Exploration Weekly - Cher Triumphs in Decades-Old Battle to Receive Sonny & Cher Royalties / Cox Tells Fourth Circuit it Should Overturn Copyright Case / Swedish CMO Revenue Up 14.2% in 2023

All creators deserve credit and recognition for the art they create. Sadly, however, creators and their work are often taken advantage of. The exclusive rights in the U.S. copyright law are basic rights given to all creators to help protect their art and themselves from copyright infringement and improper exploitation of their work. Exclusive Rights allow creators to gain control over their art and provide creators with opportunities to exploit their art for profit.

Our guide is an explanation of what the exclusive rights in copyright law are and how they are helpful to artists.

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In this newsletter:

• Cher Triumphs in Decades-Old Battle to Receive Sonny & Cher Royalties
• Cox Tells Fourth Circuit it Should Overturn Copyright Case Because of Record Label Misconduct
• Swedish CMO Revenue Up 14.2% in 2023
• Three Quarters of All Royalties Generated by UK Artists on Spotify in 2023 Came From Listeners Outside of the UK
• PRS for Music Reports Record $1.4 Billion in Collections for 2023, When Membership Grew ‘More Than in Any Previous Year’

Cher has finally won her decades-old copyright battle against Sonny Bono’s widow over royalty payments from the Sonny & Cher catalog.

Cox Communications has filed a new appeal in its legal battle with the record industry saying that the entire judgment should be overturned due to "litigation misconduct" by the record companies in the original trial.

At STIM, which this year turns a century old, distributions to members rise 19.5%, while administrative cost is down to 6.9%.

Now, the details...

Exploration Weekly - May 31, 2024
Compiled by Ana Berberana

Cher Triumphs in Decades-Old Battle to Receive Sonny & Cher Royalties

A federal judge ruled on Wednesday, May 29, in favor of Cher in her decades-long copyright lawsuit battle with Sonny Bono’s widow over royalty payments from the Sonny & Cher catalog. US District Judge John Kronstadt determined Cher is entitled to the royalties from the Sonny & Cher catalog despite Bono’s widow exercising her termination rights per the Copyright Act. That ruling upholds Judge Kronstadt’s tentative ruling issued back in February. In 1978, when she and Sonny Bono settled their divorce, Cher was determined to be entitled to a 50% stake in the Sonny & Cher publishing catalog. After Sonny’s passing in 1998 in a skiing accident, Cher entered into a new partnership with Bono’s heirs over the catalog. But in 2016, Mary Bono exercised the Copyright Act’s termination rights, enabling songwriters or their heirs to regain control of their US publishing rights after 35 years. In 2021, she claimed that through the termination rights, she could stop paying royalties — for which Cher subsequently sued. Wednesday’s ruling found around $418,000 in royalties that would have been paid out to Cher as of June 30, 2022. Judge Kronstadt’s ruling upholds the previously agreed upon divorce settlement in 1978, where Cher was granted a 50% cut. The judge writes that the settlement gave Cher a “contractual right to receive financial compensation,” and that negated the control over Sonny’s copyrights that the termination rights would grant. “A right to receive royalties is distinct from a grant of copyright,” writes the judge.

Cox Tells Fourth Circuit it Should Overturn Copyright Case Because of Record Label Misconduct

US internet service provider Cox Communications has filed another appeal with the Fourth Circuits Appeal Court in its ongoing legal battle with the music industry. It previously got the Fourth Circuit to force a review of the billion dollars in damages it was ordered to pay the record companies. However, it still quite likes the idea of paying no damages at all, and so is plowing on with a second appeal. This time the ISP wants the appeals court to consider some very specific grievances. In a recent legal filing, it explains that the issue here is alleged “litigation misconduct” by the record companies and “newly discovered evidence” which “reveals that the initial jury verdict was unfairly procured”. Cox Communications was involved in two key cases testing the copyright liabilities of ISPs in the US. First, BMG successfully argued that Cox didn’t do enough to stop repeat copyright infringers among its customer base and could therefore be held liable for the infringement of its users. Then the majors sued making the very same argument and, in 2019, won the headline-grabbing billion dollars in damages. Since then Cox has pursued various routes of appeal. Its first trip to the Fourth Circuit resulted in a mixed bag judgment, partly in favor of the ISP. In 2019, Cox was found liable for both contributory infringement - having contributed to its users’ illegal distribution of music - and vicarious infringement - on the basis it profited from that illegal distribution. The Fourth Circuit ruled that there was only a case for contributory infringement, which is relevant because that would normally reduce the damages bill. To that end, the district court where the legal battle began now has to reconsider what damages Cox should pay. While all that was ongoing, Cox also launched a separate appeal which is where the allegation was made that the record labels were guilty of “litigation misconduct”.

