CMU Daily 21.07.22: Warner joins SoundCloud's user-centric scheme, EU Commissioner on streaming ER

Warner Music signs up to SoundCloud's user-centric initiative
Warner Music is joining SoundCloud's user-centric licensing party. The two companies will today formally announce that the major is signing up to the streaming platform's fan-powered royalties initiative.

Most streaming services operate a revenue share based on consumption share business model, which is to say services commit to share their revenues each month with their licensing partners in the music industry, ie record labels, music distributors, music publishers and collecting societies.

To do that, services first need to allocate the money they've made to individual tracks that have been streamed, which is the 'consumption share' bit of the deal. That's done by pooling all the data and money linked to any one subscription type in any one market, and then doing some maths.

So if one track accounted for 0.1% of all the streams delivered to premium subscribers in the UK in a particular month, 0.1% of all the money made selling premium subscriptions in the UK that month would be allocated to that track. That allocation is then shared with whichever label or distributor delivered the recording, and whichever publisher or society represents the song.

That approach has its critics. Because some streaming service subscribers will be high-level users - streaming lots of music each month - and others will be low-level users - streaming less music each month. Under the current system, some of the subscription money paid into the system by the latter group of subscribers ends up with the labels, distributors, publishers and societies - and ultimately artists and songwriters - behind the music listened to by the former group.

With the user-centric approach, there would be no pooling of data and money, and instead each individual subscriber's monthly payment would be allocated to the tracks that subscriber listened to. It means that, once averaged out, the per-stream pay out would be a lot higher with low-level streamers, and a lot lower with high-level streamers.

Over the years it has been argued that the current system favours more mainstream music and superstar artists, and that switching to user-centric would see some of the money currently going to the biggest tracks and acts being redistributed to more niche music and artists.

Although there hasn't to date been any consensus that this would definitely be the outcome, with some arguing that their number crunching suggests some independent labels and artists would also lose out under a user-centric system. Plus, the user-centric approach is slightly more complicated.

Initially it was Deezer who was championing user-centric, trying to persuade the labels to agree to a pilot, so that its revenues would be allocated to tracks on a user-centric basis in France and/or Germany. Although many labels are officially agnostic on the proposal that the industry should shift to user-centric, to date Deezer hasn't managed to get such a pilot underway.

In the end, it was Soundcloud which became the user-centric pioneer. That was possible because SoundCloud is different to most other streaming services, in that - although it gets music from and has deals with labels and distributors - a decent portion of its catalogue actually comes from independent artists that directly upload their tracks onto the platform.

It could therefore switch those independent artists over to a user-centric system without getting the labels and distributors on board. And that's what it did last year.

So, basically, SoundCloud currently operates two systems - one for music provided by labels and distributors, which works like all the other services, and one for independent artists, which uses a user-centric system.

By concurrently running two systems, an extra stage is inserted into the royalty calculation process, in which monies are initially split between labels/distributors and independent artists, again based on consumption share. Track allocation within the two groups is then done differently, so with a pooled consumption approach for the former group, and user-centric for the latter.

SoundCloud calls its user-centric system Fan Powered Royalties. And the industry has been watching the Fan Powered Royalties initiative closely to see how it works and what impact it has.

SoundCloud insists that it is having a positive effect for the majority of its independent creators. And music consultancy MIDIA recently published a report based on SoundCloud data that reckoned 56% of the independent creators on the platform are better off under the user-centric system, and with artists who have between 100 and 100,000 fans, 63% are better off.

MIDIA also said that, under the SoundCloud system, an artist's super-fans become key. So, of the artists who were better off under the Fan Powered Royalties scheme, while on average super-fans account for 1.9% of any one artist's audience, they contribute on average 42% of that artist's royalties. This also arguably strengthens the relationship between artist and super-fan, which is also important for capitalising on all the other opportunities in the direct-to-fan space.

However, while all that is very interesting, because user-centric at SoundCloud only currently applies to independent artists, we are yet to get a full picture of what an industry wide switch to that approach would look like. Which makes Warner Music's decision to take part in the Fan Powers Royalties initiative an important development.

