Join the Copyright Office on their “Registration Guidance for Works Containing AI-Generated Content” webinar next week!
Breakthroughs in generative AI technology have prompted growing curiosity about the registrability of works containing AI-generated material. On June 28, 2023, at 2:00 p.m. eastern time, join the Copyright Office for a virtual, public webinar about how the Office evaluates applications to register these types of Works.
The webinar will be hosted by Rob Kasunic, Associate Register of Copyrights and Director of Registration Policy and Practice, and Erik Bertin, Deputy Director of Registration Policy and Practice. At the end of the presentation, attendees will have an opportunity to submit questions to the Office’s experts.
Register to attend the webinar here.
This webinar is a part of the Copyright Office’s initiative to examine copyright law and policy issues raised by AI technology, including the scope of copyright in works generated using AI tools and the use of copyrighted materials in AI training. For more on copyright and AI, visit the Copyright Office’s website.
In this newsletter:
- The US Recorded Music Industry Grew by $500M on a Wholesale Basis in 2022. The US Music Publishing Industry Grew by Nearly Double That Amount
- US Live Industry Appeals BMI Royalty Rate Increase
- ‘Transformed and Battle-Ready’ SACEM Posts Record Collections for 2022
- US Senators Slam Radio’s Lack of Performance Royalties
- The Grammys Will Allow Songs Created With AI Help
The US recorded music industry grew by $500M in 2022 and the US music publishing industry grew by nearly double that amount.
Live music giants and promoters appeal the recent ruling in the American rate courts that increased the royalties they need to pay collecting society BMI for the songs performed at concerts in the US.
French song rights society SACEM reports 34% increase in collections in 2022.
Now, the details...
Exploration Weekly - June 23, 2023
Compiled by Ana Berberana
The US Recorded Music Industry Grew by $500M on a Wholesale Basis in 2022. The US Music Publishing Industry Grew by Nearly Double That Amount
2022 was a big year for music publishing companies (plus their songwriters… and their investors) in the United States. Not only did pubcos benefit from a rise in streaming activity in the US (the world’s largest music market), many of them also welcomed a substantial bump in performance royalty income, thanks to the re-opening of public spaces in multiple international territories following Covid lockdowns. In addition, of course, there was that other major moment: last summer, the US Copyright Royalty Board (CRB) rejected appeals from platforms such as Spotify against a planned rate rise for publishers from streaming services in the States. The CRB’s decision (concluding its ‘CRB III’ proceedings) meant that the headline USD mechanical royalty rate paid to publishers by music streaming services during the years 2018-2022 was retroactively increased up to a 15.1% share of those streaming services’ annual revenues. To put it in much simpler terms: Digital services were ordered to hand over bagfuls of cash to music publishers for the retrospective use of their music in the five years from 2018-2022. Then, in August last year, more big news: The National Music Publishers’ Association (NMPA), which fights on behalf of publishers and songwriters in CRB proceedings, announced that it had agreed a deal with DSPs for the next five years (2023-2027), which would see a new headline royalty rate of 15.35% phased in during this period. Speaking of the NMPA… last Wednesday (June 14), the US trade body, led by President and CEO, David Israelite, held its Annual Meeting for 2023 in New York, where it presented an abundance of interesting information to its music publisher members. Said information included one huge stat for the music business: The overall trade revenue of US-based music publishers in calendar 2022 stood at USD $5.605 billion, up 19.25% YoY. To put the recent growth experienced by the music publishing industry in the US into better context: That $5.605 billion figure was more than double the size of the US publishing industry’s annual revenues as recently as 2016 ($2.65bn).
US Live Industry Appeals BMI Royalty Rate Increase
Live giants Live Nation and AEG, along with the North American Concert Promoters Association, have filed notice to appeal the recent ruling in the American rate courts that increased the royalties they need to pay collecting society BMI for the songs performed at concerts in the US. Songwriters and music publishers are due royalties whenever songs they wrote or published are performed in public, and that money is usually paid through the collective licensing system. Quite how this works differs from country to country. In the US, the two biggest song rights collecting societies – BMI and ASCAP – are regulated by things called consent decrees. And they say that, whenever there is a dispute over what any one licensee or group of licensees should pay, the rate courts can intervene. Back in March the rate court set new rates for what promoters should pay BMI. That saw the rate increase in a move which, the society said at the time, “ends decades of below-market rates for songwriters, composers and publishers in the live concert industry”. “As a result”, it went on, “BMI affiliates will receive a rate that is 138% higher than the historical rate. And just as important, [the court] ruled that this new rate will be applied to an expanded revenue base, taking into account the way modern promoters monetize concerts. This includes tickets sold directly onto the secondary market, servicing fees received by the promoters and revenues from box suites and VIP packages”. BMI didn’t get everything it wanted in the March ruling, but it was definitely a win for the society. Which makes the decision by the American live sector to appeal the ruling somewhat unsurprising. Responding to the filing of the notice to appeal by Live Nation, AEG and the NACPA, BMI boss Mike O’Neill says: “Given Live Nation, AEG and NACPA’s bizarre position throughout trial that concertgoers attend concerts for the experience of the staging, videos and light shows, as opposed to the actual songs and music being performed, their appeal was not a surprise to BMI”. “For decades”, he continues, “the live concert industry has fought to keep rates suppressed. And even now, when they are making more money than ever, in more ways than ever, they are determined to deny songwriters and composers the fair value of their work, despite the fact that without their contributions, a concert wouldn’t even be possible”.
