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Recently, Spotify has reclassified its premium individual, duo and family subscription services as “bundled subscription services” in an ill-informed attempt to deprive songwriters and music publishers of their rightfully earned U.S. mechanical royalties. As a result, the agreed-upon revenue share rate for Spotify premium, currently 15.2%, may effectively be reduced to less than 12%, depending upon a number of factors. Losses to songwriters and publishers, estimated by Billboard to be $150 million on an annualized basis, will undoubtedly increase over time as subscription revenue and users grow.
Let me say straight away that this column is not intended to embarrass or disparage Spotify in any way. Quite the opposite: This is a respectful appeal to the company, specifically its senior leadership team, to do the right thing by songwriters, regardless of what strategies they appear to believe are legally permissible.
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Spotify has an unfortunate and documented history of punching down at songwriters and music publishers. In just the last few years, this includes appealing the Phonorecords III decision, which reasonably raised the mechanical royalty rate from 10.5% to 15.1% of revenue over a five-year period (while also providing discounted terms for family and student accounts that are beneficial to Spotify and other music services). Almost immediately after serving notice of its intention to appeal Phonorecords III, Spotify moved to retroactively implement the Copyright Royalty Board’s final pre-appeal decision and clawed back a multi-million-dollar credit from songwriters and music publishers throughout 2019. The appeal and remand process lasted for many years, ultimately delaying the payment of a large amount of mechanical royalties, including those earned during the hardship of the COVID-19 pandemic, until February 2024. And finally, in late 2021, Spotify proposed statutory rates for 2023-2027 that the NMPA referred to as the “lowest royalty rates in history.”
While the settlement of Phonorecords IV in 2022 was celebrated by both streaming services and music publishers, Spotify and other DSPs had especially good reason to rejoice. The settlement provides that revenue share rates minimally increase from the prior rate of 15.1% to 15.35% over a five-year period while also providing for discounts related to not only family and student accounts but also Spotify duo —subscription tiers that are meaningful to Spotify given the strong growth of family and duo plans, as the company has noted in earnings reports. The settlement also provides specific terms for DSPs that choose to bundle a qualifying music subscription service with other products and services.
It’s difficult to imagine why Spotify could have any degree of buyer’s remorse concerning the Phonorecords IV settlement or deliberately attempt to manipulate its terms given how clearly reasonable and fair it is. Spotify presumably entered into the settlement with the full knowledge and acceptance that it was agreeing to pay the revenue share rates of 15.1% to 15.35% upon a properly undiluted revenue base, as it had been doing until March 2024.
But Spotify has again devalued the contributions of songwriters to its platform, a move that has been described by rights and advocacy organizations as “cynical,” “potentially unlawful,” “greedy” and “offensive.”
I’ve been asked a lot in recent weeks why Spotify is doing this. The answer, other than perhaps “because they believe they can,” is simple. I believe that Spotify is unjustly attempting to reduce the amounts it pays to songwriters and music publishers in order to (1) effectively use the displaced royalties to offset the costs of running its audiobook business and (2) improve its margins.
Spotify’s reframing of the vast majority of its subscription services as bundled subscription services is a work of fiction. It has done so, in part, by launching a standalone audiobooks access tier that does not appear commercially attractive to users and was launched, at least to an extent, to support its “bundling” strategy. As noted in the Mechanical Licensing Collective’s (the MLC) legal complaint against Spotify, the audiobooks access tier is largely hidden from view on Spotify’s website on a page where the primary purpose is to steer subscribers to premium, not audiobooks access.
The audiobooks access tier is also only available in the United States, the only country to which the Phonorecords IV settlement and accompanying statutory framework applies, and is notably not available in any other country where audiobooks are available in premium. Spotify’s intent is rather obvious on its face, but to think that the availability of the audiobooks access tier as implemented is something of a silver bullet that qualifies it to reclassify its premium individual, family, and duo tiers as a bundled subscription service is a true mark of acting in bad faith. To do so when Spotify is reportedly on the cusp of rightfully raising prices in the United States is all the more insulting.
In the wake of the ire directed at Spotify from songwriters and the music publishing community in recent weeks, the company has issued statements to Billboard and other media.
First, Spotify has stated that it is simply doing what other services have done with bundled products. In my opinion, this is misleading. The Spotify competitors that have availed themselves of bundle reporting methods have done so for products that are bona fide bundles consisting of individually available services and products that hold a clear commercial value, and to which users actively elect to subscribe. Spotify has even done this itself for bundled products on a more limited basis, in the manner actually intended by the Phonorecords IV settlement and its predecessors. But as the MLC’s legal filing against Spotify notes, anyone who subscribed to Spotify premium prior to November 8, 2023, did not elect to receive audiobooks content or functionality. Many premium users have not utilized audiobooks even once; and, as of this writing, a non-student Spotify subscription without audiobooks does not even exist.
Spotify has also been quick to point out that music publishers “agreed to and celebrated” the Phonorecords IV settlement. I can assure readers there is no world in which the music publishing community truly believed that it was agreeing to bundling provisions in the manner in which they are being abused by Spotify to drastically reduce its payments to songwriters and music publishers. At minimum, Spotify’s actions clearly violate the spirit of the agreement, and to say otherwise is blatantly dishonest. To the extent Spotify may believe it has outsmarted songwriters and music publishers, there should be no pride in ownership.