Confirming its decision to join SoundCloud's user-centric party, the major's EVP Of Business Development Oana Ruxandra says: "The evolution of the music industry brings new ways to create, consume and monetise. As the ecosystem expands, WMG is focused on advancing and experimenting with new economic models to ensure the opportunities for our artists and their communities are maximised. SoundCloud has been an amazing partner in connecting artists and fans, deepening our relationship will allow us both to proactively build for the future".

SoundCloud getting a major on board for this initiative is quite a coup. It seems likely that this agreement was achieved, in part at least, by former Warner Music exec and now SoundCloud President Eliah Seton working hard to persuade his former colleagues to get on board.

He says of the development: "Today's deal is a major milestone because, under Fan Powered Royalties, more artists get paid more money. But even more importantly, Fan-Powered paves the way for artists to create even more opportunities to monetise their art beyond streaming and create more value, driven by engagement with their fans".

"Warner Music Group is known for developing some of today's biggest superstars and helping them build long-term careers by investing in technologies and models which grow and support their fan communities", he goes on. "This makes them an ideal partner for SoundCloud and we're excited to bring our game-changing fan-driven product to their incredible roster of artists".

It remains to be seen quite how exactly Warner's involvement in Fan Powered Royalties works - and whether it will persuade it and others that a user-centric approach on other services is desirable. But, needless to say, supporters of that user-centric approach will be hoping that it does.

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EU Commissioner says copyright directive implementation can include a new ER right for performers
The European Union's Commissioner For The Internal Market, Thierry Breton, has issued a statement saying that, in principle, EU member states can introduce a new remuneration right for performers when implementing the 2019 European Copyright Directive. Belgium recently did just that, but the move has been criticised by some in the wider music community.

Article eighteen of the 2019 directive says that EU member states should ensure that artists who do not own or control the copyright in their recordings nevertheless receive "appropriate and proportionate remuneration" from the exploitation of their work. However, it doesn't say how that should be achieved.

Most of the EU countries that have now amended their national copyright laws to comply with the directive have simply added a line about artists getting "appropriate and proportionate remuneration", but without changing anything about the way artists are remunerated from the digital exploitation of their music.

In doing so, law-makers have basically implied that they believe the current system for remunerating artists - so that what cut of digital income any one artist receives depends entirely on the deals they have done with any labels, distributors or other artists they work with - is "appropriate and proportionate".

However, not every country has taken that approach. Germany has introduced a specific new remuneration right for performers when their work is exploited by user-generated content platforms like YouTube. Meanwhile, in Belgium, a new remuneration right has been added covering all streaming services.

That means that in Germany and Belgium artists will receive an additional payment via the collective licensing system when their music is streamed. Digital services will pay this money directly to the performer collecting societies. Once that is happening, the services will almost certainly look to reduce the payments they make to the labels and distributors that control the recording copyrights.

When the directive was being negotiated, some performer groups campaigned for a pan-European remuneration right of that kind - usually called 'performer equitable remuneration' on streams - to be explicitly included in the final directive draft. However, that didn't happen, and instead there was just that vague statement about "appropriate and proportionate remuneration" in article eighteen.

There are pros and cons to artists getting some or all of their share of streaming income via an ER system run by collecting societies. Labels - major and indie - are generally opposed to such a system, arguing that it removes at least some of the flexibility when negotiating record deals with artists, impacting on their ability to invest in new talent. Plus the increasing number of artists who self-release music through their own labels could earn less under an ER system.

But there are plenty of people in the music community who do support the idea of ER being paid on streams, insisting that it's an effective way to ensure artists are more fairly remunerated when their music is streamed. And, with many EU member states running behind schedule on implementing the directive, and therefore still to do so, pro-ER campaigners have said that they hope other countries will now implement the 2019 directive in the same way as Belgium.

Ioan Kaes, General Secretary of AEPO-ARTIS - the pan-European grouping for performer collecting societies - said last month that the Belgian approach was "the most comprehensive and effective" implementation of the directive, and said of the other countries still to implement said directive: "The only excuse to be late in this implementation is the search for the best additional measures to protect performers in the online environment they are increasingly dependent on".

