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Tag: streaming

  • Judge approves settlement in Lowery/Ferrick mechanical royalties case

    Judge approves settlement in Lowery/Ferrick mechanical royalties case

    A US judge has finally approved the proposed settlement in one of the highest profile of all the lawsuits filed in relation to the mechanical rights mess Stateside: ie Lowery & Ferrick v Spotify. That mess, of course, has resulted in many songwriters and music publishers not receiving all the royalties they are due when their songs are streamed via on-demand streaming platforms.

    Most streaming services operating in the US have been on the receiving end of litigation in relation to unpaid mechanical royalties. America is unusual in that it doesn’t have a collecting society that can provide a blanket licence covering the so called mechanical rights in songs. Such licences, available in most other countries, mean that streaming services can ensure that they are fully licensed when it comes to song rights, relying on the blanket licence for any works not covered by direct deals with music publishers.

    The lack of such a society and blanket licence in the US means that – while American copyright law sets the royalty rate for mechanical rights – each streaming service needs to identify what specific song rights it is exploiting and who controls those rights, and then make sure the relevant paperwork and payments are sent to the copyright owners. With no central publically accessible database of music rights linking recordings to songs and identifying current beneficiaries, that has proven to be a very tricky task.

    It also meant that some songwriters and publishers went unpaid, resulting in litigation. Musicians David Lowery and Melissa Ferrick both put their names to class actions against Spotify in relation to unpaid mechanicals. Those two lawsuits were then later combined, with the streaming firm subsequently proposing a settlement deal that includes setting aside a fund worth $43.4 million to compensate songwriters and publishers whose songs it streamed without licence.

    The basic terms of that settlement were agreed a year ago, but they needed court approval. Also, other members of the class – ie songwriters and publishers who were likewise unpaid by Spotify and who formally affiliated with this class action – had an opportunity to object to the deal. And some did.

    Among those who objected was independent music publisher Wixen, which said that the proposed settlement was “procedurally and substantively unfair” and provided “an unfair dollar amount in light of Spotify’s ongoing, wilful copyright infringement of [our writer’s] works”. Though Wixen subsequently filed its own lawsuit in relation to unpaid mechanicals.

    In her ruling this week, judge Alison Nathan overruled all those objections for various different reasons, concluding that the settlement agreement was “fair, reasonable and adequate”. She also ruled on legal fees, awarding the lawyers who worked on the case a few million less than they had been pushing for. Though they’ll still see $13 million for their efforts, so I wouldn’t worry too much about them.

    Although other lawsuits in relation to unpaid mechanicals continue to go through the motions, the digital music sector hopes that these ongoing issues will be dealt with by the Music Modernization Act that is currently working its way through US Congress.

    That legislation will finally introduce a collecting society and blanket licence for mechanicals in the USA. Which doesn’t necessarily mean the right songwriters and publishers will start receiving their royalties, but it will shift the responsibility for working out who needs to be paid away from the streaming services to the new society and the songwriters and publishers it represents.

    Source: Complete Music Update

  • Beefed up Music Modernization Act arrives in US Senate

    Beefed up Music Modernization Act arrives in US Senate

    The Music Modernization Act that not even one of you is bored of reading about yet has been introduced into the US Senate by Senator Orrin Hatch.

    This latest development requires bosses at all the American music industry trade bodies and collecting societies to find yet another way of saying they support these proposals. Given they’ll be required to issue another round of quotes if and when Senate approves this bill, I reckon they should all start work on that now, with the aim of each organisation welcoming the new laws in the form of a limerick.

    Anyway, the Music Modernization Act, as you all surely remember, having read every single word we’ve written about it avidly, originally sought to fix the mechanical rights mess that has dogged the streaming music sector in America. It will do this by copying how the so called mechanical rights in songs are managed in every other country in the world. What a bold and innovative move!