Finally, Spotify has stated that it “paid a record amount to publishers and societies in 2023 and is on track to pay out an even larger amount in 2024,” which presumably refers to Spotify’s global rather than U.S. domestic spend on music publishing royalties. This may be true given Spotify’s growth trajectory, which as of its most recent reporting was up 20% year-over-year in revenue and up 14% in premium subscribers. However, it is wholly irrelevant and a deflection from the issue. Simply paying more from one year to the next does not atone for the grave offense at hand. The amount of royalties paid is not the only pertinent metric.
Spotify has repeatedly stated its desire to become a more efficient and profitable company. I applaud that. Spotify operating profitably is good for the music business — including songwriters and music publishers. And Spotify is welcome to spread its wings and invest in new areas of business such as podcasts and audiobooks. But let’s be clear: The royalties that Spotify pays to songwriters and music publishers (and other music rightsholders including record labels) are not preventing it from becoming or remaining profitable.
Spotify has said on multiple occasions, including during its 2022 investor day presentation, that it has chosen to prioritize growth over profitability and has done so deliberately and willingly. Its music gross margin has operated at strong numbers and improved over time, in part thanks to its marketplace initiatives, but overall gross margin has been dragged down by investments the company has made in the podcast space. Not all of those investments, including content deals and acquisitions of other companies, have produced positive results, as is well documented in various media, and Spotify has since pivoted to operate more efficiently and better ensure that its costs do not grow quicker than its revenue.
The royalties Spotify pays to songwriters and music publishers are not the problem, nor are the royalties it pays to others. Spotify receives tremendous value in exchange for the mechanical and other royalties that it pays for musical works, and songwriters should not be treated by Spotify as a drag on its margins. To pay slightly north of 15% of revenue for songwriters’ creative output is a gift, and there is absolutely no reason for Spotify to sneak around corners to dilute songwriters’ income. It is beyond the pale, even relative to actions that Spotify has taken against songwriters and publishers in recent years.
I love Spotify and have been a user since the very beginning. But I value the songs upon which it has built its entire business even more. Spotify is a house built by songwriters. In the modern listening environment, which heavily depends upon personalization, recommendations and playlists, songs and songwriters are an even more crucial part of the infrastructure and the value conveyed to consumers who pay Spotify subscription fees.
I’ve often said that compensating songwriters in accordance with the value that they bring to music streaming platforms is not only good business but also good for business. Spotify’s relationship with songwriters and publishers, whether it realizes it or not, is mission-critical and not just about maintaining positive sentiment. Given the global stature of Spotify and the company’s interest in various content types including podcasts, music videos and lyrics, returning its relationship with songwriters and publishers to a respectful position is important to its future. Unfortunately, Spotify’s relationship with the songwriter and music publishing communities that it has built its business upon is now more fraught and damaged than ever. Trust has been almost entirely eroded. That cannot merely be chalked up to, as Spotify stated during its most recent earnings call, “natural tensions between suppliers and distributors.” But it may not be too late to fix things.
Here is my genuine and respectful appeal to Spotify, and it’s not a big ask: Please voluntarily honor the Phonorecords IV settlement on the intended terms that you know fully well were agreed to and promptly reverse course on your misguided attempts to reduce U.S. mechanical royalties in this manner. Songwriters and the broader music publishing community will thank you. If this is too much to ask, I believe the songwriting community will never want to hear another word from Spotify about, to use the company’s own words, “giving a million creative artists the opportunity to live off their art.”
Adam Parness was the global head of music publishing at Spotify from 2017 to 2019. He currently operates Adam Parness Music Consulting and serves as a highly trusted and sought after strategic advisor to numerous music rightsholders, notably in the music publishing space, as well as popular global brands, technology-based creative services companies and firms investing in music and technology.
Veteran venues executive Tim Worton is leaving the live entertainment industry for a new career path.
Worton will step away from ASM Global at year’s end, at which time he will enter 12 months’ full-time studies at Moore Theological College in Sydney. When completed, Worton is keen to work in a pastoral, chaplaincy or ministry role.
Sydney-based Worton has logged 33 years in the entertainment business, including 25 years with ASM Global (previously AEG Ogden). For the past 19 years, he has served as the venues and event management specialist’s group director of arenas for APAC.
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“Tim has been a great ambassador for our organization. He has made an admirable and life changing decision to follow his faith and we applaud his decision and wish him well,” comments ASM Global (APAC) chairman and CEO Harvey Lister.
“Tim’s leadership and executive management of the arena portfolio is demonstrated by the continued growth of the Group’s arenas through innovation and ongoing development of entertainment content for audiences.”
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The announcement of Worton’s career pivot was made during the 31st Asia Pacific Venue Industry Congress held at the Brisbane Convention & Exhibition Centre (BCEC). According to organizers, this year’s edition welcomes 554 registered attendees, a new record, for a program running across 23 sessions and featuring 79 speakers.
During the VMA Awards on Tuesday night (May 21), celebrating the final evening of the confab, Worton was presented with the trade body’s 12th honorary lifetime membership.
Worton joined the VMA as a member in 1994, a year after the establishment of the association, and served on its board from 1997-2003, and was the association’s president during the period from January 2001 to May 2003. In 2022, the VMA’s council created an category in his honor, the Tim Worton Award for excellence in the area of education, becoming its first recipient.
Reflecting on his career, Worton says, “helping to ensure there is plenty of live content and the company’s arena network is operationally and financially successful is a key part of my role. What I have loved most about my career is supporting and mentoring colleagues, helping to create opportunities for future development.”
The 2024 Congress marked Worton’s 30th consecutive, and final, in attendance.
