Exploration Weekly - Another Suitor Wants BMI And Has Put a $2BN+ Proposal on the Table / The MLC Introduces a New Lawyer Toolkit for Legal Professionals / Stability AI's VP Of Audio Resigns Over Its Position on AI Training

We are thrilled to extend our heartfelt congratulations to the incredible Debbie Gibson, who has been selected as an honoree at the prestigious 2024 She Rocks Awards!

The Women’s International Music Network (the WiMN) reveals Debbie Gibson, Laura Karpman, Britt Lightning, Kelsy Karter, and Sylvia Massy as the first announced honorees at the upcoming 2024 She Rocks Awards. Susanna Hoffs will co-host this event that recognizes women who stand out as innovators and role models in the music industry.

The 2024 She Rocks Awards will take place on Thursday, January 25, 2024 at The Anaheim Convention Center Ballroom in Anaheim CA at 7:00 p.m. This celebratory evening includes live music, awards and speeches, celebrity appearances, a fabulous silent auction, amazing gift bags and so much more! Tickets to the event, which include dinner, are now on sale. The She Rocks Awards is open to the public.

More 2024 She Rocks Awards honorees will be announced soon. Learn more about this year's honorees and get tickets at: sherocksawards.com.

In this newsletter:

• Another Suitor Wants BMI - And Has Put a $2BN+ Proposal on the Table
• The MLC Introduces a New Lawyer Toolkit for Legal Professionals
• Stability AI's VP Of Audio Resigns Over Its Position That Training AI With Copyright Works is 'Fair Use'
• YouTube Will Require Creators to Label AI Content as “Synthetic”
• Got a YouTube Copyright Claim? YouTube Is Now Streamlining the Process

Sources say a new financial player has made a weighty acquisition proposal for US collection society, BMI.

The Mechanical Licensing Collective has introduced The MLC's Lawyer Toolkit, a resource designed to aid legal advisors and members of the music publishing community, such as music publishers, songwriters, composers, and lyricists, in addressing frequently asked questions related to The MLC.

The VP Of Audio at Stability AI, Ed Newton-Rex, has resigned in protest at the company’s position that training generative AI models with existing content is fair use under US copyright law - meaning it does not need to get the permission of copyright owners.

Now, the details...

Exploration Weekly - November 17, 2023
Compiled by Ana Berberana

Another Suitor Wants BMI - And Has Put a $2BN+ Proposal on the Table

One of the biggest stories in the music industry this year is the ongoing potential sale of US collection society, BMI. MBW was first to report in August that private equity firm New Mountain Capital (NMC) – majority-owner of music biz valuer Citrin Cooperman – was in talks to acquire BMI. New Mountain’s reported USD $1.7 billion bid, we’re told, represents an implied multiple of 11.7X BMI’s latest annual EBITDA ($145m). But New Mountain isn’t the only potential suitor who wants BMI, the world’s largest music PRO by reported annual revenue. Credible MBW sources have told us that another financial player has made a weighty acquisition proposal for BMI, delivered to the music org’s management. This approach commenced in August, subsequent to BMI entering exclusive discussions with NMC. The most interesting thing about the newer proposal? It cites a 15X multiple on BMI’s $145 million annual EBITDA – suggesting an enterprise valuation for the PRO of $2.175 billion.

The MLC Introduces a New Lawyer Toolkit for Legal Professionals

The Mechanical Licensing Collective (The MLC) has released a comprehensive toolkit, prepared by The MLC’s Educational Partnerships team, tailored to assist legal advisors and members of the music publishing community, including music publishers, songwriters, composers and lyricists, in finding answers to their frequently asked questions pertaining to The MLC. The MLC’s Lawyer Toolkit, and the website page where it is accessed from, brings together helpful information and organizes it in a way to provide legal advisors with the knowledge and tools they need to navigate the world of mechanical licensing and royalties efficiently. Key features of The MLC’s Lawyer Toolkit include: A guide for legal advisors and their clients on who should become a Member of The MLC and how to become a Member of The MLC, a timeline that details The MLC's royalty distribution process, ensuring legal advisors can advise their clients on when to expect their royalties, information about how to access the procedures for catalog transfers, streamlining the process for legal advisors and their clients, and an overview of the comprehensive tools available to members of The MLC, enabling legal advisors to help their clients maximize their benefits. The purpose of these materials is to provide general information about The MLC and is not intended to provide legal advice. Nothing contained within the materials should be construed as legal advice.

