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Halfway through 2024, it’s once again Taylor Swift’s world, and we’re all just living in it. At the midway point of the year, her Tortured Poets Department album is the biggest release of 2024 so far by a huge margin, having spent nine of the 13 weeks of the second quarter atop the Billboard 200. That helped her label, Republic Records, best the entire Warner Music Group in current market share for the year through June 27, contributing to Republic’s 15.72% mark — by far the best among individual labels.
However, Swift is far from the only factor. Republic’s market share also includes Mercury Records, Big Loud Records and Island Records (as well as indie distributor Imperial and Cash Money), and each of those labels is also on fire in the first half: Mercury’s Post Malone has collaborated with Swift, Beyoncé, Blake Shelton and Big Loud’s Morgan Wallen on big singles (the latter of which, “I Had Some Help,” spent six weeks at No. 1 on the Hot 100), while Island’s Sabrina Carpenter has dominated the singles charts of late and the same label’s Chappell Roan has emerged as one of the artist stories of the year. Each of the three labels, if broken out on their own, would have made the top 15 of the midyear current market share chart, while Island in particular logged a midyear mark (1.29%) that was more than double its share at the same point last year, and represents its highest midpoint stake since 2018.
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That surge from Republic, which is up more than 3% from the 12.42% current share it posted midway through 2023, helped boost the Universal Music Group’s industry-leading current market share up to 36.37% at the halfway mark, up from the 34.48% it had the same period last year. In turn, Sony Music Entertainment’s current share came in at 26.07%, down from 27.54% halfway through 2023; while the Warner Music Group’s 15.68% dipped from the 17.26% it enjoyed midway through last year. The indie sector, by distribution ownership, grew more than a percentage point to 21.88%, up from 20.72%. By label ownership, the indie community remained the biggest sector of the business, with a 39.12% current share and a 37.35% overall share, both of which are slightly down year over year but relatively static.
Among individual labels, beyond Republic, Interscope Geffen A&M (whose market share also includes Verve Label Group) also had a strong quarter. The label came in at 9.51% in current share, also up a large margin from the 8.08% it posted halfway through 2023, with Billie Eilish’s Hit Me Hard And Soft leading the way. Taking into account the realignment of UMG’s label structure under the Interscope Capitol Labels Group on the West Coast, within which Capitol now reports up to ICLG chief John Janick, and Republic Recording Company on the East Coast, which includes Def Jam among the additional labels that report in to Monte Lipman, ICLG’s current market share would come in at 13.54% halfway through the year, with Republic Recording Company at 16.36%.
Outside those two labels, Warner Records — which includes Warner Latin, catalog label Rhino and some share from Warner Nashville — has continued its hot streak from the first quarter, as singles by Benson Boone (“Beautiful Things”), Teddy Swims (“Lose Control”) and Zach Bryan (last year’s “I Remember Everything” with Kacey Musgraves) remain among the biggest songs of 2024. Notably, Warner’s 6.30% current share — which keeps it in third place among labels — comes even before the impact of Bryan’s latest album, The Great American Bar Scene, given that it was released after the half-year tracking period. That’s easily Warner’s best midyear mark in years and an improvement over 2023’s 5.62%, when it ranked fifth.
Coming in fourth is Atlantic, at a 5.24% current share, which is both down significantly from the 7.34% it posted halfway through 2023 and up slightly from the 5.14% current share it had in the first quarter, as Jack Harlow’s former No. 1 “Lovin On Me” remains among the top songs of the year. (Atlantic’s share includes the 300 Elektra Music Group.) Fifth place, with a 4.59% current share, belongs to RCA Records, representing a dip in share from last year’s 4.98% midyear mark but a rise in position, as it came in seventh at this point last year.
In sixth, Columbia’s current share has improved, up to 4.35% from 3.71% in Q1, as Beyoncé’s Cowboy Carter and Hozier’s No. 1 single “Too Sweet” factors in, though it’s still down from the 5.16% it held midway through last year. (Columbia’s share includes some labels from indie distributor RED.) Capitol Music Group, meanwhile — which includes Virgin Music, Motown/Quality Control, Capitol Christian, Blue Note and Astralwerks in its share — has dropped into seventh place with a 4.03% current share, down from its 6.00% 2023 mark and the 4.71% it posted in the first quarter of 2024.