Sean “Diddy” Combs has been accused of sexual assault in a new lawsuit filed by a woman who claims the hip-hop mogul sexually assaulted her in a recording studio bathroom in 2003.
According to the complaint, which was filed in U.S. District Court in New York by attorneys Michelle Caiola and Jonathan Goldhirsch, Crystal McKinney claims she met Combs at a Men’s Fashion Week dinner in Manhattan on the invite of a fashion designer she knew. While attending the dinner, during which she alleges that Combs came onto her “in a sexually suggestive manner,” she says he invited her to hang out at his recording studio.
After arriving at the studio, where McKinney says several other men were present, she claims she was given alcohol and a marijuana joint that she later came to believe was laced “with a narcotic or other intoxicating substance.” She says Combs then led her to a bathroom, where he began kissing her without her consent before shoving her head in his crotch and forcing her to perform oral sex over her protests.
McKinney, who was then working as a professional model, claims that she later “awakened in shock” to find herself in a taxi heading back to the apartment of the designer who had invited her to the dinner. At this point, she “realized that she had been sexually assaulted by Combs,” the complaint reads. The lawsuit adds that following the alleged assault, McKinney’s “modeling opportunities quickly began to dwindle and then evaporated entirely” after Combs allegedly “blackballed” her in the industry. After falling into “a tailspin of anxiety and depression,” she claims she attempted suicide in 2004 and later fell into drug and alcohol addiction to cope with the trauma of the alleged assault.
The new lawsuit was filed under the NYC Gender Motivated Violence Act, which created a two-year lookback window beginning in March 2023 that allows survivors of gender-motivated violence to sue their abusers for alleged incidents that occurred outside the statute of limitations.
Also named as defendants in the lawsuit are Combs’ label Bad Boy Records, its parent company Universal Music Group and Combs’ clothing company Sean John Clothing, all of which McKinney claims “enabled” the alleged assault by “actively maintaining and employing Combs in a position of power” despite the fact that they allegedly “knew or should have known that Combs posed a risk of sexual assault.”
McKinney is asking for damages for mental and emotional injury, distress, pain and suffering and injury to her reputation as well as punitive damages, among other relief.
Representatives for Combs, Bad Boy Entertainment, Sean John Clothing and Universal Music Group did not immediately respond to Billboard‘s requests for comment.
Tuesday’s complaint marks the sixth sexual misconduct lawsuit to have been filed against Combs over the past several months. The torrent of lawsuits was kicked off by a November 2023 complaint filed by his former girlfriend Cassie Ventura, who alleged repeated abuse by the mogul over the course of more than a decade.
Though Ventura’s lawsuit was settled just one day later, a 2016 security video published by CNN on Friday (May 17) showed Combs physically assaulting Ventura in a hotel hallway. Though Combs denied all of Ventura’s initial allegations, in the wake of the video’s release he issued an apology calling his behavior in the clip “inexcusable.” L.A. District Attorney George Gascón later released a statement saying that Combs could not be prosecuted over the assault due to the statute of limitations.
Combs has strongly denied all allegations of sexual assault made against him. On Dec. 6, he released a statement that read: “Let me be absolutely clear: I did not do any of the awful things being alleged. I will fight for my name, my family and for the truth.”
In November, Combs stepped down as chairman of his digital media company Revolt before reportedly selling his stake in the company in March. Also in March, federal agents conducted raids of Combs’ L.A. and Miami homes “in connection” with a federal sex trafficking investigation, according to CNN.
Podcast and music streaming company LiveOne is being sued for allegedly “openly and illegally operating a commercial office, business event center, professional podcast interview studio, and music recording studio” out of a 6,000-square-foot mansion in Beverly Hills, according to a complaint filed May 10 by the property’s next-door neighbors.
Entertainment attorney Michael Kibler and his wife Ann Kibler allege LiveOne has been a “nuisance” since it moved to take over the lease for the house in 2022, leading to “noise at all hours of the day and night, increased foot and car traffic associated with commercial operations, and parking overflow, from the day-to-day commercial activity at the residence,” according to the lawsuit, which was filed by Kibler’s law partner John Fowler.
The house is located in the famed Beverly Hills Flats neighborhood, which has long struggled to balance the privacy and safety needs of its wealthy residents with the hustle and bustle of West Hollywood and Beverly Hills’ glitzy Golden Triangle corridor.
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According to the complaint, the Beverly Hills home now being used by LiveOne had been privately held and occupied by a long-time owner who passed away in 2021. The property, which includes, a pool, a swimming lap lane and a guest house, was then purchased by Siamak Khakshooy and Tanaz Koshki for $6.9 million in October 2021 and rented the following December to The Revels Group, which manages artists including rapper G-Eazy.
That’s when the problems for the Kibler family began, according to the lawsuit. The Revels Group used the space as its “creative compound,” the lawsuit reads, operating music studios on the property and promoting “all-night music industry events hosted by professional DJs” on a “nightclub-quality sound system in the backyard.” After receiving multiple complaints about the house, Beverly Hills’ Code Enforcement department launched an investigation in September 2022 and ordered the company to “permanently terminate all operations,” which led to The Revels Group not renewing its lease. After The Revels Group moved out in December 2022, LiveOne moved in around March 2023.
Since taking over the property, LiveOne “has operated its music and entertainment company by engaging in recording studio activities, hosting a pre-Grammy night party on February 3, 2024, and holding other music entertainment events,” the lawsuit reads.
