Monday, April 26, 2021

PPL CEO Peter Leathem: 'We are very positive about the opportunities for growth'

By Emmanuel Legrand

British neighbouring rights society PPL had to face in 2020 the impact of the Covid pandemic on some of its main sources of revenues, but still managed to hand out £260 million to members in 2020, a slightly lower amount than in previous year (£271.8m).

  PPL CEO Peter Leathem takes pride in the distribution of £260m to members in 2020, with more than 130,000 recording rights holders and performers receiving at least one payment during the year. At the end of March 2021, PPL distributed £61.3m (€72.17m) to more than 25,000 performers and recording rights holders for the first quarterly payment of the year.

  The society also made changes to its distribution agenda to pump more money to its members and earlier than scheduled "to help money reach our members at a critical time when other income sources had reduced or ceased," says Leathem (pictured, below).

  Leathem paints a nuanced picture when it comes to the impact of Covid on PPL's streams of revenues, with areas performing well and others less well. "Due to lockdown and the forced closure of bars, nightclubs, shops, offices and other premises where recorded music is played in public, there was a significant impact on our public performance licensing revenue," admits Leathem.

Signs of recovery

  He adds that there was "less of an impact on broadcast revenues thanks to the long-term licenses PPL has in place, with TV income in particular proving resilient as linear TV audiences held up well reflecting the UK population spending more time at home."

  However, revenues collected for commercial radio, which is based on a percentage of advertising revenues, went down in the second and third quarters of 2002, "but then showed signs of recovery in the latter part of the year."

  International collections "remained strong" in 2020, as much of the revenue we collected in 2020 related to collections made in other territories in 2019 or earlier, notes Leathem. "Globally the situation is variable and is dependent on the nature of rights available to our members and the extent of lockdown in each country," he explains.

Cautious optimism

  Looking at the near future, Leathem expresses some cautious optimism. "Once Covid-19 restrictions ease in the UK, we expect our revenues to begin to recover and to exceed our 2020 collections, without yet returning to pre-2020 levels," he reveals. "Conversely, we expect international collections to decline in 2021 to some extent due to the impact that Covid-19 will have had on collections around the world in 2020."

  Leathem says the long-term key parameters of the neighbouring rights market seem to be pointing at continuous growth, with a Covid hiccup. He notes that between 2009 and 2019 PPL’s revenue has "more than doubled," from £129.6m to £271.8m. "For the first time in many years the Covid-19 pandemic has meant that PPL’s collections will have declined in 2020, compared to 2019, and will be in a position to formally report those numbers shortly," he says.

  "We continue to be impacted by the pandemic in 2021 and, so again, this year our collections will be adversely impacted while bars, nightclubs, shops, offices, etc have been closed for many months."

Growth of international revenues

  However, for Leathem, the pandemic will have "short term impact" on PPL and he remains "very positive about the opportunities for revenue growth."

  PPL will continue to increase its revenues from international collections, says Leathem. In 2019 international collections were £86.7m. "We collect royalties from around the world thanks to more than 100 agreements with CMOs across Africa, Asia, Australia, Europe, and North and South America

  These agreements allow our members to benefit from not just established music markets but also growing markets in Africa, Asia and Latin America, which are predicted to contribute significantly to the future revenue of the music industry," says Leathem.

A competitive service

  The market for international collections has become extremely competitive, with a wide range of players, both at major companies and from the independent sector fighting for a slice of the business. The most recent significant change in the field has been the creation of peermusic Neighbouring Rights, through the acquisition of three NR collection companies.

  Leathem says PPL has been setting the pace when it comes to international collections. "As a leader in worldwide royalty payments, PPL’s highly competitive international service has helped drive down costs and improve efficiency for the whole industry," he claims.

  Leathem say PPL international service, which manage the rights of the society's internationally mandated performers and recording rights holders, is packed with a team of neighbouring rights experts who use their "in-depth knowledge of the global neighbouring rights landscape to actively drive revenues from the market, rather than act as a passive collector."

Benefits for PPL's members

  Artists and labels using PPL's Member Services to maximise their revenues includes ABBA’s Björn Ulvaeus, Chrysalis Records, Emily Sandé (pictured, below), George Ezra, Jade Bird, Rita Ora, and Sigala, among others.

  "Our scale of operations also allows us to achieve very competitive currency exchange rates due to the volume of currency being converted, all of which benefit our mandating members, as well as being able to minimise the impact of withholding tax," says Leathem, who adds that PPL will continue to invest "in our people, our technology, our data, our relationships with members and their advisors and, our international CMO relationships. All of which we believe will continue to maintain us as the world’s leading international neighbouring rights collector."

  The global sector keeps growing with both more countries adopting neighbouring rights legislation (except of course the US, but more on that later) and the creation of new societies to collect royalties for the use of recordings on behalf of performers and labels. 

Over 100 reciprocal agreements

  "We are working with these CMOs to help ensure local broadcast tariffs and public performance collections deliver appropriate levels of revenue," says Leathem, who points out that PPL is the NR society in the world that has the highest number of reciprocal deals with sister societies (more than 100 at the last count).

  PPL has also started to collect for members of other CMOs for the first time. In January, it announced a partnership with JAMMS, the Jamaican recording rights holder CMO. Under the agreement, PPL will collect international revenues for JAMMS’ members via its network of more than 100 international agreements.

  It also provides support to CMOs through its Business Services, which Leathem says is proving "very valuable, providing these CMOs the opportunity to improve their operations without significant investment in infrastructure." So far, seven CMOs in Estonia, Ireland, Lithuania, Malaysia, Nigeria, Portugal and Switzerland are already benefiting from PPL’s support, using its technology infrastructure, data and expertise. This enables them "to distribute money to their members more efficiently," he says.

More efficient collections

  Leathem is also a proponent of collaboration between music licensing companies, supported by investment in technology, which he believes "has played a key part in driving this growth." The key benefit of these investments is that they contribute to "a continued focus on improving the quality and flow of data to feed these systems," as they have played "a further critical role in ensuring that this income flows more quickly and more accurately to recording rights holders."

  Leathem references the IFPI and WIN-owned RDx service as a fruitful collaboration that PPL is "proud" to have played a part in helping build and operate. RDx, launched at the start of 2020, is the industry data portal for the supply and exchange of performance rights repertoire data between record companies and licensing companies. "Technology like RDx," says Leathem, "alongside an increasingly connected network of music licensing companies, is helping to make performance rights royalty collections and distributions more efficient, accurate and timely."