A trio of Sony labels round out the top 10, though in a different order than they did in the same period of 2023. In eighth, Epic Records has capitalized on a slew of big hip-hop albums in the first half of the year from 21 Savage, Future and Metro Boomin to boost its current share to 2.78%, up significantly from the 1.82% share it held last year when it sat in 10th. Also pushing higher is Sony Latin, which came in ninth at 2.17%, up from 1.99% last year. It comes in ahead of Sony Nashville, which dropped from a 2.55% share halfway through 2023 to a 1.96% share at the midpoint of 2024.
Another big climber at the year’s midway point is Alamo, which is up to 1.78% so far this year, good for 11th and a jump from the 0.96% current share it held this time last year. (Alamo also last year launched indie distributor Santa Anna, which inked a deal with Drake’s OVO Sound label in January.) Universal’s Nashville (1.35%) and Latin (1.12%) follow in 12th and 13th, respectively, while BMG (0.93%) and Concord (0.75%) — the latter of which scored a big hit with the Pulse Music-released “Million Dollar Baby” by Tommy Richman — round out the top 15 among current market share.
In overall market share — which combines current releases (within the past 18 months) with catalog — UMG increased its lead at the top, to 38.52% over last year’s 37.98%, while Sony (27.21%) and WMG (18.22%) both dipped slightly, and the indie community by distribution ownership inched upward, to 16.05% from last year’s 15.93%.
Among the individual labels, the race is much tighter at the top in overall share, with Republic’s 10.61% beating out Interscope’s 9.88%, though both saw their share increase year over year. (The score for the UMG umbrella groups in terms of overall share: ICLG at 15.78% and Republic Recording Company at 12.45%.) Below them, Atlantic jumps to third with a 7.61% mark, leapfrogging Warner Records’ 6.74%, while the deep catalogs of Capitol (in fifth) and Columbia (in sixth) allowed their shares rise to a virtual tie at 5.90%, with Capitol edging out Columbia by five ten-thousandths of a point. RCA (5.05%), Epic (2.75%), Sony Nashville (2.02%) and UMG Nashville (1.86%) round out the top 10.
By catalog share, both UMG (39.25%) and Sony (27.60%) grew year over year, while Warner (19.07%) and the indies (14.08% by distribution ownership) both dipped slightly. Among the individual labels, Interscope takes the top slot, coming in at 10.00% even, ahead of Republic’s 8.88%, with both up slightly over their prior-year marks. Republic barely rises above Atlantic, which drops to No. 3 with an 8.41% share, while Warner Records (6.88%), Capitol Music Group (6.53%) and Columbia Records (6.42%) are closely bunched together behind, with Warner jumping past Capitol year over year. RCA comes in a solid seventh with a 5.21% share, while Epic (2.75%), Def Jam Recordings (2.25%) and Sony Nashville (2.04%) complete the top 10.
Josh Klinghoffer, a former guitarist for the Red Hot Chili Peppers, is facing a wrongful death lawsuit over allegations that he struck and killed a pedestrian near Los Angeles earlier this year due to “distracted driving.”
Filed in Los Angeles court Wednesday (July 10), the case claims that Klinghoffer was driving a black 2022 GMC Yukon with no license plates on March 18 in Alhambra, Calif., when he took a left turn and struck 47-year-old Israel Sanchez in a crosswalk. Sanchez later died of his injuries.
“Video of the incident shows that defendant Josh Adam Klinghoffer made no braking or slowing motion until after he fatally struck Israel Sanchez, indicating that defendant was likely driving while distracted,” lawyers for the victim’s daughter, Ashley, write in the complaint, obtained by Billboard. “This horrible outcome was foreseeable and demonstrates a willful disregard for the rights and safety of others.”
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Sanchez’s lawyers claim they have video evidence that shows that Klinghoffer was “using a device mere seconds before he crashed” into Sanchez.
The lawsuit claims that Klinghoffer was not arrested after the incident, left for a tour with his band, and has never reached out to Sanchez’s family: “He has shown no remorse for his behavior.”
In a statement to Billboard, Klinghoffer’s attorney Andrew Brettler said: “This was a tragic accident. After which, Josh immediately pulled over, stopped the vehicle, called 911, and waited until police and the ambulance arrived. He is fully cooperating with the traffic investigation.”