Some of those who oppose ER have suggested that Germany and Belgium may have incorrectly implemented the 2019 directive by introducing new remuneration rights, pointing out that the three EU institutions involved in writing the directive - Commission, Council and Parliament - had the opportunity to include an explicit new ER right back in 2019, but chose not to.

However, responding to a formal question on this point raised by some MEPs in the European Parliament back in March, Breton says that, as far as he is concerned, EU states can choose to transpose article eighteen into their national laws by introducing a new remuneration right - or not - providing other European laws are complied with.

He writes: "The Commission considers that, in principle, member states could transpose article eighteen through an unwaivable remuneration right, provided that this complies with relevant EU law, including the principle of contractual freedom, fair balance of rights and interests, and the exclusive rights in [European copyright rules]. Any provision implementing article eighteen should secure appropriate and proportionate remuneration to authors and performers and should not deprive them of their freedom to decide in the first place whether or not to license or transfer their rights".

He declined to comment specifically on the German or Belgian implementations of the directive though, stating: "The Commission has not yet carried out a final legal assessment of member states' implementing measures, considering that the implementation is still ongoing and around half of the member states have not yet transposed the Copyright Directive into national law. Therefore, the Commission is not yet in a position to issue any opinion on individual national implementations of the new Copyright Directive".

Welcoming Breton's statement, AEPO-ARTIS said on Twitter yesterday: "Today Commissioner Breton confirms that implementation of article eighteen of the Copyright Directive by means of an unwaivable remuneration right is a possibility that is in conformity with the directive. What does this mean for performers? It means that a right for them to receive ER for streaming IS compatible with the new EU Copyright Directive".

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BMG acquires Jean-Michel Jarre's publishing catalogue
BMG has acquired the song rights of Jean-Michel Jarre. The company already controls the electronic musician's recordings, having acquired the Francis Dreyfus Music record label a decade ago.

"Jean-Michel Jarre is not only a ground-breaking pioneer in electronic music, he is a polymath and a shining ambassador for culture and internationalism", says BMG CEO Hartwig Masuch. "Nearly 50 years after [1976 album] 'Oxygene' burst upon the world, we are delighted to build on our longstanding relationship to become custodians of his music publishing rights".

Jarre adds: "This partnership with BMG means a lot to me. Hartwig Masuch and the entire team have been part of my family for many years. Moreover, I am pleased that my publishing back catalogue is sheltered here in Europe and that my work will continue to grow in such good hands. Today is a new start allowing me to develop fresh ideas and giving me the means to explore new territories. Together we will thrive".

The deal is the biggest that BMG has ever done in France, and follows another agreement announced earlier this week to acquire the song rights and recording royalties of Simple Minds. It also comes as the FT reports that the company has committed $1 billion to acquire further music rights over the course of this year.

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Recognise The Music campaign calls for wider embracing of audio-ID for processing performance royalties
Music industry organisations including the Music Venue Trust, Featured Artists Coalition, Music Managers Forum and Association Of Independent Music have partnered with audio recognition company Audoo on a new campaign called Recognise The Music, which is calling for technologies like that made by Audoo to be more widely embraced by the industry so to more accurately distribute public performance royalties.

Whenever music is played or performed in public, royalties are due to the music industry, of course. The licensing of public performance is handled via the collecting licensing system, so in the UK that's PPL for recordings and PRS for songs.

However, one challenge the industry has always faced in this domain is how to track what music every pub, club, bar, cafe, shop, gym and office has used and therefore which artists, songwriters, labels and publishers should be paid.

These users of music aren't usually in a position to provide complete - or, quite often, any - usage data. Therefore collecting societies have traditionally had to come up with systems to share out that money without really knowing who should get it. And whatever those systems might be, they are usually somewhat controversial.

As audio-recognition technology has gained momentum, some in the music community have called for it to be employed to track usage of music in all of these places.

And some collecting societies - including PRS and PPL - have been piloting the use of such tech, especially in the clubbing and dance music festival domain. But some reckon the time has come for audio-recognition technology to be much more widely embraced.