  Adds Leathem: "Beyond our own operations, we work with the IFPI to create a best practice approach to sound recording rights management, codifying good practice and common standards for the collection and distribution of revenues from the broadcast and public performance of recordings. The CRM Directive in Europe has also helped establish more efficient processes by stating that CMOs must distribute collected monies within nine months of the end of the financial year they were collected. We now see faster distributions thanks to this."

A long way to go

  Another partnership PPL is party to is PPL PRS Ltd, the public performance licensing joint venture between PPL and PRS for Music, set up two years ago. The idea is to provide a one stop shop for music licensees for both composition and recordings. "While we had seen significant revenue growth over those first two years we still believe that we have a long way to go in growing public performance licensing revenue," says Leathem.

  He adds, "The MusicLicence offered by PPL PRS Ltd has made it easier for businesses to get their music licensing completed in one transaction with one company, rather than the two that it used to be."

  Internationally, PPL has been paying attention to the recent European Court of Justice ruling that determined that neighbouring rights society could not discriminate performers based on their country of origin. This ruling has created havoc in Europe as most societies were not paying US performers on the grounds that the United States had not ratified the Convention of Rome which introduced the rights for public performance for recordings.

Increasing the value of recordings

  Leathem says the ruling is unlikely to have an impact on PPL's collections in the UK, but could affect distribution if the British government decides to introduce equitable remuneration for rights holders from the US. Paying US performers and labels could also be forced upon the UK as the country is negotiating a new trade agreement with the US. Canada had to start paying equitable remuneration to US rights holders after the recent agreement between Canada, the US and Mexico. At the moment, the British government has not made public its intentions on this issue.

  In the rest of Europe, Governments are currently assessing the impact of the decision. "The impact will vary by country, as in some it will impact collections and distributions, while in others it will only impact distributions with there being no increase in collections," says Leathem, who also sees an upside in the possibility to collect more on behalf of US performers if European societies start paying royalties to US rights holders.

  "More broadly," says Leathem, "PPL aims to increase the value of recordings, for both performers and recording rights holders. This means collecting as much as we can for all who invest in creating recordings. The discussion around neighbouring rights income for US performers highlights the lack of terrestrial broadcast rights for sound recordings in the United States – as well as there being no public performance rights for sound recordings. If such a right were introduced, neighbouring rights revenue for performers and recording rights holders would increase significantly."

Canada's government starts a public consultation on the copyright framework for online intermediaries

By Emmanuel Legrand

The Government of Canada has launched a public consultation on Canada's copyright framework for online intermediaries. The consultation is meant to determine if the framework "reflects the evolving digital world" and that the Copyright Act "remains consistent with modern realities and that revenues of web giants are shared fairly with Canadian creators."

  An additional consultation on a modern framework for artificial intelligence and the Internet of Things will be launched by summer 2021. These consultations are part of the government's "phased approach to the review of the Copyright Act" that are driven in part by Canada's commitment under the Canada-United States-Mexico Agreement. As part of the agreement, Canada had to make changes to its copyright law to extend the general term of copyright protection from 50 to 70 years from the death of the author.

  However, the consultation process, which follows the one on the term of copyright and the current ongoing consultation on the future of the Broadcasting Act, appears for some stakeholders as "showing that something is happening to avoid doing something substantial," in the words of a Toronto-based representative of copyright owners. The implementation in Canadian law of the term of extension will not happen until the end of 2022.

Achieve underlying objectives

  Many observers wonder if the political calendar will allow for decisions to be made. "You have to remember that we have a minority government [in Canada] at the moment, so not much is going to happen," says a source. "Basically we are stuck until a new government is appointed and then we will have to start from scratch."

  The consultation on online intermediaries will be under the aegis of Steven Guilbeault, Minister of Canadian Heritage, and François-Philippe Champagne, Minister of Innovation, Science and Industry, who appear to have conflicting agendas.

  "As the distribution and use of copyright-protected content online have expanded and the services of online intermediaries have grown and diversified, it is important to ensure that Canada's copyright framework for online intermediaries still achieves its underlying objectives," said the government in a statement. "The Copyright Act must adapt to ensure that the use of copyright-protected content online is protected and individual rights and freedoms in an open Internet are safeguarded, while facilitating an environment where the digital market can thrive."

A healthier online environment

  The Government will be publishing a consultation paper that will outline potential options for stakeholder and public consideration. Participants have until May 31, 2021, to be involved. The responses received will "help inform the Government's policy development process as the Government considers how the Copyright Act needs to evolve and how the revenues of web giants can be shared more fairly with Canadian creators."

  Said Guilbeault (pictured, below): "Our Government is committed to meaningful platform governance, including the modernisation of the Broadcasting Act, a new framework for online harms, news media remuneration and copyright reform. These efforts will contribute to a healthier online environment for Canadians, creators and media. In the area of copyright, we need a more up-to-date framework to ensure more accountability and better remuneration and transparency."



  Champagne (pictured, below) commented: "For Canada to have an innovative and flourishing digital economy, we must protect copyright online. With this consultation, we aim to strike the balance between facilitating broad, lawful access to copyright-protected content, and safeguarding individual rights and freedoms in an open Internet."

A balanced copyright framework

  Added Champagne: "We have launched this process to hear the diverse perspectives of stakeholders, from online intermediaries to those holding copyrights, as well as any Canadian who wants to share input, to make sure Canada maintains a balanced copyright framework."


  Margaret McGuffin, CEO of Music Publishers Canada, said the consultation is a positive development, which will allow to discuss such issues as safe harbours. "We are happy that the government has decided to look into these issues and we are looking forward to participate," she said.

Restore fairness to artists

  Patrick Rogers (pictured, below), CEO of Music Canada, the organisation representing major record companies, welcomed the launch of the public consultation on Canada’s copyright framework for online intermediaries. “Simply put," said Rogers, "artists should be paid when their music is played. That’s equally true whether they’re played on radio, in film or TV programs, or online."


  He continued: "For too long, Canada’s Copyright Act has allowed some unlicensed online services to avoid paying creators – and the impact of these exemptions have never been more clear than they are in 2021. The pandemic demonstrates how important copyright protection is for artists. We look forward to working with the Government through this consultation to help modernise Canada’s Copyright Act and restore fairness to artists and the businesses who support them.”

