To reimagine the phrase commonly attributed to former British PM Harold Wilson, a week is a long time in music publishing. This year has seen a lot of developments and a lot of changes for publishers. Here are the three dominant themes that defined 2018 for the business, the repercussions of which will continue to be felt next year and beyond.
1. One consolidation under a groove: publishers on an acquisition spree
Record labels – namely Universal, Warner and a host of indies – initially fought over the spoils of EMI’s recorded music arm after Terra Firma lost control of the company in 2011. The fate of EMI Music Publishing, then the preeminent music publisher in the world, took a slightly different route and may have arrived at its final destination – under the total ownership of Sony/ATV. This also set the temperature for the rest of the business, with acquisitions happening at all levels.
The EMI story had many twists and turns and in early November a SEC filing by Sony revealed it had completed its $2.3bn acquisition of the publisher it was buying up by stealth since 2011. When Citigroup took control of the company from Terra Firma, Sony/ATV stepped forward to initially purchase 30% of EMI Music Publishing, buying up another 10% owned by the Michael Jackson estate in July this year and swooping for the final 60% owned by a consortium led by Mubadala Investment Company. Indie trade body Impala had ferociously contested the bid, arguing it gave one company too much control in, and influence over, the market. This fell on deaf ears and regulators waved it through (without divestment requirements) at the end of October.
This was the biggest publishing merger in recent memory and dwarfed Universal Music Publishing’s €1.63bn acquisition of BMG Music Publishing in 2006; but it was not the only publishing shopping spree of the year.
Hipgnosis Music, set up by artist manager Merck Mercuriadis, raised $262m in a funding round in the summer and immediately went to work buying up as many publishers and catalogues as it could for the rest of the year. Within a fortnight, it had a 75% interest in 302 songs by US performer, writer and producer Terius Youngdell Nash (better known as The-Dream, who has helped write hits for Justin Bieber, Beyoncé, Rihanna and Jay-Z among others) for just over $23m. In November, Mercuriadis paid an undisclosed sum to buy out 100% of 214 compositions by Poo Bear (who has written for Justin Bieber as well as others like Jennifer Lopez and David Guetta). The same month, he took a 37.5% stake in the blockbusting songwriting catalogue of the late Chic co-founder Bernard Edwards. And in the closing month of the year, Hipgnosis bought up 121 songs from UK production team TMS (who have written for Little Mix and Jess Glynne among others).
Not quite on the same scale as Sony/ATV and Hipgnosis, there were plenty of other deals of note this year. In July, peermusic snapped up Accorder Music Publishing (who provide music for TV shows including The Great British Bake Off). The same month, one77 Music launched with a catalogue of 6,000 songs and, backed by Virgo Investment Group, revealed plans to start buying up other publishing catalogues. Then in October, Shamrock Capital bought the music publishing catalogue of Stargate (who were behind enormous global hits by Rihanna, Beyoncé and Katy Perry).
It is unlikely 2019 will see acquisitions on anything approaching the scale we have witnessed this year, but it is clear music publishing is currently a hot area for investment and more sales and more consolidation are inevitable.
2. Base hunters: building the publishing databases of tomorrow
The collapse of the Global Repertoire Database in 2014 at an estimated cost of £8m was taken as proof at just how Sisyphean the task was to get publishing and recorded music rights properly aligned in the digital age. But while there is no unified solution yet, this year saw the laying of important foundations to finally bring some workable solution to the market.
The biggest, of course, was a key point making up the Music Modernization Act that was signed into law in the US in October. Dealing exclusively in downloads and streams, the establishment of the Mechanical Licensing Collective will cover a variety of things including the administration of blanket licences, collecting and distribution of royalties and the creation and maintenance of what is termed a “musical works database”.
On its own, it will not be a global panacea; but it is just one of several interesting developments this year to clear up metadata and rights information for the streaming age.
Spotify has been on the sharp end of criticisms over its attitude towards mechanical licensing in particular and publishers in general – but this year made two significant plays to right a lot of its perceived wrongs. In April, it acquired Loudr, a platform specialising in the identifying, tracking and paying of royalties to publishers and songwriters. Of equal significance was the November debut of Spotify Publishing Analytics, essentially its songwriter version of Spotify for Artists – offering daily streaming analytics for the publishing world. Spotify is selling it as “the first music streaming analytics tool built specifically for publishers” – which may raise some quizzical eyebrows at Kobalt, SOCAN and others, but it is the first play here by a DSP. Artists and their managers have found Spotify for Artists an essential tool and data dashboard and the hope is publishers and writers will feel the same benefits.
Also of note this year was both Spotify (in its mobile app) adding songwriter information (where available) to songs and YouTube starting to add not just label data but also songwriter and writer data to its sprawling catalogue of music videos in May. And not to be left out here, Apple set up a dedicated division internally to deal with music publishing, naming Elena Segal Apple Music’s new global director of music publishing.
For too long, the world of big data has been seeking to mainly serve the label and performing artists community; but this year finally saw publishers and songwriters start to be prioritised. A lot of exciting and potentially transformative things have been set up in 2018 and it is up to everyone in the sector to properly deliver on these promises in 2019.
3. Face the music: will publishers share in the UGC windfall?
Facebook has seen native video as a key draw in recent years, rewarding those who uploaded directly (rather than linking to YouTube or other video sites) by pushing content up the algorithm – something that was especially welcome as organic reach slumped to close to 0%, meaning musicians would have to pay for their social media fans to see their posts. That was all well and good – except, well, it wasn’t paying any rightsholders to host their music.
That all started to change at the end of 2017 and throughout 2018 a flurry of licensing activity saw labels and publishers sign up. In early January came deals with Sony/ATV, Irving Azoff’s Global Music Rights and Kobalt Music Publishing. Hot on the heels of these deals came ones with SESAC, ICE (the JV between PRS for Music, STIM and GEMA), SACEM, SOCAN and Wixen. By August, APRA AMCOS (the Australasian Performing Right Association and Australasian Mechanical Copyright Owners Society) were also on board.
Little about the deal terms were known, but sources suggest a lump sum payment covering a two-year period was made. Precisely how that was to be carved up was something the MMF in the UK and BASCA started to publicly question. BASCA even launched the #soldforasong social campaign to try and get to the bottom of how its members would (or would not) share in the Facebook payments.
The deal covers not only UGC on Facebook itself but also on Instagram and Oculus (for use within VR), and the social media giant went about launching a wide range of music-centric properties where UGC content was key. These included creating Lip Sync Live (basically its version of Musical.ly/TikTok) in June and swiftly following it up with a music sticker button to Instagram Stories so users could add licensed music to their uploads. Then in November came Lasso, allowing users to create 15-second video content with special effects and music.
It is clear that music has been a strategic play to both hold onto existing users and try and draw in younger users who, according to research from both Pew and eMarketer, are turned off by the very notion of Facebook, regarding it as a platform for their parents or even grandparents.
Facebook finally taking music seriously – given it has over 2.6bn users globally – has to be a good thing. But ensuring publishers and writers are properly recompensed here has to be paramount. They cannot be an afterthought. When the cheques start arriving at the end of this year and the start of next year will be the first real indication of how well Facebook (and its other social and technological properties) has served the publishing world. If they are underwhelmed or feel short-changed, the biggest social network in the world will soon hear about it.