"Will they, won't they" Spotify psychodrama settled after Uruguay clarifies ER rules; UDS reveals bumper numbers; 80s vinyl standoff for Christmas + more

We've covered the music business

each day since 21 Jun 2002

Today's email is edition #5119

Thu 14 Dec 2023

Spotify's chaotic about-face on Uruguay threats

Spotify will not now exit the Uruguayan market after the country’s government clarified that labels and distributors, not streaming services, will be responsible for new equitable remuneration payments for performers…

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Today's music business news

TOP STORY

ONE LINERS

PHYSICAL

LIVE

DIGITAL

FUNDING

DEALS

AND FINALLY

Spotify's chaotic about-face on Uruguay threats

Ghetts, MOBO Awards, Wez Clarke + more

UDS: Bumper numbers testament to industry support

UK Music calls for summit on “rip-off” ticket tout "scourge"

EU regulators to force change in app store payment rules

PRSF launches new Talent Development funding initiative

Warner touts 'music as medicine' partnership

Pogues vs Wham as vinyl set to decide Christmas top spot

TOP STORY

Spotify backtracks on Uruguay posturing after ER clarification

Spotify has back-tracked on its threats to exit the Uruguayan market. The news follows a blog post earlier this month in which the streaming firm declared that it was being “pushed out of Uruguay” by a change to copyright law that meant its business would become “unsustainable”.


The about-face comes after the country’s government confirmed that those copyright reforms - termed “dramatic changes” by the streaming company - would not in fact increase how much money Spotify has to pay over to the music industry each month.


"We’re pleased to share that Spotify will remain available in Uruguay and will continue to give artists the opportunity to live off their art", it said in a statement yesterday. "The Uruguayan government has demonstrated that it recognises the value Spotify provides to local artists, songwriters and fans".


The change to copyright law in Uruguay provides performers in the country with an equitable remuneration right on streaming. That means any performer who appears on a recording has a right to payment, through their collecting society, when a track is streamed, even if they don't own the copyright in the recording, and oblivious of any deal they have with the copyright owner.


ER applies in most countries when recorded music is broadcast or played in public, but in most places not on streams. What wasn't clear with the new streaming ER right in Uruguay was whether the streaming service - or the label or distributor that controls a recording - was responsible for paying any ER that is due.


If it's the streaming service, Spotify argued, that would mean it has to pay twice for each recording. And it is already sharing up to 55% of its revenues with the labels and distributors.


Of course, the next time its music industry deals come up for renewal, Spotify could seek to deduct any ER payments from what is paid to each label and distributor.


Indeed, CMU has confirmed that at least some of Spotify’s existing deals with distributors allow for such deductions to be made if any new ER payments come into force - albeit sometimes with a cap - the streaming service having anticipated that ER might be added to streaming in some countries.


Those provisions may well not be in all the deals, especially with the majors. Because if they are, it would greatly weaken Spotify’s justification for leaving Uruguay following the copyright reforms.


Either way, Spotify was adamant that the ambiguities in Uruguay's new ER rule meant that it could end up paying even more into the music industry. And, once payments to music publishers and songwriters are taken into account, in some cases the industry is already getting 70% of its revenues. Paying over more than 70% was just not viable, the streaming service insisted.


Hence the announcement last month that Spotify would bail on Uruguay at the start of next year. That resulted in a petition signed by more than 40,000 Spotify users in the country demanding that politicians urgently sort things out. Even President Luis Lacalle Pou got pulled into the drama, reassuring reporters that ministers were "in talks" with the streaming platform.


Those talks and a subsequent 'regulatory decree' have seemingly reassured Spotify chiefs. “The clarification to the recent changes in music copyright law", it said yesterday, "means that the rightsholders - to whom Spotify already pays roughly 70% of every dollar it generates for music - should be responsible for these costs".

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ONE LINERS

One Liners: Ghetts, MOBO Awards, Wez Clarke + more

DEALS


The catalogue of songwriter Will Jennings has been acquired by his longtime publisher Lance Free in partnership with Fuji Music Group. His credits include songs such as ‘My Heart Will Go On’ and ‘Up Where We Belong’.


B2B streaming company Tuned Global has signed a deal to power Sona, which is described as a “new artist-centric streaming service”. TunedGlobal MD Con Raso explains that Sona seeks “to offer more ways to support artists directly, not just through the usual streaming royalty payouts. [It] offers a particularly exciting opportunity, combining blockchain and traditional music streaming on a single platform. It’s a first and it’s brought together some of Tuned Global’s most exciting technical capabilities”.


