What is a Public Performance License?

An airport cafe is bustling with travelers on a Monday morning. The sweet and familiar opening of “Come On Eileen” comes on through the speakers. Patrons of the cafe start to visibly perk up. Feet tapping and head nodding ensue. Soon the whole place is more lively. The song is a classic, after all.

“Come On Eileen” is still generating significant revenue for its copyright owners today. In this particular instance, the song is considered to have been performed to the cafe’s patrons. The entities that collect the license fee from the cafe for the right to publicly perform compositions are the Performing Rights Organizations (PROs), of which there are four in the United States: ASCAP, BMI, SESAC and GMR.

Our guide has been written to provide a broad account of how performance licensing works, as well as to paint a detailed picture of the more granular aspects of the business. The goal is to empower creators to better leverage the performances of their works.

If you would like to learn about our copyright administration services to find you unclaimed royalties, please visit our website.

In this newsletter:

The Brazilian authorities have been running a new anti-piracy programme called Operation Redirect targeting torrent, stream-ripping and illegal download services in the country, with eight websites being taken down so far. It follows previous anti-piracy work under the banner Operation 404.

Spotify has requested a US federal court to dismiss a lawsuit filed by The MLC over Spotify’s decision to classify its Premium subscription as a “bundle” including both music and audiobooks, arguing that audiobook streaming is distinct from music streaming and offers significant value, making the lawsuit unnecessary.

Italy’s recorded music market saw significant growth in the first half of 2024, expanding by over 15% according to a report by the FIMI. The market generated $226.5 million in revenue, with paid streaming leading the way, growing by 23% year-over-year to $125 million.

Now, the details...

Exploration Weekly - August 30, 2024
Compiled by Ana Berberana

Record Industry Welcomes Takedown of Eight Piracy Sites in Brazil

The record industry has welcomed the latest efforts by government and law enforcement agencies in Brazil to target websites that facilitate music piracy. Called Operation Redirect, the agencies behind the new scheme say that a particular focus this time was piracy sites that expose users to malware and viruses. Welcoming the work, Paulo Rosa, President of record industry trade group Pro-Música Brasil, says, “This is another important operation which benefits creators and producers of music, as well as the Brazilian population vulnerable to malware distribution. We thank all the authorities involved for their hard work”. The Brazilian government has been particularly proactive in targeting music piracy sites in recent years. A previous programme called Operation 404 secured the suspension of hundreds of domains, and the removal of hundreds of apps, that were allowing people to access unlicensed music. According to an official statement, the new scheme has “already resulted in the identification and deactivation of eight sites that were sharing unauthorized music whilst exposing users to malware and viruses”. Those sites included torrent search engines, stream-ripping services and websites that link to copyright infringing music files. Together they “received over 12 million visits in Brazil in the last year”.

Spotify Asks Court to Dismiss MLC Lawsuit Over Cutting Pay Rate to Songwriters Via Premium Bundles

Spotify has asked a US federal court to dismiss a lawsuit brought by The Mechanical Licensing Collective (The MLC) over the streaming service’s decision this spring to reclassify its Premium paid subscription as a “bundle” that includes both music and audiobooks. The move effectively lowers the mechanical royalty payouts to music publishers and songwriters in the US, drawing the ire of large parts of the US music industry, and resulting in a lawsuit from The MLC, the body tasked by US law to collect mechanical royalties. Spotify had previously notified Judge Analisa Torres of the US District Court for the Southern District of New York that it planned to file a motion to dismiss – a move outright rejected by The MLC. “The MLC opposes Spotify’s proposed motion to dismiss because it is based on mischaracterizations of the well-pleaded allegations in the MLC’s complaint, new purported facts that go well beyond or contradict the MLC’s pleading, and merits-based arguments that are inappropriate on a motion to dismiss,” lawyers for The MLC said in a letter to Judge Torres in June. In a memorandum in support of its motion to dismiss, filed with the court on Tuesday (August 27), Spotify argued the case centers around “an easily answered question: Is audiobook streaming distinct from music streaming, offering greater than token value? The answer is indisputably yes, and there is no need for federal court litigation to confirm it.” Under the Phonorecords IV rules that govern mechanical royalty payouts in the US, digital service providers can bundle music services with other digital services, and pay out royalties as a share of the standalone value of each service, provided that the additional service has “more than token value.” “Spotify is not only offering a new service to consumers, but is also paying a new set of rights owners – book authors and publishers,” Spotify’s memorandum stated.

