Exploration Weekly - iTunes Users Sue Apple / Snap in Licensing Talks with Labels / CBS Hit With Copyright Infringement Lawsuit

Aaron Davis -

“Music is the divine way to tell beautiful, poetic things to the heart.”

Pablo Casals

iTunes users Leigh Wheaton, Jill Paul, and Trevor Paul, who recently filed a class action federal lawsuit against Apple on May 24, allege that Apple supplements its revenues by selling, renting, and transmitting with third parties information about the music that each customer purchases from the iTunes Store, including home addresses and full names of Apple’s customers. The lawsuit states that plaintiffs are seeking an excess of $5 million in damages.

Snap is currently in talks of negotiating licensing deals with major labels like Sony Music Entertainment, Universal Music Group, and Warner Music Group, specifically for use of their song catalogs on social messaging and media app, Snapchat. The report was confirmed by Wall Street Journal and cited by two industry sources.

Earle Hagen and Herbert Spencer, songwriters of “Theme for the Andy Griffith Show” in the 1950’s, filed a complaint against CBS for direct and contributory copyright infringement this past Thursday in California federal court. The TV network allegedly exploited the theme song without a license by selling DVDs of the series. Plaintiffs are seeking an injunction as well as either actual damages and disgorgement of the network’s profits or statutory damages.

Now, the details...
Compiled by Heidi Seo

Exploration Weekly - May 31, 2019

iTunes Users Sue Apple for Privacy Violations

Apple is facing a class action federal lawsuit filed on May 24 in California’s Northern Federal District by customers who allege that information on their iTunes purchases was sold by Apple to third parties. iTunes users Leigh Wheaton, Jill Paul, and Trevor Paul, specifically filed the suit, claiming that Apple supplements its revenues by selling, renting, and transmitting with third parties information about the music that each customer purchases from the iTunes Store. Data includes “full names and home addresses of [Apple’s] customers, together with the genres and, in some cases, the specific titles of digitally-recorded music that its customers have purchased via the iTunes Store and then stored in their devices,” says the lawsuit. It adds that the recipients of this data then match it to other personal information on Apple’s customers and then resell that information on the open market. Listening data is also allegedly disclosed to developers of various mobile applications available for download in its App Store as well as to data aggregators, data cooperatives, list brokers, and other third parties. The plaintiffs are seeking an excess of $5 million in damages, according to the lawsuit. Apple has not responded to a request for comment.

Snap in Talks with Record Labels to License Music for Snapchat App

A Wall Street Journal report confirmed that, according to two industry sources, Snap is currently in negotiations with music companies, including Sony Music Entertainment, Universal Music Group, and Warner Music Group, to license song catalogs for the Snapchat app. The move would allow users to include music in their posts, similar to the way ByteDance’s TikTok and Facebook do. The licensing rights would be limited to songs embedded in users’ posts on the social messaging and media app. Representatives for Snap and the music companies declined to comment. Snapchat has already signed a pact with SiriusXM’s Pandora, which lets Pandora Premium subscribers share their favorite songs, albums, stations, and playlists via Snapchat. The app is also in a deal with Apple-owned Shazam, under which Snapchat users can ID a song by pressing and holding on the camera screen. The company is also known to have entered into deals with individual artists like Ariana Grande. Meanwhile, China’s ByteDance, which acquired musical.ly in 2017 and rebranded the app as TikTok, is in talks of acquiring music licenses for a new streaming service that initially would be rolled out in emerging markets.

CBS Hit with a Copyright Infringement Lawsuit Over “Andy Griffith Show” Theme Song

Earle Hagen and Herbert Spencer, who both wrote “Theme for the Andy Griffith Show” in the ‘50’s, sued CBS for allegedly using the work without a license. According to the complaint filed on Thursday in California federal court, the copyright was registered in 1960. Their rights in the work were later transferred to their partnership, Larrabee Music. After their deaths, The Diana R. Spencer Trust and the Hagen Family Trust inherited the rights and eventually dissolved Larrabee and gave partial copyright ownership to the Hagen Children’s Trust and the Hagen Decedent’s Trust. The heirs assert that CBS is exploiting the theme song without a license by selling DVDs of the series. The 1978 agreement between Viacom and Mayberry Enterprises concerning rights to the series allegedly does not include home video or other modern media. Attorney Neville Johnson writes in the complaint, "CBS has refused to enter into a new agreement with Plaintiffs to authorize its exploitation of the Theme in additional media or to otherwise cease conducting such unauthorized exploitation...To the contrary, Plaintiffs have since learned that CBS has licensed the Series to digital services such as iTunes and Amazon for distribution and public performance." The heirs are seeking injunction as well as either actual damages and disgorgement of the network’s profits or statutory damages under the copyright infringement lawsuit.