Swedish CMO Revenue Up 14.2% in 2023

STIM, the Swedish collective management organization (CMO) turned 100 last fall — and its results for 2023 are giving it another reason to celebrate. The organization took in a record-high 3.095 billion Swedish Krona (SEK) ($291.9 million, based on a 2023 average krona-dollar conversion rate), up 14.2% from the previous year, the CMO announced May 28. It also announced that it would distribute 2.573 billion SEK ($242.6) — up almost 20% from 2022. The Swedish CMO has always been much smaller than giant counterparts such as SACEM (the French collecting society) or PRS for Music (UK), due to the country’s comparatively smaller population and economy. But Sweden has always punched above its weight in pop music, especially when it comes to songwriting, and STIM is more important than its size would indicate. Along with PRS and GEMA (Germany), STIM owns and controls the joint venture ICE, the Berlin-based licensing and processing hub that has become an important force in European copyright. STIM’s biggest source of licensing revenue was online, which accounted for 43% of its total, counting both Swedish and direct international licensing. The second biggest source was foreign revenues, which accounted for 30%, followed by TV (9%), background (7%) and live (4%). Of those sources of income, live and background revenue were up 13%, while multi-territory online revenue rose 27%.

Three Quarters of All Royalties Generated by UK Artists on Spotify in 2023 Came From Listeners Outside of the UK

In March, Spotify updated its annual Loud & Clear Music Economics Report, confirming that as of early 2024, Spotify’s all-time payouts to rightsholders in the music industry exceeded $48 billion. These rightsholders include record labels, publishers, independent distributors, performance rights organizations, and collecting societies. The music streaming service also revealed that it paid out more than $9 billion to the music industry in 2023, in what it called “the highest annual payment to the music industry from any single retailer”. According to Spotify, that $9 billion annual payout figure for 2023 “has nearly tripled over the past six years” since 2017. This month, Spotify also released streaming royalty data for several individual streaming markets in Europe, including the UK, Sweden, Denmark, and Italy. Spotify reports that the amount of money generated by UK artists on its platform in 2023 (across recorded music and publishing) exceeded £750 million ($932.83m according to the average annual exchange rate published by the IRS). The company says that this figure has “more than doubled compared to 2017″. It hasn’t reported what it paid out in 2022 for us to make a YoY comparison. Spotify breaks down the numbers for the UK further and reports that more than 40% of all royalties generated by UK artists on Spotify in 2023 were by independent artists or labels. One of the most interesting stats of all however, is this: Spotify has confirmed that 75% of all royalties generated by UK artists on the platform in 2023 were from listeners outside of the UK.

PRS for Music Reports Record $1.4 Billion in Collections for 2023, When Membership Grew ‘More Than in Any Previous Year’

London’s PRS for Music shed light on its 2023 showing today, less than one week after ICE (which it co-founded) touted a $1.09 billion/€1 billion annual distributions milestone. Running with the newer data, PRS for Music identified $1.21 billion (£943.6 million) in songwriter, composer, and publisher payouts for 2023 – an increase of 12.8% and $137.20 million/£107.4 million from 2022. And as mentioned, collections also improved in 2023, albeit by roughly 12% year over year (YoY) to $1.38 billion/£1.08 billion. Expanding on the point, PRS for Music took the opportunity to emphasize that collections have more than doubled, with a 121% annual payout increase of $661.69 million (£518 million), across the past decade. Digging into interesting takeaways concerning the 2023 totals, PRS acknowledged an 8.5% YoY bump in online collections (encompassing streaming, video games, and video on demand) at $468.35 million (£366.5 million) – and a 23.2% YoY hike in payouts at $460.46 million (£360.3 million). Top-performing streaming tracks from member writers included Raye’s “Escapism” and Rema’s “Calm Down,” PRS relayed. Next, collections from international usages spiked 25.9% YoY to $433.56 million (£339.3 million), with payouts rising 19.35% to $362.13 million (£283.4 million) between 2022 and 2023, the Nexus program creator communicated. Europe remained the largest contributor to that category ($231.32 million/£181 million in collections, up 23% YoY), though royalties from North America rose 25% YoY to $134.13 million (£105 million). Rounding out PRS’ 2023 financials, the use of music in public establishments fueled collections of $321.60 million/£251.7 million (up 10% YoY) as payouts experienced a comparatively modest 2% YoY uptick to $240.50 million/£188.2 million.

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