Stability AI's VP Of Audio Resigns Over Its Position That Training AI With Copyright Works is 'Fair Use'

Stability AI's VP Of Audio Ed Newton-Rex has resigned in protest at the tech company's position that the training of generative AI models constitutes fair use under American copyright law. Explaining his decision on X, he wrote: "Companies worth billions of dollars are, without permission, training generative AI models on creators’ works, which are then being used to create new content that in many cases can compete with the original works. I don’t see how this can be acceptable in a society that has set up the economics of the creative arts such that creators rely on copyright”. The copyright industries are adamant that consent must be sought before AI models are trained on existing content. Which, of course, would require AI companies to negotiate licensing deals. However, many AI companies argue that certain copyright exceptions apply to the training of AI models, at least in some countries, so consent is not required. In the context of US copyright law, AI companies are relying on the concept of fair use. Copyright owners insist fair use does not apply in this context, and there are now a number of lawsuits working their way through the US courts that will put all this to the test. Meanwhile, the US Copyright Office is undertaking a review of how AI interacts with copyright, and earlier this month it published the thousands of submissions that have been made to that review. That included submissions from various big players in generative AI who very much put it on the record that they consider AI training fair use. Stability AI wrote in its submission: "We believe that training AI models is an acceptable, transformative and socially beneficial use of existing content that is protected by the fair use doctrine and furthers the objectives of copyright law, including to ‘promote the progress of science and useful arts’”.

YouTube Will Require Creators to Label AI Content as “Synthetic”

YouTube CEO Neal Mohan has made it very clear the platform thinks that generative AI is a good thing for creators. But it’s still taking a page out of TikTok‘s book and requiring that videos made with AI be labeled “synthetic” so viewers know they’re watching “technically manipulated content.” Like TikTok, YouTube says these labels–which will be introduced in the “coming months”–must be used on content that is “realistic.” “For example, this could be an AI-generated video that realistically depicts an event that never happened, or content showing someone saying or doing something they didn’t actually do,” the platform said in a blog post. “This is especially important in cases where the content discusses sensitive topics, such as elections, ongoing conflicts and public health crises, or public officials.” There will be two types of labels. One, a general-use label for videos where AI was used, but the videos aren’t about sensitive topics, will go in the video description panel. And a second, more serious label will apply to videos about sensitive topics (like politics, pandemics, etc) and will appear in the actual video player. YouTube also says that content created by its upcoming generative AI products (because yeah, it’s working on those) will be “clearly labeled as altered or synthetic.” Creators who flout these new rules are in line for some serious consequences. YouTube says creators who “consistently choose not to disclose” that they used AI in their videos “may be subject to content removal, suspension from the YouTube Partner Program, or other penalties.” It says it’ll work with creators before the labels roll out to make sure everyone “understands these new requirements.”

Got a YouTube Copyright Claim? YouTube Is Now Streamlining the Process

YouTube is making efforts to streamline its copyright claim process, providing more options in the hopes of helping creators amend their uploads when a copyright claim (or “copy strike”) is submitted. The changes will also alert creators of multiple claims in a single notification instead of presenting each claim as a separate email, further helping creators to quickly and easily amend their uploads. These changes will be implemented within YouTube’s copyright claim notification emails, which will incorporate multiple claims within one message instead of sending a new notification for each claim. The email will include a set of steps to take to amend the infringing content or otherwise rectify the issue, including a link to YouTube’s Creator Music to help replace infringing audio. YouTube is drawing more attention to its Creator Music, the company’s ever-growing catalog of high quality music that creators can use without losing monetization. This, coupled with its streamlined claim process, aims to mitigate the amount of infringing content that appears on YouTube in the first place while more adequately addressing it when it does. Users can access Creator Music inside YouTube Studio. Some tracks can be licensed upfront, enabling creators to retain full monetization, while others may be eligible to share revenue with rights holders. Creators can preview songs and save them to their library, with usage details available for each track to make it easy to tell how a song can be used. In YouTube’s continued efforts to improve its copyright claim system, the company also implemented an education-based process for repeat rule-breakers to help them avoid further removals and bans. Creators can also check their content through a pre-publish check process to detect potential violations before they upload the content.

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