The Kiblers have hired private investigators to surveil the house and issue lengthy reports identifying LiveOne staffers as they enter and exit the property, even running license plate checks on cars parked near the house to determine the identities of the drivers, according to the lawsuit. Besides the occasional late-night party, the Kibler’s biggest complaint is the “large quantities of trash overflowing from the City trash and recycling bins in the alley behind The LiveOne House.”
The Kiblers are suing LiveOne and the property’s owners for violating local zoning laws, charging both with public and private nuisance, as well as infliction of emotional distress. The Kiblers are asking a judge to order LiveOne to cease all business at the house and pay a $10,000 fine for each day it operates at the house.
Billboard reached out to LiveOne for comment but did not receive a response.
A new venue in Brooklyn is set to bring large-scale cultural events to an industrial area of the city.
Announced Tuesday (May 21), Brooklyn Storehouse is a 104,000-square-foot warehouse that’s been taken over as a venue for culture-spanning programming involving fashion, art, music and more — with an emphasis on electronic events.
Brooklyn Storehouse is a partnership between two longstanding independent promoters: New York City‘s TCE Presents, the parent company of event producer Teksupport, which was founded by Rob Toma and has produced electronic music events in pop-up (and often industrial) spaces around the city since 2010, and Broadwick Live. Founded by Simeon Aldred in 2010, Broadwick Live is a U.K. live events company that operates 30 venues and event spaces including Drumsheds and the former Printworks London. Housed in a former Ikea and a converted newspaper printing facility, respectively, Drumsheds and the now-defunct Printworks London fit squarely into Broadwick Live’s focus on repurposing industrial buildings.
Together, TCE Presents and Broadwick Live have leased the Brooklyn Storehouse from the Brooklyn Navy Yard, with the warehouse space existing amid a 300-acre industrial waterfront complex. The building was first used for shipbuilding during World War I and II, and its structure maintains its original industrial aesthetic. Much of the Navy Yard is currently being developed for industrial use by clean energy and climate solutions companies. As such, it’s unlikely that the area will be built out with housing units, allowing Brooklyn Storehouse more leeway when producing live (and often late-night) events.
“One of the problems we have in the U.K. is that nearly every space we open, two years later someone’s building condos right on our back door, and it becomes a constant pressure,” says Aldred. “One of the things that’s very attractive about the Navy Yard is that it’s protected for jobs, and it’s going to be like that for a long time.”
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The founders — who launched the endeavor with “50/50 our own money,” says Aldred — soft-launched Brooklyn Storehouse last September with a fashion show by Ralph Lauren. The venue can host a maximum of 7,000 people.
Brooklyn Storehouse
Phillip Reed
The partnership brings Toma and his team’s strengths— “promotions, marketing, bookings, licensing, opening doors, breaking down operations, community outreach” says Toma — along with the company’s ability to, Aldred says “immediately supercharge this [space] with 30 to 40 shows.” Over the next few months, Brooklyn Storehouse is set to host performances from Justice, Charlotte de Witte, Dom Dolla, John Summit, Swedish House Mafia, Alesso, James Hype and Meduza and four parties from Ibiza-based party brand CircoLoco later this year.
Toma adds that a lot of those artists are “coming to us because we don’t only focus on selling tickets on the dance floor. They know the spaces we do are involved with fashion [and other cultural programming], and they know this is that.” Toma also says artists are drawn to performing shows in special locations, with Brooklyn Storehouse thus offering “an advantage over our competitors.”
Toma adds that the key to making the space work is “the balance of not only having programming in terms of cold hard tickets. It’s more about figuring out how to position it in a way where we’re also bringing in several different industries, from film to fashion.” The founders hope it can be a space where orchestras, musicians and other groups can set up extended creative residencies. It will be also used for corporate gatherings.
Brooklyn Storehouse is the first of several venues Broadwick Live and TCE Presents plan to operate in the United States, with the partners also currently looking at former industrial spaces in Boston, Miami, Los Angeles and Sao Paulo, Brazil.
“In America at the moment we’ve got 25 to 30 [conversations ongoing],” says Aldred. “Five to 10 of those are in the money part of the talk, so they’re becoming quite real.”
In these industrial spaces, the partners see a particularly timely expansion opportunity, with Aldred predicting that many such facilities will open up as the power grid converts to clean energy.
“These spaces were used for kind of dirty work,” he says. “In the next 5 to 10 years, you’re gonna see them coming offline from being dirty and developers not knowing what to do with them. You’re not going to bulldoze a hundred-year-old power station with amazing architecture. It’s not easy to put retail in them. It’s not easy to put housing into them.”
But as is the hope with Brooklyn Storehouse, parties, fashion shows and DJ sets will be just the right fit.
This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between.
This week: Spotify faces a lawsuit over allegations that it “unlawfully” chose to reduce royalty payments to publishers and songwriters; Earth, Wind & Fire reaches a settlement over how much it’s owed in damages by an unauthorized tribute band; Elvis Presley’s granddaughter sues to protect Graceland from a “fraudulent” foreclosure; and much more.
