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Lawyers often say that bad facts make bad law – meaning that unusual or unlikely details of a case can shape precedent in unpredictable ways. But bad facts can also make for bad contracts, to judge by the contractual restrictions on re-recording that major labels may be adopting in the wake of the success of Taylor Swift‘s “Taylor’s Version” of her albums.
Re-recording restrictions, a common contractual provision that has been part of record deals for decades, are intended as a kind of post-term noncompete. Their understandable economic purpose is to stop an artist from re-recording songs released under a contract that has run its course in order to benefit a subsequent label – and let the subsequent recording compete with the original without a comparable investment. Under that logic, the reasonable duration of a re-recording restriction would be a few years, as was the practice before the “Taylor’s Version” releases came out. It’s harder to justify locking up artists for a protracted period that might be longer than the duration of the original recording agreement.
That duration could be limited, too, by a potential legal challenge. Both the federal government and many states restrict the enforceability of noncompete clauses in employment agreements, particularly when they limit economic freedom. (Examples include California Business and Professions Code Section 16600, and the recently passed New York Senate Bill S3100A, which New York governor Kathy Hochul is expected to sign.) Next year, the Federal Trade Commission will vote on banning noncompete clauses in employment agreements altogether. Labels often say that recording artists aren’t employees, but that wouldn’t necessarily put these kinds of restrictions above the fray – especially if they last longer than seems reasonable.
Few artists re-record anything, and those who do usually only revisit one or a few hits, maybe their biggest album at most, and that’s more likely if there’s a contractual dispute. It’s unprecedented for a significant artist to re-record his or her entire catalog, repackage each album and promote their rerelease – particularly when the original hit releases are still readily available. That requires motivation. Or, in Swift’s case, perhaps, frustration. But in a “Taylor’s Version” world, who wants to be the one who let it happen again?
Chris Castle
Laura Lee Nall Photography
Without getting into the he-said-she-said of the sale of Big Machine, including Swift’s recording catalog, it’s important to note that it was an unusual case. So, it’s worth asking if there’s a lower-risk alternative.
If a label is going to sell a living artist’s entire catalog – or sell a company whose value is dominated by that catalog – the safe thing to do might be to offer the artist a chance to bid on it. Or, failing that, at least consult with the artist to create a comfortable situation, even if that requires additional assurances or an additional payment. If you think it’s only necessary to do the minimum, look at what can happen with an overly legalistic approach. To artists like Swift, these recordings are their life.
Changing the recording agreement template to try to guarantee an outcome may backfire. “Taylor’s Version” simply isn’t a normal situation – it’s one that involved the world’s most popular artist, who is as attached to her catalog as any performer, plus just as business-savvy as most executives. It’s a situation that was almost impossible to anticipate – so making contracts even more one-sided may not help. Instead, a change like this could draw the attention of President Biden’s FTC, which seems to have an abiding interest in noncompete clauses. Especially if a number of competitors just happen to push the same contractual change at the same time.
If labels must have extended re-recording restrictions, couldn’t they add a sweetener, such as offering living artists a right to match the highest bid if their recording catalogs are ever sold individually, or a blocking right over the buyer or something similar? Alternatively, they could also just leave things be.
An overreaching re-recording restriction could also provoke retaliation from artists’ lawyers. They could make leverage points like post-term marketing restrictions and audits more important deal points in order to fight restrictions. That means disfavored buyers might have to wonder how hard it could be to get the approvals they need, or how much they would like continual audits. And in cases where artists are also principal songwriters, buyers could also have trouble clearing song rights, especially for new purposes like AI.
Some labels may be less concerned with expanding this restriction than they are with winning a competitive negotiation to sign a new artist. And if a competing label agrees to a shorter restriction, it could be an easy compromise that would cost little or nothing.
There’s always a temptation to add restrictions to contracts, but in this case, the exercise could backfire. Labels might be advised to be careful what they wish for.
Chris Castle is an Austin-based lawyer. He represents artists, publishers, songwriters and startups on commercial and public policy matters.