After serving as a touring guitarist for the Red Hot Chili Peppers in the late 2000s, Klinghoffer joined the band as a full-time member in 2010 to replace longtime guitarist John Frusciante. But in 2019, after performing on two studio albums, he was fired by his bandmates after Frusciante chose to return to the group. He later served as a touring musician for Pearl Jam and has released solo material under the pseudonym Pluralone.
In technical terms, the lawsuit accuses Klinghoffer of wrongful death and negligence — meaning that he allegedly knew that what he was doing was dangerous but did it anyway.
“Klinghoffer … was more focused on his personal business than on acting as a responsible driver,” the lawsuit says. “These decisions culminated in the motor vehicle, inflicting fatal injuries on decedent, whodied a horrific and excruciating death.”
The complaint does not specify how much the family is seeking in monetary damages.
Independent promoter Donnie Estopinal and Dallas entrepreneur Patrick Tetrick are opening a new venue in Dallas next month in the city’s celebrated Design District.
SILO Dallas will open with back-to-back performances by Tiësto Sept. 19 and 20 following three years of planning and development of the concrete landmark. First built in 1959 as a grain storage facility for Johnson Grain Company, the building played a crucial role in feeding Texans and supplying General Foods’ Cereal Division.
The 30,000 sq.-ft. modular custom space with 40-foot high ceilings can accommodate up to 3,145 guests and will be powered by an over 100,000-watt D&B sound system, a new HVAC system and a huge 40-foot by 30-foot stage. Acoustic design for SILO Dallas is by Owens, which designed the Winspear Opera House.
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“We have a fan community who is hungry for live entertainment all of the time,” said Estopinal, founder of Disco Donnie Presents, which promotes festivals in Texas, Florida and throughout the Southeast. “Even with the success of major festivals like Lights All Night, Shaq’s Bass All-Stars Festival, Ubbi Dubbi, and So What?!, we haven’t had a venue in Dallas that we can control and can call home. Silo solves that.”
SILO in Dallas, TX.
Courtesy of Silo
Estopinal is known for successful events at venues like the Texas State Fair and Dallas Convention Center. He plans to continue this tradition with SILO Dallas, projecting millions in economic impact and numerous job opportunities within its first year.
“We found the only building in Dallas that had no parking lot, no roof, no electrical, no plumbing, no HVAC – and it’s kind of on Holy Ground,” Tetrick said. “The community’s response to our vision has been overwhelmingly positive, and we look forward to making SILO Dallas a key player in the city’s cultural and economic landscape.”
The venue will host a number of high-profile acts in its first month, including superstar DJs Sasha & John Digweed on Sept. 28, Above & Beyond’s premier record label Anjunabeats showcase on Oct. 10 and James Hype on Nov. 1.
More at silodallas.com. Tiësto tickets go on sale Thursday, July 11 @ 10 AM CT.
A group of consumers have dropped a class action lawsuit against Spotify over its recent decision to kill its short-lived “Car Thing” device, a case that claimed the streamer left users holding “a useless product.”
Filed in May, the case came just days after Spotify announced that the Car Thing — a device launched in 2021 for playing music in a car — would be bricked in December. The customers claimed the move left them “with nothing more than a paperweight that cost between $50 and $100.”
But less than two months later, attorneys for the jilted consumers said Tuesday (July 9) that they would drop the lawsuit. The move came without explanation and does not indicate that any kind of settlement with Spotify was reached.
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In their initial complaint, the aggrieved buyers claimed Spotify had refused to offer refunds and, at the time of the lawsuit’s filing, the company’s FAQ addressing the deactivation did not make any mention of refunds. It simply told users that Spotify was “not offering any trade-in options” and urged them to consider “safely disposing of your device following local electronic waste guidelines.”
But after the news of the lawsuit had spread, Spotify’s website was updated to include a new section covering refunds. In the updated text, Spotify tells users: “Individuals seeking a refund can contact customer support with proof of purchase to discuss their options.”
It’s unclear if the move to more clearly offer refunds resulted in the withdrawal of the lawsuit, and neither side immediately returned requests for more information. But the voluntary dismissal was made “without prejudice,” meaning the accusers could refile the case at some point in the future if they choose to do so.
Spotify announced Car Thing in April 2021, saying it would provide users with a “seamless and personalized in-car listening experience.” The product — a touch screen with a physical dial that still requires access to a smartphone — rolled out in February 2022 at a price point of $89.99. But just months later, Spotify said it would cease production, telling investors that they “frankly haven’t seen the volume at the higher prices that would make the current product financially viable.”
