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The Justice Department recently decided to leave the 80-year-old music industry consent decrees that govern the public performances of music unchanged, says Makan Delrahim, the outgoing Justice Department Assistant Attorney General for the Antitrust Division. Performing rights organizations ASCAP and BMI as well as the music publishing community have called for changes to the decrees, arguing that they are outdated in the digital age and favor broadcasters to the detriment of creators.
BMI has also decided to change its royalty distribution schedule to help songwriters, composers, and publishers during the pandemic by evenly spacing out quarterly royalty distributions in 2022 every three months. This is set to create a balanced payment schedule throughout the year. 2021 will also be a transition year of five distributions, rather than four, in order to shift to a slightly accelerated time frame. Grab a copy of the BMI Distribution Schedule change on our website here.
According to reports by The Information, Apple is in talks of introducing a subscription product to its podcasting business as it faces heated competition from tech and media companies like Spotify, Amazon, and SiriusXM. Podcasts have always been free to access on the platform and the business has long been funded largely through advertising sales.
What is copyright reversion and why is it important to know? Watch our recent video below in our weekly “Music Industry - 5 Mins or Less” series to learn more!
In this newsletter:
- Justice Department Leaves Music Industry Consent Decrees Unchanged
- BMI Changes Royalty Distribution Schedule to Help Writers and Publishers During Pandemic
- Apple Mulls Podcast Subscription Push Amid Spotify’s Land Grab
- The MLC is Open for Business - Now the Hard Part Begins
- SoundCloud Inks Exclusive Ad-Sales Representation Deal with SiriusXM’s AdsWizz
Now, the details...
Compiled by Heidi Seo
Exploration Weekly - January 22, 2021
Justice Department Leaves Music Industry Consent Decrees Unchanged
After years of discussion, the Justice Department has decided to leave unchanged the 80-year-old consent decrees that govern the public performances of music, Makan Delrahim, the outgoing Justice Department Assistant Attorney General for the Antitrust Division, announced Friday. The music publishing community and performing-rights organizations ASCAP and BMI have long advocated for changes to the decrees, arguing that they are vastly outdated in the digital age and favor broadcasters to the detriment of creators. Broadcast organizations have long argued that changes would wreak havoc. In a joint statement, ASCAP and BMI CEOs Elizabeth Matthews and Mike O’Neill said, “While we were disappointed that no action was taken, we are encouraged to see how the DOJ’s approach to these issues has evolved. In his closing remarks, AAG Makan Delrahim recognized several important truths that we have long understood: Songwriters are the backbone of the music marketplace and must be paid fairly; blanket licensing is incredibly efficient; ASCAP and BMI are innovating to serve the needs of the industry; greater competition and not compulsory licensing is the answer; and the value of music is best decided in a free market.”
BMI Changes Royalty Distribution Schedule to Help Writers and Publishers During Pandemic
Performing rights organization BMI is changing its distribution schedule to better serve their writers, composers, and publishers. Starting in calendar year 2022, quarterly royalty distributions will be evenly spaced apart every three months so that there is one distribution per calendar quarter, each February, May, August, and November. This will create a balanced payment schedule throughout the year. The change will also result in BMI processing distributions on a slightly accelerated time frame. Distributions will be processed one to two months faster than they have been historically. In order to shift to this new schedule, 2021 will be a transition year where BMI makes five distributions, rather than four. The additional distribution will hopefully maximize 2021 royalties during this difficult time and mitigate the financial impact of the pandemic on the creative community.
Apple Mulls Podcast Subscription Push Amid Spotify’s Land Grab
Apple has reportedly been in talks with creative partners about introducing a subscription product to its podcasting business, according to The Information. The company faces heated competition from tech and media giants including Spotify, Amazon, and SiriusXM. In the years since it first added podcast support, Apple also has placed an emphasis on its growing services business, through which it already offers subscription products for music, television, video games and fitness videos. But Apple will have to proceed carefully as it explores introducing subscriptions to podcasting, a business that has long been funded largely through advertising sales. The medium has been free and widely accessible for quite some time. Wedbush Securities analyst Daniel Ives says Apple might have an easier time selling a podcast subscription if it offers a curated selection of exclusive and original shows from in-demand talent, much like it does for video programming with Apple TV+.
The MLC is Open for Business - Now the Hard Part Begins
On January 1, the Mechanical Licensing Collective (MLC) officially began operations to collect and distribute mechanical royalties under a blanket license for streaming services. In April, the MLC plans to start paying royalties to over 8,000 rights-holder members, who by spring should be able to review their ownership data and register new compositions through an online portal. Two questions now loom over the MLC. The first is how much to collect, or more specifically what rate should be used to calculate mechanical royalties now that an appeals court in June 2020 remanded a Copyright Royalty Board rate determination for further deliberation. The second is how much "black box" money will the digital music service providers turn over to the MLC. The MLC is charged by the MMA to attempt to match and then disburse such royalties to rights holders - and if that’s not possible within two years, it will be eligible to distribute to publishers according to market share. The answer to the second question could be between $250 million to $450 million, Billboard estimates, depending on which funds will be included.
SoundCloud Inks Exclusive Ad-Sales Representation Deal with SiriusXM’s AdsWizz
Berlin-headquartered SoundCloud and AdsWizz - a direct subsidiary of Pandora and, in turn, SiriusXM - announced their advertising-focused partnership this week, in a formal release emailed to Digital Music News. The expanded “existing global relationship” between the two allows AdsWizz to become the exclusive seller of SoundCloud advert space in 14 European nations “effective immediately”. This release also reiterates that Pandora is SoundCloud’s “exclusive ad sales representative” in the United States; SoundCloud received a $75 million investment from SiriusXM in February of 2020.
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