CMU Daily 09.12.16: Spotify drops plans to buy SoundCloud, NMPA announces YouTube deal over unpaid song royalties

Spotify drops plans to buy SoundCloud
Spotify has abandoned plans to buy good old SoundCloud, according to the Financial Times. The former is seemingly worried that the costs and licensing challenges of acquiring the latter would slow down its own march towards an Initial Public Offering.

SoundCloud, of course, is busy trying to re-establish itself as an advertising and subscription funded streaming set-up that pays royalties over to creators and rights owners, rather than being a content distribution platform that generates its revenues by charging the same creators and rights owners for its services.

However, even though it boasts a larger catalogue of tracks than its competitors because of user-uploads, and despite its popularity among opinion formers and early adopters in the music community, that's a very competitive market for SoundCloud to be moving into, where it is up against a small number of major players with very deep pockets.

Many people reckon that SoundCloud's future is only assured if it can be acquired by a bigger company, though the firm's $700 million valuation means the list of potential bidders is pretty small. Spotify has been mooted as a possible bidder at various points, and most recently in September when "advanced talks" were reportedly under way.

There is some logic to such a deal - if Spotify could get the price down and negotiate primarily an equity swap - because it could use SoundCloud as a big fat marketing platform via which to sell its premium subscriptions, possibly ultimately instead of its own freemium level. However, sources indicate, attempts to get the price down to a realistic level for Spotify to go through with such a purchase ultimately failed.

For Spotify, which has really stepped up its above-the-line marketing efforts of late, the priority now is showing continued rapid growth in key markets ahead of that IPO, which really needs to come sooner rather than later because of deals the company has done with some of is financiers.

Meanwhile long-term success is reliant on reaching sufficient scale that the minimum financial guarantees it has to make to the record companies, music publishers and collecting societies are always outperformed by the music rights owners' revenue share arrangements, so that the digital firm gets to keep 25-30% of its income, hopefully allowing it to ultimately go into profit year-on-year worldwide.

As for SoundCloud, well, who knows? Who's got a spare $700 million lying around and then a few billion to further grow the business? Anyone?

NMPA announces deal with YouTube over unpaid song royalties
The National Music Publishers' Association in the US has announced an agreement with YouTube that will facilitate the distribution of "royalties for musical works used in videos on YouTube where ownership was previously unknown".

As previously reported, there is an extra layer of complexity when it comes to digital licensing Stateside because there is no collecting society for mechanical rights, ie an American version of the UK's MCPS. Companies like the Harry Fox Agency traditionally fill the gap to an extent, but there is no direct American counterpart of the mechanical rights societies that exist elsewhere.

It's generally agreed that a stream exploits both the 'performing right' and 'mechanical right' elements of the copyright (or in the case of YouTube, publishers might talk about the 'sync right' being the second element exploited). In the UK, while streaming services will often do direct deals with the big five music publishers, the digital firm can ensure it has everything else covered by doing a deal with PRS for performing rights and MCPS for mechanicals.

In the US, the likes of BMI, ASCAP, SESAC and GMR perform the role of PRS on the performing rights side. There is then actually a compulsory licence covering mechanical rights. But under that licence the streaming service needs to file paperwork with the owner of any song streamed - or the US Copyright Office if the owner can't be identified - and pay royalties to the rights owner or Copyright Office at the statutory rate.

A company like HFA can administer that process, but there is no one-stop database listing every song and its owners. Moreover, there is no database confirming which precise song any one recording contains. This is true everywhere, but in other countries the collecting societies do the data crunching, and the publishers make sure they are allied to the relevant collecting society. In the US, millions in non-performing right royalties fall into a hole.

Various streaming services have been sued on this issue because - while the real problem is arguably the music publishing industry's failure to put in place a collective licensing system in line with other countries - under the law it is the digital platforms that are liable for copyright infringement for failing to comply with the terms of the compulsory licence.

The most high profile case of this kind to date is that being pursued by David Lowery and Melissa Ferrick against Spotify. As those cases gained momentum, the NMPA - which previously owned HFA - stepped in to try to facilitate a settlement, whereby it and Spotify would work together to identity all unidentified songs, and the streaming service would then hand over unpaid royalties and a little compensation. That left self-publishing songwriters with the option to sign up to the settlement or join the Lowery/Ferrick action.

