CMU Daily 29.01.18: Music industry welcomes US mechanical royalty ruling, BMI and ASCAP persuade broadcasters to back Music Modernization Act

Music industry welcomes US mechanical royalty ruling
The US music publishing sector this weekend welcomed the news that the country's Copyright Royalty Board is increasing the rate that must be paid whenever the mechanical rights in songs are exploited by streaming services in America. The top line mechanical royalty revenue share rate goes up from 10.5% to 15.1%, which is the largest increase since the CRB was set up.

Mechanical royalties are due whenever someone makes a copy of a song. Traditionally that meant whenever records were pressed, though it also applies to downloads and on-demand streams too. In the US there is a compulsory licence covering mechanicals, meaning that publishers and songwriters are obliged to license anyone making such copies of their songs at rates set by the Copyright Royalty Board.

The music industry has long reckoned that whenever the CRB sets royalty rates for compulsory licences in the US - or the rate courts intervene on royalty rates charged by American performing rights organisations BMI and ASCAP - music makers always end up being short changed.

That's partly because of the criteria the CRB and rate courts employ. Which is why the recently proposed Music Modernization Act in Congress seeks to alter those criteria, a move that it's hoped will push rates up in the future. Though, after a lot of lobbying and legal wrangling, the US music publishers got a pretty good deal for 2018-2022 under the current system.

In the US, record companies pay the mechanical royalties on CDs and downloads, while the streaming services pay mechanicals directly to songwriters and publishers. Which means that when the mechanical royalty rate is under review these days, both labels and digital services sit across the table from the publishers. Though a deal was reached with the former, so it was the streaming rates that everyone was waiting for the CRB to rule on.

The National Music Publishers Association outlined the specifics of the CRB's new ruling on mechanicals on Saturday. It stated: "The court's decision includes a significant increase in the overall percentage of revenue paid to songwriters from 10.5% to 15.1% over the next five years - the largest rate increase in CRB history".

It added: "Additionally, the CRB removed the 'total content cost cap', giving publishers the benefit of a true percentage of what labels are able to negotiate in the free market resulting in significantly higher royalties for songwriters. In addition, the CRB granted a late fee which will dramatically alter the licensing practices of digital music companies".

Welcoming the ruling, NMPA boss David Israelite said: "We are THRILLED the CRB raised rates for songwriters by 43.8% - the biggest rate increase granted in CRB history. Crucially, the decision also allows songwriters to benefit from deals done by record labels in the free market. The ratio of what labels are paid by the services versus what publishers are paid has significantly improved, resulting in the most favourable balance in the history of the industry".

He went on: "While an effective ratio of 3.82 to 1 is still not a fair split that we might achieve in a free market, it is the best songwriters have ever had under the compulsory licence. The court also decided in our favour regarding a late fee which will force digital music services to pay songwriters faster or be subject to a significant penalty. The bottom line is this is the best mechanical rate scenario for songwriters in US history which is critically important as interactive streaming continues to dominate the market".

The one extra thing that the music publishers had been hoping for was a per-stream rate as well as the revenue share rate. This isn't part of the CRB's ruling. Which was something noted by the boss of the biggest music publisher, Sony/ATV's Marty Bandier, though even he was optimistic overall.

He told reporters yesterday: "As the leading music publisher, we believe that overall this is a very positive ruling by the CRB as it will deliver an unprecedented topline rate increase for songwriters and publishers over the next five years. While we are disappointed not to get the per-stream rate that we wanted, the planned rate increases go a long way to fairly compensate our songwriters for the essential contribution they make to streaming's success story".

Also talking up the ruling was Bart Herbison of Nashville Songwriters Association International, who said: "Songwriters desperately need and deserve the rate increases resulting from the Copyright Royalty Board trial. The CRB was a long and difficult process but songwriters and music publishers together presented a powerful case for higher streaming royalty rates".

The Association Of Independent Music Publishers was happy too, saying in a statement: "The AIMP is THRILLED with today's announcement of the 44% increase in interactive streaming mechanical rates over the next five years - the biggest increase in the history of the CRB and the compulsory license. The additional benefits obtained from the late fee granted in the decision plus the removal of the total content cost cap are sorely needed elements in our path towards equitable compensation for the use of our music in the ever-growing digital economy".