Then in May, Spotify alerted users that it would stop supporting the devices entirely. The company told users that it was “not a decision we made lightly” and offered a link to customer service to “ensure that you have the right place to reach out if you have any questions.” A week later, the company confirmed in a public statement that the move, set to take effect Dec. 9, would render the devices fully inoperable.
On May 28, three Car Thing buyers — Hamza Mazumder, Anthony Bracarello and Luke Martin — filed their lawsuit, accusing Spotify of violating state and federal laws by essentially duping their clients into buying a “useless product.”
“Had plaintiffs and other members of the class known that Spotify manufactured the Car Thing with the ability to brick the product at any point after its introduction to the marketplace and in Spotify’s total discretion, they would not have bought a Car Thing, or would have paid substantially less for them,” the lawsuit read.
A legal battle over Nirvana‘s iconic smiley face logo will end in a settlement, resolving years of sprawling litigation between the band, fashion designer Marc Jacobs and a former Geffen Records art designer who claims he created it.
In a notice filed in Los Angeles federal court on Tuesday, attorneys for all three sides said they had accepted a mediator’s proposal to end the long-running case over the logo, which has appeared on countless t-shirts and other merch in the years since Kurt Cobain’s death.
Attorneys told Judge John A. Kronstadt that they would formalize the settlement within 21 days, and the judge later removed all upcoming hearings and other deadlines. Terms of the deal were not disclosed, and each side did not return a request for comment.
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Nirvana’s logo – a yellow smiley face with X’d-out eyes — first appeared during promotion for 1991’s Nevermind. The design eventually became something of an unofficial emblem for the band, and has become particularly prominent again in recent years amid a wave of 90s nostalgia among younger music fans.
The band’s lawyers first sued Marc Jacobs in 2018, accusing the design house of using a look-alike image on a line of its own t-shirts and other apparel called “Bootleg Redux Grunge.” They said Jacobs had just replaced “Nirvana” with the word “Heaven” and replaced the two eyes with an “M” and a “J,” but had changed little else.
“Defendants’ use of Nirvana’s copyrighted image on and to promote its products is intentional, and is part and parcel of a wider campaign to associate [the Grunge line] with Nirvana, one of the founders of the ‘grunge’ musical genre,” the band’s attorneys wrote at the time.
In their initial complaint, Nirvana’s lawyers said the smiley face had been created by the late Cobain – the conventional wisdom for decades about the logo’s origins. But soon after the case was filed, a former Geffen art director named Robert Fisher jumped into the case: “It is, in fact, Mr. Fisher, who authored the Happy Face, not Mr. Kurt Cobain.”
“For 30 years now, Nirvana has reaped enormous profits from Mr. Fisher’s works through the sale of a wide range of products,” his lawyers wrote. “Assisted by a team of lawyers and managers, Nirvana was able to do so without any compensation to Mr. Fisher by falsely claiming authorship and ownership.”
Since Fisher entered the case, the band’s lawyers have staunchly maintained that it was Cobain who designed the image. At the very least, they’ve argued, if it was Fisher who created the image, he did so when he was employed by Geffen at the time – meaning it was a “work for hire” and the label retained all rights to the image.
In December, Judge Kronstadt largely agreed with Nirvana on that issue. Fisher later sought to appeal that ruling, but the judge denied that motion last month, saying he would need to wait until after Nirvana and Marc Jacobs went to trial to file an appeal.
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: A new copyright rule on streaming royalties and termination rights is hailed as a “landmark victory” for songwriters; a judge rules on the latest legal battle inside the Prince estate; a band called Jellyroll drops its trademark lawsuit against Jelly Roll; and much more.
THE BIG STORY: ‘Landmark Victory’ On Termination & Streaming
The U.S. Copyright Office has finalized a new rule to clear up uncertainty about who gets paid streaming royalties when songwriters take back their music rights – a wonky subject, but one that roused superstars and advocacy groups into action to secure a “landmark victory” for songwriters.The new rule addresses complicated issues about how the Music Modernization Act’s blanket license for streaming royalties interacts with so-called termination rights – a federal provision that empowers authors to reclaim the rights to their copyrighted works decades after selling them away.It seems straightforward that if a songwriter invokes termination to win back their songs, they should get paid for them. But due to complex legal questions (mind-meltingly complex, trust me on this), the Mechanical Licensing Collective had implemented a policy that critics warned might keep streaming royalties flowing – in perpetuity – to the companies that used to own the rights.Following a multi-year effort that included a push from artists like Don Henley, Sheryl Crow, Sting, Bob Seger, Maren Morris, John Mayer and many others, the Copyright Office overturned that “erroneous” approach this week. For more, go read our full story, complete with an explainer of the legal issues, reactions from the industry, and access to the text of the new rule.