APPOINTMENTS


Universal Music Greater China has appointed Ming Lu as VP Artist Development & Entertainment Strategy. “In my role, I will dedicate myself to advancing artist development with the broader scope of entertainment opportunities, focusing on cultivating talent and enhancing artist services”, he says. “It is an exciting prospect to help bridge Chinese music culture with the global market, thus broadening the horizons for Chinese artists internationally”.


Primary Talent International booking agent Peter Elliott has announced that he will retire at the end of this month, having spent the last 28 years at the company. "We grew Primary with a 'family' ethos, driven by a desire to work with the most creative people and talent”, he says. “In my role as an agent I have been privileged to work with and help develop many wonderful musicians, creatives and great genre-defining artists. All in all, it's been a damn fine journey”.


YolanDa Brown has announced that she will step down from her role as Chair of the trustees at music charity Youth Music. "After six fulfilling years at the helm, I am preparing to pass the baton in March 2024”, she says. “It's been an incredible journey, one filled with learning, inspiration and, most importantly, meaningful impact in the lives of young people through the power of music”.


DIGITAL


Sound engineer Wez Clarke has launched an AI clone of himself, in partnership with AI mastering company Masterchannel. The tool aims to offer Clarke-style mixes to anyone who wants them. “The exciting thing about the clone is that it’s opening up what I can deliver to a much wider audience of bedroom artists and producers”, he says. “It’s great that they can experience working with a major engineer - I would have loved to have had the opportunity to use something like this when I was just starting out, because it’s a perfect way to learn … how to achieve that professional sound themselves”.


RELEASES


Ghetts has not released the video for his recent single ‘Laps’. That’s not a typo, instead of making a visual promo for the track, he’s donated the entire budget to Newham And Essex Beagles Athletics Club instead. The donation will cover the annual membership fees of 150 young people.


Toddla T and Big Zuu have released new track 'No Justice4Grenfell, No Peace’. Six and a half years on from the Grenfell disaster, all proceeds from the release will go to Hope Garden and Justice4Grenfell.


AWARDS


The nominations for next year’s MOBO Awards have been announced. Little Simz and Stormzy lead with four nods each - with both competing for Album Of The Year and Video Of The Year. The ceremony will take place at Sheffield’s Utilita Arena on 7 Feb. See the full nominations and vote here.

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DISTRIBUTION & RETAIL

UDS says it shipped 3,360,067 units last month, as stability seems to return to the UK physical music supply chain

Physical distribution company UDS says that it has just completed its busiest month since it acquired the assets of defunct music and video distributor Cinram Novum back in September 2022. Having moved its operations to a new site in Bicester in August this year, it shipped 3,360,067 units in November, a 26% increase on October.


The stats confirm that, while physical products now account for a minority of the record industry's revenues overall, the sale of CDs and vinyl nevertheless remains a key part of the business for plenty of artists and labels. Physical brought in 16% of the UK industry's revenues in 2022 and the UDS figures suggest demand for CD and vinyl among music fans remained pretty consistent as the 2023 Christmas shopping season got underway.


UDS's Bicester site now handles the distribution for 70% of the UK’s physical music, working for Universal Music, Sony Music, [PIAS] and Cargo, as well as handling invoicing, cash collection and returns services for Warner Music. Given the ongoing importance of physical for at least some artists and labels, the collapse of Cinram Novum last year, and high profile problems at UDS's parent company Utopia Music this year, have been a cause for concern within the industry.


Though sources say that - with the new Bicester base up and running, and the support of a number of key partners at UDS - it feels like some stability has now returned to the supply chain.


In an end-of-year interview with CMU - which will be published over the Christmas break - Kim Bayley, CEO of UK entertainment retail trade group ERA, notes that: "The biggest challenge for physical retailers [this year] has been the move of Utopia to a new warehouse in Bicester. Things are now settling down, but back in the summer it looked bleak. Retailers cannot operate if they have no stock to sell".


Commenting on the new UDS stats today, Bayley adds: “On behalf of all our members, I would like to congratulate UDS for hitting this milestone. It is a testament to the success of a physical music ecosystem in which UDS links labels and retailers, and retailers bring fans together with the music they love. The continuing success of vinyl, CD and even cassette shows that music lovers’ passion for physical formats is far stronger than many of us would have believed possible just a few years ago”.


Drew Hill - who is Managing Director of both UDS and Proper Music Group - says: “As demand for physical music continues to grow, it remains essential that the recording’s business can benefit from a fit-for-purpose supply chain able to service the biggest major to the smallest indie”.


