CMU Daily 27.03.18: Soon-to-list Spotify says it could top 96 million premium subscribers this year, Lana Del Rey says non-existent Radiohead lawsuit is "over"

Soon-to-list Spotify says it could top 96 million premium subscribers this year
Spotify reckons it could top 200 million overall users by the end of 2018, including as many as 96 million paying users. Nevertheless, losses for the year could be as high as 330 million euros, of which up to 40 million euros comes from the cost of next week's direct listing.

These are just some of the predictions made in a forward-looking statement issued by the soon-to-be-publically-listed Spotify yesterday. The market-leading streaming music company will finally list on the New York Stock Exchange next week, of course. Which officially makes this 'Everyone Has To Have An Opinion About Spotify Week'.

Having done a very quick sweep of all the Spotify-business-model chatter on the social networks and op-ed pages, apparently the entire music community is doomed, damned, condemned, screwed and just generally fucked. Apart from Drake, Ed Sheeran and Daniel Ek, who are all heading to a coke-fuelled cash party. I'm paraphrasing of course. Slightly.

Once publically listed, Spotify will be obliged to reveal information about its finances every quarter. And unlike streaming services that are operated by bigger publicly listed companies, where information about loss-making musical adventures can be buried under abstract cost-centres, as a standalone streaming music company Spotify's quarterly reports will provide more tangible insight about the state of both its business and the wider streaming sector.

With the current streaming music business model still to be proven - the hope remains that it might just work at scale - you can expect lots more chatter in the music community every time one of those quarterly reports lands. So that'll be fun, won't it? I'd say that gathering together four times a year to pull apart figures most people don't quite understand sounds much more fun than a coke-fuelled cash party.

In yesterday's pre-listing statement, Spotify confirmed that both monthly active users and premium subscribers continued to rise in the first quarter of 2018, the latter growing more rapidly in percentage terms year-on-year. If the company achieves the upper end of its estimates for year-end user figures, the total userbase will have grown 32% year-on-year in 2018 and the total number of premium subscribers 36%.

Though, of course, despite those impressive growth rates, the combined costs of royalty payments to the music industry, continued global expansion and being a buzzy tech firm means Spotify will still make sizable losses. The question for Wall Street investors next week is whether the continued growth means that at some point in the not too distant future things will flip, the model will work, and Spotify will become a lucrative business.

Whether or not that optimism - even if you possess it - can be extended to the "doomed, damned, condemned, screwed and just generally fucked" music community depends on how monies will be shared out.

Yes, whatever happens a sizable portion of income will continue to fund the Drake/Sheeran/Ek coke-fuelled cash party, but will a decent number of artists, songwriters, labels and publishers still be able to fund their own Panda Pop parties with their respective shares of what is left on the table?

Maybe. And yes, that other party's Coke-fuelled. As in cola. I'd never suggest anything else.

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Lana Del Rey says non-existent Radiohead lawsuit is "over"
Lana Del Rey has said that the lawsuit brought against her by Radiohead is "over". That being the lawsuit which Radiohead's publisher Warner/Chappell said earlier this year didn't exist.

In January, Del Rey said that she was being sued by Radiohead, who wanted 100% of the publishing rights in her song 'Get Free', due to its similarities with their song 'Creep'. "Their lawyers have been relentless, so we will deal with it in court", she said.

Warner/Chappell then said that it was true that discussions had been ongoing for a number of months in relation to the claim that 'Get Free' borrowed from 'Creep'. However, it added, "no lawsuit has been issued and Radiohead have not said they 'will only accept 100%' of the publishing of 'Get Free'".

After performing the song during her encore at the Brazilian leg of the Lollapalooza festival at the weekend, she told the audience: "Now that my lawsuit's over, I guess I can sing that song any time I want, right?"

Given that there was no lawsuit and no one has ever said that she couldn't perform her song, that remark doesn't make a whole lot of sense. But it's not what you say, it's how you say it. And she says it very confidently and then takes a drag on a cigarette, so that's a good as actually winning a legal battle, I reckon.

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BMI boss welcomes conclusion of 100% licensing dispute, considers extending his society's licensing remit
The boss of American collecting society BMI has written an opinion piece for Billboard following the recent passing of a key deadline in the long-running 100% licensing dispute. In it he hails his society's victory in that battle and then talks mechanicals.

A quick recap. Songs are often co-written and therefore co-owned. In the US, there are multiple collecting societies representing the performing rights in songs, meaning songwriters must decide which one to join. Once the writer is joined up, that society represents their performing rights.