    That plan is still at the heart of the MMA, but a revamped and beefed up version of the legislation was unveiled last month which also included elements of other music copyright proposals that have been doing the rounds in Washington of late. Perhaps most important of those is the move to fix the pre-1972 technicality in American copyright law which is [a] stupid, [b] short-changed legacy artists in the online radio domain and [c] led to lots of tedious and tiring litigation.

    The people behind the MMA have sought to get as much consensus behind the proposals as possible, from across the music industry and also the digital music sector. This has meant ensuring all stakeholders benefit in some way.

    It has also meant not including the one big music copyright proposal that has been doing rounds in Washington for years now, ie forcing AM/FM radio stations in America to pay royalties to artists and labels, like their counterparts in other countries do. Presumably the MMA’s authors recognised that, with a powerful broadcast lobby in the US, including those proposals would scupper the whole project.

    There are still some critics of the MMA in the music community, though groups representing artists, labels, publishers and songwriters have all come out in favour. Coupled with the legislation having cross-party support in Congress, that helped speed the proposals through the House Of Representatives, which passed the bill last month. There could be more scrutiny in Senate, though the MMA’s backers are still hoping to get the measures through the law-making process super fast.

    Formally introducing the expanded MMA into Senate yesterday, the aforementioned Hatch said: “Today’s introduction is an important step toward enacting historic reform for our badly outdated music laws”.

    He went on: “For far too long, our old-fashioned, disorganised way of collecting and distributing music royalties has resulted in songwriters and other content creators being paid far too little for their work. It’s also exposed digital music companies to significant liability and created overall uncertainty in the music marketplace. As a songwriter myself, I know how important these issues are. That’s why I’m so pleased we’re taking this significant step today to bring fairness and certainty to our music laws”.

    With the embarrassing and total lack of limericks being issued by the music industry in relation to this latest MMA development, here are some tedious quotes that I’ve cut and pasted from some press releases so that you can all ignore them. But before you all starting the ignoring, let’s acknowledge my champion cutting and pasting efforts. And hey, how good are those limericks going to be? I reckon David Israelite’s will be the best.

    NMPA CEO David Israelite: “The introduction of the Music Modernization Act package in the Senate is a massive step forward for songwriters. [The senators endorsing the bill] have done music creators a great service by sponsoring a music licensing package which will help not only songwriters and composers but also producers and legacy artists. The bill improves both how and how much songwriters are paid while increasing transparency and enabling digital music platforms to thrive. The MMA represents unprecedented consensus around necessary updates to how music creators are valued, and we look forward to seeing it become law”.

    ASCAP CEO Elizabeth Matthews: “After a unanimous vote to pass the MMA in the House, we are THRILLED to see such ardent, bi-partisan support for music creators in the Senate. This legislation is critical to ensuring songwriters have a pathway to fair compensation so they can sustain their livelihoods and create the next great songs. We applaud the leadership of fellow songwriter Senator Hatch … for spearheading this effort in the Senate. We look forward to the Senate’s vote and eventual passage of the MMA”.

    musicFIRST Executive Director Chris Israel: “Today’s introduction of the Music Modernization Act follows the House’s unanimous passage of similar legislation and demonstrates that we are one step closer to enacting once-in-a-generation legislation that will bring old laws into the digital age and treat music creators fairly. The comprehensive approach taken in this bill for updating federal copyright law enjoys broad support in Congress and throughout the entire music industry. We applaud this bipartisan group of Senators for introducing this legislation benefiting music creators, services and fans and look forward to its swift consideration and passage in the coming weeks”.

    Nashville Songwriters Association International president Steve Bogard: “The Music Modernization Act … will create the most comprehensive and important copyright reform package the United States Senate has considered in decades. [It] gives songwriters, artists and music producers essential tools to achieve fair marketplace royalty rates in the digital era”.

    SoundExchange CEO Michael Huppe: “On behalf of the 150,000+ music creators represented by SoundExchange, we are grateful to Senator Hatch for building this consensus legislative package that will benefit the entire music ecosystem. Taken together, the elements of this legislation will strengthen and protect the rights and interests of creators – the artists, songwriters and producers whose music enriches our lives – and it will improve engagement between the creative community and the digital services whose businesses rely on their work. We look forward to working with the sponsors and the entire community of stakeholders that built accord on this package to make it law”.