One of the key themes to emerge from Billboard Latin Music Week in Miami earlier this month was the undeniable and unstoppable rise of Mexican music — a trend that’s being powered by the TikTok generation.
In an era marked by a global surge in music consumption, the revival of Latin music in the United States is nothing short of spectacular. Data from the RIAA paints a compelling picture, showing U.S.-based Latin music revenues have increased by 15% year on year to reach a record high of $627 million in the first half of 2023, accounting for 7.5% of market share. When we reflect on numbers from the first half of 2021, the leap of 52% over these two years is particularly striking. The primary impetus for this is the growing audience tuning in to Latin music on ad-supported on-demand music streaming services. This is remarkable growth in a genre characterized by non-English language songs.
The rise of reggaeton in particular has been nothing short of meteoric. The commercial success of the likes of Bad Bunny, J Balvin and Karol G has left an indelible mark on the Latin music landscape. However, it’s important to note that Latin music’s appeal isn’t confined to a single genre.
TikTok has evolved into a hub for music discovery for millions of fans worldwide, with many trending songs on the platform often ending up on the Billboard Hot 100 or Spotify Viral 50. According to Luminate, 67% of the app’s users are more likely to seek out songs on music streaming services after hearing them on TikTok.
So what trends are we now seeing in Latin music? The short answer: Mexican music is leading the charge.
Over the past 12 months alone, Mexican music has experienced more than 83 billion views on TikTok worldwide, with a third of these coming from the United States, according to hashtag research the team and I have conducted in-house at Round. In that time, Mexican music has emerged as the fastest-growing genre on the platform with an astounding 322% surge in popularity, compared to electronic music (122%), rock/indie (96%), reggaeton (90%) and rap/hip-hop (87%). Mexican music stands as the third-largest genre on TikTok in terms of viewership in the U.S., with more than 27 billion views over the past 12 months, behind only rap/hip-hop and K-pop.
Artist after artist has emerged from the Mexican music scene to take TikTok by storm — from Natanael Cano and Yng Lvcas to Fuerza Regida and Grupo Frontera. However, one in particular is paving the way: Peso Pluma.
Thanks to Eslabon Armado’s viral TikTok hit “Ella Baila Sola,” on which Pluma is featured, the rising star has emerged as one of Mexico’s most exciting breakthrough artists. The track not only hit No. 1 on the Billboard Global 200 chart, where it held for six weeks, but it also secured a No. 4 spot on the all-genre Hot 100 — an unprecedented feat for a regional Mexican song. Plus, it dominated Hot Latin Songs for 19 consecutive weeks, the longest run at No. 1 for a regional Mexican track since the tally’s inception in 1986. The song has generated 525.5 million on-demand official streams in the United States to date, according to Luminate. Moreover, “Ella Baila Sola” reached No. 1 on the overall Streaming Songs chart, becoming the first regional Mexican song to lead the list and the first No. 1 on the chart for both acts.
The undeniable catalyst in this success story has been TikTok, where Pluma has gained over 30 billion views in just 12 months and inspired over 5 million creations on the platform. In April, four of Pluma’s tracks dominated the list of top trending Latin songs on the platform in the United States.
The appeal of regional Mexican music is further broadening as tastemakers continue to upload educational videos about the genre to TikTok and Instagram Reels. That trend is helping to nurture a deeper connection to the genre, fostering long-term engagement and powering it to new heights.
So what lies on the horizon?
Round’s analysis of TikTok hashtags reveals a treasure trove of uncharted music cultures and sub-genres waiting to be discovered. For example, views of #sertanejo, a Brazilian sub-genre of traditional music, have doubled from 15 billion to 30 billion over the last 12 months globally. That nearly rivals #reggaeton, which received 33 billion views globally across TikTok over the same period.
As new trends arise, one thing remains certain: TikTok is a powerful force for promoting diversity in music and opening up international markets for local sounds. Its global reach has ushered in an era where artists can easily have their music heard by millions. Now, it’s no longer a question of if artists, record labels, brands and influencers are on the app — it’s about how they maximize its power to the fullest. The stage is set, and the world is listening.