Other top stories this week…
PRINCE ESTATE FIGHT – A Delaware judge issued a key decision in the latest legal battle over the Prince estate, ruling that a group of the star’s heirs could not oust two of Prince’s former business advisors (L. Londell McMillan and Charles Spicer Jr.) from leadership roles. The judge said the advisors had been vested with “broad” authority and could not be removed after one heir “came to regret this decision.”JELLYROLL v. JELLY ROLL – The leader of a Philadelphia wedding band called “Jellyroll” agreed to drop a trademark lawsuit he filed earlier this year against rapper-turned-country singer Jelly Roll, claiming he had settled the case by reaching an “amicable agreement” with the superstar artist. But the move to drop the case was unilateral and the artists reps did not confirm that any kind of deal had been reached.CARDI B COPYRIGHT – The rapper was sued for copyright infringement by a pair of producers (Joshua Fraustro and Miguel Aguilar) who claim that Cardi used their earlier track without permission in her hit single “Enough (Miami).”DIDDY SUED AGAIN – Sean “Diddy” Combs was hit with another sexual abuse case, this time by an exotic dancer named Adria English who claims she was a victim of a sex trafficking operation. Like one of the many previous cases against Combs, the new lawsuit claims he and others violated the Racketeer Influenced and Corrupt Organizations, the federal “RICO” law that’s historically been used to target the mafia, drug cartels and other organized crime rings.LYRICAL PROBATION? Following an 11-year prison sentence on federal gun charges, New Orleans rapper B.G. will be required to provide the U.S. Probation Office with a copy of the lyrics to his upcoming songs before producing and promoting them. The arrangement – the product of an agreement between prosecutors and defense attorneys – came months after prosecutors arrested B.G. for violating his parole by performing at a Las Vegas concert alongside rapper Lil Boosie.
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GUITAR RULING SHREDDED – A federal appeals court overturned a jury verdict won by guitar maker Gibson against a smaller company that allegedly copied the trademarked shape of the Flying V and other iconic designs. The reason? The appeals court said the trial judge improperly excluded key evidence that might have helped show that the design was too “generic” for trademark protection.
AEG Presents and independent Portland, Ore., promoter Monqui Presents are bringing a brand-new music venue to the city that will be located in the Lloyd District at the former Nordstrom building site on NE Multnomah Street.
Developed and operated by the two entities, the 68,000 sq. ft. venue will offer flexible seating for 2,000 to 4,250 attendees and feature a movable stage for dynamic event configurations. The strategic partnership will be led by AEG Presents’ president of Rocky Mountains and the Pacific Northwest Don Strasburg and Monqui Presents co-owner Mike Quinn.
“This is a project we’ve been working on with Don and the AEG Presents team for about ten years now — we have a great site, excellent design, and most importantly a shared vision in making the audience and artist experience a truly great one,” said Quinn in a press release. “We are extremely fortunate and excited about this partnership and thrilled to bring this venue to Portland.”
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The release details the new venue’s location as “prime” given its placement within the Lloyd Entertainment District boundaries with “its extensive surface and adjacent parking facilities, coupled with easy access to light rail, streetcar lines, and the recently completed north-south bike and pedestrian bridge, ensures unparalleled convenience for attendees.”
AEG Presents and Monqui Presents Partner to open new venue in Portland, Oregon.
Courtesy W.PA
“Mike and the whole Monqui team represent the fabric of Portland,” added Strasburg. “We worked together to find the perfect site and designed the perfect venue — we are excited to deliver the city of Portland the concert experience it so deserves.”
According to the release, the venue will boast state-of-the-art acoustics and sightlines optimized for every patron while accommodating a wide range of musical genres and special events, from intimate acoustic performances to extravagant EDM sets.
Portland-based firm Works Progress Architecture, which also designed Mission Ballroom in Denver, has been entrusted with designing the new venue.