     

    Source: Complete Music Update

  • Voluntary web-blocks in Japan lead to litigation

    Voluntary web-blocks in Japan lead to litigation

    A Japanese internet service provider last week announced that it would voluntarily block its customers from accessing a number of piracy websites. This came after the country’s government urged such action while it considers how to formally instigate web-blocking as an anti-piracy measure. However, now said ISP is being sued over allegations that those very web-blocks breach Japanese privacy laws.

    Web-blocking, of course, has become an anti-piracy tactic of choice for the entertainment industry in many countries, with ISPs being ordered to block access to sites deemed to undertake or facilitate copyright infringement. In some countries specific web-blocking systems have been put in place, whereas in other jurisdictions – like the UK – the courts just started issuing web-block injunctions under existing copyright rules.

    Earlier this month the Japanese government said it also favoured web-blocking as an anti-piracy measure. While ministers work out what legal framework might enable such a thing, internet firms were encouraged to act voluntarily against certain piracy sites, in particular platforms that facilitate the illegal sharing of manga and anime.

    Responding to that, ISP NTT last week announced “short-term emergency measures until legal systems on site-blocking are implemented”. Those measures have seen sites highlighted by the government blocked.

    When the Japanese government announced its web-blocking plans earlier in the month, some questioned whether blockades of that kind might breach privacy and free speech rights contained in the country’s constitution.

    Now lawyer Yuichi Nakazawa, also an NTT customer, has gone legal accusing the net firm’s measures of being in breach of privacy law. In legal papers filed with the Tokyo District Court, Nakazawa says that the blockades in essence require the net firm to spy on their customers’ internet activity, which is not allowed under privacy rules.

    The lawyer is quoted by Torrentfreak as saying: “NTT’s decision was made arbitrarily… without any legal basis. No matter how legitimate the objective of [stopping] copyright infringement is, it is very dangerous”. He adds that the “freedom” being threatened is “an important value of the internet”, and therefore legal action was appropriate to protect it.

    In addition to potentially breaching constitutional rights and the country’s telecommunication laws, Nakazawa reckons the web-blocks may also put the ISP in breach of his contract with the company.

    The lawyer goes on: “There is an internet connection agreement between me and NTT. There is no provision in the contract between me and NTT to allow arbitrary interruption of communications”.

    It remains to be seen how NTT responds to the litigation, but it will surely put other ISPs off the idea of acting voluntarily on this, while piling pressure onto lawmakers to provide a clear legal framework regarding web-blocking in the country. Though they too will have to find a way of making such measures compliant with the constitution.

     

    Source: Complete Music Update

  • Spotify share price dips 9% on back of first quarterly report

    Spotify share price dips 9% on back of first quarterly report

    Spotify’s share price took a hit yesterday as the streaming music firm published its first quarterly financial report as a publicly listed company. Even though most of the figures contained in said report were pretty much in line with expectations, based on statements made by Spotify in the run to the firm’s direct listing on the New York Stock Exchange last month. The company’s CFO reckons investors just weren’t paying attention.

    According to the quarterly report, net sales were up 26% year-on-year for the first quarter of 2017, though they were down slightly on the previous quarter. That was a result of a 22% dip in ad income, which can possibly – in part at least – be explained by the seasonable ups and downs of the ad market: there’s always more ad spend in the Christmas quarter.

    Ahead of its arrival on the NYSE, Spotify did try to put a positive spin on the revenue-generating potential of its loss-leading really-all-about-the-upsell free service – a service it enhanced last week, of course – which might make investors nervous when they see that side of the business under-perform.

    However, the real money in streaming is in premium subscriptions. There were 75 million paying subscribers by the end of the quarter, a 45% increase on the same period a year ago. In terms of subscription revenue, that was up 2% quarter-on-quarter to 1.04 billion euros.