THE BIG STORY: Spotify Taken To Court Over Royalties
Weeks after Billboard estimated that Spotify would pay roughly $150 million less to songwriters and publishers over the next year, the streaming giant is facing a legal battle over the move.In a lawsuit filed last week, the Mechanical Licensing Collective (MLC) claimed Spotify had “unilaterally and unlawfully” chosen to cut its royalty payments nearly in half by “erroneously recharacterizing” the nature of its streaming services to secure a lower rate.“The financial consequences of Spotify’s failure to meet its statutory obligations are enormous for songwriters and music publishers,” the MLC wrote. “If unchecked, the impact on songwriters and music publishers of Spotify’s unlawful underreporting could run into the hundreds of millions of dollars.”At issue in the lawsuit is Spotify’s recent addition of audiobooks to its premium subscription service. The streamer believes that because of the new offering, it’s now entitled to pay a discounted “bundled” royalty rate under federal law. But the MLC says Spotify’s interpretation is legally incorrect and represents a “clear breach” of its requirements under the law.This is the second lawsuit of the past six months for the MLC — an entity created by Congress in 2018 to collect royalties under the Music Modernization Act. After the MLC filed a similar case against Pandora in February, that streamer argued that the group was supposed to operate as a “neutral intermediary” and was “not authorized to play judge and jury” or pursue “legal frolics.”For the full breakdown of the new case against Spotify — including industry reactions and access to the full complaint filed in court — go read Kristin Robinson’s entire story here.
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Other top stories this week…
TRADEMARK TRIAL AVERTED – Earth, Wind & Fire reached a settlement with a tribute act that used the R&B group’s name without permission, avoiding a looming trial over how much the unauthorized group would have to pay in damages. The agreement came months after a federal judge ruled that the tribute act — “Earth, Wind & Fire Legacy Reunion” — had infringed the band’s trademarks.LIVE NATION CASE EXPLAINED – With an antitrust lawsuit against Live Nation from the U.S. Department of Justice expected soon, Billboard‘s Dave Brooks dove deep — breaking down the particulars of the looming case, explaining how it might affect Live Nation and recounting recent federal efforts to crack down on anti-competitive practices at tech giants like Google and Apple.COURTHOUSE ROCK – Elvis Presley’s granddaughter Riley Keough filed a lawsuit aimed at blocking a “fraudulent” foreclosure sale of the late singer’s historic Memphis home Graceland. Keough’s lawyers say the sale foreclosure was triggered by phony claims that her late mother, Lisa Marie Presley, borrowed $3.8 million and used Elvis’ famed mansion as collateral.UMG DROPPED FROM DIDDY CASE – Universal Music Group (UMG) and CEO Lucian Grainge were dismissed from a lawsuit claiming they “aided and abetted” Sean “Diddy” Combs in his alleged sexual abuse — a move that came after the lawyer who filed the case admitted there had been “no legal basis for the claims.” The sudden reversal came as UMG’s lawyers argued that the accusations were so “offensively false” that they planned to take the unusual step of seeking legal penalties directly against the accuser’s lawyer.SAMPLE SETTLEMENT – Kanye West reached a settlement with the estate of Donna Summer to resolve a copyright lawsuit that accused him of “shamelessly” using her 1977 hit “I Feel Love” without permission in his song “Good (Don’t Die).” The case, filed in February, claimed that West “arrogantly and unilaterally” used her music even though he had been explicitly refused a license.NAME GAMES – Members of the 1980s new wave band The Plimsouls won a legal ruling against the group’s guitarist over the trademark rights to the band’s name. The case was the music industry’s latest battle over the names of classic rock groups, including Journey, Stone Temple Pilots, Jefferson Starship, the Rascals, the Ebonys, The Commodores and The Platters.
Live entertainment executive Jason Miller is leaving operational responsibilities at ELA, the joint venture he launched with global entertainment leader CTS Eventim in 2021. Miller continues to hold an ownership stake in the concert promotion company. During his nearly three years as CEO, Miller, based in Los Angeles, led ELA to produce shows in all […]
When country singer-songwriter Brett Young celebrated his first Recording Industry Association of America (RIAA) Diamond-certified single for his 2017 hit “In Case You Didn’t Know,” the Nashville party looked a bit different than the typical Music Row shindig. The father of two welcomed not only his wife and daughters, but music executives were encouraged to bring their children as well — with more than 30 kids taking part in the event.
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The celebration was also a launch party of sorts for Family Alliance in Music (FAM), a Nashville-based non-profit, which advocates for and supports professionals across all facets of the music industry, including executives and creatives, who are achieving their career aspirations while caring for members of their family units.
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FAM was co-founded by a collective of Nashville music executives — Jackie Jones (senior vp of artist and industry relations for the RIAA), Haley Montgomery (senior manager of awards & membership for the Academy of Country Music) and Margaret Hart (YouTube’s head of Nashville industry and label relations).
The organization offers a place of community, education, and support for all families, aiding music industry members who are also parents, caretakers for aging or sick family members, and those who want to start families. FAM’s multi-pronged approach encourages employers to provide clearly defined, comprehensive family benefits and flexible work practices, as well as offering information to employers detailing why such benefits are vital.
“We all have a family,” Montgomery tells Billboard.
The idea for FAM sparked in 2021, after Montgomery invited Jones to a breakfast meeting in Nashville.
“She thought I wanted to do the typical networking meeting, but I said, ‘I would love to talk about your kid,” Montgomery recalls. “You actually post about her [on social media] and you are successful. How does that work?’” At the time, Montgomery had been surveying the music industry around her as she was hoping to start a family.
“I had been looking at this industry that I had put so much of my heart into and I couldn’t help but feel like it wasn’t going to support my full self, which included starting a family,” Montgomery says. “I showed her a survey I’d done across the industry — 25% of companies in the music industry don’t even support the minimal amount of time it takes to heal your body after giving birth. So, to me, that said, ‘This isn’t welcome here.’”