“I am incredibly proud of the infrastructure UDS has built”, he goes on, “with the success of our new warehouse being testament to the collective hard work from industry stakeholders to ensure physical formats can continue to thrive in years to come".

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LIVE

UK Music calls on government to convene summit to tackle ticket touting

Cross-sector trade group UK Music has called on the UK government to urgently convene a summit to tackle ticket touting and what it calls the “multi-million-pound scourge of rip-off festival and concert ticket prices”.


“Fans are being ruthlessly exploited by ticket touts who snap up thousands of tickets with a view to reselling them for huge profits", says UK Music Interim CEO Tom Kiehl. “The government should give music lovers everywhere a Christmas gift by tackling the greedy Grinch gangs that are determined to rob them of their hard-earned cash”.


Seeking action from both Business And Trade Secretary Kemi Badenoch and Prime Minister Rishi Sunak, Kiehl continues: “We hope the Prime Minister will listen to our request for a meeting so we can all unite behind a plan to combat this problem and help nurture the talent pipeline on which our world-leading music industry depends".


There is some regulation of ticket touting in the UK. However, campaigners argue that much more should still be done. Indeed, in September, for the first time, campaign group FanFair called for an outright ban of for-profit ticket touting.


However, earlier this year ministers seemed unwilling to introduce any more regulation, rejecting proposals made by the Competition & Markets Authority back in 2021. It remains to be seen if they now respond more positively to this call from the industry.


For anyone interested in knowing how they might buy touted tickets for Taylor Swift's shows on the secondary market, the Daily Express has just published another article explaining the process and recommending fans use Viagogo or Vivid Seats - "we will receive a commission on any sales", it admits in small greyed out writing at the top of the piece.


And you only have to read through 1299 words of the article before you get to the quote from official Taylor Swift ticket seller AXS which confirms "any tickets found to be purchased via re-sale on the non-official secondary market will not be valid for entry into the concerts and will be cancelled in accordance with the terms and conditions of sale". Good job everybody!

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DIGITAL

European Commission set to force changes to Apple's rules around in-app payments


The European Commission is set to force Apple to change to its App Store rules following a complaint filed nearly five years ago by Spotify. The tech giant could also be fined by the EU for anti-competitive conduct in relation to its rules around in-app payments on iOS devices.


Sources who have spoken to Bloomberg say that EU regulators are putting the finishing touches to their ruling following the lengthy investigation that was instigated by Spotify's complaint. A final decision should be published early next year.


Spotify and other app-makers have long complained about the rules enforced by Apple and Google regarding payments within apps on iOS and Android devices respectively. Many app-makers are forced to use Apple and Google's own commission-charging payment systems - and aren't allowed to sign-post alternative payment options outside the app.


Various app-makers have sought to force a change to those rules, either by putting pressure on regulators or via legal action. Spotify filed its complaint against Apple with the European Commission in 2019. Investigators then gave a preliminary view in 2021 that Apple's rules did distort the music streaming market.


As the investigation continued, Bloomberg reports, Apple argued that it has already relaxed its rules in some circumstances for some apps. Which is true, though generally due to regulator pressure elsewhere in the world. For example, for some apps, including Spotify, the rule regarding sign-posting alternative payment options was changed.


These changes address the EC’s competition concerns, Apple claimed. However Spotify countered that restrictions still existed and that Apple’s concessions were "just for show".


The EC's final decision seems likely to force more concessions from Apple. Regulators could in theory also fine the tech giant up to 10% of its annual sales because of its anti-competitive conduct, though any fine seems likely to be more modest and the forced rule change will be more significant.

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EDUCATION & FUNDING

PRS Foundation announces new funding scheme for talent developments organisations

The PRS Foundation has announced a change to the way its funds talent development organisations with the creation of a new scheme called the Talent Development Network.


The music charity - backed by collecting society PRS - has a number of funding schemes that directly support music-makers. However, it also provides funding to organisations that run music talent development programmes, currently through schemes like the Open Fund For Organisations and Talent Development Partner programme.


The new Talent Development Network replaces both of those initiatives. "This new model of multi-year funding", says the Foundation, "will benefit those organisations who can demonstrate clear, tangible creative, career and professional outcomes, with more support, over a greater period enabling longer term planning and better support for talented music creators across the UK".


Supported organisations will receive up to £25,000 a year for three years, providing they meet certain targets in the first year. The changes are being made, the charity adds, "following feedback from the sector" and will “create a more sustainable way of supporting talent development".