“We’ve had an incredible 25+ year relationship promoting shows with Mike Quinn and Monqui and look forward to many more years of putting on historical shows together,” said regional vp of AEG Presents Pacific Northwest Chad Queirolo.
The leader of a Philadelphia wedding band called Jellyroll has agreed to drop a trademark lawsuit he filed earlier this year against rapper-turned-country singer Jelly Roll.
The case accused Jelly Roll (Jason DeFord) of infringing the trademark to “Jellyroll” — a name Kurt Titchenell says he’s used for decades for an act the Philadelphia Inquirer has labeled as “Philly’s favorite wedding band.”
But in a court filing on Tuesday (July 9), Titchenell agreed to voluntarily drop his lawsuit permanently. In a statement, Titchenell said he had “settled” the case by reaching an “amicable agreement” with the superstar artist: “We look forward to our continued use of the name, Jellyroll Band, in connection with our party band business.”
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Court records do not confirm that such a settlement was reached. The filing dismissing the case was not signed by attorneys for Jelly Roll, and instead simply dropped the case against him unilaterally. A spokeswoman for the star did not immediately return a request for comment.
Titchenell sued in April, claiming that Jelly Roll’s increasing popularity — his “Need A Favor” reached No. 13 on the Billboard Hot 100 in November — has flooded the market with his name, making it difficult for prospective clients to find Titchenell’s band.
“Prior to the defendant’s recent rise in notoriety, a search of the name of Jellyroll … returned references to the plaintiff,” his lawyers write in their complaint, obtained by Billboard. “Now, any such search on Google returns multiple references to defendant, perhaps as many as 18-20 references, before any reference to plaintiff’s entertainment dance band known as Jellyroll can be found.”
Titchnell claimed he’s been using the name for his band since 1980. In a 2019 Inquirer article marking the band’s 40th anniversary, the newspaper described Jellyroll as a group that nearly every Philadelphian has likely heard at some point, at one of thousands of weddings, galas and other public events.
In media interviews, Jelly Roll has said that his mother gave him the nickname as a child. He used the name on a 2003 self-released mixtape called The Plain Shmear Tape, and then on dozens of subsequent releases over nearly two decades as a little-known Nashville rapper.
The two artists appear to have peacefully co-existed until recently when Jelly Roll climbed the charts and became a household name. Following his breakout 2021 hit “Son of a Sinner” and last year’s “Need A Favor,” he was nominated for Best New Artist at this year’s Grammy Awards and won a trio of major honors at this year’s Country Music Awards.
In the April lawsuit, Titchenell’s attorneys had asked for an immediate court order that would stop the star from using the name “Jelly Roll.” They specifically pointed to an upcoming concert at Philadelphia’s Wells Fargo Center in October: “Despite his receipt of a demand to cease and desist using plaintiff’s registered service mark, defendant has ignored this demand.”
The U.S. Copyright Office has finalized a new rule aimed at ensuring that songwriters who invoke termination rights to regain control of their music will actually start getting paid streaming royalties after they do so.
The provision, issued on Tuesday, will overturn what the Copyright Office called an “erroneous” earlier policy by the Mechanical Licensing Collective, which critics feared would have kept sending money from streamers like Spotify to former owners in perpetuity, long after a songwriter took back ownership.
Proposals to force the MLC to change that approach, first reported by Billboard in 2022, were supported by a slew of songwriters like Don Henley, Sheryl Crow and Sting, who feared they would be “deprived of the rights afforded to them by copyright law.” The effort was led by groups including the Music Artists Coalition, Songwriters of North America, Black Music Action Coalition and the Recording Academy.
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In a statement on Tuesday, Music Artists Coalition board member Jordan Bromley called the Copyright Office’s new termination rule a “landmark victory for songwriters.”
“This decision not only ensures fair compensation for songwriters who reclaim their rights, but also sets a precedent that strengthens the very foundation of copyright law in the digital age,” Bromley said. “It’s a clear message that in the evolving landscape of music streaming and licensing, the rights of creators must be protected and respected.”
A spokeswoman for the MLC did not return a request for comment.
HOW IT WORKS
The new rule issued Tuesday addresses complex questions about how MLC’s blanket license for streaming royalties, created by the Music Modernization Act in 2018, interacts with so-called termination rights – a federal provision that empowers authors to reclaim the rights to their copyrighted works decades after selling them away.