Reservoir prepares for a NASDAQ listing via a SPAC valuing the company at $788m

By Emmanuel Legrand

New York-based independent music company Reservoir is preparing to be listed on the NASDAQ stock exchange through a reverse merger with a special purpose acquisition company (SPAC).

  According to a regulatory document, Reservoir Holdings is to merge with NASDAQ-listed Roth CH Acquisition Co. II to create a company valued at $788 million. Roth CH Acquisition Co. II is a NASDAQ-traded SPAC with $115m in trust. 

  Existing Reservoir shareholders, the Khosrowshahi family, will be rolling 100% of their equity as part of the transaction.

An important step forward

  The transaction is expected to provide approximately $246m in gross proceeds to Reservoir. The new merged company will be renamed Reservoir Media Inc. in the third quarter of 2021, when the transaction is completed.

  “From day one, our mission has always been to be the best independent music company in the industry. Today we have taken an important step forward in Reservoir’s evolution to fully realize that vision through our partnership with Roth CH II," said Reservoir founder and CEO Golnar Khosrowshahi (pictured, below), who will continue to lead the combined company, alongside current executive team, including President and COO Rell Lefargue and CFO Jim Heindlmeyer.

  Khosrowshahi added: "Our dedication to our songwriters and artists and their music is at the heart of everything that we do, and this path to growth supports our promise to service our clients, enhance value, and build a quality catalogue."

An outstanding collection of hit songs

  Since its creation in 2007, Reservoir has deployed over $400m in catalogue acquisitions, and has also spent an additional $100m on new signings. The he company represents over 130,000 copyrights and 26,000 master recordings.

  Partners of Roth Capital and Craig-Hallum, sponsors of Roth CH II, said Reservoir has built "an outstanding collection of hit songs and soundtracks in both its music publishing and masters businesses, and has a unique and differentiated value enhancement model that drives highly attractive returns."

A diversified portfolio

  They added: "We are excited about Reservoir’s strong cash flow generating capabilities in a growing industry with significant tailwinds. The portfolio is fully diversified in all genres of music with some of the most iconic hits of the past hundred years. We look forward to Reservoir pursuing future organic growth and acquisitions in this exciting sector under consolidation."

  "This deal will provide Reservoir with a lower cost of capital in the fast-paced, high-stakes music asset trading world, allowing it to follow the Hipgnosis business strategy of finding music assets for acquisition and then tapping the public markets to fund the deals," analysed Billboard's EdChristman.

Napster Group prepares for the launch of a new platform combining Napster and MelodyVR

By Emmanuel Legrand

Napster Group, the London-based company that was set up in December 2020 following the completion of the merger of virtual reality specialist MelodyVR and music streaming platform Napster, is preparing for the launch of a new Napster-branded platform combining the two businesses, which for the moment continue to exist as stand-alone operations.

  No date has been announced by the company for the launch of the new platform, other than "later this year," according to a recent "operational update" filed with the London Stock Exchange. The new service will be available across multiple connected devices such as smartphone, tablet, smart TV, desktop, console, native VR, home audio and in-car and will offer streaming, video content and immersive VR experiences. 

  At launch, MelodyVR customers will be "encouraged" to migrate to the updated Napster platform. "Using proven customer acquisition and marketing strategies to build our subscriber base, we have clear ambitions to significantly increase subscriber and user numbers, driving revenues and in turn accelerate our progress  towards becoming cash flow positive," said the company.

Significant savings

  Napster Group also revealed that it now counts more than 5 million users worldwide to its subscription-based model, including subscribers from PaaS services powered by Napster. Proforma revenues from the Napster streaming service and Melody VR service combined reached $96 million in 2020 and during January 2021, the company generated monthly revenues of about $8m.

  "Since acquisition, the Company has now largely completed the integration of the MelodyVR and Napster businesses, which has led to greater efficiencies and significant opex savings across the group," said the group. "Our in-house team of leading strategists and engineers is currently developing a new music platform which is intended to be launched as an update to the existing Napster offering later this year."

  It continued: "The new platform will not just combine Napster's music streaming capability with Melody VR's capabilities in streaming live music, but it will also offer access to a library of content including documentaries, short form episodic content and music feature films, as well as exclusive recorded performances, own brand physical events and digitally ticketed live events."

A transformative acquisition

  Anthony Matchett, Napster Group CEO, commented: "We recognise that this has been a difficult period for shareholders, but we are incredibly pleased with our recent developments and believe that the acquisition of the Napster brand is transformative for our business. We intend to relaunch the Napster product later this year and to-date the reception to our plans has been overwhelmingly positive. Our growth plans are ambitious, but operationally realistic, and we are excited about the growth potential and value that we can create for the music industry and for our shareholders in the coming years."

Triller announces new leadership as it expands with Amplify.ai and FITE

By Emmanuel Legrand

TrillerNet, the parent company of short video app Triller, has acquired AI-Powered "customer engagement platform" Amplify.ai, and event streaming platform FITE, for undisclosed amounts.

  As a result of the acquisitions, Amplify.ai’s co-founder and CEO Mahi de Silva has been appointed CEO of Triller, replacing current CEO Mike Lu, who will become President of TrillerNet. De Silva has also been appointed non-executive Chairman of TrillerNet’s board, while TrillerNet co-owner Bobby Sarnevesht will remain executive Chairman.

  In his new role, Lu will “expand his focus on global investor relations” ahead of the planned IPO of the company, via a SPAC, a Special Purpose Acquisition Company.

Innovative ways

  Said de Silva: “Triller has empowered global influencers with unique capabilities to reach and engage millions of users around the world, while delivering innovative ways for partner brands to join this vibrant and flourishing ecosystem. The best is yet to come."

  Sarnevesht commented: “[We] could not ask for a better CEO than Mahi de Silva. He is one of the brightest minds in business, and his vision and leadership will be invaluable assets to Triller during its explosive growth. Having built and successfully exiting multiple unicorns in tech, social media, ad-tech and eCommerce, there couldn’t be a better person for the role.”

  Triller still has to license Universal Music Group's catalogue, but has made progress recently in sealing licensing deals with the likes of the National Music Publishers' Association in the US a month ago, or with Merlin, the licensing agency for independent music labels.

Qobuz expands is six new countries

By Emmanuel Legrand

French hi-res music streaming and downloads platform Qobuz is expanding in six new countries: Australia, New Zealand, Sweden, Norway, Denmark, and Finland.