Ray Uscata is managing director of Round, North and South America. Round is a tech-enabled digital agency using content, creators and communities to place the world’s leading brands and artists at the center of culture.
Banned Books Week is here, and while book lovers everywhere rally against the censorship of our cherished stories, musicians like Ariana Grande, Idina Menzel and Yola have added their names to the chorus of celebrities and activists in an open letter condemning the ominous threat of book bans. This impassioned message — led by the iconic LeVar Burton of Reading Rainbow fame and propelled by moveon.org — boldly declares about book bans that “It’s only a matter of time before they target other forms of art, expression, and entertainment.”
This point is exactly what I was afraid of as I began working on my latest album, FREADOM: Songs Inspired by Banned Picture Books, and the reason why I want to get more musicians on board to join the movement against book bans.
As a Manhattanite, I wear many hats: touring musician, recording artist, early childhood music educator and mom to an eight-year-old bookworm. Over the past year, I’ve taken a dive deep into the disheartening world of book bans, especially books removed from school and library shelves. My connection to this issue deepened when I discovered that some of my daughter’s beloved books, including Sulwe by Lupita Nyong’o and Alma and How She Got her Name by Juana Martinez-Neal, had been taken away in my own home state of Florida by Governor Ron DeSantis and spearheaded by his supporters in the right-wing group Moms for Liberty.
In the 2021-22 school year, First Amendment advocates PEN America reported that a shocking 317 children’s picture books were banned. Most of these silenced stories belong to BIPOC authors, LGBTQIA+ individuals, books with Jewish themes or stories representing diverse cultural backgrounds. The fact that even our youngest readers aren’t spared is truly devastating. Picture books and children’s music go hand-in-hand for young kids to learn about the world around them and build empathy for others.
When I set out to create songs for FREADOM, I naively thought that only books were under threat from modern censorship, though I vaguely knew about the mid-20th century “banning of immoral music” as it pertained to censorship of jazz and rock & roll due to “provocative” dancing or promoting social change. Growing up in the 1980s, while devouring the shelves of CDs at my local Miami music store, I recall the infamous black and white Parental Advisory labels placed on the plastic because of explicit content. I honestly thought music censorship was a thing of the past and we were collectively cool when it came to free music (and I’m not talking about the Napster kind.)
When I recently visited the PEN America offices, I was shocked to learn about an elementary school in Waukesha, Wis., where they banned a performance of the song “Rainbowland” by Dolly Parton and Miley Cyrus for violating their “controversial content policy.” Over the summer, the school board controversially dismissed first-grade teacher Melissa Tempel for daring to speak out against the musical ban — exercising her First Amendment rights outside of school hours on social media. Teachers in that district are also barred from wearing rainbows, discussing gender pronouns or even mentioning the word “anti-racist.”
As a lyricist, educator, and mother, I can confidently say that there’s nothing controversial about “Rainbowland” and its removal may be seen as an actionable blueprint from the right and a glimpse of what’s coming our way in the land of the “free.”
Book bans are just one piece of a larger plan to dismantle our education system and undermine the core of our democracy one art form at a time, all under the guise of “protecting children.” By standing idle and failing to protect our First Amendment rights now, we are heading on a bleak path forward. It’s only a matter of time before they come after our music, just as they’ve come after our bodily autonomy and voting rights.
Musicians, I urge you to join me in the fight against book bans, defending our First Amendment rights and safeguarding the personal freedoms of all Americans. Come stir up good trouble and take a stand! “We will not be banned!”
Singer/songwriter Joanie Leeds won a 2020 Grammy Award for best children’s album and in her new album, FREADOM, released Sept. 15, she and her band take on book banning through eight original songs that amplify love and inclusion.