The Talent Development Network will be supported by another UK collecting society, PPL, whose CEO Peter Leathem says: “In recent years, The Open Fund and Talent Development Partners network have been essential in supporting a multitude of grassroots organisations. We are excited to see these initiatives evolve into a more holistic, long-term programme that will provide greater clarity and stability for talent developers, ensuring they can continue to provide spaces, expertise and encouragement to the next generation of musicians, performers and industry professionals".


President of PRS Members’ Council Michelle Escoffery - who is also a trustee of the Foundation - adds: “This new multi-year funding scheme will mean more impact and longevity for recipients, as well as access to a music community network with invaluable expert knowledge and advice from peers across the industry. With support from PRS For Music, PRS Foundation continues to help level-up the music industry, and we are incredibly proud to be part of that journey."

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DEALS

Warner Music announces alliance with start-up MediMusic to trial ‘music as medicine’

Warner Music has announced a partnership with MediMusic - a UK-based start-up - to help trial ‘music as medicine’ to relieve pain, anxiety and stress.


Through the partnership, the two companies explain, "MediMusic will conduct research testing in several closed randomised controlled trials in both the US and UK where they will deliver playlists from WMG’s catalogue of music to various patients and sample groups and observe how they respond in real-time. Beginning in Q1 of next year, this partnership with MediMusic will allow further trials to take place in hospitals and care homes".


"MediMusic’s proprietary algorithms extract the relevant features from the digital DNA of a piece of music", they add, "resulting in a fingerprint for healthcare use. Using AI, machine learning and the data about the patient, MediMusic then automatically creates personalised 20 minute playlists and plays the music through a streaming device called the MediBeat and a pair of headphones".


Confirming the alliance, Warner Music's VP Digital Strategy And Business Development Michael Baines says: “At WMG, we are focused on finding new ways for our artists and music to be used for good, to benefit society, and to empower an ecosystem of partners with similar goals. Together with MediMusic, we’re THRILLED to explore the transformative healing power of music in their 'music as medicine' trials - we are just beginning to scratch the surface of what’s possible".


“This partnership with WMG is hugely important in helping us on our global mission to prescribe music and medicine to ease anxiety, pain and stress”, adds Gary Jones, CEO of MediMusic.


“We’ve always known music is good for our soul. But there are thousands of medical papers and studies that prove music can also improve our health. Together with WMG’s catalogue of music, we can gather more data to improve our technology so that music can be used as medicine to help people around the world".

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AND FINALLY

Vinyl sales of two 1980s classics may decide who is Christmas number one in 2023

The Pogues’ ‘Fairytale Of New York’ is to be released on seven-inch vinyl in a bid to get it to Christmas number one for the first time. A smart plan. The only issue is that the same is being done for ‘Last Christmas’ by Wham!


The campaign to get ‘Fairytale Of New York’ to Christmas number one has been hotting up following the recent death of Pogues frontman Shane MacGowan. It has now been announced that the song will be released on seven-inch vinyl in aid of homelessness charity the Dublin Simon Community.


With the song currently at number four in the UK singles chart, MacGowan’s widow Victoria Mary Clarke recently told BBC Radio 4’s ‘Today’ of the possibility of the song hitting the festive top spot: "It would be nice, wouldn't it? It should be the Christmas number one. It absolutely should”.


Despite being a perennial and very popular Christmas hit, the track, which was originally released in 1987, has never actually been at number one on Christmas Day. The year it came out, it was held off by the decidedly less festive ‘Always On My Mind’ by the Pet Shop Boys.


Could a new physical release help to finally push it to the top spot? Absolutely, thanks to the way physical versus digital stats are counted when the charts are totted up. Not to mention the handicaps placed on older tracks when it comes to streaming - although these don’t seem to affect the Christmas classics much.


Either way, the Dublin Simon Community will receive £6 for every copy sold. Available for pre-order now, the seven-inch record will be released on Monday 19 Dec, putting all of its initial sales toward the Christmas chart.


"We would like to say a huge thank you to The Pogues and Shane McGowan's family for their generosity in creating such a special legacy for Dublin Simon Community with this release”, says the charity’s Head Of Fundraising, Emma Kilkenny. “Music is an emotional and visceral gift that can lift spirits and bring hope to people at their lowest point”.


So that’s a heartwarming endeavour. But this is the Christmas number one battle. It’s ruthless. And nothing is guaranteed. Especially when there’s a very similar campaign being run for another festive classic that’s never topped the chart in Christmas week. That being the song currently at number one, ‘Last Christmas’ by Wham!

That song - originally released in 1984 - will be available on seven-inch and CD from tomorrow, in a bid to keep it at the top through December. So this year’s Christmas number one really could all come down to the number of physical sales of two 1980s tracks. What a daft world we live in.

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