  Qobuz was available previously in 12 countries, including France, the United Kingdom, Ireland, Germany, Austria, Spain, Italy, Belgium, Switzerland, Luxembourg, the Netherlands, and the United States.

  “Our ambition is to make Qobuz the global benchmark for high-quality music streaming and download platforms," said Georges Fornay, Deputy CEO of Qobuz. "Today we are pleased to bring our offering to markets where the expectation for a premium service such as ours exists and is growing."

International expansion

  He added: Far from a simple streaming service that gives music to consume, Qobuz aims to bring music back to its true value by offering its subscribers the best of music. In mature markets such as Australia, New Zealand, and Northern Europe, these new locations are highly strategic for Qobuz in the context of our international expansion.

  Qobuz’s music library currently contains over 70 million tracks.

Musical Chairs -- Week 16 2021

CANADA

Margaret McGuffin has been promoted to Chief Executive Officer of Music Publishers Canada. She has been Executive Director of the Toronto-based music publishers' association since May 2016.

EUROPE

Maria Martin-Prat has been appointed as a new Deputy Director-General at the European Commission's DG Trade. He brief includes Asia (I), Services and Digital Trade, Investment and Intellectual Property. Prior to that, she was Head of the Copyright Unit in the European Commission Communications, Networks, Content and Technology Directorate General. Her responsibilities covered the development and enforcement of the EU rules in the area of copyright as well as international negotiations at the World Intellectual Property Organisation.

UNITED KINGDOM

Brooke Salisbury has been promoted from Marketing Director to General Manager of ADA UK, the independent distribution and services division of Warner Music Group. Based in London, she reports to Howard Corner, Managing Director, ADA UK. 

British music publisher and composer agency Manners McDade has promoted Sarah Winn as Chief Financial Officer. She was Finance Manager since 2015, and reports to the company's co-founder Catherine Manners.

The Napster Group has appointed Emmy Lovell as Chief Strategy Officer. Based in London, she reports to CEO Anthony Matchett. Her role is to drive the strategic direction and growth of the company. The Napster Group was created after MelodyVR acquired in 2020 streaming platform Napster. Lovell was previously EVP of Warner Music Group's WEA Europe.

CHINA

Zhu “Ross” Liang has been appointed as the new CEO ofTencent Music Entertainment Group, replacing Cussion Kar Shun Pang who becomes Executive Chairman of the company’s board of directors. Liang will look after the day-to-day operations of Tencents's various platforms: QQ MusicKugou MusicKuwo Music, karaoke service WeSing and long-form audio business. TME announced that current Chairman of the board, Tong Tao Sang, will resign from his position as well as Chairman of the compensation committee. James Gordon Mitchell has been appointed chairman of the board’s compensation committee.

SOUTH AFRICA

Dharamraj Sewraj, who worked for almost three decades at Universal Music South Africa, has died at the age of 58 from diabetes-related complications. He relentless fought against music piracy, in particular piracy affecting Indian music.

NIGERIA

The Musical Copyright Society Nigeria (MCSN) has appointed entrepreneur and investor Matthew Ohio as a board director, alongside veteran songwriters and artists SunnyNeji and Asha Fapohunda.

Music Deals -- Week 16 2021

US-based TV group Univision has acquired the content and media assets of Mexico's Grupo Televisa in a transaction valued at $4.8 billion, with Univision paying Televisa $3bn in cash and $1.45bn in equity. Televisa will retain an equity stake of approximately 45% in the combined Televisa-Univision operations. Univision CEO Wade Davis will be in charge of the day-to-day operations of the new company, with Grupo Televisa’s co-CEO Alfonsode Angoitia serving as Executive Chairman of the board of directors. “This transformative combination brings together the leading network serving U. Spanish-language audiences with the leading media platform in Mexico powered by the most powerful Spanish-language content engine in the world,” said Davis. 

British independent company Cooking Vinyl has set up a new department "to optimise and grow its catalogue offering to artists and labels." The new division will try to maximise the long-term sales of artists currently signed to the company – including Frank BlackBilly Bragg and The Orb– as well as roll out an "aggressive acquisition policy" to bolster its roster. The new department will be headed up by Steve Bunyan, who worked in the past at Union Square Music and BMG. “The appointment of someone of the calibre and standing of Steve Bunyan allows us to enhance our service to artists and to look to acquire new catalogues of recordings,” said Cooking Vinyl Chairman Martin Goldschmidt. "Our track record, size, flexibility and financial backing means that we offer an attractive bespoke alternative to the larger companies currently hoovering up rights.”

Universal Music Group's Virgin Music Label & Artist Services has entered into a strategic partnership with Metales Preciosos, a new record label launched by former Warner Music Iberia President José Carlos “Charlie” Sanchez.

Warner Music Asia has launched Whet Records, a new Pan-Asian dance label focused on signing both emerging talent and established DJs and producers. Zoe Yang has been appointed head of Whet Records’ China division, reporting to Jonathan Serbin, CEO of Warner Music Greater China. The label’s first signing is producer and DJ Lizzy Wang

Joel Broms Brosjo, the Swedish executive who co-founded Spotify-backed Soundtrack Your Brand, has launched Doors, a new platform allowing artists to curate and perform online concerts, communicate with fans and manage ticket sales and royalties. “We provide a one-stop shop for engagement, ticketing, broadcasting, reporting and payment,” Broms Brosjo told Bloomberg, adding that 70% of the platforms' revenue will go to the performers after compensating performance rights and collective management organisations. The service went live on April 19.

Sony-owned London-based anime distributor Manga Entertainment has been rebranded as Funimation in the UK and Ireland. Fumination will also incorporate anime streaming service Crunchyroll, which was acquired by Sony earlier this year. Manga – which produced, licensed and distributed anime products since 1991 – was acquired by Sony in 2019. Fumination's catalogue includes more than 700 anime series and 13,000 hours of content available in 47 countries. “By unifying our brands, it will be apparent to fans, creators and the entire ecosystem that it is a winning formula to deliver more content, more experiences and more community in service to anime. By fully leveraging the global Funimation brand, it’s a win for fans,” said Tim Anderson, SVP of international for Funimation Global Group.

