Exploration Weekly - Publishers and DSPs Negotiate MLC Costs / NMPA Requests TikTok Investigation / Katy Perry Appeals “Dark Horse” Ruling

Aaron Davis -

“One difference between poetry and lyrics is that lyrics sort of fade into the background. They fade on the page and live on the stage when set to music.”

Stephen Sondheim

It has now been one year since the Music Modernization Act (MMA) was signed into law and now, publishers and digital service providers (DSPs) are in talks of setting up operational costs for the Mechanical Licensing Collective (MLC), mandated by the MMA. The deadline to reach an agreement is February 18, 2020. However, if the two sides fail to make a deal, the Copyright Royalty Board (CRB) will undergo a fee-assessment proceeding, which would expect to reach a cost determination by July 8. The official start date for the MLC is January 1, 2021, and the board is requesting a first-year operating budget of $29 million, which the DSPs would have to cover by law.

The NMPA has called on Congress to investigate video-sharing app TikTok over potential copyright infringement. Senator Marco Rubio submitted a similar request for an investigation earlier to US Treasury Secretary Steven Munchin, pointing to “ample and growing evidence” that TikTok was “censoring content that is not in line with the Chinese government and Communist party directives.” The NMPA letter further states that the company does not have agreements in place to use the musical works in question, and that as a result, copyright owners are not being paid. Sources suggest TikTok hit 1 billion downloads worldwide in February, 100 million of which were in the US.

Following a recent judgment in July stating Katy Perry and company illegally copied elements of a 2008 Christian rap song in their 2013 hit, “Dark Horse,” the musician’s legal team is now filing an appeal, according to documents filed October 9 that requests the California courts overturn or at least grant a new trial. The appeal focuses on Michael Gray’s supposedly plagiarized track, “Joyful Noise” in that it may not have sold a single verifiable copy. This could point to Defendants having a greater difficulty becoming aware of the Christian song. The July decision found Katy Perry and her team liable of $2.78 million.

Now, the details...
Compiled by Heidi Seo

Exploration Weekly - October 18, 2019

Publishers and DSPs Wrestle with Details of the MMA’s Mechanical Licensing Collective

The Mechanical Licensing Collective (MLC) is now in the process of confirming operational costs after a year has passed since the Music Modernization Act was signed into law. Digital service providers like Spotify and Amazon Music need to reach an agreement on these costs with the MLC by February 18, 2020. Otherwise, the two sides will head to a Copyright Royalty Board (CRB) fee-assessment proceeding, which they are now preparing for, even as they adhere to a timeline constructed to help facilitate settlement negotiations. The publisher-run entity is to officially begin operating on January 1, 2021. The board is requesting $37.25 million in startup funding and first-year operating budget of $29 million, according to a document the organization filed with the CRB on September 13. The MMA mandates that digital music streaming services pay these expenses. However, an agreement has not been reached to cover these costs, which further points to moving forward to a CRB process. The Digital Licensing Coordinator (DLC), which will be run by leaders from Apple, Spotify, Google, Amazon, and SiriusXM, has until November 15 to investigate the MLC's proposals and must respond by November 19. The MLC then has until January 23, 2020, to reply. A second negotiation period will run from January 14 to January 28. If no settlement is reached, the proceedings would begin February 18, and the CRB would make its determination by July 8.

NMPA Writes Letter to Congress to Investigate TikTok for Copyright Theft

A letter sent by the National Music Publishers’ Association (NMPA) to Senator Marco Rubio this week calls on Congress to investigate popular video-sharing app TikTok over potential copyright theft. This message follows an earlier one sent by Rubio to US Treasury Secretary Steven Munchin that requested an investigation into the ByteDance-owned company by the Committee on Foreign Investment in the United States (CFIUS). Senator Rubio cited “ample and growing evidence” that TikTok was “censoring content that is not in line with the Chinese government and Communist party directives” in Western markets, including the US. In the NMPA letter, the argument continued by stating, “Many videos uploaded to TikTok incorporate musical works that have not been licensed and for which copyright owners are not being paid.” A “large part” of the industry reportedly does not have agreements in place with the video-sharing app, says the letter. Figures from Sensor Tower show TikTok hit 1 billion downloads worldwide in February, 100 million of which were in the US. The platform has driven the success of a number of tracks including Lil Nas X’s “Old Town Road.”

Katy Perry and “Dark Horse” Collaborators Appeal Copyright Infringement Judgment

Katy Perry and company have filed an appeal of the July decision that found them liable to the tune of $2.78 million for plagiarizing elements of their 2013 hit, “Dark Horse,” from a 2008 Christian rap song. Defendants requested in the documents filed October 9 that California courts overturn or at least grant a new trial on “the legally unsupportable jury verdicts in this music copyright infringement case that are widely recognized within the music industry - and beyond - as a grave miscarriage of justice.” The appeal points to Michael Gray’s supposedly plagiarized track, “Joyful Noise” in that the original song may not have sold a single verifiable copy, thereby denying that it was “so well-known that it could be reasonably inferred that Defendants heard it…” It additionally goes deep into the similarities and differences between the music and rhythm in the two tracks: “The pitch on Beat 7 of the ostinato in ‘Joyful Noise’ is a B, while the pitch on Beat 7 of Ostinato 2 in ‘Dark Horse’ is an A. The pitch on Beat 8 of the ostinato in ‘Joyful Noise’ is an A or an F, depending on the iteration. The pitch on Beat 8 of Ostinato 2 in ‘Dark Horse’ is an E…”

Artist Activist David Lowery Resigns from the Mechanical Licensing Collective

Artist activist David Lowery recently departed the Mechanical Licensing Collective’s Unclaimed Royalties Oversight Committee this past week. This committee is responsible for matching and paying unclaimed mechanical royalties from streaming services in the US, an amount that has been estimated to be as high as $1.5 billion. The US Copyright Office signed the MLC contract back in July, and now, Lowery’s abrupt resignation follows the departure of two other MLC members, including one committee member and a board member. When asked by Digital Music News about his departure, Lowery responded by saying that he is “just overextended and don’t have bandwidth for the committee.” Other members party to the Unclaimed Royalties Oversight Committee include Phil Cialdella (Atlas Music Publishing), Patrick Curley (Third Side Music), Michael Eames (PEN Music Group), Frank Liwall (The Royalty Network, Inc.), Kathryn Ostien (TRO Essex Music Group), Kay Hanley, Dan Navarro, and Tom Shapiro.