Litigation against YouTube on unpaid royalties would be further complicated by the bloody safe harbours, so both the NMPA and the Google firm are presumably hoping that there will be an even greater incentive across the music publishing and songwriting community to sign up to this settlement. The trade group says that, under the deal, "millions of dollars in previously unclaimed non-performance royalties will be paid to publishers and songwriters".

Publishers need to opt into the agreement by 28 Feb, after which YouTube will provide a list of songs it has been unable to identify owners for. Newly identified owners will then be paid any royalties they are due dating back to August 2012.

Confirming the deal, NMPA boss David Israelite said: "We appreciate YouTube's willingness to work with us on behalf of the industry to help pay out millions of dollars in previously unclaimed royalties to publishers and songwriters. It is essential that we work with digital services like YouTube - the most popular digital platform for music discovery - to fix the challenge of incomplete ownership information to ensure royalties are no longer unmatched and music owners are paid accurately by the platforms that rely on their work".

On YouTube's side, Tamara Hrivnak said: "The revenue earned by the music industry on YouTube continues to grow significantly year over year, and we're committed to making sure that publishers are paid for the usage of their works on our platform. We are excited to partner with the NMPA to address the industry-wide challenges associated with identifying publishing ownership on digital platforms".

Spotify knows what you listened to at your office Christmas party last night
Last week PPL revealed the most-played Christmas songs on TV and radio last year. Well how about the most-played songs at office Christmas parties happening right now? Or more likely, last night.

According to Spotify, the second Thursday of December, as in yesterday, is the busiest day of the year for office Christmas party playlists in the UK. So the streaming service pulled all 220,000 of those playlists together and worked out what the top ten most popular songs on them all are.

Is Mariah Carey number one again? No, she is not. Let's do the countdown:
1. Wham! - Last Christmas
2. Mariah Carey - All I Want For Christmas Is You
3. Andy Williams - It's The Most Wonderful Time Of The Year
4. Shakin' Stevens - Merry Christmas Everyone
5. The Pogues - Fairytale Of New York (feat Kirsty MacColl)
6. The Ronettes - Sleigh Ride
7. Wizzard - I Wish It Could Be Christmas Everyday
8. Boney M - Mary's Boy Child/Oh My Lord
9. Eartha Kitt - Santa Baby
10. Elvis Presley - Blue Christmas
You can listen to the top 50 tracks as a playlist here.

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Radar Music Videos announces rebrand to encompass wider visual remit
Radar Music Videos has announced that it is rebranding as Radar Music Creatives, as it opens up its platform to become a wider commissioning service for other visual elements surrounding music, such as album artwork, stage visuals, websites and more, on top of its traditional focus, ie music videos.

"Music marketers need more and more visual content, so we're expanding to meet that need", Radar MD Caroline Bottomley says. "We've taken the same 'Radar' approach to scouting illustrators, graphic designers, photographers and website designers - finding the best up and coming talent and signing them exclusively to Radar".

Find out more here.

Paste magazine goes back into print with vinyl covermount
Following the news that American pop culture mag Complex is winding down its print edition, another pop culture title Paste is going back into print, having been online-only since 2010.

Also US-based Paste announced earlier this week that it will launch a new quarterly print edition next year, to be called Paste Quarterly. And whereas the old Paste magazine used to come with a covermount CD attached to the front, the new mag will be delivered complete with a vinyl record, obviously.

Readers are encouraged to help make the return to print happen by pledging via Indiegogo, for a single issue or one year subscription, or for various other premium packages that offer other bits n pieces beyond the new magazine.

Announcing the new venture earlier this week, co-founder Josh Jackson wrote: "We've embraced the realities of our new digital world and are thankful for all the new ways it allows us to present stories to our readers. But we still love the tangible".

He went on: "We love the smell and feel of a magazine fresh off the printer. We love the luxury of sitting down with something special to read, completely unplugged from the devices that so often have us at their beck and call. We love a clever illustrated spread, stunning photos bleeding off the edge and long-form stories that pull you in page after page. That's why we're launching Paste Quarterly".

On the vinyl revival embracing covermount he adds: "We're bringing back the Paste Sampler, but this time it's a 150 gram coloured vinyl album with exclusive tracks recorded at the Paste Studio in New York".

The first edition will include tracks from Lake Street Dive, Shakey Graves, Lucius, Josh Ritter, Joseph, Anderson East, Lee Fields & The Expressions, Bonnie Bishop, Violent Femmes and Courtney Barnett.