Canadian independent music company CCS Rights Management (CCS) is expanding its focus with the launch of a new neighbouring rights division, which will add to the music publishing, rights administration, and creative services businesses of the company. Lee-Anne Wielonda has been appointed CCS Manager of Neighbouring Rights. She worked previously for Canadian rights management organization ACTRA RACS. CCS has direct affiliations with neighbouring rights management organisations in 30 territories. CCS Neighbouring Rights has sealed a series of worldwide deals to manage the performing rights of sound recordings of artist TateMcRae, children’s entertainment company Spin Master, and Montreal-based record label Higher Reign Music Group. "Launching the new neighbouring rights division is a natural step in fulfilling the company’s mandate of providing a full suite of services to artists, writers and rights holders,” said Jodie Ferneyhough, Founder and President of CCS Rights Management.

Royalty-free music licensing platform Soundstripe has teamed with Medal, the platform for recording and viewing gaming clips and videos on desktop and mobile, to provide its creators with fully licensed music for their video game recordings. “We’re excited to partner with Medal to solve a growing frustration of creators who face ‘takedown’ notices from popular video sharing platforms due to copyright issues,” said Travis Terrell, Co-Founder and Co-CEO of Soundstripe. “With Soundstripe music integrated into the Medal platform, users on Medal can record their game clips with high-quality music without worrying their videos will be rejected or removed from YouTubeTwitch, or other platforms.”

Monday, April 12, 2021

Curtis LeGeyt to replace NAB CEO Gordon Smith in 2022 but don't expect policy changes on performance rights for recordings


 

By Emmanuel Legrand

Former Oregon Senator Gordon Smith, who has served as President and CEO of the National Association of Broadcasters (NAB) since 2009, will step down from the organisation at the end of 2021, to transition to a 36-month advisory and advocacy role. His successor will be NAB’s Chief Operating Officer Curtis LeGeyt, who will take on his new position on January 1, 2022.

  LeGeyt (pictured, below) has been with the NAB for nearly a decade, serving for the first five years as NAB’s EVP of Government Relations before being appointed COO. He was involved in many of the recent legislation and regulation proposals involving radio broadcasters, including the passing of the Music Modernisation Act, which did not include performance rights for sound recordings.



  LeGeyt is not expected to change NAB's policy with regards to performance rights and continue to fight against any attempts to change the consent decrees ruling rights societies ASCAP and BMI.

Competition from digital services

  Analysing the challenges ahead for the NAB, David Oxenford from law firm Wilkinson Barker Knauer wrote that "many issues remain for broadcasters – some of them ones that have never gone away completely." He listed the sound recording performance royalty for over-the-air broadcasting as an on-going issue, as well as "other music licensing issues calling for changes to the way that songwriters and composers are compensated, generally calling for higher payments or different compensation systems."

  Overall, for Oxenford, "competition from digital services may well be the biggest current issue facing broadcasters." 

  Mitch Glazier, the Chairman and CEO of the Recording Industry Association of America (RIAA), welcomed the elevation of LeGeyt and praised Smith for his tenure at the NAB. "We do have a very good personal relationship with both Gordon Smith and Curtis LeGeyt and, personally, both of them are absolutely wonderful people," Glazier tells Legrand Network. "If you are going to fight on policy, then to be able to have on the other side somebody that you genuinely like, and with whom you can communicate, is definitely an asset."

Allies of copyright issues

  Glazier goes on: "I only have wonderful things to say about Gordon and Curtis. To their credit, both are forthright, and honest and good folks. To that extent I am very happy that Curtis is going to be following Gordon, and sad to see Gordon leave because he is such a gem."

  Glazier says that except on two major issues, the interests of NAB and RIAA are usually aligned. "When we're talking about copyright generally, and working to preserve strong copyright laws, NAB is usually an ally and a supporter, because most of the time the copyright community is together to preserve copyright and that includes the copyrights involved in programming," Glazier says. "Generally, on copyright, we are trying to find how we can work on together, especially with the TV side."

  He adds: "Most of the time, generically, we are fighting on the same side. But when they are the users of music, whether it is keeping rates for songwriters very low or ensuring that they maintain their exemption so that they don't have to pay artists and record companies, then we are on the other side."

A grave injustice

  Glazier elaborates: "On a policy level we still believe that their exemption from the broadcast performance right is a grave injustice so we are going to continue to fight to try to achieve that. And we are going to continue to stand by songwriters to make sure that they get their a fair share from the rates."

  Glazier believes that legislation on performance rights on recordings "is going to be introduced again [in Congress], and broadcasters will once again introduce their resolution, to oppose it. Honestly, this issue is an issue of time because as we move forward and access to FM programmes over an antenna declines, and over a mart phone increases, radio will be paying for music under the current law."

  He continues: "I think that the focus of the issue is going to change. It's going to shift to those who have a national digital presence, like the big guys, and ensuring that there is competition as we move forward. That's the challenge for the NAB, besides the tension that already exists between the TV side and the radio side, they also have to recognise the different situations that the big broadcasters are in versus the real local broadcasters, and the different needs that they are going to have going forward. So this issue is going to come to a head because of the marketplace. It is a pretty strange law if you have to pay somebody else's copyright depending on which technology you are using to access the same programmes. They can't help the fact that people aren't going to use antennas any more. Time is on our side, I would say."

Give the lion's roar for broadcasters

  The NAB represents some 10,000 commercial radio stations in the US and is known to be one of the most influential lobbying group in Washington, DC.

  “It has been my great honor to give the lion’s roar for broadcasters – those who run into the storm, those who stand firm in chaos to hear the voice of the people, those who hold to account the powerful – and to stand with those of the fourth estate who have the hearts of public servants," said Smith (pictured, below).



  “I am honored and humbled to be named the next leader of this great organization,” said LeGeyt. “To represent the broadcast industry and the local stations that bind our communities together in a moment of such tremendous change across the media landscape is a privilege. Our stations’ role in communities across this country has never been more important, and I look forward to working every day to ensure their ability to grow and thrive.”

India could become a Top 5 music market in a decade according to IMI report


 

By Emmanuel Legrand

Just by the size of its population, India should be one of the world's largest music largest market. The Netherlands, which is less populated than the city of Mumbai, is the tenth biggest music market in the world, while India trails behind at 15.

  Blaise Fernandes, President & CEO the local music industry organisation, the Indian Music Industry (IMI), believes that India has the potential to become a Top 5 market in the world within a decade, providing the sector goes through some structural changes.