Collaborating writers may choose to join different societies, which means that any one song may be concurrently represented by BMI, ASCAP, GMR and SESAC, with each society representing a percentage of the work. Where that is the case - convention has generally held - anyone wishing to broadcast or perform that work must have a licence from all the societies, and pay royalties to each, pro-rata according to what percentage it controls.

That system is called 'fractional licensing'. You get every licence you need until you have 100% of the song covered. But when the US Department Of Justice reviewed the consent decrees that govern BMI and ASCAP in 2016, it announced that - by its reading of said decrees - the two big American collecting societies were obliged to operate a so called '100% licensing system'.

That would mean that, where BMI controlled part of a song, a licensee could make use of that song with just a BMI licence. BMI would then collect 100% of the royalties at whatever rates it had agreed with the licensee, but would then have to pass on a share of the money to ASCAP or whoever, who would then pay the writer who was not a BMI member.

Both BMI and ASCAP objected to the DoJ's new interpretation of the rules, the former fighting the ruling in the courts, the latter lobbying against it in US Congress. BMI's pro-fractional licensing position was then endorsed by the courts much quicker than anyone expected. The DoJ then appealed that ruling, but just before Christmas last year an appeals court upheld the original judgement saying that a fractional licensing system was just fine.

The DoJ could have pursued a further appeal, but the deadline for doing so passed last week with no appeal being filed. As that deadline passed BMI said in a statement: "With no action taken, the final decision of the Court Of Appeals stands that BMI is free to continue to engage in the historic practice of fractional licensing. This development definitively ends litigation between BMI and the DoJ in this matter, and represents a significant victory for songwriters, composers and publishers, as well as the music industry at large".

Writing in Billboard, BMI boss Michael O'Neill says: "We are incredibly gratified by our victory in this matter, and believe the industry should view it as an overwhelmingly positive outcome as well. To put it in context, the negative ramifications of the DoJ's 100% licensing interpretation were so sweeping that it was important enough for BMI to take the US government to court".

He goes on: "We did this even though some said we could have increased our strength as a performing rights organisation if we had agreed with the DoJ. We did this purely because it was the right thing to do, and the courts agreed with us".

And, he adds: "Our win means songwriters can keep collaborating with whomever they choose, businesses that use music can continue to license that music in the same manner as they always have, and BMI can focus on protecting and growing the profession of songwriting and modernising music licensing, which was always our intent".

O'Neill then goes on to consider other current and future developments in the collective licensing domain in the US, including the possibility of the PROs getting involved in other aspects of song licensing, which presumably means the mechanical rights.

ASCAP's consent decree specifically limits the society's operations to licensing performing rights, whereas the BMI consent decree is less explicit about any such limitations. The ruling in the 100% licensing dispute, O'Neill reckons, confirms that BMI could get involved in mechanicals.

"We have long believed our consent decree allows for the licensing of multiple rights, which is why four years ago we asked the DOJ to amend our decree to clarify that ability, among other much-needed updates", he writes. "Thanks to our recent victory over the DOJ, we now have definitive confirmation".

He continues: "The Court Of Appeals ruled that if the language of our consent decree does not expressly prohibit a business activity, in this case fractional licensing, then it is permitted under the decree. That opens up opportunities for us to better serve the needs of our affiliates, and we are exploring what it would look like for music users, creators and copyright owners if BMI licensed or administered multiple rights".

Mechanical rights have been much debated in the US of late, of course, because of the issues around streaming services paying mechanical royalties to music publishers and songwriters. That is in no small part because of the lack of a collecting society able to offer a blanket licence for this element of the song copyright, which does exist in most other countries.

You can read O'Neill's full article here.

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Guvera CFO was concerned when he joined the business, but trusted its CEO to raise more finance
The public investigation into the collapse of one-time streaming service Guvera continued in the Australian courts last week. This time it was the company's former Chief Financial Officer Ken Hostland discussing the events that led up to the digital music company's ill-fated IPO in 2016.

The Australian Securities Exchange ultimately blocked Guvera's Initial Public Offering, which began a sequence of events that led to the collapse of the digital music firm. Accountancy giant Deloitte, as liquidator of the business, instigated the court-based public examination as it tries to work out what events and decisions led to the company's demise, which in turn left shareholders $180 million out of pocket.

Hostland became Guvera's CFO in January 2016 and - according to Mumbrella - he admitted during last week's hearing that he had immediate concerns about the company's financial position. However, he said, his role didn't include direct oversight of the firm's fundraising efforts, and he put his faith in Guvera CEO Darren Herft's ability to find further finance, primarily through his separate private equity business Amma.