YouTube recently launched an AI Music incubator with artists and producers from Universal Music Group. The purpose of the group, according to Universal CEO Lucian Grainge, is to explore, experiment, and offer feedback on the AI-related musician tools and products the Google team is researching — with the hope that more artists will benefit from YouTube’s creative suite.
This partnership demonstrates the clear desire to involve the industry in the development stages of AI products and protect the human component of artistry. This desire is heightened in the face of deep fakes. Just last month, Google launched its Synth ID watermark meant to spot AI-generated images (Google DeepMind CEO Denis Hassabis cited the importance of deepfake detection ahead of a contentious election season). “Heart on My Sleeve,” the song created with AI-generated voices of fake Drake and The Weeknd kicked off the music industry’s scramble to shut down and stamp out any unauthorized use of artists’ voices. Most importantly, though, the viral track proved that AI voice models are here and only improving with each passing day.
As artists, labels, and other rights holders have grown more concerned about AI models learning and profiting from their copyrighted material, fans and creators have discovered new ways to engage with their favorite artists and imagine completely new musical works using their AI voice models. This is prompting other industry executives (myself included) to wonder how these models can continue to be used to explore this new creative frontier of music while protecting artists.
With all of this in mind, the industry needs to mull over a few philosophical questions and consider the distinction between voice cloning and voice synthesis. A singer is much more than timbre, the primary quality that voice models modify in a voice. AI voices are not the same as samples, where the whole vocal element is based on an underlying artist’s full performance which would include pitch, emotion, timbre, accent, tone, etc.
Regardless, AI innovations will only reach their maximum potential if the industry faces one foundational issue: artists and their labels need to control the ways in which their image, likeness and voice are used. Whether the industry decides to embrace these innovations or limit AI-powered cloning entirely, the next step begins with synthetic voice detection. Is the artist singing on any given track fake or the real deal?
In the early 2000s, music companies found themselves losing control of their content to the digitalization of music. The industry’s initial impulse to crush file-sharing networks like Napster led to the launch of Apple’s iTunes store in 2003 and, eventually, legal streaming. Other digital rights management tools, like ContentID on YouTube, were developed to detect unauthorized use of music. Once the industry learned to embrace digital music and formed a foundational infrastructure to support it, streaming revenues soared — breaking the $10 billion mark for the first time in 2022 and making up 84% of the industry’s total revenue, according to the RIAA.
The industry needs synthetic voice detection, but with 120,000 new tracks uploaded to streaming platforms daily (according to Luminate) on top of the already existing back catalogs, can it be done accurately and at scale? The short answer: yes.
As the industry begins to embrace the responsible use of AI for synthetic voice creation, I strongly believe there should be a corresponding willingness for artists and labels to collaborate in that training process. It’s in their best interests to do this now. AI applications are already scaling in a variety of categories. Well-engineered models are becoming exponentially more efficient and can increasingly manage massive computing tasks. Combined with strategic operational approaches, this is achievable today.
To honor each artist’s decision whether or not to participate in voice models, the industry needs an easy and accessible way for artists to build their own voice models and grant fans and creators permission to use it. This type of initiative paired with synthetic voice detection ensures that only the voices and works of those who want to be involved in voice cloning and other derivative AI tools are used. Artists who want to create their own voice models can work with voice synthesis platforms to establish the terms of where and how their voice model can be used–offering more control and even opportunities for monetization.
Geraldo Ramos is the co-founder and CEO of Moises, the AI-driven music platform that is transforming the way artists and businesses incorporate AI technology into their workflows.
It’s been months since the concept of “artist-centric” royalties was introduced in a January memo from Universal Music Group Sir Lucian Grainge to his staff. It raised a considerable amount of speculation for a company memo, even though for a while the concept remained rather vague. Something about streaming manipulation, functional music, and a model that “supports all artists.”
Now, though, that speculation is over: Deezer has announced its UMG-backed proposal, with plans to launch it soon.
We need more clarity, but this proposal definitely adds to the streaming debate, which is important if we want to improve the streaming ecosystem. The European recorded music market is still far from where it should be – around 42% of its market peak when adjusted for inflation, following the absence of any substantial change in streaming subscription prices over the past decade and a half.
