This Month in Music Royalties: January 2019 – Who Will Sort Out the MMA’s Black Box?, Article 13 in Disarray, More

We round up and analyse the top news stories of the last month in music royalties, including commentary from Synchtank CBO Chris Cass.

Who is going to sort out the MMA’s black box?

• https://www.billboard.com/articles/business/8491190/lobbying-spots-music-modernization-act-licensing-collective-heats-up
• https://www.rollingstone.com/music/music-news/music-modernization-act-congress-mma-bill-772981/

Chris’ take: Synchtank views the Music Modernization Act (MMA) positively, all be it took a long time coming. Our clients, from corporates down to startups (including ClicknClear who recently won NY:LON’s Best Startup Award), should all benefit from a one-stop shop for mechanical licensing in the US. Ease and transparency for micro-payments is a problem the industry has stared in the face for too long.

Almost inevitably, given it was signed by the big-league disruptor himself, President Donald J. Trump, its appearance on the national stage has cracked open divisions. To the right is the “consensus group”, representing corporate America, whilst occupying another lobby is the American Music Licensing Collective, notably championed by Stewart Copeland from the Police. “Stew’s giving it to ‘The Man!’”, “Yeah, despite his father having worked for the CIA”, as some might put it.

The MMA calls for the creation of a board that will administer the blanket mechanical license. Said board will choose which technology vendor will get the complicated undertaking, and resulting mega bucks, for matching future Works to Recordings and vice versa. It is likely, however that all existing ‘black boxes’ of unpaid royalties will be divvied-up simply on the market share each publisher has with each individual digital music service, which is surprising given the technology available in the market.

“Where there’s muck there’s brass” is an expression originating from Yorkshire, England, uttered by farmers leaning on shovels, contemplating steaming piles of cow manure. “We like complexity” is the closest comparison in the music streaming royalty collection arena. It is a typical remark from executives sitting behind polished teak somewhere in California clicking software visualisers on big screens. They will be illuminating that today’s global pop hits have increasing amounts of writers with just as many publishers representing them. Importantly though, they will be showing that the data to be exact already exists.

The argument goes, that in this age of transparent reporting by responsible, legitimate music services, there is no need for ‘black boxes’ full of, well, muck that nobody knows anything about. There are a growing number of independent technology companies, many of whom are forming entwined eco-systems, that already have the chops to slice and dice through the crap. They can report what song is it, who wrote it, who recorded it and who owns it, when, where and at any given moment in time. They’re just going to need a bundle of brass to cart away all of the complexity.

Article 13 in disarray and the music family splits, then does its best to make up 

• https://www.musicbusinessworldwide.com/music-to-youtubes-ears-article-13-in-trouble-as-european-copyright-directive-progress-stalls/
• https://www.musicbusinessworldwide.com/article-13-music-industry-optimistic-that-re-drafted-text-can-still-crush-youtube-value-gap/
• https://www.billboard.com/articles/business/8495822/article-13-youtube-whats-really-going-on-brussels-column
• https://www.musicbusinessworldwide.com/article-13-disaster-for-music-biz-joy-for-youtube-as-labels-call-for-eu-copyright-bill-to-be-cancelled/
• http://councilmusicmakers.org
• https://www.impalamusic.org/content/raising-alarm-copyright

Chris’ take: Internet users’ freedoms in uploading content to UGC platforms, the use of filters to police this and the liabilities for tech companies hosting potential infringing material, is the fundamental copyright issue facing the world today.

Eleven European nations, including Germany, Sweden and Italy, recently rejected the latest draft text of the European Copyright Directive and it seems like Big Tech’s messaging that Article 13 will “ban memes, burden business and break the internet” has been effective in scaring election-aware politicians, at least according to John Phelan, Director General of the ICMP, who represents most of the world’s major and indie music publishers.

The fear expressed by Germany, however, was apparently on behalf of the smaller content providers getting unduly penalised. The most powerful economic nation in Europe is requiring an exemption for companies with less than €20m annual turnover, whereas France and others wanted that threshold far lower. Now the chances are that if some new text is not agreed and passed in the coming few months, then, following May’s European Parliament elections, such proposed high-profile legislation will be subject to even more scrutiny and delay.