More info about the magazine and the Indiegogo crowd-funding campaign is here.

Greg Lake 1947-2016
Greg Lake, best known as a member of King Crimson and Emerson, Lake & Palmer, has died, it was announced via his website yesterday. He was 69.

In a statement, his manager Stewart Young said: "Yesterday, 7 Dec, I lost my best friend to a long and stubborn battle with cancer. Greg Lake will stay in my heart forever, as he has always been. His family would be grateful for privacy during this time of their grief".

Lake's death follows that of his ELP bandmate Keith Emerson, who passed away in March this year.

Born in Dorset in 1947, Lake first rose to prominence as the original frontman of King Crimson, appearing on the band's first two albums, 1969's 'In The Court Of The Crimson King' and 1970's 'In The Wake Of Poseidon'. The same year as the second album came out, Lake left to form a new band with Emerson, whom the former had met when the latter's band The Nice supported King Crimson a year earlier.

Drafting in Atomic Rooster drummer Carl Palmer, they formed Emerson, Lake & Palmer, building a sound that took in rock, classical and electronic influences - leading to them becoming one of the defining acts in prog rock. Their career was kickstarted by a well-received performance at the Isle Of Wight Festival in 1970. They signed to Atlantic Records and released seven albums before splitting in 1979.

Lake and Emerson continued to work together in various capacities, reuniting with Palmer a number of times - most recently for their 40th anniversary. Lake also enjoyed a solo career, which will possibly be best remembered for his 1975 Christmas song 'I Believe In Father Christmas', which remains a staple of the festive season.

Greg Lake is survived by his wife Regina and their daughter Natasha.

Diana Gordon releases video for Woman
Diana Gordon has released her first music video, for 'Woman', her second single under her own name.

Formerly known as Wynter Gordon, she is currently best known as a songwriter for other artists, working with the likes of Mary J Blige, Jennifer Lopez and Beyonce ('Becky with the good hair' was her invention). She reignited her career as an artist in her own right with 'The Legend Of' earlier this year.

Speaking about the new video, Gordon says: "We shot this video on a cold day in November. Five pregnant women on the cusp of giving birth and hungry, everyone having to pee at the same time. It was also one of the calmest days I've ever experienced. We all wanted to capture the incredible beauty of this ancient magic called 'creation of life'".

"I also wanted to give them classic beautiful images to show their children when they were older" she adds. "This song, that is rock n roll reincarnated, that celebrates your mother, my mother, your sister, and my sister, is just my way to stand up for the woman next to me and all those unseen. We need each other and the world really needs us right now".

Watch the video here.

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Sondre Lerche releases video for I'm Always Watching You, plus alternate version
Sondre Lerche has released the video for his recent single 'I'm Always Watching You', as well as an alternative version of the single called 'I'm Always Watching Too'.

Speaking about the two tracks, Lerche says: "The night before I was going to record 'I'm Always Watching You', I awoke from dream about the song. In the dream the song was slower, anchored by a sluggish dub groove, and a narrative that was turning on me: I was being watched. I had been found out".

"It proved impossible to bridge the dream with the more natural, realistic version that became the original take on the song", he adds. "But I couldn't let go of the dream, and the hazy recording I made on my phone in the middle of that night became my guide for a different take on the same dream. A response, of sorts: 'I'm Always Watching You Too'".

So, for the full effect, here's 'I'm Always Watching You'.

And here's 'I'm Always Watching Too'.

Twickets, Riz MC, Tegan & Sara, more

Other notable announcements and developments today...

• Kilimanjaro Live and DEAG have partnered with Twickets to provide face value ticket resale on their MyTickets.co.uk website. Kilimanjaro Live CEO Stuart Galbraith says: "This demonstrates our firm commitment to ensuring price transparency of tickets and ultimately as fair a deal as possible for fans".

• Riz MC did a freestyle rap about 'Star Wars' and discovered that nothing rhymes with Calrissian. Though, what if Hal, Riz and Dan had all got together?

• Tegan & Sara are puppets in their new video for 'Dying To Know'.

• The Jesus & Mary Chain will release new album, 'Damage And Joy', on 24 Mar. Here's a song.

• Brasstronaut have released the video for new single 'Hawk'. Their new album, 'Brasstronaut', is out on 24 Feb.

• Ama Lou has released new single 'Not Always'.

