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What is a Synchronization License?

There is a lot of video content out there, and much of it uses music! Synchronization licensing is the process by which production companies of audiovisual works clear the rights for outside music to use in their videos. Synchronization is a burgeoning corner of the music industry, and for a musician, a placement in a major television show, film, advertisement or video game can boost their career in innumerable ways. This guide has been written to provide a comprehensive overview of the world of synchronization licensing.

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In this newsletter:

Private equity outfit New Mountain Capital has agreed a deal to buy US collecting society BMI - terms of the deal are not known but $100 million will be distributed to songwriters and publishers allied to the organization.

Spotify has officially confirmed major changes to its royalty model in Q1 2024. The music streaming giant aims to address three key issues: discouraging artificial streaming, improving the distribution of small payments to artists, and preventing manipulation of the system with noise.

The UK government's attempt to gather views on regulating artificial intelligence in the creative industries has faced criticism from the Council of Music Makers, which criticized the event for being unbalanced, as it allotted three seats to major record company executives but only one for representatives of all creatives across various media.

Now, the details...

Exploration Weekly - November 24, 2023
Compiled by Ana Berberana

BMI confirms deal to sell to New Mountain Capital

An investor group led by private equity outfit New Mountain Capital has agreed a deal to buy US collecting society BMI. The society says that $100 million of the money generated by the deal will be distributed to publishers and songwriters allied to the organization. “Today marks an exciting new chapter for BMI that puts us in the best possible position to stay ahead of the evolving industry and ensure the long-term success of our music creators”, reckons BMI boss Mike O’Neill. “New Mountain is an ideal partner because they believe in our mission and understand that the key to success for our company lies in delivering value to our affiliates”. "We are excited about the many ways New Mountain will accelerate our growth plan, bringing new vision, technological expertise and an outstanding track record of strengthening businesses, all of which will help us build an even stronger future for BMI and our songwriters, composers and publishers", he goes on. Most of the music industry collecting societies are not-for-profit organizations owned by their members. The other big song rights society in the US - ASCAP - operates on that model. BMI was also not-for-profit until last year, although, unusually, it was actually owned by a group of broadcasters.

Spotify Confirms Details of How Its Royalty Model Will Change in 2024

Music Business Worldwide broke the news last month that major changes were coming to Spotify‘s royalty model in Q1 2024. Now Spotify has confirmed precisely what those changes are. The music streaming company has published a new blog post on Spotify for Artists introducing what it calls “new policies to better support those most dependent on streaming revenues as part of their livelihood”. According to Spotify, “as the royalty pool and catalog” on the platform “have surged,” there are “three particular drains on the royalty pool [that] have now reached a tipping point”. SPOT says that it is working in close collaboration with industry partners, including distributors, independent labels, major labels, plus artists and their teams to introduce its new set of policies. Spotify’s new policies aim to tackle three core issues: To “further deter artificial streaming”, to “better distribute small payments that aren’t reaching artists,” and “Rein in those attempting to game the system with noise”. The streaming company claims that by addressing these issues, it will be able to drive “an additional $1 billion in revenue toward emerging and professional artists over the next five years”.

Music Creators’ Body Criticizes UK Government Over AI Roundtable

The creative industries – and their creators – have plenty of views on how artificial intelligence technologies should be regulated. And they are very keen to communicate those views to the politicians who’ll be responsible for crafting the legislation to make those regulations happen. However, the British government’s latest efforts to canvas those views has sparked criticism from one of the bodies that represents musicians: the Council of Music Makers. The UK’s Department for Culture, Media and Sport held a roundtable yesterday with “music, film and publishing bosses” to discuss “how government and industry can address the risks AI poses to artists’ intellectual property and explore how AI can help grow the sector, supporting jobs and talent”. That sounds like a good thing, right? Executives from Warner Music Group, Getty Images and the Publishers’ Association (as in book publishers) were part of the roundtable alongside representatives of the Intellectual Property Office (IPO) and Creators’ Rights Alliance. The Council of Music Makers (CMM) isn’t happy though. It’s the umbrella body for the Featured Artists Coalition, Ivors Academy, Musicians’ Union, Music Producers Guild and MMF – bodies representing musicians, producers and managers rather than rightsholders. “We are hugely concerned that the government is forming a roundtable which only gives one single seat to a representative of all creatives across all media (including film, theater, literature and music), but has three seats for executives from major record companies. This is profoundly unbalanced and tone-deaf,” said the CMM in an open letter.

OpenAI and Microsoft Face New Copyright Lawsuit for Allegedly ‘Taking the Combined Works of Humanity Without Permission’

Julian Sancton, the author of 2021’s Madhouse at the End of the Earth, only recently submitted the suit to a New York federal court. As highlighted, the case is one of several levied against OpenAI (which reinstated Sam Altman as CEO today) owing to the alleged unauthorized use of copyrighted works. But contrasting the complaint from Sarah Silverman as well as a separate action from the Authors Guild, Sancton’s suit centers on both OpenAI and Microsoft – and not solely because the latter’s invested billions in the AI startup. “OpenAI and Microsoft have built a business valued into the tens of billions of dollars by taking the combined works of humanity without permission,” the legal text begins, proceeding to explore at relative length the “close” relationship between the entities. “While OpenAI was responsible for designing the calibration and fine-tuning of the GPT models—and thus, the large scale copying of this copyrighted material involved in generating a model programmed to accurately mimic Plaintiff’s and others’ styles—Microsoft built and operated the computer system that enabled this unlicensed copying in the first place,” the document continues. Beyond this significant difference – which could, of course, have major implications down the line – other components of the suit resemble those within the above-mentioned complaints. Specifically, Sancton’s action touches upon OpenAI’s alleged transition from a non-profit “into a complex (and secretive) labyrinth of for-profit corporate entities,” the sources from which OpenAI allegedly accessed protected media, and the importance of training ChatGPT on “quality” content.help heal the music community.

Spotify “To Phase Out Its Service In Uruguay” From January 1, 2024 Over Music Copyright Law Changes

Last month, music streaming giant Spotify threatened to withdraw its service from Uruguay over proposed amendments to music copyright law in the market. The modifications were initiated by the Uruguayan Society of Performers (SUDEI) earlier this year, advocating for revisions to the South American nation’s music copyright regulations. In October, the Parliament of Uruguay voted on a budget bill that included these proposed changes, Articles 284 & 285 in the Rendición de Cuentas law. That bill (Rendición de Cuentas) has since passed, and a Spotify spokesperson said in a statement on Monday (November 20) that, “Without clarity on the changes to music copyright laws included in the 2023 Rendición de Cuentas law” the streaming platform “will, unfortunately, begin to phase out its service in Uruguay effective January 1, 2024.” Spotify says that it will then “fully cease” service in the market by February 2024. The clarity Spotify appears to want confirmation on is whether or not “any additional costs are the responsibility of rights holders” or if those “additional costs” will need to be paid for by streaming platforms.

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