Exploration Weekly - MMA Phrase Sparks Debate / Apple Faces Anti-Trust Investigation in Europe / YT Launches Multiyear $100M Fund for Black Creators

“Music shouldn't be just a tune, it should be a touch.”

Amit Kalantri, Wealth of Words

According to the US Copyright Office’s April update on the Music Modernization Act, debate ensued around the phrase “server fixation date and termination,” which represents a data point that the Mechanical Licensing Collective (MLC) wants to be seen in the monthly reporting from digital music providers. Songwriters’ advocates are worried about rights holders getting paid as it pertains to commercial exploitations of the derivative sound recording by the digital music provider that occur after the date of copyright termination. The Copyright Office is planning to schedule an ex parte teleconference for Monday among the parties who have commented on this particular detail.

An anti-trust investigation into Apple’s App Store rules was launched by the European Commission in Europe to find whether or not Apple’s restrictions for app developers around the distribution of apps are in violation of EU competition rules. Complaints were made previously last year by Spotify and by an e-book/audiobook distributor on the impact of the App Store rules on competition in music streaming and e-book/audiobooks.

YouTube CEO Susan Wojcicki revealed in an official blog post that the company has launched a multiyear, $100 million fund to amplify the voices of Black creators and artists. Less than a month ago, Google also made a $1 million donation to the Equal Justice Initiative, counting $3.4 million in total donations to the organization since 2016.

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In this newsletter:

Proposed Wording in Music Modernization Act Worries Songwriting Advocates
Apple Faces Anti-Trust Investigation Over App Store Rules in Europe
YouTube Launches $100 Million, Multiyear Fund to Amplify Voices of Black Creators
Tencent Now Controls 10% of Universal, 9% of Spotify...And Nearly 2% of Warner Music Group
NMPA Touts Cross-Industry Legislative Cooperation, New Friendship with Peloton, and More at Annual Meeting
Report: 12.7 Million Australians are Using Music Streaming Services

Now, the details...
Compiled by Heidi Seo

Exploration Weekly - June 19, 2020

Proposed Wording in Music Modernization Act Worries Songwriting Advocates

The phrase “server fixation date and termination” from the US Copyright Office’s April update on the Music Modernization Act sparked debate among those hammering out rules for the new law, which takes effect in January. The new data point wants to be seen by the newly formed Mechanical Licensing Collective in monthly reporting from digital music providers. In an effort to untangle the issue, the Copyright Office has scheduled an ex parte teleconference for Monday among the parties who have commented on this particular detail since it posted a “Notice of proposed rulemaking” (NPRM) docket in April, the first major update since September. Within this docket, the section titled “Server fixation date and termination” worries songwriters’ advocates, as does the MLC’s assertion that the data point was “required to determine which rights owner is to be paid one or more grants pursuant to which a musical work was reproduced in a sound recording has been terminated pursuant to Section 203 or 304 of the [Copyright] Act.”

Apple Faces Anti-Trust Investigation Over App Store Rules in Europe

An anti-trust investigation was launched by the European Commission into Apple’s App Store rules in Europe. The probe seeks to find whether or not Apple’s restrictions for app developers around the distribution of apps via its App Store are in violation of EU competition rules. Two restrictions imposed by Apple will be investigated: (i) The mandatory use of Apple’s own proprietary in-app purchase system “IAP” for the distribution of paid digital content. (ii) Restrictions on the ability of developers to inform users of alternative purchasing possibilities outside of apps. Separate complaints were made last year by Spotify and by an e-book/audiobook distributor on the impact of the App Store rules on competition in music streaming and e-books/audiobooks. Spotify’s anti-trust complaint was filed against Apple with the European Commission in March 2019. An Apple spokesperson stated in response to the news, “At the end of the day, our goal is simple: for our customers to have access to the best app or service of their choice, in a safe and secure environment. We welcome the opportunity to show the European Commission all we’ve done to make that goal a reality.”

YouTube Launches $100 Million, Multiyear Fund to Amplify Voices of Black Creators

In a statement posted on the official YouTube blog, CEO Susan Wojcicki revealed that YouTube has created a multiyear, $100 million fund “dedicated to amplifying and developing the voices of Black creators and artists in their stories.” Earlier this month, Google, YouTube’s parent company, made a $1 million donation to the Equal Justice Initiative as part of a pledge to give $12 million to organizations working to address systemic racism. The company has donated $3.4 million total since 2016. YouTube’s head of originals, Susanne Daniels, added, “I support the Black Lives Matter movement and I think it’s imperative that we help amplify Black voices and continue the conversation about meaningful change and racial justice. YouTube has a unique ability to unite creators, artists, and powerful voices within the Black community to encourage the world to stand up and speak out for racial justice.”.

Tencent Now Controls 10% of Universal, 9% of Spotify...And Nearly 2% of Warner Music Group

On Friday June 12, Tencent Music Entertainment was found to have acquired 4 million Class A shares in Warner Music Group in a transaction worth around $100 million. Another transaction was made in which Tencent Holdings - the majority owner of TME - has acquired a separate stake in Warner of the same size as TME’s (4 million shares/0.8% of Warner’s company). The two transactions took place on Wednesday June 3, the day Warner floated a portion of its company on the Nasdaq. Tencent now controls 8 million Class A shares in Warner, equivalent to 1.6% of the entirety of the music company. A Tencent-led consortium also owns a 10% stake in Universal Music Group. Tencent has the option to acquire a further 10% in UMG before mid-January 2021. In addition, Tencent owns 9.1% of Spotify, with three-quarters of that stake owned by Tencent Holdings and the remaining quarter by TME.

NMPA Touts Cross-Industry Legislative Cooperation, New Friendship with Peloton, and More at Annual Meeting

Many topics were discussed during the National Music Publishers’ Association’s annual meeting on Wednesday. The organization’s president and CEO David Israelite applauded RIAA chairman and CEO Mitch Glazier for lobbying Congress for CARES Act relief for self-employed music industry workers. NMPA executive vp and general counsel Danielle Aguirre also interviewed the Mechanical Licensing Collective CEO Kris Ahrend, who stated that the service organization will fulfill the transparency mandate written into the law and “pay creators accurately.” And Israelite described fitness company Peloton as an “exciting new source of revenue for songwriters and publishers”.

Report: 12.7 Million Australians are Using Music Streaming Services

According to a report on music streaming usage in Australia by research firm Roy Morgan, more than 12.7 million Australians - 61% of the population - now stream music on a monthly basis. Spotify’s Australian user base, combining free and paying users, has reportedly more than doubled since 2017 to eight million people. YouTube Music (including Google Play Music) is the second most popular with 5.5 million users in Australia, with Apple Music and SoundCloud in third and fourth place. “Importantly, the largest growth has been over the last year with an increase of 1.6 million users of music streaming services since early 2019,” said Roy Morgan CEO Michele Levine. Australia was the ninth biggest recorded music market in the world last year according to the IFPI, growing by 6% year-on-year. Streaming accounted for 70% of that market.

Random Ramblings

David Israelite: Live stream boom raises questions about music licensing and payment of songwriters.
Fandom and how streaming music needs a new future.
Resilience in music: composers in times of hardship.
The Black Eyed Peas, J.Rey Soul, and Ozuna rule the Latin Airplay chart with "Mamacita".
The Killers return with a new single from their upcoming album "Imploding the Mirage".

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