Google Reveals Truly Wireless Pixel Buds

Google unveiled its second-generation Pixel Buds alongside other hardware on Tuesday October 15 this week. The new earbuds are re-engineered from the ground up and are truly wireless. Users will have hands-free access to Google Assistant as well as to a long-range Bluetooth connection. The company stated they took an “intricate origami” approach when redesigning the Pixel buds. They sit flush with your ear and can automatically detect when they are in. Touch controls for play, pause, and adjusting volume are also available. The advertised battery life is five hours of continuous use or 24 hours in the charging case. The buds are priced around $179 and come in four colors including Clearly White, Oh So Orange, Quite Mint, and Almost Black.

SAG-AFTRA Approves Music Video Agreement for Performers

SAG-AFTRA’s national board unanimously approved an agreement with major record labels on a three-year successor contract to their music video agreement. Labels include Warner Records, Atlantic Records, Sony Music Entertainment, Universal Music Group, Capitol Records, and Hollywood Records (Disney). The new agreement is effective retroactively from May 1, 2019, through April 30, 2022. Negotiating Committee Chair and National Vice Chair of the Dancer Committee Danielle Towne added, “This agreement will ensure that music videos can remain creative while the performers that bring them to life feel safe.” A few important aspects of the Music Video Agreement include gains in minimum pay, increases in the daily rate for existing dancer minimums, a minimum rate for background performers, stunt coordinator requirements for aerial acrobatic and non-dance stunt performances, language surrounding sexual harassment prevention, and a nudity rider that defines nudity with considerations to the special requirements and culture of music video production. The SAG-AFTRA board met Monday and Tuesday following their four-day biennial convention in Beverly Hills.

APRA AMCOS Reports Record Financial Year with AUS $471.8 Million in Revenue

Australasian music rights management organization APRA AMCOS reported a record-breaking AUS $471.8 million in total revenue for the 2018-19 financial year, up 12.3% on the previous year. In addition, net distributable revenue (the amount payable to members and affiliated societies) in the 2018-19 financial year was AUS $410.9 million, up 13.2% on last year’s AUS $362.8 million. More specifically, digital revenue was AUS $175.4 million, delivering 30.4% growth on last year’s results. The revenue generated from digital’s three sub-categories also all increased year-on-year, with audio streaming up 28.2% (AUS $105 million); Subscription video-on-demand (SVOD) up 41.8% to AUS $26.1 million and revenue from Websites and User Generated Content (UGC) up 61.2% to $35.3 million. Elsewhere, radio and television broadcast income totalled AUS $126.8 million, while public performance sources accounted for AUS $92.4 million.

Deezer Reportedly Expecting to IPO in the Next 12-15 Months, CEO Says

Deezer CEO Hans-Holger Albrecht signaled plans for an IPO, stating that the company will go public sometime in the next 12-18 months, with the exact time being dependent on market conditions. The music streaming service company was planning an IPO back in 2015, hoping it would raise close to $330 million, but it backed out after failing to convince investors. Some of its main investors include Saudi Prince Alwaleed bin Talal, who in August of last year invested 1 billion Saudi riyals ($270 million) in the company, valuing it at about $1.1 billion. Warner Music, Sony, Universal as well as telecommunication company Orange and French tycoon Xavier Niel also have interests. Albrecht reported that the company does not need to raise more money at the moment, but he also insisted that they could if they wanted to. He categorized Deezer as being “well-funded” and in “a very fortunate situation.” The company began operations in 2007, and it currently has 14 million active monthly users spread across 185 countries. The catalog includes over 56 million songs as well as other content. In October of last year, Deezer entered both North Africa and the Middle East, and they are expecting significant growth in the coming months from countries such as Saudi Arabia, Egypt, and the UAE.

Random Ramblings

  • The Recording Academy honors Aerosmith as the 2020 MusiCares Person of the Year.
  • Guns N’ Roses' "Sweet Child O’ Mine" sets the record as the first ’80s music video to reach one billion views on YouTube.
  • How Enrique Iglesias became the King of Latin Pop.
  • The 3 Strains of “Internet Rap" in 2019.
  • Justin Bieber becomes the youngest solo male artist to have at least 200 total weeks on Billboard's Hot 100's Top 10.
  • Jojo launches her new musical era through new song, "Joanna".


Who is Exploration?

Exploration is proud to be the company of choice to administer much of the world’s most important media. Utilizing competent staff and advanced technology, our clients are able to better control their data and collect their money.

We’re writing a free book on how the music business works. Learn more here.

The catalog metadata template offers the minimum viable data needed to collect publishing royalties. Download the .csv file here.

Please feel free to reach out anytime if you have any questions or ideas!

Hope you have a great weekend!

hello@exploration.io
http://exploration.io

Facebook
Twitter
Linkedin
Google+

310-739-5482
171 Pier Ave., #251
Santa Monica, CA 90405