Meanwhile, Jones, who has an eight-year-old daughter, had been having conversations with Hart because they had heard from others in the music industry questioning how to balance family and career.
“Seeing how this is an industry that goes way beyond just the ‘9-to-5,’ and asks so much of those working in it — if the industry wants to truly be inclusive, it has to consider these issues,” Jones says.
“Part of what we’re doing is ripping the blindfold off,” adds Hart, a mother of two. “This is who we are; this is our whole selves.”
According to a survey of employers conducted by the Bureau of Labor Statistics in March 2022, 24% of private-industry employees had access to paid family leave (parental leave and family caregiving leave) through their employers.
There is currently no federal law requiring paid family and medical leave for the private sector, though 13 states and the District of Columbia have laws creating paid family and medical leave programs for eligible workers. In Tennessee, the Tennessee Paid Family Leave Insurance Act went into effect on Jan. 1, 2024, allowing insurance companies to offer paid family leave, which employers can voluntarily choose to purchase for their employees. The insurance would cover the birth or adoption of a child by the employee, placement of a child with the employee for foster care, care of a family member with a serious health condition, or in aiding families of service members of active duty or an impending call/order to active duty.
In surveying 20 music companies, FAM found that more than half offered at least 12 weeks of fully paid leave for birthing caretakers, while 25% supported only four weeks or less of fully paid leave for a birthing caretaker. Some of the top company policies did include aid for IVF, adoption and fertility testing.
FAM advocates for companies in the music industry to offer more comprehensive family benefits including, at a minimum, 12 weeks of fully paid leave for birthing caretakers, six weeks of fully paid leave for family caretakers (those caring for sick or aging family members) and for non-birthing caretakers, as well as offering travel to the nearest compliant state/care in aiding with termination assistance.
In 2023, the organization formed a task force encompassing top executives across the spectrum of the industry, including Shannon Casey (Wasserman Music), Halie Hampton-Mosley (Why & How Management), Morgan Mills (CmdShft), Tiffany Provenzano (mtheory), Rachael Terrell (Paramount), Rachel Wein (Prescription Songs), Dan Wise (maddjett) and Mackenzie Cooper (Triple Tigers).
The task force’s work is centered around four core pillars: education and resources, community, benefits and grants. In helping to increase visibility for parents and caretakers within the music industry, they just held a music industry family meet-up event in Nashville a few weeks ago. The task force is also working on holding a fertility-focused workshop and expanding the organization’s current benefits resource to include recommendations for employers regarding fertility benefits and caretaker leave. FAM is under fiscal sponsorship with the Players Philanthropy Fund (PPF), allowing the organization to receive charitable donations, while working to eventually have its own 501c-3.
“I’ve been so fortunate to work for companies that provided incredible benefits and understanding,” Jones says. “I’ve taken care of a child, I’ve had maternity leave. I’ve now lost a parent — those aren’t things you get over in a week—these are things you have to take time and have grace for.”
“It’s important to have diversity in our workforce,” Montgomery says. “Having people with different lifestyles and backgrounds at the table is going to allow you to reach more people. And it’s good business; it’s such a recruitment and retention tool.”
Hart says that their discussions with various music industry companies has been met with openness and she advises senior executives to advocate for others in their company through encouraging these policies.
“When you can be a senior executive and come into these conversations, make sure that as you protect yourself, that you’re protecting the people coming behind you, that maybe don’t have the influence that you have in the room. It’s not just about getting you the leave that you need — it’s about getting the new employee the leave that they will need if they decide to have a family or need to be a caretaker. We’ve had conversations where someone will say, ‘Oh, my boss told me I can kind of take what I need.’ That’s a lovely sentiment, but ultimately what happens when a coordinator or assistant might need to go on leave, they aren’t protected by the handshake agreement that you’ve just made.”
Jones notes that some of the industry members who have navigated the biggest issues with family and caretaking benefits are the creatives, musicians, and artists, and says they hope to provide grants to aid this segment of the industry: “These are the very people who drive the industry at large. How are we going to help the musicians, the touring teams? Those issues are harder than, ‘Hey, can you change your policies? There is no safety net for a 1099 touring employee.”
Jones adds that making meaningful change in this segment of the industry doesn’t always necessitate a complete policy overhaul.
“I don’t want people to think, ‘They want me to provide maternity leave to my entire road crew, my band.’ It’s about what other things can you do to help make things easier—can you help with shipping breast milk from the road? Or, if someone needs to spend several weeks caring for a sick or elderly family member, can you promise them that their job will still be there? It’s not about the cost; it’s about the culture.
“In the case of women touring, whether in a band or on the road, they are usually in the minority,” Jones continues. “If you are the only woman in the band, how do you speak up? Or you look around and there are those fears of, ‘If I voice this concern, what if I don’t get to be on this tour anymore?’ Or it could be a woman that is a tour manager, or a dad that wants to take time with his newborn, or someone who needs to care for a parent.’”
“We have to be proactive to create a safe space for people to have benefits and resources that are going to be able to keep them in this industry,” Hart says. “It’s a very complicated issue and I don’t want to say, ‘We’re going to fix it,’ but I think we can help make it better.”
Suno, a generative AI music company, has raised $125 million in its latest funding round, according to a post on the company’s blog. The AI music firm, which is one of the rare start-ups that can generate voice, lyrics and instrumentals together, says it wants to usher in a “future where anyone can make music.”