‘Transformed and Battle-Ready’ SACEM Posts Record Collections for 2022
France’s Société des Auteurs, Compositeurs et Editeurs de Musique (SACEM) has posted all-time-high collections of over €1.41 billion (currently $1.55 billion) for 2022, when revenue attributable to streaming platforms and other digital sources is said to have approached €500 million ($549.54 million). SACEM detailed its 2022 financials and membership specifics in a recently published annual report. Of course, the society had previously identified material collections falloffs (less than €1 billion/$1.1 billion in collections for 2020 and just over that sum in 2021) as COVID-19 lockdown restrictions decimated the live entertainment landscape and shut down more than a few bars, restaurants, and nightclubs. Within the €1.41 billion or so in 2022 collections, SACEM pinpointed €492.6 million/$541.37 million from the aforesaid online category (up 37.6% year over year), €353.1 million/$388.06 million from TV and radio (up 18.9% YoY), and €327 million/$359.38 million attributable to “general rights” (up 92.8% YoY but still down from pre-pandemic 2019). Rounding out the URights owner’s 2022 collections total is €104.1 million/$114.43 million from “private copying” (up 9.1% YoY) as well as €88.5 million/$97.26 million from international usages (up 9.9% YoY) and €48.1 million/$52.86 million from the long-declining “phono/video” category (down 14.3% YoY). Shifting to the distribution side, SACEM – which is said to have 210,800 members, 14,100 of whom joined last year and about 17% of whom are women – paid rightsholders approximately €1.06 billion ($1.18 billion) for 2022, the resource shows. Notwithstanding an almost €10 million/$10.99 million YoY hike in personnel costs, to €134.7 million/$148.06 million during the 12-month stretch, the revenue boost resulted in expenses’ accounting for 11.7% of collections – well beneath the percentages delivered by the three prior years, according to the analysis.
US Senators Slam Radio’s Lack of Performance Royalties
Music Ally has been covering the American Music Fairness Act [AMFA] since it was introduced as proposed legislation in the US House of Representatives in 2021, and then the Senate in 2022. Now the sponsors of the latter, senators Alex Padilla and Marsha Blackburn, have written an op-ed piece for Variety reiterating the bill’s intentions to finally introduce performance royalties for terrestrial radio in the US. Among their arguments is that the lack of these royalties hurts American artists not just at home, but internationally. “The majority of foreign nations — those who already pay their own artists for radio airplay — currently withhold royalties from American music creators, simply because the United States does not reciprocate by paying their performers,” they wrote, suggesting that these royalties are around $200m a year. “This unfortunate status quo is not just outdated, it’s un-American.”
The Grammys Will Allow Songs Created With AI Help
The Recording Academy has updated the rules for the 2024 Grammy Awards to include music created with the help of AI tools. The new rules for the 66th Grammy Awards, released on Tuesday, now state that “only human creators are eligible to be submitted for consideration for, nominated for, or win a Grammy award”—but AI-assisted music will also be considered. According to the new rules, “the human authorship component of the work submitted must be meaningful and more than de minimis,” with de minimis defined as “lacking significance or importance.” That human element must also be relevant to the appropriate Grammy category, while songs that contain “no human authorship” are not eligible in any category. “At this point, we are going to allow AI music and content to be submitted, but the Grammys will only be allowed to go to human creators who have contributed creatively in the appropriate categories,” explained Recording Academy CEO Harvey Mason Jr. in a news post. “If there's an AI voice singing the song or AI instrumentation, we'll consider it,” he continued. “But in a songwriting-based category, it has to have been written mostly by a human. Same goes for performance categories—only a human performer can be considered for a Grammy.” Mason Jr. went on to say that the updated rules are “important,” because “AI is going to absolutely, unequivocally have a hand in shaping the future of our industry. The idea of being caught off-guard by it and not addressing it is unacceptable.” He further added that the Academy has to start “adapting” to accommodate AI technology, along with setting “guardrails and standards.” “Not knowing exactly what [AI] is going to mean or do in the next months and years gives me some pause and some concerns,” he added. “But I absolutely acknowledge that it's going to be a part of the music industry and the artistic community and society at large. "There are a lot of things that need to be addressed around AI as it relates to our industry,” he added.
- The Future of Music: A Glimpse into the Rhythm Revolution of 2023.
- Kate Bush’s ‘Running Up That Hill ’ reaches 1bn Spotify streams.
- How Megan Thee Stallion turned viral fame into a GRAMMY-winning rap career.
- Ed Sheeran tops PPL’s 'most-played' chart for 2022.
- Taylor Swift spends a record-extending 69th week at No. 1 on the Artist 100 Chart.
Who is Exploration?
Exploration is proud to be the company of choice to administer much of the world’s most important media. We rely on advanced technology and a competent, full-time staff of 70+ people to help our clients and partners better control their data and collect their money.
We wrote a free book on how the music business works.
To see who is collecting your royalties, request a free copyright audit.