Though a powerful tool for songwriters, termination comes with an important exception. Even though a publisher must hand back the rights to the original song, they’re entitled to keep selling any existing “derivative works” they created when they owned it. Those continue to be fair game, and any fees under existing licenses keep flowing back to their old publisher.
That exception makes practical sense: It would be unfair to let a terminating songwriter suddenly send cease-and-desists over a famous sample that had been legal when it was initially cleared, or sue over a movie that featured the song under a synch license. But it also creates difficult ambiguity for the MLC and the blanket license.
Say a songwriter terminates their publisher’s control of their music. The writer is now the owner of those songs — that’s easy to figure out. But by paying the MLC for access to the blanket license, Spotify arguably already has an existing license in place with the old publisher. So, isn’t the copy of the song on Spotify an existing derivative work? And shouldn’t the royalties from it continue to go to the old publisher under that license?
Under a dispute resolution policy issued by MLC in 2021, that appeared to be the case. The rules seemed to choose who to pay based on when a song was uploaded to a digital streamer’s servers; if it was uploaded prior to when a songwriter invoked their termination right, the royalties would keep going to the old owner — seemingly forever.
The MLC’s approach was not intended as a scheme to hurt songwriters. According to the Copyright Office, the group saw it as a “middle ground,” aimed at preventing drawn-out disputes that would lock up royalty payments “to the disadvantage of both songwriters and publishers.” But advocates argued that it would undermine the very purpose of termination rights, which were created to level the playing field for small creators who sold their works away to powerful companies.
In October 2022, the Copyright Office largely agreed. In a proposed new rule, the agency said the MLC’s policy was based on an “erroneous understanding and application of current law.” Ordering the group to “immediately repeal its policy in full,” the proposal said that when a songwriter gets their rights back, they should obviously start getting the royalties, too.
Nearly two years later, that rule was finalized on Tuesday. The final version retains most of the core features of the original proposal, though certain elements have been changed to address “practical and administrative concerns” raised by industry groups. In particular, the agency said it had modified how the rule identifies the payee to whom the MLC must distribute royalties, and pushed back deadlines to give the MLC more time to “update its processes and systems.”
QUIETING THE CRITICS
Over the past two years, the proposed rule underwent a so-called public comment period, during which it was met with both support and criticism from outside groups. According to Tuesday’s final rule, one of the “principal critics” was the National Music Publisher’s Association, which argued that the MLC’s original approach had been supported by historical precedent in industry practice.
In the new rule, the Copyright Office said it was “not persuaded by NMPA’s argument” on that issue.
“We do not dispute NMPA’s assertion that certain publishers may have adopted a different approach to termination, but this approach is not supported by the law in the context of the blanket license,” the agency wrote. “The Office is not adopting a new position, or changing the law as it relates to termination or the exception. Nor are we contending that the MMA or blanket license altered the law as it relates to the exception. The Office is merely stating what the law is and has always been.”
The Copyright Office also rejected separate arguments from the NMPA that the new rule was an impermissible “retroactive” rule, or even an unconstitutional “taking” that violated the Fifth Amendment. In doing so, the agency said that “these royalties always belonged to the post-termination copyright owner” and that the new rule simply “implements the law as it already existed.”
Despite earlier disagreements, NMPA President & CEO David Israelite celebrated the final enactment of the rule in a statement Tuesday, saying the group was pleased with a policy that “ensures songwriters are properly and expediently paid post termination.”
“Having clear guidance on this issue will make the MLC and larger industry even more efficient as it gives a clear roadmap to those who have decided to reclaim their copyrights,” Israelite said. “The songwriter groups deserve much credit for working with the Copyright Office and music publishers to push for this decision.”
A spokesperson for the NMPA declined to comment the Copyright Office’s decisions on the group’s specific objections.
Notably, the new rule will not just change the MLC’s approach going forward, but also require “corrective royalty adjustments” to address any money that was paid improperly under the old policy. But such payments are likely to be relatively small: In filings, the MLC has said that it voluntarily suspended the old termination policy while the case played out at the Copyright Office, and that it expects any corrections to total “less than $2 million.”
You can read the entire new rule here.
BMI’s C-suite continues to grow with the appointment of Tom Kershaw as chief technology officer and Justin Rohde as chief transformation officer. The respective CTOs, both new hires with 40-plus years of experience between them, will report to BMI president and CEO Mike O’Neill. Kershaw arrives from travel retail platform Travelport, where he served as […]