Italy’s Recorded Music Market Expanded by Over 15% During H1 2024 Amid Streaming and Vinyl Growth, Report Shows

According to a new analysis from the Federation of the Italian Music Industry (FIMI), Italy’s recorded music market grew by double digits during 2024’s opening half. FIMI reached out today with that Deloitte-compiled H1 2024 breakdown for the Italian music industry, which is said to have generated a total of $226.5 million (€202.6 million) in recorded revenue during the six-month stretch. But it was a different story on the paid-listening side, which expanded by about 23 percent YoY en route to bringing in $125.0 million/€111.8 million, according to FIMI. Rounding out the streaming category, video revenue hiked 23.5 percent YoY to $27.1 million/€24.2 million. Factoring also for the couple million euros attributable to the long-contracting permanent downloads side, digital sources made up over 82 percent of Italian music industry revenue in H1 2024, the report shows. Behind the other 18 percent or so, FIMI attached $7.6 million/€6.8 million to an evidently limited-in-scope sync category (up 4.5 percent YoY), leaving $33.0 million/€29.5 million for physical formats (up 5.7 percent YoY). Presumably when calculated at estimated retail value, CDs kicked in $11.0 million/€9.8 million (down 10.6 percent YoY), and vinyl sales jumped 16 percent YoY to approach €20 million, the organization relayed. Lastly, in terms of noteworthy takeaways, each of the European nation’s top-10 singles and albums of H1 2024 was released by an Italian artist, FIMI noted.

U.S. Recorded Music Revenue Rose 3.9% to $8.65 Billion in First Half of 2024: RIAA

The U.S. recorded music market grew a little bigger in the first half of 2024 — but not by much. The retail value of total industry revenue reached $8.65 billion, according to RIAA figures released Thursday (Aug. 29), thanks mainly to a modest gain in streaming revenue and a jump in vinyl sales. While the period’s revenue is a record for the first half of a year, it marked just a 3.9% gain from the prior year’s period. The U.S. market has returned to a more workmanlike trajectory, putting high-single digit and double-digit gains in the rear-view mirror. By contrast, revenue was up 8.8% and 9.0% in the first half of 2022 and 2023, respectively. In the first half of 2021, as paid and ad-supported streaming benefitted from pandemic-era lockdowns that drove consumers to their devices, revenue rocketed 27.0%. Vinyl EP and LP sales totaled 24.3 million units, up 10.7%, and were valued at $739.9 million, up 17%. Other physical formats gained, too, but the distance between them and vinyl grew larger. CD sales improved just 0.3% to $236.7 million. The other category—encompassing cassettes, CD singles, vinyl singles, DVD audio and SACD—improved 66.6% to $13.2 million. Physical sales increased its percentage of total revenue to 11.4% from 10.5% in the prior-year period and 10.2% in the first half of 2022. Vinyl has doubled its share of the market in five years, reaching 8.5% of total U.S. revenue — up from 4.2% in the first half of 2020. Streaming still dominates industry revenue and provided the single-biggest dollar gain of all the categories. Total streaming revenue grew 3.8% to $7.3 billion and accounted for 84.1% of total revenue, equal to the year-ago period. Paid subscription revenue hit $5.23 billion, up 5.1%, leading all streaming categories by a wide margin. The average number of subscribers reached 99 million, up just 2.6%, suggesting record labels benefitted from price increases by Spotify and other services.

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