How do we fix this?
First, we need to see higher subscription prices. We have seen some increases, but they are still minor. We just can’t escape that fact. Then there are ideas about how the business can reallocate royalties, and we need as many voices as possible to take part in the discussion. IMPALA started t this wo years and a half ago with its 10-point plan to make the most of streaming, which we revisited in April (infographic here and full plan here). We think Deezer’s proposal is ambitious, and some of it resonates with our own. But it also includes some more controversial provisions.
Let’s start with them.
I’m referring of course to Deezer’s plan to set a threshold for boosts in royalties, available only to acts that get a certain number of streams from a certain number of listeners. Where would the additional revenues go? How many artists would benefit? And what does it say about the stability of the system that an artist could attain “professional” status for a month, only to potentially lose it in following one?
More clarity is needed. Independent labels account for 80% of new releases (including artists patiently awaiting discovery, artists who cater to niche audiences, artists from smaller territories and newcomers just starting their artistic journey). We must avoid a two-tier approach that would impact not only their work, but musical diversity as a whole. We understand that this is not Deezer’s objective, but IMPALA will always oppose thresholds that would harm smaller players and smaller markets, a position that was set already in our first streaming plan. Let’s make sure it’s not the case here.
Key to IMPALA’s approach is a progressive redistribution of revenues where tracks would see a boost in royalties beneath and before the point of global ubiquity, and those which are in the top echelon (however that’s defined) would lose a small percentage of revenue. That’s the Artist Growth model – initially developed by AIM in the UK. We feel this can lead to a healthier ecosystem and more opportunity for new creators from diverse genres.
This could be controversial as well, which is fine, as long as we remember that change must be discussed – and negotiated. It shouldn’t simply be imposed in a deal between two market players, even when one of them is the leader of the market. And while Deezer and UMG will launch this plan soon, until other stakeholders agree, this “artist-centric” model will really be UMG-centric.
Deezer’s plan also has a lot of positives, though.
Who could argue that streaming manipulation needs to be addressed, for example? We absolutely support Deezer’s commitment there, which is also point 4 of IMPALA’s proposal, but we will need to review the idea of caps on individual accounts as we wouldn’t want superfan streams to be devalued.
Deezer also want to address “noise” content is also an issue that Deezer seeks to address. We flagged this in our plan, as a way to address revenue dilution. So we welcome this move and would appreciate other ideas to handle this content, which has a place, as long as it doesn’t dilute royalties.
Deezer’s second proposal for boosts in royalties, for tracks that fans actively engage with, is also interesting. That’s also the rationale behind our “Active Engagement” model, put forward in our plan in 2021. There are different ways one could do this, but it’s great to see the idea getting traction.
Is Deezer ready to make the imaginative leap to embrace the “Fan Participation” model, also proposed by IMPALA, to offer creators a space within the service where they could develop incremental revenues from direct relationships with fans? If so, we could be talking about really exciting and important changes in the streaming market.
We hope that services will also look at ways of rewarding artists who record longer-form music. That’s a conversation we started with our “Pro rata Temporis” model. The issue needs to be addressed without at the same time harming shorter tracks.
In the meantime, we need more extensive discussion and debate. We invite all interested parties to explore IMPALA’s plan and share their perspectives as we collectively navigate the evolving streaming landscape.
Let’s keep the ideas coming!
Helen Smith is the Executive Chair of IMPALA, the European non-profit organization that represents independent music companies, with key issues that include copyright, sustainability, diversity and inclusion, streaming reform, AI, finance and digital services as well as strategic relations with key partners through the Friends of IMPALA program.
Today we are releasing U.S. recorded music revenue data for the first half of 2023, reflecting 9.3% growth over the first half of 2022 — the ninth straight year of positive growth.
With overall first-half revenues hitting an all-time high of $8.4 billion at retail value and paid streaming subscriptions nearing 96 million, this report makes clear the strength of American recorded music’s fundamentals.