So it was that on 7^th February 2019, the music, sports and TV industry bodies published a letter requesting the European Copyright Directive to be scrapped as they were “not able to support it or the impact it will have on the European creative sector”. A reminder, this is for a Directive that was being celebrated by the same organisations for getting so far down the road as recently as September. “We would rather have no directive at all than a bad directive”, they went on to say.

Just a day later, this pronouncement resulted in a no-prisoners response from the UK Council of Music Makers, which includes the Featured Artist Coalition, Music Managers Forum and the Musicians Union. “The labels and publishers”, they write, “have shown an unsettling disrespect for the talent that they have the privilege of representing, raising serious questions about their suitability to be custodians of copyright”.

As with the inevitable schisms accelerated by the signing of the US’s Music Modernization Act, Synchtank are of course not the only ones to regret seeing the music-industry at loggerheads. So, imagine our delight to find out that on Monday morning (February 11^th) there was a backtrack, with the music bodies IMPALA, IFPI and ICMP, specifying that, really, they don’t want the Directive torn up and it was all just flag-waving! We will continue to watch this drama intently…

More interesting headlines from January 2019:

•  Collection societies PPL and SoundExchange report record revenues
  – https://www.musicbusinessworldwide.com/soundexchange-paid-953m-to-artists-and-labels-last-year-an-all-time-record/
  – http://www.musicweek.com/labels/read/ppl-reveals-largest-ever-annual-international-collection/075115
•  Is Liberty Media about to become the most powerful company in music?
  – https://www.rollingstone.com/music/music-features/liberty-media-about-to-become-the-most-powerful-company-in-music-780411/
• CD Baby announce that their artists earned more than $100m in royalties in 2018, enter historic alliance with Mexico’s performance rights organization SACM
  – https://musically.com/2019/01/09/cd-baby-paid-out-more-than-100m-in-royalties-in-2018/
  – https://www.billboard.com/articles/business/8494303/cd-baby-mexico-sacm-distribution-agreement
• US broadcast giant iHeartMedia on the road to recovery
  – https://www.musicbusinessworldwide.com/iheartmedia-set-to-bounce-back-from-bankruptcy-as-ceo-bob-pittman-inks-new-four-year-deal/
• Music industry investment pours into Africa…despite massive royalty challenges
  – https://www.musicbusinessworldwide.com/nigerias-mavin-records-secures-multi-million-dollar-investment-from-kupanda-and-tpg/
  – https://musically.com/2019/01/23/africa-music-here-to-stay/
• UK startup Songbook allows fans to earn royalties from an artist’s music
  – https://www.musicbusinessworldwide.com/this-uk-startup-allows-fans-to-earn-royalties-from-an-artists-music/
• Streaming royalty rates drop as streaming volume grows
  – https://thetrichordist.com/2019/01/29/2018-streaming-price-bible-per-stream-rates-drop-as-streaming-volume-grows-youtubes-value-gap-is-very-real/
  – https://musically.com/2019/01/29/streaming-price-bible-reveals-one-labels-2018-per-stream-rates/
• Hipgnosis Songs strikes again, buying Giorgio Tuinfort and Itaal Shur catalogues
  – https://www.musicbusinessworldwide.com/merck-mercuriadis-buys-again-as-hipgnosis-snaps-up-giorgio-tuinfort-catalog/
  – https://www.billboard.com/articles/business/8495870/hipgnosis-itaal-shur-catalog-smooth-songwriter
• SiriusXM and Pandora merge to create music industry powerhouse
  – https://variety.com/2019/digital/news/pandora-sirius-xm-shareholders-approve-roger-lynch-out-1203122984/
  – https://www.musicbusinessworldwide.com/why-is-siriusxm-buying-pandora-in-a-3-5bn-deal-and-whats-it-going-to-do-with-a-music-streaming-platform/
• Spotify fails to launch in India by end of January
  – https://www.musicbusinessworldwide.com/spotify-didnt-launch-in-india-today-after-all-and-still-doesnt-have-major-label-approval-to-do-so/