Various partners beyond Amma had been seeking significant investment for Guvera in 2015, though those efforts didn't deliver. In an earlier hearing, Herft himself admitted that was why the company proceeded with its IPO in 2016, despite advice from JP Morgan that it was too soon, because it needed the cash it was hoped the flotation would raise quickly.

Asked about his concerns after taking on the CFO role at Guvera, Hostland said last week: "The directors who had worked at the company for a long period of time were confident that the ability to continue to raise capital was something Amma was capable of doing". Nevertheless, not long in the job, Hostland was asked to significantly cut the company's operating costs, including cutting the number of countries where it operated.

Hostland was also asked about whether he initially expected the doomed IPO to be a success that could provide Guvera with the cash injection it so urgently needed. He insisted that the company's 'due diligence committee' would not have signed off the flotation's prospectus had it not expected the listing to succeed.

According to Mumbrella, he said: "I believe the due diligence committee proceeded forward because we felt it was still very possible to be successful and raise the funds that were required. I believed it was going to be successful on the basis I was comfortable with the process that we had gone through, the due diligence we had gone through, and the expectation that the capital raising was going to be successful enough to raise those funds".

More questions will be asked about the Guvera collapse when the public hearing reconvenes on 6 Apr.

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Entertainment One acquires Round Room Entertainment
Content company Entertainment One has acquired live music firm Round Room Entertainment. The latter's Co-Presidents - Stephen Shaw and Jonathan Linden - will continue to lead the business as a division of eOne.

"Across all areas of music, we work with so many spokes on the wheel and live entertainment is such an important one", says eOne's Global President For Music Chris Taylor. "Adding Round Room to our team, with Stephen and Jonathan at the helm, is going to provide the capacity to expand the reach of our brands, touch more fans on a global scale, and further elevate our management roster".

Shaw adds: "We are very excited to join eOne and become a part of their global family, while continuing to grow our core roster. This is a very strategic move for both sides, and we look forward to working closely with Chris and his team to connect his extensive roster of artists with countless fans around the world".

Other Co-President Linden confirms that he is "excited" and adds "eager".

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Claire Horseman joins Coalition Agency
Live company the Coalition Agency has announced that Claire Horseman is joining as Managing and Creative Director. She was previously Managing Director at booking agency Coda.

"I've watched Guy and the Coalition team build a strong and innovative business that has really impressed me", says Horseman. "I'm looking forward to playing a key role in the overall strategy to grow the business further".

Also joining at the same time are Anthony Norris and Owen Kent, who arrive from Music Plus Sport, where they were Managing Director and Creative Director respectively.

Previously mentioned guy, Coalition CEO Guy Robinson, says: "Coalition is successfully embracing a 'three sixty' vision in the way we work with our talent and brands, and with the addition of these three truly inspiring professionals we are now stronger than ever. From talent building, delivering and promoting live events, through to brand creation and management, I'm extremely proud to welcome Anthony, Claire and Owen to our dynamic entrepreneurial team".

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Streaming services pressured to introduce quotas for Australian music in localised playlists
Australian collecting society APRA AMCOS is calling on streaming services to promote more domestic music to their respective users in the country. It says that streaming companies should commit to push at least 25% Australian music in their domestic playlists, in line with commercial radio stations in the country.

The announcement coincides with various Australian musicians heading to the capital city of Canberra to lobby politicians. They are demanding that their representatives educate themselves on how the shift to streaming in the music industry is affecting them. Concerns have been raised now in particular because no Australian artist had a number one single in the country during 2017.

As streaming becomes an increasingly prevalent way in which consumers discover new music, new APRA AMCOS CEO Dean Ormston told ABC: "We're in ongoing discussions with the major streaming services as to how they can better support Australian music and show their commitment to the market here, on their local platforms. We are calling for a minimum of 25% Australian content on their own locally curated playlists".

Similar quotas were introduced for Australian commercial radio in 2001, in order to ensure that listeners were exposed to domestic talent. Music on mainstream rock and pop stations must be at least 25% from local performers between 6am and midnight. There are lower quotas for other genres, dropping to at least 10% on jazz and 'oldies' stations.

However, recently published research found that many stations are failing to meet these quotas - some falling as low as 7%. Stations have also been accused of "stacking" the local output, by putting it all into less popular timeslots rather than spreading it out across the day.