Suno allows users to create full songs from simple text prompts. While most of its technology is proprietary, the company does lean on OpenAI’s ChatGPT for lyric and title generation. Free users can generate up to 10 songs per month, but with its Pro plan ($8 per month) and Premier plan ($24 per month), a user can generate up to 500 songs or 2,000 songs, respectively, on a monthly basis and are given “general commercial terms.”
The company names some of its investors in the announcement, including Lightspeed Venture Partners, Nat Friedman and Daniel Gross, Matrix and Founder Collective. Suno also says it has been working closely with a team of advisors, including 3LAU, Aaron Levie, Alexandr Wang, Amjad Masad, Andrej Karpathy, Aravind Srinivas, Brendan Iribe, Flosstradamus, Fred Ehrsam, Guillermo Rauch and Shane Mac.
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Suno is commonly believed to be one of the most advanced AI music models on the market today, but in past interviews, the company has not disclosed what materials are included in its training data. Expert Ed Newton-Rex, founder of Fairly Trained and former vp of audio for Stability AI, warned in a recent piece for Music Business Worldwide that it seems likely that Suno was trained on copyrighted material without consent given the way he has been able to generate music using the model that closely resembles copyrights.
In a recent Rolling Stone story about the company, investor Antonio Rodriguez mentioned that Suno’s lack of licenses with music companies is not a concern to him, saying that this lack of such licenses is “the risk we had to underwrite when we invested in the company, because we’re the fat wallet that will get sued right behind these guys.… Honestly, if we had deals with labels when this company got started, I probably wouldn’t have invested in it. I think that they needed to make this product without the constraints.”
Suno representatives have previously said, however, that their model will not let anyone create music by using prompts like “ballad in the style of Radiohead” or employ the voices of specific artists.
Many AI companies, including OpenAI, argue that training on copyrights without licenses in place is “fair use,” but the legality of this practice is still being determined in the United States. The New York Times has launched a lawsuit against OpenAI for training on its copyrighted archives without consent, credit or compensation, and Universal Music Group, Concord, ABKCO and other music publishers have filed a lawsuit against Anthropic for using its lyrics to train the company’s large language model.
In the Suno blog post, CEO Mikey Shulman wrote: “Today, we are excited to announce we’ve raised $125 million to build a future of music where technology amplifies, rather than replaces, our most precious resource: human creativity.”
“We released our first product eight months ago, enabling anyone to make a song with just a simple idea,” he continued. “It’s very early days, but 10 million people have already made music using Suno. While GRAMMY-winning artists use Suno, our core user base consists of everyday people making music — often for the first time.
“We’ve seen producers crate digging, friends exchanging memes and streamers co-creating songs with stadium-sized audiences. We’ve helped an artist who lost his voice bring his lyrics back to life again after decades on the sidelines. We’ve seen teachers ignite their students’ imaginations by transforming lessons into lyrics and stories into songs. Just this past weekend, we received heartwarming stories of mothers moved to tears by songs their loved ones created for them with a little help from Suno.”
The National Music Publishers’ Association (NMPA) has sent a letter to Judiciary Committee leadership in both the U.S. House of Representatives and Senate, asking for the overhaul of the statutory license in section 115 of the Copyright Act, which “prevents private negotiations in a free market” for mechanical royalty rates for songwriters and music publishers in the U.S.
On May 20, David Israelite, the organization’s president and CEO, teased this announcement in a guest column for Billboard, saying: “soon we will unveil a legislative proposal to permanently fix the power imbalance songwriters face by being subject to a compulsory license for their songs.”
In his new letter, NMPA’s Israelite writes that doing away with the 100-year-old system of government-regulated price setting for songwriter and publisher royalties (specifically, mechanical royalties) and allowing rate negotiations to occur in a free market would prevent songwriters and publishers from being taken advantage of by “Big Tech:” “Those who do operate in a free market, such as record labels, have negotiated protections against bad faith tactics. However, music publishers and songwriters have no such leverage under the [Copyright Royalty Board] to do so.”
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For years, music publishers and songwriters have lamented that they do not get to negotiate for their U.S. mechanical royalty rate privately because of wording in section 115 of the Copyright Act, which places “non dramatic musical works,” like songs, under a compulsory license, dating back to 1909. The rate for that license is determined by a set of Copyright Royalty Board judges, who weigh the interests of the music business against that of tech companies like Spotify, Apple Music, Amazon Music and more to determine what they feel is a fair price for music.
Record labels, which work with “sound recording” copyrights, not “musical works,” are able to freely negotiate their rates, as are music publishers and songwriters outside the U.S. Because of the discrepancy between how U.S. music publishers and songwriters are treated compared to others, publishers feel that they are held back from getting the best rates possible.
The letter arrives just a week after music publishers, the NMPA, and the Mechanical Licensing Collective (The MLC) — which collects and distributes mechanical royalties for U.S. publishers and songwriters — waged a war against Spotify for paying a lower U.S. mechanical royalty rate for premium, duo and family plans, starting in March 2024. Spotify believes that the addition of audiobooks to premium, duo and family plans qualifies these tiers as bundles, a type of subscription that pays a lower royalty rate.
For days after this information was first reported, various music organizations made statements against Spotify, often calling its reclassification “cynical” and a “loophole” to pay songwriters less and takes advantage of the settlement made between music publishers, songwriters and streamers to agree on a rate structure for 2023-2027 (known as “Phonorecords IV”), which was approved by the Copyright Royalty Board judges.