It went on: "This is an incredible victory and a testament to the great work of David Israelite and the NMPA board and staff, Bart Herbison and the NSAI board and staff, and their collective legal team. Songwriters, composers and publishers all owe them a debt of gratitude for their tireless efforts on our behalf, and the AIMP leadership and our 1000 members nationwide salute and thank them".

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BMI and ASCAP persuade broadcasters to back Music Modernization Act
US collecting societies BMI and ASCAP have reached a deal with America's National Association Of Broadcasters, ensuring the radio industry group's support for the Music Modernization Act.

The MMA - which has now been introduced in both houses in the US Congress - primarily seeks to sort out America's mechanical rights mess, helping streaming services avoid multi-million dollar lawsuits over unpaid mechanical royalties.

It will set up a new collecting society empowered to offer streaming firms a blanket licence covering the mechanical rights in any songs streamed that are not otherwise covered by a direct deal with a music publisher. The streaming firm will hand over mechanical royalties to the society, which will then be charged with the task of working out which publishers and songwriters need to be paid.

That system would be a huge boost to the streaming companies. The kickback for the songwriters and publishers is an overhaul of the way rates are set in the US by the Copyright Royalty Board and the rate courts whenever compulsory licences - or licences administered by collecting societies BMI and ASCAP - are in play.

The music industry reckons that criteria currently employed by the CRB and rate courts short-change publishers and songwriters. New criteria could see future rates go up, for both the mechanical and performing rights in songs. The streaming firms will nonetheless back those changes, despite possible rate increases, because the blanket licence for mechanical rights they will get in return will bring to an end millions - if not billions - in liabilities for when a streaming service can't work out which publisher or writer to pay.

However, if performing right royalties go up as a result of the new rate court criteria, that will affect traditional radio stations too. They don't generally exploit mechanical rights, unless they also run on-demand streaming services. This means that traditional radio - a powerful lobby in Washington - could lose out as a result of the MMA with no accompanying kickback. As a result, the broadcasters might seek to block legislation that the streaming firms need to get through as quickly as possible.

BMI and ASCAP reaching an agreement with the NAB is therefore important. The two collecting societies and the radio industry trade group put out a joint statement on Friday confirming that such an agreement had been reached.

They stated: "We are extremely happy to announce that the NAB, ASCAP and BMI have reached an agreement regarding the Music Modernization Act. This agreement resolves NAB's concerns with the potential introduction of new evidence into the rate-setting process while preserving ASCAP's and BMI's ability to seek meaningful compensation from the growing digital music marketplace".

They continued: "Our three organisations have enjoyed a long, unique and successful relationship, and as a result, we were able to work together to find a path forward on this important legislation that is fair to all parties".

Finally, they name-checked the political types leading on the MMA in Congress, concluding: "We greatly appreciate the support of the bill's sponsors, in particular Representatives Doug Collins and Hakeem Jeffries, and Senators Orrin Hatch, Lamar Alexander, Sheldon Whitehouse and Chris Coons, for their leadership in facilitating this agreement and advancing important music licensing reforms".

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Kieron Donoghue launches new streaming-focussed indie label, Humble Angel
Warner Music's former VP Global Playlists Strategy - Kieron Donoghue - has announced the launch of a new streaming-focussed indie label, Humble Angel Records.

Donoghue joined Warner Music in 2014 after it bought his Playlists.net company. Last year, it was announced that he would helm a new imprint at the mini-major, Artists To Watch, which would sign acts and attempt to promote them through streaming alone. However, in October, he announced that he was leaving the company. As he did so, Artists To Watch was seemingly also wound up.

Speaking to Billboard, he explained that he'd basically been given no budget to run the imprint label, and his only means of promoting acts was through the in-house playlists he already controlled. However, he did achieve some success, and so left the major with ideas of how to do things better.

"The biggest lesson I learned [from Artists To Watch] was that you have to move fast", says Donoghue. "You have to act fast to find new music and artists just as soon as they publish a song online - act fast to reach out to them, put a contract together and then sign them. Major labels can take weeks if not months to negotiate terms, draw up legal papers and so forth, whereas Humble Angel Records is designed to do it in days, sometimes hours".

His first singing is pop artist Jazz Mino, who has released a cover of Philip Oakey and Giorgio Moroder's 'Together In Electric Dreams' through the new label.

New acts are invited to submit music through the Humble Angel website.