Universal Music Group in Talks with Tencent Over Preliminary Sale, According to Report

French media empire Vivendi announced last summer that it planned to sell up to 50% of its subsidiary, Universal Music Group, in a process which it said could be completed within 18 months. This meant Vivendi would get a part-sale of UMG wrapped up by January 2020. To accelerate the process, Vivendi stated that it was looking to appoint up to “half a dozen” investment bank advisors in February 2019. Now, a Bloomberg report has announced that Vivendi is facing difficulties in the sale process of UMG. Sources suggest that “some private equity investors balk at the high price and slow pace of the deal.” Vivendi is also in talks with Tencent Holdings Ltd about a minority investment in UMG. In May 2017, UMG inked a new, expansive deal for Tencent to exclusively sub-license its catalog in China. Tencent is the majority stakeholder in Tencent Music Entertainment, which has traded on the New York Stock Exchange since the end of last year. Bloomberg’s report further suggests that certain suitors “have been dismayed by the minimum value [of UMG] of 25 to 30 billion Euros” that Vivendi is seeking for the business. The highest valuation of UMG so far has come from JPMorgan, which in February suggested the company could be worth as much as $50 billion. Other potential buyers include Tencent, Alibaba, KKR, Apple, Verizon, Amazon, and Liberty Media.

SoundCloud Acquires Repost Network, Expanding Creator Tools

SoundCloud’s recent acquisition of Repost Network is now offering artists and creators a wider range of music distribution and marketing tools. Although SoundCloud competes with other streaming services like Spotify with its ad-funded and premium streaming packages, most of its innovations in the last year have focused more on the company’s original core business, like providing services for content creators in the form of distributing and monetizing their content beyond the SoundCloud platform itself. The tech firm announced an alliance with music distributor FUGA back in February in order to allow customers of its SoundCloud Pro service distribution opportunities onto other key streaming platforms as well as new monetization channels via the company’s Premier program. As a result, the most recent Repost acquisition will further extend the range of tools available to Pro subscribers. Confirming the deal, SoundCloud’s COO Michael Weissman said, “The acquisition of Repost Network will meaningfully move SoundCloud forward as we build the most comprehensive set of tools to help creators build their careers. We welcome the Repost Network team to SoundCloud and are excited about what we will build together”.

Poland Files Complaint Against the European Union’s Copyright Directive

The European Union’s Copyright Directive was challenged by the country of Poland, according to Reuters, via a complaint filed with the Court of Justice of the European Union. The country’s Deputy Foreign Minister Konrad Szymanski added that the “system may result in adopting regulations that are analogous to preventive censorship, which is forbidden not only in the Polish constitution but also in the EU treaties.” Polish MPs predominantly rejected the measure (2 abstentions, 8 for, 33 against, 6 no-votes, and 2 missing) when it was voted on. The Council of the European Union officially approved the directive in April, and it is set to go into force on June 7th 2019. EU member states are then given two years until June 7th 2021 to produce their own laws to implement it.

Mark Mulligan: “Monetising Fandom: How ByteDance Is Poised To Lead A Streaming Paradigm Shift”

MIDiA analyst Mark Mulligan explains the value of monetizing fandom as opposed to monetizing music consumption, saying that “streaming needs to figure out how to bring heart and soul back to music.” Music has been commodified by streaming, making it less useful to say “I follow that artist” or “yes, I’ve streamed that artist”. Streams are more accessible now and there’s no financial commitment from the listener. To fix this problem, Mulligan introduces two solutions: Add context, and Add fandom. Building context may add more meaning around music, and following fandom-powered sites like YouTube, SoundCloud, and Tencent may bring about more engagement from fans. The next streaming paradigm is needed, and TikTok might be at the forefront of that shift. Parent company ByteDance is reportedly to launch a fandom-focused streaming service soon that will be targeted at emerging markets, spurring the next stage of streaming growth. “The future is monetising fandom,” says Mulligan.

Mabel Named YouTube Music’s Artist on the Rise in the UK

Rising R&B star Mabel has been announced as the first Artist on the Rise in the UK for YouTube Music. The Artist on the Rise program originally launched in the US in 2018 with artists including Maggie Rogers, Brockhampton, and Burna Boy. It then expanded in March with a new content series. Mabel will receive support in the form of billboards in London and support on YouTube Music’s global social channels. The artist racked up nearly 200,000 new subscribers since the launch of her latest video for hit single “Don’t Call Me Up” in March. The single also reached No. 3 in the Official UK Singles Chart. Others selected as Artists on the Rise include Jessie Reyez, Ella Mai, Gunna, and Jacob Banks. “I feel privileged to be recognised by a platform that has been such an integral part of my creative journey, YouTube is one of the most amazing ways I can connect with my fans all over the world. I’m so excited for the next chapter and I hope I can make my YouTube Music family proud,” says Mabel.

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