Which brings us to the Recognise The Music campaign, which states: "Unidentifiable and inaccurate royalty payments is one of the music industry's biggest challenges, with over £2 billion in global revenue allocated without the capacity to track where it should really go. Recognise The Music believes that in order for all artists and songwriters to get paid with greater accuracy, first it needs to be possible to recognise what music is being played, consistently".

As part of the scheme, certain venues and other businesses playing music in public will receive audio-meters from Audoo to track what music they are playing. The tech firm states that that audio-meter "recognises what music is playing and securely fingerprints it, with no audio ever being stored or sent from the device. Providing this new, real-world data means artists and songwriters will receive the correct royalties they are owed for the broadcasting of their work".

Commenting on the campaign, Audoo CEO Ryan Edwards says: "Recognise The Music is really special to us because it does exactly what it says it will. It recognises music to ensure that all artists of all shapes and sizes have their music recognised and that they're paid equally and correctly".

"This helps the industry across the whole board", he goes on. "From the venues right to the artists - the biggest artists in the world to the new artists that are starting out. Venues don't need to report, everything is automated. The music fees they have to pay flow straight through to the artists. It's important because everyone is paid accurately and correctly".

Beyond getting people more accurately paid, Edwards adds, audio-recognition tech can also help the industry better understand where music is being played. "Recognise The Music is going to deliver a new way for venues, artists, publishers, labels, song funds, booking agents, the whole music industry to understand the ways music is consumed and then distributed", he concludes. "It's about enabling the entire industry to understand how, why and where music is played".

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Beardyman to collaborate with fans on new album
Beardyman has announced a new crowdfunding project for his next album, which will not only see fans fund the recording of the project but also be given the opportunity to directly input on its creation. The project - dubbed 'Milking The Community' - features two funding tiers, Production Team and Technical Consultant, which respectively cost £6.75 and £10 a month.

Fans participating in the programme will be able to make creative suggestions to Beardyman, who will then create tracks based on those suggestions and subsequent conversations. Some of those tracks will appear on his next album, and - where that's the case - the fan who inspired each featured track will get 10% of the recording rights and resulting royalties.

At the higher Technical Consultant level, fans will also get access to videos, tutorials and Q&As that provide more insight into the producer and beatboxer's creative process; a special Discord server; and a load of demoes, stems and other studio content.

"To my knowledge this is a unique proposition in the history of music, and is a potentially industry-disrupting funding structure with the marginal possibility for patrons … to see a return on their investment in an artist", says Beardyman.

"I will call you personally, we'll talk about music, life and the universe, we'll exchange inspirations, thoughts and influences, get inspired together, and what we make will be a song we have both had a hand in writing - and here's where it gets really interesting", he goes on. "If I really love the track we make I will include it on the album. We both have an incentive to make it as good as it can be, as I will be including you as a writer on the track. You will share in the streaming revenue".

"This is the investment a record company would normally make in an artist, the leap of faith they would normally take in funding an 'advance' to keep an artist in the black whilst they craft their next career-defining piece of art", he continues. "A record company will appoint an A&R person to oversee the creation of the work to ensure it pleases the record company. This is not the vibe. I have a better idea. I want to make you guys the A&R rep for a label made entirely of my true supporters, the ultimate consumers of the art itself. This has never been done before".

Commenting on the project, Patreon's UK & Ireland Creator Partnerships Team Lead, Gee Linford-Grayson, adds: "Patreon is hyper-focused on providing the platform and infrastructure creators need to create on their own terms and be successful in growing and running their creative businesses, and Beardyman is taking his community along with him".

Find out more about the project here.

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Skullcrusher announces debut album, Quiet The Room
Incongruously named singer-songwriter Skullcrusher has announced that she will release her debut album, 'Quiet The Room', this autumn. Out now is new single 'Whatever Fits Together'.

"I wrote 'Whatever Fits Together' while reflecting on my past and wondering how I might begin to explain it to someone", says Skullcrusher, real name Helen Ballentine. "I viewed my younger self through a wash of emotions: anger, sadness, pity, confusion, all reaching for a kind of compassion".