  The hindrances to the growth of the music market in India have been highlighted in the recent report titled 'A Case For Free Market Economics In the Indian Recorded Music Industry', a research paper by the IMI that tries to understand why there such is a massive discrepancy between the value of the music industry in India and that of the film industry.

 Bring in free markets economics

  Most of the music consumed in India comes from film soundtracks, so it would be fair to assume that one industry would feed the other, but it hasn't been the case. Let's call it the Indian paradox.

  To understand the reason for this situation, the report examines why there is a wide variation in the growth rates of the recorded music industry and the film industry that have up to 70% in common," according to Fernandes, who penned the research paper.

  "The paper also aims to determine the reasons for the phenomenal growth of the film industry and contrast it with the stunted growth of the recorded music industry. Further, this paper hopes to establish the need for bringing in free market economics to the recorded music industry to enable the recorded music industry to reach its full potential."

Unecessary regulatory interventions

  Fernandes notes that 70% of recorded music in India is film-based, while the other 30% is largely classical, devotional, folk and independent. For Fernandes, "the growth of the film industry should have led to the growth of the recorded music industry," but if the film industry was worth ₹ 19,100 cr. in 2019 ($2.55bn), the music industry was valued at a mere ₹ 1,500 cr ($200.7m).



  For Fernandes, the revenue gap between the recorded music and film industry is mostly due to "archaic laws compounded by unwarranted and unnecessary regulatory interventions, especially in the rapidly developing digital marketplace as well as exemptions from public performance rights."

  He estimates that around ₹2,016 cr. to ₹ 2,791 cr. ($269.7m-373.4m) are lost annually by the recorded music industry "due to obsolete laws eroding the fair value of the copyright, safe harbor provisions under Section 79 of the Information Technology (IT) Act, 2000, leading to a value gap between the copyright holders and platform and exemptions from Public Performance Rights that continue to debilitate the growth of the recorded music industry in India."

Inhibit the growth value of the market

  The report outlines in more details these issues that "inhibit the growth trajectory and the potential value" of the recorded music industry in India.

  > Non-voluntary Licensing
  The report dates back to 2001 one of the "foremost reasons" why the recorded music industry is not achieving the potential the film industry has reached: The existence of non-voluntary licensing of recorded music to support the then nascent radio industry. Record labels, according to the IMI, did not get proper compensation from radio stations for the use of recordings. The initial rate for public performance rights was 20% of net advertising revenues in 2001, to be collected by Phonographic Performance Limited (PPL). But the rate was challenged by radio stations until the Copyright Board passed an order setting a 2% NAR compulsory license rate in 2010, which was still in force in 2020.

  > Exemptions from public performance rights
  One of the key exemptions from public performance rights introduced by the Copyright Board relates to weddings. A public notice issued by the Indian Copyright Office in August 2019 extends the exemption even to non-traditional events associated with marriage. The IMI considers that the exemptions was "wrongly" issued and is costing the industry between $200 and $250m. 

  > Intermediary liability
The report notes that intermediaries or platforms which run on the back of the recorded music industry’s output, "enjoy high valuations and investment flows into their platforms" but these online intermediaries enjoy a legal framework which creates "a large value gap in revenue realised between various online intermediaries which."

  > Digital music piracy
  The IMI also points out that usage of pirated music content "was 67% of the surveyed music listeners in 2019." Music pirate activities "inhibits fair competition in the recorded music market by allowing rogues platforms to reap benefits of the hard work of others labour," reads the report which estimates that visits to illegitimate services cost the industry $26-39m a year.

Encouraging entrepreneurship

  In its conclusions, the reports notes that the ₹ 19,100 cr. value of the film industry "is attributable to free market structure which encourages entrepreneurship and fosters innovation." Thus, the IMI calls for major changes, in particular in the licensing regime.

  "Had the recorded music industry been allowed to operate with free market values, the ₹ 1,277 cr. recorded music industry would have been anywhere between 1/5th to 1/4th the size of the ₹ 19,100 cr. film industry, approximately ₹3,332 cr. to ₹4,107 cr. in 2019," reads the report.

  For the IMI, the Government of India "needs to let free market conditions play in the recorded music industry for it to experience the film industry’s revenue growth. Further, given that the film industry and recorded music industry are symbiotic, there is no reason why they should have different licensing regimes. Had it been allowed to operate with free market values, the ₹1,277 cr. Indian recorded music industry, which was ranked 15th globally in 2019, would have been worth approximately ₹3,332 cr. to ₹4,107 cr.62 in 2019, placing it in the top 10 music markets in the world."

CTM partners with Outlander to invest up to $1bn in music assets in the next five years

 

By Emmanuel Legrand

Outlander Capital Management, a Dallas-based intellectual property fund targeting both music and patent royalty streams, and Dutch music company CTM, set up by André de Raaff, have announced a strategic alliance to acquire music publishing and master rights. The two partners have set up CTM Outlander Music LP, with the ambition to invest up to $1billion over the next 5 years in music assets.

  CTM Outlander Music said it plans "to capitalise on Outlander’s intellectual property expertise and knowledge to gather the rights necessary for holographic performances and the issuance of non-fungible tokens (NFTs) — namely, rights to use songs and likenesses for these purposes."

  “We have carefully studied the music IP market for some time now," said Les Ware, a managing Principal of Outlander. "We have been managing intellectual property for the past 30 years and believe that the time has come to bring our expertise to bear on the music industry. Technology is changing the music market very rapidly and we have the deep expertise necessary to navigate and profit from these changes."

Target profitable acquisitions

  De Raaff is not a newcomer in the business of music assets. In 2008, he set up Imagem, which was funded by the Dutch pension fund, and made a series of acquisitions such as Boosey & Hawkes, before being sold in 2017 to Concord for $500 million. “We are thrilled about our relationship with Outlander and its principals’ proven investment savvy, and look forward to many profitable acquisitions with Outlander," said de Raaff (pictured, below).



  The new fund has acquired the music publishing assets of TEN Music Group, a Stockholm-based company founded by veteran executive Ola Håkansson, which has a song portfolio of over 1,000 tracks, including songs performed by Rihanna, Shakira, Panic! At the Disco and Zara Larsson ('Lush Life'). Terms of the deal were not disclosed.

  “We are convinced that the new partnership between Outlander and CTM, together with André and CTM’s longstanding experience and reputation in music publishing, will provide a great new home for TEN’s publishing catalogue,” said Håkansson.