In the NMPA’s letter — addressed to Sen. Richard Durbin (D-Ill.), Sen. Lindsey Graham (R-SC), Rep. Jim Jordan (R-OH), and Rep. Jerrold Nadler (D-NY) — Israelite calls Spotify’s move a “manipulat[ion] [of] the compulsory licensing rules” and the latest in what he feels is the “continued abuse of the statutory system by digital services… [which] has made it clear that additional action by Congress is needed.”
On May 15, the NMPA sent a cease and desist letter to the streamer for hosting lyrics, music videos, and podcast content that contain their copyrighted musical works without a proper license. The next day, on May 16, The MLC joined in, filing a lawsuit against Spotify for “improperly” reclassifying its premium, duo and family plans and trying to get a discount, which would result in what Billboard estimates is a $150 million annualized reduction in U.S. mechanical royalties, compared to what they would have paid if these tiers never changed over.
In his new letter, NMPA’s Israelite proposes a solution for abolishing the current system, saying: “Congress should allow rightsholders the choice to license through the MLC using the statutorily set royalty rates or to withdraw from the MLC and operate in a free market if they meet certain conditions.”
He continues, “if copyright owners chose to withdraw their copyrights from the blanket license, currently administered by the MLC, they would be required to do the following:
Require all rightsholders who exercise this option to provide 6 months’ notice to the Register of Copyrights and the MLC;
Require that the withdrawing rightsholders ensure their musical work copyrights and ownership interests are registered in the MLC’s public database;
Require the MLC to flag those rightsholders and their catalogues as withdrawn from the MLC blanket license and subject to voluntary license negotiations; and
Require copyright holders to maintain with the MLC database current, up-to-date contact information, which would be used to contact for licensing.”
Read the full letter below:
Dear Chair Durbin, Ranking Member Graham, Chairman Jordan, and Ranking Member Nadler:
The Music Modernization Act (MMA) has offered not only songwriters and music publishers, but also digital service providers, unprecedented benefits. However, the bill has amplified the need for corrections to the century-old compulsory license governing their work.
Large, foreign-owned companies, like Spotify, should not enjoy unfair advantages over American songwriters because of outdated federal policy. By making one simple change, Congress can undo a more than 100-year-old mistake in the compulsory license and ensure songwriters and music creators continue to benefit from their creative efforts.
How did we get here? Almost six years ago, members of the House and Senate Judiciary Committees came together to pass the MMA, a landmark piece of copyright legislation for the age of digital music streaming. The MMA took important steps forward in improving the compulsory license imposed on songwriters and music publishers by creating the Mechanical Licensing Collective (MLC) to administer a blanket license under Section 115 of the Copyright Act, which is taken by digital music services.
The MLC increased transparency through a public database, furthered licensing efficiency through a central administrator, and improved the process for distributing musical work royalties. However, the benefits did not extend to, or remedy, the ongoing issues faced by rightsholders subject to the government rate-setting process.
The continued abuse of the statutory system by digital services, most recently Spotify, has made clear that additional action by Congress is needed. The royalty rates paid to musical work copyright owners for uses of those works under the Section 115 blanket license are set in a proceeding before the Copyright Royalty Board (CRB), within the Library of Congress, once every five years. In these proceedings, music publishers and songwriters must face off against some of the biggest tech companies in the world: Spotify, Apple, Amazon, Google, among others to establish rates for the use of musical works.
Because the law prevents private negotiations in a free market, publishers and songwriters have seen ongoing abuse of the statutory system and CRB rate-setting process with little ability for recourse. Most recently, Spotify has found a new way to game the statutory rate system to underpay rightsholders by hundreds of millions in royalties.
In March, Spotify began manipulating the compulsory licensing rules and reclassified its premium subscription music service, along with almost 50 million subscribers, into what it is calling a “bundle.” The benefit to taking this action is, under the compulsory royalty rates, bundles attribute less revenue – and therefore pay less in royalties – to the music than a premium subscription music service. Spotify has taken a part of its music service that was previously offered to consumers for free, audiobooks, and it is now calling audiobooks a bundle with its music service to substantially reduce the musical work royalties owed.
Those who do operate in a free market, such as record labels, have negotiated protections against these bad faith tactics. However, music publishers and songwriters have no such leverage under the CRB to do so.
Fortunately, there are solutions Congress can enact that would preserve the benefits of the MMA and the MLC while providing songwriters and publishers a better chance to compete on a level playing field with Big Tech firms like Spotify. Rather than picking who wins and who loses, Congress should allow rightsholders the choice to license through the MLC using the statutorily set royalty rates or to withdraw from the MLC and operate in a free market if they meet certain conditions.
If copyright owners chose to withdraw their copyrights from the blanket license, currently administered by the MLC, they would be required to do the following:
Require all rightsholders who exercise this option to provide 6 months’ notice to the Register of Copyrights and the MLC;
Require that the withdrawing rightsholders ensure their musical work copyrights and ownership interests are registered in the MLC’s public database;
Require the MLC to flag those rightsholders and their catalogues as withdrawn from the MLC blanket license and subject to voluntary license negotiations; and
Require copyright holders to maintain with the MLC database current, up-to-date contact information, which would be used to contact for licensing.
This would give rightsholders the option to stay within the current compulsory system or to operate within a free market. It would also restore basic principles of fairness to the market by requiring streaming platforms to deal with music makers as partners. Finally, it would provide a needed point of leverage for songwriters and music publishers to negotiate with streamers, like Spotify, who can otherwise use their power to bend government regulations to their advantage. All of this could be accomplished by building on the successful infrastructure created by the MMA and the MLC.”