"I tried to capture the contradictions that comprise my past and define who I am now", she goes on. "As I looked back, I saw my life in pieces: some moments blacked out, some extremely vivid, some leading nowhere. Through the song I attempt to piece it together in some non-linear form and accept my disparate story".

"The video for 'Whatever Fits Together' is a nightmare of phantasmagoria, taking inspiration from 'The Cabinet Of Dr Caligari' and one of my favourite silent films, 'Shoes'", she adds. "We felt this song needed a darker atmosphere in order to shed light on its essential message: to address the monsters that exist in the shadows. Aiming to keep it simple, we created a black void and Angela Ricciardi filmed on black and white super eight. In the end, it became a series of confrontations".

Watch that very video right here.

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RELEASES

Keane's Tom Chaplin has released new solo single 'Gravitational'. "There's an ambiguity to the lyrics", he says. "The heavy chemicals now are the love for family. But it's also the desire to unravel. With my addiction and then with certain midlife questions, every time I felt myself getting very far away from home, and my wife, and kids, and music even, there's an energy that pulls me back. I love that".

Lacuna Coil are back with new single 'Tight Rope XX', taken from the upcoming 20th anniversary re-recording of their 2002 album 'Comalies'. That new version of the album, titled 'Comalies XX', will be released on 14 Oct. "To celebrate the 20th anniversary of 'Comalies', we felt this special album deserved more than a remastering", say the band. "We didn't just give it a new dress, we built a new skeleton and gave it new skin and a new life".

Paul Heaton & Jacqui Abbott will released their fifth album, 'N.K-Pop', on 30 Sep, and have put out first single 'Still'. "I wanted to write a song for folk who have lost a child, whether by miscarriage, stillbirth or in infancy", says Heaton of the track. "It's a common occurrence and, for every one story you may hear, there are 20 or 30 left untold. Whilst totally understandable we, together with the stillbirth charity Sands, want to direct people to talking. Many only feel able to talk to their partner about the loss, but talking to someone equally distressed can be suffocating".

Genesis Owusu is back with new single 'GTFO'.

Kaitlyn Aurelia Smith has released new single 'Have You Felt Lately?' The track is taken from her upcoming new album, 'Let's Turn It Into Sound', which is out on 26 Aug.

Girlpuppy has announced that she will release her debut album 'When I'm Alone' on 28 Oct, and has also released new single 'Wish'. "On 'Wish' I was thinking about when friends leave your life and you're not entirely sure why", she says. "This song is me living with that feeling, when loss just doesn't quite add up. This is the first shoegaze rock song I've made and I did that intentionally - the emotions in the song go from anger to sadness to nostalgia and all the other emotions that you feel when you go through a 'friend breakup'. I imagined it being really cathartic to play it live".

Check out our weekly Spotify playlist of new music featured in the CMU Daily - updated every Friday.

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James Blunt not sure "Spinal Tap meets Alan Partridge" documentary was "a good idea"
James Blunt is to star in a new documentary about his career, described in the official blurb as being like "Spinal Tap meets Alan Partridge". And if your immediate thought is, "Oh, like the Bros documentary", it is indeed made by the same production company behind the incredible 'When The Screaming Stops'.

Filmed during Blunt's recent greatest hits tour, the film explores the musician's time in the British Army, his move into music - which, of course, saw him make and release the biggest selling album of the early 21st century - and the progression of his career since then.

"This is the story of an ageing, British popstar, still fighting for relevance some seventeen years after his star momentarily twinkled", says production company Lorton Entertainment. "No one has a more extraordinary story than James Blunt. The soldier turned singer has one of the most inspiring trajectories in the history of music".

"Described as 'Spinal Tap meets Alan Partridge', this is a behind the scenes, brutally honest story of a painfully self-aware, endlessly touring musician, for whom persistence eventually prevails", it adds.

If you're wondering how the "painfully self-aware" musician has responded to the film, Blunt comments: "In hindsight, I'm not sure letting them film this was a good idea".

With that ringing endorsement, I think it's safe to say that we all want to see this now. Sadly, a release date is yet to be confirmed.

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