A robust foundation

 For Ware, the TEN acquisition "fits our strategic goals and serves as a robust foundation for our fund’s music acquisitions. In cooperation with André we trust that this is the first of many, many purchases.” 

  Ware, is also the co-founder and chairman of Marconi, a multi-platform patent management firm that manages the licensing of tens of thousands of patents globally for dozens of Fortune 500 companies and other major IP holders around the world.

  Outlander plans create non-fungible tokens (NFTs) representing legendary artists, iconic songs, and unforgettable musical moments. Outlander's NFT will "differentiate" from others "by backing them with provable legal rights in the song, the likeness of the artist, and/or in the footage used."

Promote holographic performances

  Outlander also plans to gather the rights necessary for holographic performances, including the right to use songs and likeness rights in such performances. The company said it has long term business relationships with the firms "most likely to deliver easily-distributable holographic concert technology. We manage patents in this field and have a deep understanding of the technology as it will apply to both e-sports and music. Thus, we are well-positioned to provide a use-case for the technology which will provide additional revenue streams for our artist partners."

DG Connect's guidelines on Article 17 could possibly be discussed by the European Commission on April 14

By Emmanuel Legrand

The European Commission's Guidance on the application of Article 17 of the Directive on copyright in the Digital Single Market could be released in the coming weeks, according to sources in Brussels.

  The members of the Working Party on Intellectual Property at the Council of Europe have tentatively listed on their agenda a possible presentation from the European Commission on the Guidance on the application of Article 17 of the Copyright Directive. The Guidance proposal, which will provide a framework for Member States to implement Article 17, has been under discussion for the most part of 2019 and 2020.

  The Commission's DG Connect held a series of consultations with stakeholders in order to come up with a consensus on how to deal with Article 17. However, several countries, such as France, objected to Commission's approach, which they saw as drifting away from the letter and the intent of the Directive. 

Concern about the Commission's approach

  The same concern was expressed by Members of the European Parliament, who sent a letter to the Commission in February 2021, claiming that the current approach to the Guidance "would not properly reflect the agreement hardly achieved after long negotiations on Article 17 of the Copyright Directive.”

  Representatives from the creative sector are concerned that the Commission's Guidelines will be watering down the scope of Article 17 and have publicly expressed their views to the Commission and Member States.

  The Guidance still needs to be adopted by the Commission and industry sources in Brussels suggest that it could be on the agenda of an April 14 meeting of the Commission. 

Guidelines not yet adopted by the Commission

  "For this to be confirmed on the working group's agenda, the college of commissioners would have to adopt the guidelines on Wednesday April 14, but it is still quite improbable at this stage," said a source in Brussels.

  During the same April 19 meeting, the Working Party is also supposed to hear from the Commission a report on the implementation of Directive on collective rights management.

Tencent-owned JOOX inks licensing deal with Merlin covering most of Asia


 

By Emmanuel Legrand

Tencent-owned music streaming platform JOOX, has signed a licensing agreement with Merlin, the digital music licensing agency for the independent sector.

  Hong Kong-based JOOX's footprint covers most of Asia and this agreement will give Merlin members access to new audiences in Hong Kong, Indonesia, Macau, Malaysia, Myanmar and Thailand, as well as South Africa, where the platform launched in 2017.

  The agreement covers JOOX’s ad-supported and premium tiers, as well as its karaoke feature and library. The deal will also "facilitate Merlin members’ access to marketing and promotional activities on the JOOX service." 

Unlocking content

  Poshu Yeung, Senior Vice President of JOOX said, “JOOX always strives to bring users a wide range of music entertainment content from around the globe in different languages and genres, catering to music lovers’ various tastes. We are thrilled about our strategic collaboration with Merlin as it reinforces this goal by unlocking abundant content from hundreds of thousands of artists via Merlin’s membership for our users.”

  Added Merlin CEO Jeremy Sirota, “Our agreement with JOOX is one that expands access for our members across new markets while also driving value back to JOOX. We’re truly pleased to explore new ideas and features with them in order to help Merlin members make the most of this exciting music platform.”

  Merlin members account for more than 15% of the global digital music market, representing tens of thousands of labels and hundreds of thousands of artists. In 2021, 81 new members joined from countries across the globe, including first-time members from Burkina Faso, Ghana, Peru, Singapore, Slovakia, and the United Arab Emirates.

MCPS distributed £157.8m to its members in 2020, up 10%

By Emmanuel Legrand

British mechanical rights society MCPS, part of the UK's MPA Group, has distributed £157.8 million to its members; a 10% increase over 2019 figures for the year ended 31 December 2020.

  The London-based society said it was the highest per year distribution of royalties to songwriter, composer and publisher members since 2012. MCPS operates on a break-even basis returning any excess commission to members.

  In a statement, MCPS said the strong returns "reflect the growing demand for entertainment streaming services, solid distributions from International receipts and from both major and indie record labels, as well as good results from broadcast revenues." 

Reassuring figures

  These strategies, added the organisation, have enabled MCPS to reduce the effective blended commission rate to 7.7% from 9.3% in 2019, allowing for the redistribution of £5.9m in commission savings across the membership who received a distribution in 2020.

  MCPS Chair Jackie Alway commented: “We are pleased to report the distribution of such reassuring figures to our membership during this time of uncertainty for many. MCPS will continue to focus our efforts on offsetting the impact of Covid-19 with innovative planning and respond to the need for growth with new initiatives throughout 2021.”

  MCPS CEO Paul Clements added: “This is an exciting time for MCPS with our dedicated team in place and a significant milestone reached in terms of distributions. We continue to be committed to ensuring the best outcomes for our songwriter, composer and publisher members and aim to navigate MCPS to further success in 2021.”

MRI added 20m recordings and compositions to its Songdex database in 2020

 

 

By Emmanuel Legrand

Music rights administration platform Music Reports Inc. (MRI) has disclosed that it has administered over $400 million in music royalties in 2020, with music publishing royalties paid out by the Woodland Hills, CA company increasing by 50% over 2019, and individual royalty payment transactions increasing by 16%, to more than 212,000 individual payments. 

  MRI also operates the Songdex database, described as the largest independent registry of music copyright information in the world. In 2020, MRI added over 20 million distinct sound recordings and musical compositions to Songdex, bringing the total number of unique sound recordings and musical compositions in the database to 160 million. 