Chrissie Vincent, who conducted the research as part of a masters degree, before submitting it to APRA AMCOS, said: "My research showed that during a typical week Nova played a measly 7% Australian content, Fox FM just 11% and KIIS FM played 13% during a 24 hour period, with the stations making their quotas playing local artists from 10pm till midnight during the 'off-peak'".

She continued: "Of the commercials, Triple M was the only station researched to hit the minimum of 25% content quota during a 24 hour period. National youth broadcaster Triple J, who are not a commercial radio station, were compared for this research and were found to be easily reaching well above the minimum local requirements, proudly flying the Aussie flag with a massive 49% Australian content".

The government has been called upon to step in and ensure that quotas are met in the radio domain, with a hearing set for next month.

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Prince had "exceedingly high" level of fentanyl in his system when he died
Prince was found to have "exceedingly high" levels of pain medicine fentanyl in his system when he died, according to a report obtained by the Associated Press.

The star's death had already been recorded as an accidental overdose of the synthetic opioid. However, last week the lead prosecutor overseeing the ongoing investigation into Prince's passing said that police are now investigating whether anyone should be prosecuted for prescribing dangerous doses of the drug.

Commenting on the report, Dr Lewis Nelson of Rutgers New Jersey Medical School called the amount of fentanyl in Prince's system "a pretty clear smoking gun" with regard to possible liabilities.

In the aftermath of the musician's death the debate was re-opened around the willingness of some doctors in the US to prescribe highly addictive painkillers to celebrities and other wealthy clients. This debate also arose following the death of Michael Jackson, after it emerged that he had been given a surgical anaesthetic to treat insomnia.

Elsewhere in Prince news, as we head to the second anniversary of his death on 21 Apr, his estate has announced plans to mark the date. During the month of April, a memorial fence will be erected at his Paisley Park home, where fans can leave tributes.

There will also be various events taking place from 19-22 Apr in Minneapolis under the banner 'Celebration 2018. This will include seminars by former Prince collaborators and a screening of a Prince live performance.

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Native Sessions, Cardi B, Bill Murray, more

Other notable announcements and developments today...

• Native Instruments will hold its latest Native Sessions event at the Barbican on 11 Apr. Focussed on grime, contributing to workshops, Q&As and performances will be P Money, Ms Banks, Jaykae, Steel Banglez, DJ Target, Sir Spyro, Flowdan and more. Free tickets here.

• Cardi B has announced that she will release her debut album proper, 'Invasion Of Privacy', next week.

• Wooden Shjips have announced that they will release their first album for five years, 'V', on 25 May. As well as that, they'll play a week's worth of UK shows in September, kicking off at Heaven on 10 Sep.

• Bill Murray has announced a live collaboration with cellist Jan Vogler. They will play the Southbank Centre in London on 4 Jun and the Festival Theatre in Edinburgh on 18 Jun. "I am bathing in this experience, really", says Murray. "I can't get enough of it".

• Nightwish have announced three UK shows in December. They'll play Wembley Arena, Birmingham and Manchester Arena. Tickets on sale on 29 Mar.

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

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Birdman reunites with "son" Lil Wayne
Lil Wayne and Birdman are apparently on speaking terms again - the Cash Money boss even back to referring to Wayne as his "son" in a new post on Instagram. Now all they need to do is get past that $51 million lawsuit.

According to TMZ, the two rappers hung out at Miami club LIV on Sunday. It was the second weekend in a row they'd bumped into each other there, but the first time they'd sat down and had a proper chat. Although that lawsuit apparently wasn't a topic of conversation.

The legal dispute between Lil Wayne and Birdman's Cash Money label has been going on since 2015. It began with claims that the label had failed to hand over a $10 million advance for Wayne's long-awaited 'Tha Cater V' album, and in the intervening years has spiralled into a complicated case into which Universal Music has also been pulled.

It's been going on for so long now that everyone involved has probably forgotten about it. Certainly, neither of the men looked like they were bothered about one possibly owing the other more than $50 million in Birdman's Instagram post. Under a photo of them happily posing together, Birdman caption it "me and my SON".

'The Carter V' has been in the news recently, of course, because a copy of it is among items the US government plans to seize from Martin Shkreli.

He was recently convicted of fraud and ordered to hand over more than $7 million. That money is being retrieved through the seizure of the contents of Shkreli's brokerage account, his copies of 'Tha Carter V' and Wu-Tang Clan's single copy album 'Once Upon A Time In Shaolin', and a Picasso painting.

Shkreli yesterday filed an appeal against his conviction and the seven year prison sentence he is currently serving. What effect this will have on the plans to seize his record collection isn't clear.

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