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BBC to celebrate 100 years of classical performances
The BBC has announced a run of programmes to celebrate 100 years of classical music performances on the broadcaster's airwaves. Various shows will appear on BBC Four and BBC Radio 3 in the run up to this year's Proms.

New BBC Four series 'Our Classic Century' will be the centrepiece of the programming, charting the greatest classical performances at the BBC over the last 100 years. There will also be tie-in shows on Radio 3 and related live performances with BBC Orchestras.

Says Radio 3 Controller Alan Davey: "In the classical music industry we have to respond to changing times with new ideas and new ways of connecting with and engaging the public. Our aim will be to help people of all ages to begin a new relationship with classical music - or take their existing relationship even further - and make it a habit and passion for life".

Meanwhile, BBC Four Controller Cassian Harrison commented: "As the home of classical music on television, BBC Four is always looking for new ways to explore the genre, and to bring the very best artists and performances to our audiences. 'Our Classical Century' will be an ambitious series of programmes working in collaboration with other parts of the BBC".

The series will be brought to a close on the first night of the 2019 BBC Proms.

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Learn about deals, digital and copyright as CMU Insights returns next week
CMU Insights swings back into action next week with the return of our evening seminars, and the first CMU Insights conference sessions of the year.

The CMU Insights seminars take place each Monday evening at the London HQ of Lewis Silkin. The first three are focused on music rights, providing a beginners guide to copyright, an introduction to music licensing, and a bang up-to-date overview of the music rights sector.

Says CMU's Chris Cooke: "Everyone working in music should have a basic understanding of how music copyright works, and our seminars are known for providing a user-friendly guide to both the legalities and the commercial realities of the music rights business. Whatever questions you've got about music copyright but have always been too nervous to ask, we'll either answer them in the seminars themselves, or there is plenty of time to ask specific questions too".

Ahead of the latest CMU Insights seminars on music copyright, we have also published a new post on the CMU Insights blog which features five of the key slides used during the training sessions, with an explanation of what each one shows. You can read that blog post here and book into the seminars here.

The first CMU Insights conference sessions of 2018 will be at Output in Belfast, which takes place on Thursday 8 Feb. CMU will present a session looking at the MMF 'Deals Guide' published last year, explaining the different kinds of label and distributor deals now available to artists, and the pros and cons of each approach. MMF CEO Annabella Coldrick and music lawyer Will Priestley from Harbottle & Lewis will join Cooke to discuss the guide and offer plenty of insights and advice.

CMU Insights will also present two of its speed briefings at Output. These one-hour sessions offer a free sample of our training courses. The speed briefings at Output this year will explain what the music industry's much talked about 'value gap' campaign is all about, and will also reveal the top five streaming challenges the industry faces as it heads into 2018.

Adds Cooke: "Output is a great music industry event, so we are glad to be back in Belfast once again. This is the first time we've presented the MMF 'Deals Guide' at a music conference, and that's going to be a fact-packed session. Plus the speed briefings are a great free sampler of our training courses for anyone yet to attend one".

More info on CMU Insights @ Output 2018 is available here, while you can register for the conference itself here.

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Grammys boss says women need to "step up", following criticism of awards gender balance
Of the many controversies surrounding last night's Grammy Awards, there was particular focus on the lack women celebrated during the show. Grammys boss Neil Portnow definitely helped by saying that women just needed to try harder.

Performers on the night skewed male, while only one woman was actually presented with an award during the televised ceremony - Alessia Cara for Best New Artist - there being so many categories at the Grammys that only a selection actually feature in the broadcast. There was also criticism that the only woman nominated for Best Album - Lorde - was not offered the opportunity to perform solo, while her male counterparts were.

Speaking to Variety, Portnow said: "It has to begin with women who have the creativity in their hearts and souls, who want to be musicians, who want to be engineers, producers, and want to be part of the industry on the executive level. [They need] to step up because I think they would be welcome".

In recent years, many women - particularly those in behind the scenes roles like producers and engineers - have spoken about the barriers they face in working their way up the music industry. Portnow admitted: "I don't have personal experience of those kinds of brick walls that you face but I think it's upon us - us as an industry - to make the welcome mat very obvious, breeding opportunities for all people who want to be creative and paying it forward and creating that next generation of artists".

So, hey, that doesn't deal with the issue of the Grammys at all. Nor does it acknowledge that there is already a generation of female artists making music that should be getting acknowledged by America's big awards bash. So you can add that you your cut-out-and-keep collection of quotes in which Neil Portnow denies that the Grammys have any sort of diversity problem at all.

