each year for Amazon’s distribution and advertising services but receive less each year in return.” 

  They are asking Congress to consider four recommendations to limit the power of Amazon on the books business: 

  1 - Prohibit Amazon from leveraging data from the operation of its online platform to compete with and disadvantage the suppliers doing business there, as data "gives Amazon an insurmountable lead over any would-be distribution rivals."

  2 - Prohibit amazon from tying distribution services to the purchase of advertising services, as Amazon "brazenly ties them together so that suppliers must spend advertising dollars in order to make distribution services viable.”

  3 - Prohibit Amazon from imposing Most Favored Nations (MFNs) and other parity provisions, as Amazon "imposes MFNs and other parity provisions to eliminate the ability of rivals or new entrants to gain any meaningful competitive advantage relative to Amazon."

  4 - Prohibit Amazon from using loss-leader pricing to harm competition, as Amazon "no longer competes on a level playing field when it comes to book distribution, but, rather, owns and manipulates the playing field, leveraging practices from across its platform that appear to be well outside of fair and transparent competition."

 The signatories conclude the letter by asking government officials to "step in decisively to exercise appropriate governance of Amazon.”

Tencent signs deals with Universal Music and Kobalt

By Emmanuel Legrand

 

China's music and entertainment company Tencent Music Entertainment Group has renewed its licensing deal with Universal Music Group. Tencent, which owns 10% of UMG, will continue to distribute music from UMG's repertoire on its streamimg platforms QQ Music, Kugou Music and Kuwo Music. 

  UMG's content will also be licensed for use on TME's online Karaoke platform, WeSing, along with other live streaming and expanded digital services. The difference from the previous agreement is that the licenses are exclusive to Tencent and do not grant Tencent the right to sub-license UMG's repertoire in China. 

  The companies also announced a new joint venture music label, which will be dedicated "to reaching audiences across China through cultivating, developing, producing, and showcasing highly talented domestic artists and their premium original music." 

Strengthen the licensing ecosystem

  TME said it is "working closely together with its partners on copyright protection to empower artists, musicians and performers to create, distribute and monetise their music, and ultimately reach an enormous base of Chinese music lovers." UMG and TME have pledged to "reinforce a sustainable music licensing ecosystem in order to help support the industry's evolution in China." 

  "We are pleased to extend and evolve our licensing agreement with TME for the Chinese market," said Adam Granite, UMG's London-based, EVP of Market Development. "We look forward to working together with TME to help create compelling new experiences for fans across all TME platforms, and to expand on the opportunities available to UMG's global and domestic family of artists in China."

  TME's Chief Executive Officer Cussion Pang added: "Through this partnership expansion, we look forward to cultivating the growth of the dynamic and expanding music entertainment industry in China, taking our shared love and pursuit of new music, to new levels that will benefit all."

  Tencent Music has also  signed an agreement with independent music company Kobalt Music Group to license and distribute the Kobalt publishing and AWAL recording catalogues on TME's streaming platforms (QQ Music, Kugou Music, Kuwo Music and WeSing). TME said it will "help Kobalt to simultaneously expand to concerts, music festivals, online live streaming and more fields, in order to effectively meet the music needs of fans all over the world." In the future, the two parties said they would "join hands in content, to deepen the development of music IP and explore potential new artists." 

A new deal with NetEase

  In addition to Tencent, UMG has also signed a new multi-year licensing agreement with Chinese interactive music streaming service provider NetEase Cloud Music. Under the agreement, NetEase Cloud Music will directly distribute UMG's domestic and international catalogue on its streaming platform and associated digital services in China. NetEase Cloud Music and UMG will also "work together to create innovative campaigns and initiatives that will allow music fans in China to engage with both domestic artists from China and UMG's international talent from around the world." 

  "The partnership further strengthens NetEase Cloud Music's position as a go-to platform for high-quality international music and marks a great step forward for China's music industry as a whole," said NetEase CEO William Ding.

The MLC enrolls Vistex for its Data Quality Initiative

By Emmanuel Legrand

The Mechanical Licensing Collective (The MLC) has launched the Data Quality Initiative (DQI), which will provide a streamlined way for music publishers, administrators and ex-US collective management organizations (CMOs) to compare their musical works’ data with The MLC’s data. 

To achieve a better result, The MLC has partnered with tech solutions company Vistex to enhance Vistex's Music Maestro software package to enable Music Maestro users to participate in the DQI. Participants in the DQI will receive reports "highlighting the discrepancies between the two sets of data so they can easily identify and correct those discrepancies," according to The MLC. 

“Vistex’s Music Maestro product is used by copyright owners all over the world,” noted The MLC’s CIO Richard Thompson. “We wanted to ensure that Vistex’s clients were able to participate in the Data Quality Initiative so that they could see where their works were not being correctly registered with The MLC and take the necessary corrective action.” The MLC will start delivering mechanical rights licenses to DSPs from Jan 1, 2021, and administer these rights on behalf of songwriters and music publishers.

In addition, The MLC has sent a note to all Harry Fox Agency client inviting them to share their account information with the MLC as an opt-in proposal. "In order to receive payment of royalties from The MLC starting in 2021, you will need to sign up with The MLC and set-up a new user account," wrote The MLC. "Once registered, you will need to provide The MLC with your contact, payment, and tax information. With your permission, HFA can share the existing contact, payment, and tax information you have on file with us with The MLC. The MLC will then transfer such information into your new MLC account, saving you the time and trouble of having to resubmit that information in The MLC’s user portal."

RIAA designates SoudExchange as the ISRC authoritative source in the USA

By Emmanuel Legrand

US labels' trade body the Recording Industry Association of America (RIAA) has designated neighbouring rights society SoundExchange as the authoritative source of International Standard Recording Code (ISRC) data in the United States. ISRCs are use around the world as the leading identifier for sound recordings and music videos.

  RIAA, which represents the three major companies and some independent companies, said it made the designation "to ensure a trusted and authoritative source of ISRC data for the US marketplace, particularly as the implementation of the Music Modernisation Act and the transition to streaming make accurate identification of sound recordings even more critical."

  RIAA added that the designation built on a prior agreement between SoundExchange global trade industry body the IFPI "to provide a publicly accessible ISRC lookup service." IFPI's Chief Technology Officer Richard Gooch said appointing SoundExchange as the authoritative source of ISRCs will "will bring greater certainty within the US."

Efficiency and transparency

  “Due to SoundExchange’s extensive experience and widely respected reputation for efficiency and transparency, RIAA considers the ISRC codes and associated sound recording data held by SoundExchange as authoritative for commercial use in the US marketplace," explained David Hughes, head of technology and standards at RIAA. "Moving forward, everyone should utilise this data."

  For Paul Jessop, Executive Director of the US National ISRC Agency, designating SoundExchange as the authoritative source will help improve the accuracy of ISRCs in the US. "We hope it will lead to more efficient and cost-effective processes for data management and transmission,” said Jessop.

  “Accurate and accessible data is vital to a healthy music industry, and serving as the authoritative source of ISRC data advances SoundExchange’s mission to ensure that music creators are paid accurately and efficiently,” said SoundExchange President & CEO Michael Huppe.