Exploration Weekly - Youtube Strikes Deal With SESAC / AccuRadio Agrees to Pay SoundExchange $210,000 per month / TikTok Shuts Down Merlin Negotiation Over Streaming Fraud Fears

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In this newsletter:

• Youtube Strikes Deal With SESAC, Begins Reinstating Music Videos by Adele, Kendric Lamar and More Following Licensing Dispute
• AccuRadio Agrees to Pay SoundExchange $210,000 a Month In Temporary Payments Agreement as Litigation Plays Out
• TikTok’s Stance on Direct Licensing is “Disingenuous” and Risks Harming the Digital Supply Chain Say Industry Insiders
• Mdundo Expands in Africa’s Hyperlocal Markets, Projects $1M+ in 2025 Royalties

This weekend music videos featuring songs by writers allied with American collecting society SESAC were blocked on YouTube in the US, because its SESAC licence was about to expire and no new deal had been agreed. But, at the very last minute, a deal was done and the videos are back.

A little over two months after SoundExchange filed a lawsuit against AccuRadio over unpaid royalties, the two parties have reached a temporary payment agreement.

TikTok wants to do direct licensing deals with Merlin members, cutting Merlin out of the equation. It claims this is to help tackle copyright issues but industry sources say it could make things worse, not better - and potentially harm the whole digital supply chain.

Now, the details...

Exploration Weekly - October 4, 2024
Compiled by Ana Berberana

Youtube Strikes Deal With SESAC, Begins Reinstating Music Videos by Adele, Kendric Lamar and More Following Licensing Dispute

YouTube and performing rights organization SESAC have reached a license agreement. The deal follows the news over the weekend that some music videos from several popular artists, including Adele, Kendrick Lamar, Nirvana, Bob Dylan, Green Day, Mariah Carey, and more, were blocked in the US. That content was removed by YouTube in the US due to a licensing dispute between the platform and SESAC. YouTube said in a statement published via social media over the weekend its deal with SESAC had “expired without an agreement on renewal conditions despite our best efforts”. That dispute has now been resolved. SESAC said today (September 30) that it has struck a deal with YouTube “to equitably compensate SESAC’s songwriters and publishers for the use of their music”. According to Scott Jungmichel, President & COO of SESAC Performing Rights, during SESAC’s negotiations with YouTube, its “affiliates’ works were unilaterally removed” by YouTube ahead of their contract end date of October 1, 2024. SESAC and YouTube have now confirmed, however, that those music videos will be restored on the platform with the new deal in place. YouTube said in a statement published to social media earlier today that it will be reinstating the missing content “over the next day or two”. Said YouTube: “If you’re in the United States we’re happy to share that YouTube has reached a deal with SESAC. Content (that was previously blocked) will be restored across YouTube services over the next day or two. We appreciate all your patience.” In a statement issued to MBW this afternoon, Scott Jungmichel, President & COO, SESAC Performing Rights, said: “We have reached an agreement with YouTube to equitably compensate SESAC’s songwriters and publishers for the use of their music.”

AccuRadio Agrees to Pay SoundExchange $210,000 a Month In Temporary Payments Agreement as Litigation Plays Out

A little over two months following the start of their lawsuit, SoundExchange and AccuRadio have hammered out a temporary payments agreement and ceased battling over an injunction. That agreement’s specifics were just recently finalized in an order from Judge Matthew F. Kennelly, after SoundExchange submitted the underlying complaint in late July. The plaintiff accused the internet-radio defendant of failing to cough up allegedly owed royalty payments. Besides pursuing the royalties themselves, SoundExchange moved to obtain a preliminary injunction barring the statutory license’s use on the part of AccuRadio, which described the suit to DMN as “a complete surprise.” But now, following ample back-and-forth over the amount allegedly owed and more, the litigants have reached a deal to dial things down while the action plays out. First up under that deal, which has as noted been confirmed by the court, SoundExchange has withdrawn its preliminary injunction motion. However, the AI-minded entity can resume that push down the line if it so desires. This leads us to the second component of the agreement and order, “adequate protection in the form of advance monthly payments” from AccuRadio to SoundExchange. As laid out in the legal text, the defendant is specifically set to forward to SoundExchange a minimum of $210,000 on the first of every month “until a final judgment is entered in the” overarching case, with the initial payment due today. Regarding potential changes to the amount, the payments plan can be altered sans court approval if AccuRadio and SoundExchange consent to the retooled terms in writing. Any adjustments would be based on “AccuRadio’s average number of performances” per month (which will still be tracked through monthly reports in any event) as well as “the current regulatory rate for non-subscription transmissions.”

TikTok’s Stance on Direct Licensing is “Disingenuous” and Risks Harming the Digital Supply Chain Say Industry Insiders

TikTok has walked away from licensing negotiations with Merlin, the digital music licensing organization, saying that it would prefer to strike direct deals with the indie labels which use the Merlin deal, claiming that there’s a history of copyright legitimacy problems, and music that is “not quality controlled for copyright”, coming via Merlin members. Whether that is people deliberately uploading music they don’t have the rights to as part of an attempt to fraudulently collect royalties, or whether it’s people uploading sped up/slowed down or otherwise manipulated tracks in a misguided belief that they can do so without permission of the original copyright holder, is not clear. However, no one is pretending that there are not widespread problems across the whole industry to do with “copyright legitimacy”. What is important is that key stakeholders in the value chain - like Merlin, and like the Music Fights Fraud alliance - are taking significant steps to address those problems. A TikTok spokesperson told CMU, “We know that our community of over a billion music fans value the diversity and richness that independent music brings to our platform. We are committed to entering into direct deals with Merlin members in order to keep their music on TikTok”. The company is keen to stress that its motivation for ditching Merlin, and going after its members to get them to sign direct deals, is the “big burden” of “quality control for copyright”, adding that direct deals will give them “better control” over that process.As the story broke yesterday, TikTok’s music licensing honcho Ole Obermann told MBW’s Murray Stassen that the spat is “not about bad blood with Merlin” but rather that “by doing direct deals, if we detect any kinds of content copyright issues, we can address it directly”, adding “it’s that simple”. It is the supposed “simplicity” of tackling the problem that many in the independent label community have said is “disingenuous”. Over the course of a number of conversations with senior executives and licensing specialists from the independent sector, a different message is coming across: TikTok wants to divide and conquer, and is using smoke and mirrors to put forward an argument that doesn’t stand up to scrutiny.

Mdundo Expands in Africa’s Hyperlocal Markets, Projects $1M+ in 2025 Royalties

Mdundo has achieved 36 million Monthly Active Users (MAU), solidifying its standing as a key player in Africa’s music industry. The platform is now intensifying its focus on hyperlocal markets, curating region-specific content to broaden its reach and enhance opportunities for both artists and advertisers. Mdundo’s hyperlocal strategy involves curating music content tailored to specific regions, enhancing its appeal to local audiences. For example, the platform has spotlighted Kalenjin and Kamba music in Kenya, Western Uganda’s unique sounds, Singeli in Tanzania, and Hausa content in Nigeria. This localised approach not only strengthens the platform’s connection to diverse communities but also significantly boosts the visibility and earnings potential for artists creating in these genres. “Our mission is to provide a sustainable platform that enables artists to earn consistent and meaningful income, helping them grow while fostering the broader development of Africa’s music industry,” Mdundo CEO Martin Nielsen said. The company’s shift toward hyperlocal content is part of its broader mission to deepen its connection with African audiences while providing artists new opportunities to reach listeners and generate revenue. For advertisers, Mdundo’s approach adds value by offering targeted reach within these communities, making it an attractive platform for local and global brands alike.

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