    Of course, another reason for concern among investors is that Spotify – like all streaming music companies – is currently loss-making. Although Spotify was clear that that would be the case for a while yet as it continues to grow the business. Streaming is a scale game, and Spotify’s aim is to get to the level of scale where the whole thing starts to become profitable.

    Nevertheless, among the concerns expressed by Wall Street types are the level of losses, the pace of growth, and the financial value of each subscriber.

    Some are concerned that Spotify’s pretty impressive premium subscriber growth numbers are being achieved through heavy discounting, reducing the value of each customer. Other more US-centric investors worry about how the service is competing in their home market, where rivals Apple and Amazon are particularly strong and therefore Spotify subscriber growth is generally slower.

    All of which might have contributed to an almost 9% drop in Spotify’s share price in after-hours trading following the release of yesterday’s financial report. Spotify CFO Barry McCarthy told the Financial Times that there were no surprises in said report, and that the share price wobble was likely the result of the market having got slightly ahead of itself when the firm listed. That is quite common with much hyped tech start-ups.

    The FT quote McCarthy as saying: “It was a no-surprise quarter that turned into a surprise for the market. I don’t know what I would have done differently, except scream in a louder voice: ‘We’re going to do what we said we would’”.

    He added that the streaming music firm was pretty much happy with the outcome of its stock market listing. He went on: “We thought there was a risk sellside analysts would ignore the stock. We thought success would be if fifteen analysts followed the stock after three months, and we have 20 analysts covering it already. Volatility has been terrific, liquidity has been good. In hindsight, all of what we hoped to accomplish, happened”.

    Which is all great Barry, but CMU’s single Spotify share is now worth pretty much what we paid for it on the first day of trading. This time yesterday we were up $9.71 on the deal. And I had such big plans for how we were going to spend that $9.71!

     

    Source: Complete Music Update

  • Radiohead’s Philip Selway Discusses Future of Streaming Music

     Latest News – Pitchfork by Jazz Monroe
    Radiohead's Philip Selway Discusses Future of Streaming Music in Part 2 of Talkhouse Podcast

    Photo by Kevin Westenberg

    Yesterday, the Talkhouse aired the first part of an in-depth conversation between Radiohead’s Philip Selway and Ghostpoet (aka Obaro Ejimiwe), in which Selway discussed, among other things, the schedule for recording Radiohead’s forthcoming album, as well as the band’s early years. Now, the second part of their conversation is available as a 50-minute podcast (listen above).

    During the conversation, recorded before Apple’s decision to pay labels during its 90-day free trial, Selway says of streaming:

    As a user, I love it. I’m listening to so much more music than I ever used to. That whole thing, the fact you can go and look at recommendations, look at other people’s playlists… Whether, in the long run, it can make a sustainable living for musicians, that’s another thing. Apple claim that they’re going to go there, which would be great. It’ll be interesting to see what happens in the three months of free subscription, but there you go.

    Asked whether he thinks streaming is the future of music consumption, Selway responds:

    I do worry about how new artists can afford to tour. It is an expensive process. And that’s one of the areas where you really learn your craft. I suppose music’s muddled through for many decades, and it’s had its very greedy phases when it’s been able to change formats every decade and get everybody to pay double. This might just be wishful thinking, but people with talent and a good independent frame of mind will find ways of making it work for them. But also, it’s finding a fair deal within that. Because you can do all of that stuff as an artist, and think, okay, I have to look for ways I can make this work for me, as a living, and continue making music. There’s something slightly galling though, when you see someone creaming off a lot of money at some point in the equation. You hope the streaming model will redress that balance at some point.

    Elsewhere in the conversation, Selway reveals that he’s been listening to the “very clever”Holly Herndon, singer-songwriter Nadine Shah, and, on Thom Yorke’s recommendation,Jeremiah Jae.

    Watch Philip Selway’s video for “Around Again”: