MTP readers know I take a dim view of the music business (and the larger entertainment industry) falling over themselves to drive traffic to YouTube. Big Machine is taking a major step in the right direction to protect their artists’ brands from being used to hand Google negotiation leverage on a silver platter. This trend won’t reverse itself overnight, but Big Machine is to be applauded for having the foresight (per usual, frankly) to set the right strategy for the industry.
Here’s the press release:
Big Machine Label Group will soon launch a proprietary digital video platform that gives fans direct access to content featuring the label’s superstar roster of talent. Big Machine TV (www.BigMachineTV.com) will offer music videos and behind-the-scenes content when it goes live in February, later hosting exclusive interviews, announcements, contests and more. All of the label’s artists, including superstars Taylor Swift, Tim McGraw, Reba, Florida Georgia Line, Rascal Flatts and Thomas Rhett, will have individual channels on the platform that allow viewers to seamlessly search for desired content for an immersive online fan experience.
The development of Big Machine TV comes just as Nielsen Music’s recent 2016 U.S. Year-End Report shows that music video streaming is up 8% year over year, reaching nearly 180 billion streams last year. Video viewership on the new BMLG platform will count towards Nielsen’s consumption charts.
“Big Machine has always pushed the envelope, and we found ourselves asking, ‘is there a better way’ when it comes to syndicating our online content, pushing it onto social media, protecting it and ultimately monetizing it at the highest rate possible to benefit our artists,” said BMLG President and CEO Scott Borchetta. “And the answer was ‘yes’. The Big Machine TV platform is an incredible tool to better serve our artists and their fans by delivering content when and how we want, all the while making sure the creators are compensated fairly.”
Big Machine Label Group has repeatedly been known for making groundbreaking moves among the music industry and in 2016 was named by Fast Company magazine as one of the “Most Innovative Companies” in America. In 2012, in an unprecedented deal, BMLG made history by working with Clear Channel, the largest owner of U.S. radio stations, to secure sound-recording performance royalties to the label and its artists. This became the first time in history that artists would get paid of their recordings on terrestrial radio stations.
@thetrichordist: Updated! Streaming Price Bible w/ 2016 Rates : Spotify, Apple Music, YouTube, Tidal, Amazon, Pandora, Etc. — Artist Rights Watch
The problem with a pro-rata share of advertising revenue is that the fraction may well always trend downward and is dependent on the growth rate of the service involved. If that sounds like a ponzi scheme, it is pretty similar.
[your plays/all plays] * [ad revenue]
If the fraction is always your plays divided by all plays, your plays may spike a bit but will always be more constant than the all plays number which continually grows at least on a relative basis as more recordings are released industry wide. The “your plays” number will likely never grow at a rate that is greater than the growth in the “all plays” number. The denominator will probably always grow faster than the numerator, which means the fraction is continually getting smaller.
This may be offset somewhat by growth in the ad revenue, but in order for royalties to grow for any particular artist, the percentage increase in the ad revenue would have to exceed the percentage decrease in “your plays” and your percentage piece of the pie. Based on the Trichordist findings, it looks like the percentage decline in the plays ratio is greater than the increase in ad revenue.
The same will probably be true of subscriber revenue as the “new money” starts to level off or even decline.
That’s why it’s like a ponzi scheme.
The last time we did this was back in 2014, so we thought it was time for an update. Not a lot of surprises but as we predicted when streaming numbers grow, the per stream rate will drop. This data set is isolated to the calendar year 2016 and represents an indie label with an […] […]
The string trio Time for Three and S’More Entertainment filed a class action yesterday (Jan 17) in New York federal district court against “Defendants Entertainment One GP LLC and Entertainment One U.S. LP, doing business as E1 Entertainment and/or Koch Entertainment LP” for a variety of claims relating to the defendant’s direct deal with SiriusXM.
The class action complaint describes the suit:
4. In violation of the Class Member Contracts, Defendants entered into secret negotiations and agreements with satellite radio provider Sirius XM Radio (“Sirius XM”), for the exploitation of Plaintiffs’ and the Class Members’ intellectual property. Defendants have systematically failed to account for any revenue, or pay any portion of the revenue generated from the exploitation of the Class Members’ Musical Works on Sirius XM under this agreement.
5. Plaintiffs bring this nationwide class action on behalf of themselves and similarly situated Class Members arising from Defendants’ failure to properly account for and pay revenues generated for the distribution of the Class Members’ Musical Works on Sirius XM and other digital satellite radio providers. Plaintiffs bring claims including for breach of contract, breach of the implied covenant of good faith and fair dealing, an accounting, and declaratory relief. Plaintiffs seek monetary damages, injunctive, and/or declaratory relief on behalf of themselves and others similarly situated against Defendants’ for their willful violation of the Agreements….
B. Defendants’ Secretly Withheld Revenues From Sirius XM in Violation of the Contracts Resulting in Substantial Damages to the Class Members
24. Pursuant to the 1995 Digital Performance Right in Sound Recordings Act, and the 1998 Digital Millennium Copyright Act, artists, songwriters, and masters holders are legally entitled to receive royalties for digital performances of Musical Works on DEMD, including on Sirius XM. In the absence of a direct contractual agreement between the digital transmission entities (e.g. Sirius XM) and a record company, these DEMD royalties are determined based on federally-approved statutory license rates. By law DEMD royalties generated pursuant to a statutory license—absent an agreement between the parties—are collected on behalf of and distributed to rights holders by the independent non-profit organization, SoundExchange, Inc. (“SoundExchange”).
25. When digital transmission providers contract directly with record companies for DEMD rights, such royalties are paid at contractually negotiated rates, and the obligation to collect, account for and pay such revenues to artists and musicians falls on the record company, instead of SoundExchange.
26. In this case, Defendants secretly negotiated and entered into an agreement for Sirius XM to distribute the Musical Works of Plaintiffs and the Class Members. Defendants had a legal obligation under the Agreements with Plaintiffs and other Class Members to properly and accurately account for and pay the revenue received by Defendants to Plaintiffs and Class Members. On information and belief, rather than fulfilling their contractual obligations, Defendants have systematically, knowingly, and intentionally withheld and failed to account for and pay for revenue generated from Sirius XM Plaintiffs and other Class Members.
27. As a result of Defendants’ conduct, the revenue that Defendants have collected from Sirius XM is never reported, and is never subject to potential remittance to Plaintiffs and the Class Members. Instead, these revenues have been wrongfully retained by Defendants outright.
28. Defendants have engaged in this conduct even though they have no contractual or legal right to do so. It is currently unknown whether there are entities other than Sirius XM from whom Defendants are collecting DEMD revenue, without reporting and paying such revenues to Plaintiffs and the Class Members.
29. Defendants are wrongfully retaining monies that are owed to Plaintiffs and the Class Members. On information and belief, Defendants could easily account for and pay the money owed to Plaintiffs and the Class Members, as required by the Agreements.
This will be one to keep an eye on. The lawyers filing the complaint on behalf of the potential class include some familiar names and are:
Michael R. Reese
George V. Granade
100 West 93rd Street, 16th Floor
New York, New York 10025
Telephone: (212) 643-0500
Facsimile: (212) 253-4272
JOHNSON & JOHNSON LLP
Neville L. Johnson
Douglas L. Johnson
Jordanna G. Thigpen
439 N. Canon Dr. Suite 200
Beverly Hills, California 90210 T: (310) 975-1080
F: (310) 975-1095
PEARSON, SIMON & WARSHAW, LLP
Clifford H. Pearson
Daniel L. Warshaw
15165 Ventura Boulevard, Suite 400
Sherman Oaks, California 91403
Telephone: (818) 788-8300
Facsimile: (818) 788-8104
@njmacphee: Musician @MaximCormier wonders how songs ended up for sale online without his OK–Artist Rights Watch
One of the only stories on piracy where the artist called the cops. More of that, please!
A guitarist from Cape Breton was shocked this week to discover his music was being sold online without his knowledge or consent. Maxim Cormier of Chéticamp said a local radio station was offering track-by-track digital downloads of his songs for a fee. “I had never given permission to them to do that,” said Cormier. “And I had certainly never received any payments for any of the sales.” When Cormier found out, he called the police.
After years of catering to copyright holders and their increasing demands, is Google about to go rogue in sheer frustration? According to a report by TorrentFreak, 2017 could well be the year Google throws its toys out of the pram, raises the Jolly Roger and takes to the digital seas in anger by launching its very own mega torrent search engine.
Remember the rending of garments by Pandora’s overpaid executive team about how they just couldn’t turn a profit because of the royalties they paid under their statutory licenses? Statutory licenses allow Pandora to operate without paying minimum guarantees like they will need to do for their much ballyhooed on demand service that is yet to launch. And remember the standing offer we made to pick any MBA lurking in any business school corridor anywhere in the world to help a company with government mandated price controls on the expense side and over $1 billion in annual revenue turn a profit?
Looks like their secret is out–as Bloomberg’s Shira Ovide writes, Pandora is feeling the burn. This right before (we suppose) that Pandora launches its on demand music service for which they are serving millions of “address unknown” NOIs on the Copyright Office to stiff songwriters on statutory royalties. The story from Ms. Ovide is thought provoking, but let’s provoke this thought: What happens if Pandora can’t pay its statutory royalties at all?
At its current rate of cash burn, then, [Pandora] will exhaust its reserves of ready cash in about 10 months.
What happens to the statutory royalties if Pandora goes bankrupt? Remember–in bankruptcy, artists and songwriters are known as “unsecured creditors” standing way, way behind Pandora’s creditors such as bond holder Texas Pacific Group. Of course, it’s probably more likely that Pandora’s exit will be a sale–hopefully before it misses a royalty payment and hopefully for more than the $450 million of cold cash it spent on the misguided acqusition of Ticketfly.
Pandora said on Thursday that it was being savvy about how it lures new subscribers without overspending on marketing and that it was finding more ways to automate advertising sales. The company also said its “commitment to cost discipline” — i.e., its willingness to fire people and pinch pennies in nonessential areas — would allow it to devote funds to new products. Using a customized measure of earnings, Pandora said it expects to do better than the losses forecast by Wall Street analysts. The company still doesn’t expect to be profitable under conventional accounting standards.
The best hope to cure Pandora’s ills is a sale. And that’s why Pandora’s stock moves up mostly at any hints a sale might be coming.
[Editor Charlie sez: What? No blockchain?]
IBM and Sacem, one of the world’s leading cultural and creative collective management organizations, announced today a 10-year strategic alliance to develop URights, a world-class copyright platform on IBM Cloud designed to track and capture the value of online music for both creators and publishers.