• Bob Dylan has announced that he will tour the UK next year, finishing up at Wembley Arena on 9 May. Or he might decide not to bother and send Patti Smith instead.

• Pins have announced that they will be touring the UK next year, including a show at London's Moth Club on 19 Apr. They've also just contributed a song to this Amazon Christmas playlist.

CMU Beef Of The Week #335: Vinyl v Downloads
Cassandra: Let me show you what I got at a garage sale. Isn't that great? Heard of it?

Wayne: Exsqueeze me? Have I ever seen this before? Everybody has 'Frampton Comes Alive'. If you lived in the suburbs, you were issued it. It came in the mail with samples of Tide.

Cassandra: Look at this old one. Gerry And The Pacemakers.

Wayne: That is old. I bet those guys actually have pacemakers by now.

Cassandra: Can you believe they don't make vinyl anymore? It's weird, isn't it?

Wayne: That is weird.

Cassandra: Bobby said my album won't be vinyl.

Wayne: Bobby says... Are you and Bobby having an affair?

An exchange there from the classic 1993 movie 'Wayne's World 2'. Oh yes. And you know what, I remember thinking at the time, "yes Cassandra, it is weird that they don't make vinyl anymore". And sad. Real sad. Though having just invested in a CD player in 1993, I was also part of the problem. I too was shunning the classic recorded music format for shiny discs. But maybe I was just moving with the times. Vinyl was dead and yet life goes on.

Except vinyl wasn't dead, was it? It wasn't even true that vinyl production had ceased completely by the early 1990s, it had just become an ever more niche product presumed to be on its way out. But it'll be dead soon we all thought. Dead, dead, dead. How wrong were we? DATs and downloads are the future they said. But oh no, it's all about the vinyl revival.

Some reckon that Brexit was an attack by the older generation on the younger generation. So perhaps the vinyl revival is a kind of retaliation by The Kids. They can't stop their parents from inflicted ever more insular politics on the world, but they can bloody well stop vinyl from slipping into the history books.

Granddad forced a Trump presidency on you, but hey Granddad, look at this twelve-inch record I just bought. Ha, you thought you'd killed this format off, didn't you? Of course the long-term economic chaos caused by 2016's political events probably means The Kids will never be able to afford a piece of vinyl ever gain. But it's a victory of sorts.

Anyway, all this nonsense has been prompted by news from the UK's Entertainment Retailers Association this week that vinyl sales recently outperformed download sales. During one week. It was only a small difference, but vinyl took £2.4 million in those seven days, while downloads brought in £2.1 million.

"This is yet further evidence of the ability of music fans to surprise us all", says ERA chief Kim Bayley. "It's not so long ago that the digital download was meant to be the future. Few would have predicted that an album format, first invented in 1948 and based on stamping a groove into a piece of plastic, would now be outselling it in 2016".

Yeah, that's right, the vinyl record has completely taken over the music market from your new fangled downloads. That's "downloads" by the way, not "digital downloads". The death of that latter phrase will be the best thing to come out of the eventual complete demise of the download market. Though, of course, spoilsports like, well, us mainly, insist on qualifying ERA's announcement.

First things first, let's note that the retail trade group's fun stat tells us a lot more about the tanking download market than the vinyl revival. Download sales have been in steep decline for a while now of course as the streaming market booms, something Bayley's quote forgets to mention. So it's streams that have bashed download sales sufficiently into the ground that vinyl income seems impressive by comparison.

Also, of course, it's December. This is always a good month for physical product, because - and scientists will be back me up on this - you can't wrap an MP3 file. Not even an AAC file. One of the reasons CD sales have stayed more buoyant than you might expect is it's much more fun to gift something physical, and the same applies for vinyl. "Here you go son, I bought you something you can't play, but look how physical it is. And what about that Brexit hey! Good times".

And then, finally, it's worth noting price point. Arguably from an industry perspective, the key thing about the vinyl revival isn't so much how many vinyl records are being sold, but how much you can get away with selling them for. The biggest selling vinyl release of the week this stat stems from was Kate Bush's 'Before The Dawn' live album, which retails at £52. That certainly helped vinyl outperform downloads in terms of revenue despite the fact the number of units shifted vinyl-to-digital was 120,000 v 295,000.

But hey, vinyl revival, woo! Take that Mr Download, with your stupid convenience-over-authentic-listening-experience mentality. We've seen the future, and it's black and round.