We round up and analyse the top news stories of the last month in music royalties, including commentary from Synchtank CBO Chris Cass.
Spotify as usual dominated the months headlines, particularly when they stated they had over-paid music publishers in 2018 whilst settling two outstanding law suits relating to mechanical royalties.
There was also Spotify’s announcement that distribution for ‘unsigned artists’ is no longer part of its roadmap, which no doubt was a weight off the shoulders of those elbowing around in an already packed crowd. It followed Stem’s earlier announcement in May that it too was abandoning the mass market approach in favour of a more boutique service a la AWAL and Create Music Group. This means only certain artists will get white-glove treatment in the future, a decision not difficult to comprehend when you consider the sheer amount of customer support required to help keep literally hundreds of thousands of bedroom artists happy – a fact not lost on CD Baby, as it impressively rolls out call centres across the globe following the Downtown acquisition.
Speaking of Downtown, it was reported its Songtrust subsidiary added IMRO to its list of PROs whilst in the same month declaring its royalty collections were up 70% in a year, although not particularly surprising for a nascent company given the National Music Publishers Association announced the US music publishing industry is now making a billion dollars more than it was 4 years ago.
And so it goes, the plethora of record breaking pay-outs continuing apace, almost to the extent they are no longer news. Alongside TuneCore apparently collecting a million bucks a day on behalf of its (mostly bedroom) clients – which is impressive but still a way behind CD Baby – Merlin announced it had paid out $715m ($845m if you include the Spotify equity sale) to its members between April 2018 and March 2019. That’s impressive, of course, as is UMG’s €3.24b digital revenues in the same period. It is certainly a high from which Charles Caldas to abdicate from, as Merlin’s long-serving chief, um, wizard. Elsewhere, SOCAN announced $375m of pay outs in 2018 and even Beatstars, famous for having played a role in the year’s biggest smash to date (“Old Town Road”) announced it had paid out over $50m in royalties to producers, despite the aforementioned beats having apparently being bought for just $30 from the platform. Go figure!
Indeed, the music industry’s streaming revenue forecasts continue to be valued ‘big league’ by Goldman Sachs though what ramifications await Universal Music Group following the fire at Universal Studios, which allegedly destroyed half a million master tapes and has led to a succession of creators to look for compensation, has only begun to play out. Vivendi’s sale of 50% of UMG has been put on “indefinite hold” as the share price starts to head south. One is reminded of the quote Moby gave about how recouping advances is like paying off your mortgage only to find the bank still owns your house. Now there is an added twist. Imagine you decided to rent out the property, but your bank chose a letting agency whose decorators then accidentally burnt it down. Having said that, newly signed UMG artist Taylor Swift, who allegedly gets to keep her masters under her terms with the major, was none too thrilled to learn Scooter Braun had purchased her former label home.
Things are not so rosy either for a pair of the lesser known music services (at least to Western consumers) that are in the doldrums, with Melon in South Korea under investigation on suspicion it embezzled over $4m through a “ghost company” handling royalty reporting and Britain’s 7Digital looking like it is going out of business this month unless it can raise a similar figure to that which Melon are accused of siphoning. Both services were modest, if not outright trail-blazers in their day, and both, like Omnifone – who also ceased trading not all that long ago – were initially ensconced within the mobile communications industry (SK Telecom and Blackberry respectively) so there is a kind of inevitability seeing them in such a sorry predicament, albeit for completely unconnected reasons. And 7D cannot even blame Brexit any more than Melon can blame Kim Yong Un.
Finally, controversy in the world of lyrics had an unexpected upside for Italian technology company Musixmatch, who were at last able to be transparent that they too provide words to songs to Google, alongside the Italian’s arch-rival – LyricFind. Previously subject to a non-disclosure agreement (we guess?) the company from Bologna benefited from the fall out between Genius, Lyric Find and Google, with the former accusing the other two of a) cutting and pasting its own lyrics content and passing it off as its own and b) throttling traffic to its own site, given Google now has its own search-and-return feature. This has led to Google now stipulating online who supplies what lyric and yep, that means Musixmatch can get some previously unrecognised exposure. It also meant we got this priceless quote from Techdirt (not that we necessarily agree with it, but it is well made):
“All of this demonstrates just how idiotic the whole ‘licensing of lyrics’ business is – considering that what everyone here is admitting is that even when they license lyrics, they’re making it up much of the time. If the publishers don’t even know the lyrics they’re licensing, then what the f**k are they licensing in the first place? The right to try to decipher the lyrics that they supposedly hold a copyright on? Really?”
More headlines from June 2019:
- US Dept. of Justice Reviewing ASCAP & BMI Consent Decrees
- The challenge for music and podcasts: “Rights are a disaster”
- Intellectual Property Office warns on music industry’s ‘data problem’
- How the Music Business Can Actually Crack Down on Streaming Fraud
- Hipgnosis already owns over 5,000 songs – with another $1bn-plus of deals in its sights
- House Judiciary Hearing on Copyright Office Reviews Music Modernization Act, Black Box Royalty Concerns
- Nielsen reports a record half a trillion on-demand music streams in U.S. so far this year
Enjoyed this post? Why not check out our latest sync licensing and music supervision news round-up