  "Music Reports delivered tremendous value to the music ecosystem in 2020, processing over $400 million in music royalties that flowed through our trusted technology and payments platform to recording artists, songwriters, and their representatives – at a fraction of the cost of comparable administration services," said Dhruv Prasad, President and CEO of MRI. 

Transparent and accurate reporting

  Added Prasad: "The growth in payments from the previous year is also notable, representing the rapid expansion of our services in new international territories; our best-in-class content matching, which enable a high proportion of publishing royalties to be matched and paid out quickly; and finally the gravitational pull of our Songdex Marketplace, where songwriters and music publishers can register their works, opt-in to direct licenses with global rights users, and receive timely payment of royalties, along with transparent and accurate reporting."

  Music Reports administers royalties for over 500 customers, including Spotify, Netflix, Peloton and TikTok. MRI was acquired from ABRY Partners and its co-founders Ronald Gertz and Douglas Brainin in August 2020 by New York-based asset management firm MidOcean Partners.

 

The International Music Council joins preservation project Global Music Vault

 



By Emmanuel Legrand
 
The Global Music Vault, focusing on "safeguarding the world’s music of yesterday and today," has launched 'Project ARV - Safeguarding Music For Future Generations', to raise awareness on the need to preserve musical expressions for the future.
 
  Global Music Vault uses a dedicated vault, exclusively for music capsules, located deep inside the same arctic mountain as the Global Seed Vault on Svalbard in far north Norway. Master music files of unique music will be preserved there, using "innovative, future-proof and timeless storage technologies."
 
  Luke Jenkinson, Managing Director of the Global Music Vault, said the goal of the project is to “offer the music community a solution for the future, in a world where storage and security is expected to be in short supply."
 
Protect music cultures
 
  The International Music Council (IMC), the world's largest network of organisations and institutions working in the field of music, has joined the project and Alfons Karabuda, the President of the IMC, has been appointed Board Director of the Global Music Vault's advisory board.
 
  "We see the Global Music Vault as a solution to a couple of the big challenges faced by the musical ecosystem of today – notably the danger of the world forgetting about music cultures or not being able to access this rich diversity," said Karabuda.

French organisations call for industry-wide discussions on streaming

By Emmanuel Legrand

Three French music organisations representing independent labels (FELIN), music events organisers (SMA) and the electronic music community (Technopol) have asked for an industry-wide discussion on the regulation of streaming. 

  Noting that streaming now represents 69% of the recorded music market, but that streaming is skewed towards certain music genres, they are asking for "possible changes in the remuneration system for streaming." 

  For the three organisations, it is necessary to look at all the options, in particular evaluate if the current pro rata system should be substituted to a user centric model, based on what each subscriber is listening to.

A fair and transparent system

  They also suggest that it is also time to put an end to the practices of "fake streams" which creates an artificial increase in market share for those who use it and is detrimental to others. 

  The signatories are asking the recently created Centre National de la Musique to "set up discussions between producers [labels] and platforms, in order to reflect on the model of tomorrow, which we want balanced, fair, transparent and virtuous for all. Streaming should not perpetuate the biases and questionable practices of our industry's past."

Music Deals -- Week 15 2021

Lupa Systems, the company set up in 2019 by James Murdoch, has invested in San Francisco-based start-up Authentic Artists, an AI-powered virtual artist platform for music, gaming and streaming applications founded by Chris McGarry, formerly in charge of music integration at Facebook’s Oculus. Authentic Artists’ other investors and advisors include Linkin Park's Mike Shinoda, OVO Fund, Mixi Group, Bill Silva Ventures, Permira's Brian Ruder, Liberty Media SVP Chad Hollingsworth, C3 Presents co-founder Charlie Walker, Roblox CBO Craig Donato, Microsoft's Liz Hamren and Young Guru. “We’re very pleased to support the early growth of Authentic Artists," said Murdoch. "As technology continues to transform creativity and experiences, the opportunities for new forms of highly scalable social entertainment will be substantial. We look forward to working with this impressive team that is well positioned to lead the space.”

Universal Music Group, through Republic Records, is launching Universal Arabic Music (UAM), in partnership with The Weeknd manager Wassim “Sal” Slaiby. The newly-created label is dedicated to "discovering, introducing and championing the artists and musical culture of the Middle East & North Africa (MENA) region to audiences around the world." Slaiby will serve as Founder and CEO of Universal Arabic Music, effective immediately. “It’s been my dream to highlight the talent and culture of Arabic music on a global level with partners that I trust and admire,” said Slaiby. 

Sony Music Publishing has signed hip-hop songwriter, producer and beatmaker Jonathan DeMario Priester, also known as Supah Mario, to a worldwide deal. Supah Mario has worked with Drake, Lil Uzi Vert, Swae Lee, and Post Malone.  “I’ve long wanted to be a part of Sony Music Publishing, and I am excited for my future with the publisher," said Supah Mario. Sony Music Publishing Vice President, Creative Adrian Nunez said, “The opportunity to work with Supah Mario has been a long time coming, and I’m excited to continue our creative relationship with Mario." 

Los Angeles-based sync licensing company HyperExtension is launching its publishing division, in partnership with Warner Chappell Music, the global publishing arm of Warner Music Group, which will provide administration services, as well as support for HyperExtension songwriters through its Creative Services department. The first signings to the new publishing division include Erik Mattiasson (Melpo Mene), Christopher Barnes (Gem Club), and Henry MacLean and Dylan Grossman (Maryanne Bold). HyperExtension founder and CEO Rachel Komar said the partnership with Warner Chappell has "opened us up to new opportunities on a global scale, for our growing roster of exceptionally talented writers, all the while respecting and supporting our artists-first ethos.”

Electronic and dance music act Swedish House Mafia have hired The Weeknd manager Wassim “Sal” Slaiby as their new manager. The trio from Sweden split in 2013 after scoring a series of hits and performing top-grossing tours, but they reunited in 2018 — shortly after which they parted ways with longtime manager Amy Thomson.

American songwriter and performer Taylor Meier, frontman for the band Caamp, has launched his own independent record label, Gjenny Record. "So much good stuff gets buried because people don’t have the right contacts or connections, so I started Gjenny Records just so I could put out people’s stuff and give them a shot at some daylight,” said the Columbus, Ohio-based artist. The first artist signed to the label is Sam Filiatreau, a songwriter from Louisville, Kentucky.