Despite this, the ceremony was in fact, filled with politically charged moments - acknowledging the #MeToo movement and the horror that is Donald Trump's presidency.

One of the big moments of the night was Kesha's performance of her song 'Praying'. The musician made a significant comeback last year, following years locked in various legal battles with producer Dr Luke, who she accuses of rape. Introducing the performance, Janelle Monáe said: "Just as we have the power to shape culture, we also have the power to undo the culture that does not do us well".

Many women also walked up the red carpet carrying white roses in honour of survivors of sexual assault. This was co-ordinated by a group set up by Roc Nation's Meg Harkins and Interscope's Karen Rait.

In a statement, Voices In Entertainment said: "As we are inspired by the #TimesUp campaign [at the Golden Globes], we are encouraging the artists that we work with and our colleagues attending the 60th Annual Grammy Awards in New York City to wear a white rose to the ceremony. We choose the white rose because historically it stands for hope, peace, sympathy and resistance".

Elsewhere, Logic, Alessia Cara and Khalid performed their song '1-800-273-8255' - its title the phone number for the US National Suicide Prevention Lifeline. As they closed the ceremony, they were joined on stage by a large group of people who have survived suicide attempts and loved ones of others who haven't.

Logic also used his time on stage to proclaim, "To all the beautiful countries... you are not shitholes", in reference to recent comments made by President Trump. He was not the only artist to do so. However, the most overtly political moment of the ceremony was a video in which Hilary Clinton (as well as Cardi B, John Legend, DJ Khaled, Cher, and Snoop Dogg) was shown reading aloud from the recently published, and pretty damning, book on Trump's first year in office, 'Fire And Fury'.

Anyway, I'd tell you now who the winners all were, but the Grammys has way too many categories. Also, Bruno Mars took all three of the main prizes, which is just nonsense. You can make your way through the full list here.

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Libertines, Shakira, Jonathan Davis, more

Other notable announcements and developments today...

• The Libertines have released a short video showing their first day in their newly acquired hotel in Margate. While the official opening is a way off yet, the recording studio the band are building inside will be finished next month, at which point they'll start recording a new album.

• Shakira has released the video for 'Trap', featuring Maluma.

• Korn frontman Jonathan Davis has released 'What It Is', the first single from his forthcoming debut solo album. "It's just art", he says of the track. "I've changed lives with Korn, but I wanted to open minds with this shit". Fucking hell.

• 30 Seconds To Mars have released new single 'Dangerous Night'. They're playing shows in the UK in March.

• Suede have announced that they will release a 25th anniversary edition of their debut album on 20 Mar. It will feature a quite unnecessary three extra CDs and a DVD of bonus material. "The album is charged with a naivety but it manages to have a feel which I still love", says Brett Anderson.

• Noel Gallagher has released the video for new single 'It's A Beautiful World', taken from his bloody awful new album 'Who Built The Moon?'

• Soko has released a video for her cover of Yves Simon's 'Diablo Menthe'.

• Scandal will release new album, 'Honey', on 2 Mar. From it, this is 'Koisuru Universe'.

• Anushka have released new single 'Hitman'. The track is taken from a forthcoming new EP. They're touring in March and April.

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

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Shaun Ryder saves Roy Walker from drowning
Shaun Ryder may have a new career as a lifeguard. Former 'Catchphrase' presenter Roy Walker is "eternally grateful" to the Happy Mondays frontman for saving him from drowning.

The two men were (of course) filming a new ITV reality TV show in Sardinia, called '100 Years Younger In 21 Days'. Depending on how far they were into filming, Walker may have been anything up to -33 years old, which may account for the accident.

According to The Sun, Walker fell into the sea after a paddleboard he was on was hit by a wave. Seeing that the comedian was in trouble, Ryder jumped in to save him. It was, says an unnamed source, "a real superhero moment".

A rep for Walker told Digital Spy: "He says he's eternally grateful to Shaun and has made a lifelong friend - a longer life than he would have had otherwise!"

The premise of the show is to slightly extend the lives of some celebrities you'd forgotten about, using a variety of age-reversal techniques. Contrary to what I said earlier, the eight personalities are aiming to improved their life expectancies by 100 years between them.

It's possible that the statement on behalf of Walker also hints that it hasn't really worked.

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