For example, this new data shows broad strength across formats — especially digital streaming, which now comprises some 84% of recorded music revenues and grew at a robust 10.3% rate this period. Looking solely at paid streaming subscriptions, that figure climbs to 11%.
In fact, paid subscription services were responsible for nearly two-thirds of total revenues and more than three-quarters of streaming revenues. And they continued to grow at an even faster rate than ad-supported revenues.
But it’s not only streaming; the new data also show the lasting power of physical formats — which grew by 5% — including growth in the value of sales of CDs and vinyl. Overall, physical revenues reached their highest level since a full decade ago, topping $880 million so far this year.
And digital and customized radio music revenues, which include SoundExchange distributions for revenues from services like SiriusXM and internet radio stations, grew 16% to $657 million for the period.
As we’re fond of saying, “Music doesn’t just happen.” This success reflects the hard work, innovation, and creative genius of the artists, songwriters, labels, publishers, and services that make up the U.S. music community.
Finally, with annual Latin music revenues in the U.S. exceeding $1 billion for the first time in 2022 and the first half of 2023 showing continued growth faster than overall revenues, Latin music continues to shine — both economically and creatively. We look forward to releasing a full report on the Latin segment during Hispanic Heritage Month and as a capstone to our upcoming RIAA Honors Celebration of Latin music where we will recognize legends Gloria and Emilio Estefan, superstar Sebastián Yatra and other Latin music trailblazers as well as the policymakers who protect it all.
RIAA is proud to develop and release this transparent data which shows the continued power and vitality of U.S. recorded music.
Mitch Glazier is chairman/CEO of the Recording Industry Association of America.
I’m a California-raised Filipino American who spent my formative years (in the mid-aughts) worshiping bands like Death Cab for Cutie and much of the Myspace-era Warped Tour scene. So when I was 16, I decided to pursue my dream of starting my own band. But as I took a closer look at the artists I loved, the realization hit: Apart from Joey Santiago of the Pixies (who is Filipino), there was no one who looked like me.
Even as I transitioned into the business side of the music industry — working at large management companies, agencies and in touring — the lack of diversity was hard to ignore. And while the industry has changed a lot since I was a teenager, it still has so much room to grow.
As an active songwriter and senior director of A&R at Angry Mob Music Publishing, I’m a big advocate for songwriting camps and the significant opportunity they offer to everyone involved. I recently joined an organization called Mono Stereo Groove, which focuses on the representation of AAPI songwriters in the industry, and, inspired by all of the amazing work being done by those involved in the organization, I wanted to spearhead my own initiative. So at Angry Mob, I decided to introduce a diversity initiative into all creative areas, including by focusing on one of the most important elements in all of songwriting: the community.
This is why I recently launched the New Normal Writing Camp — an all-inclusive, diversity-forward camp that says it all in the name. I wanted to show that diversity should be represented not only on the artist level but also within the writing rooms, which have been very slow to catch up in terms of diversity. Our first annual New Normal Writing Camp, held in June 2023, featured 70% female artists/writers and 50% women producers representing more than 12 cultural backgrounds and featured artists including UMI, Deb Never, Yuna and Paravi. The hope is that camps like this will continue to push the industry to embrace all of the beautifully diverse writers and producers who deserve to be in high-level writing rooms.
The music industry can be difficult to work in, and these songwriting camps give the participants a chance to be themselves, get out of their comfort zones and make music in an intimate, safe space. Through these camps, I have the opportunity to create a diverse environment where songwriters and other professionals can network with those who do and don’t look like them, be exposed to a variety of genres and work with people with whom they otherwise may not have had the opportunity.
The best parts of these week-long writing events are the beautiful songs that are created and the lasting friendships that come out of them. It’s truly special to see people connect through their life stories, cultures and interests, creating music that reflects those. Unless you’re a person of color, it might be hard to grasp how crucial it is to see others who look like you pursuing their dreams and being given a fair shot in a white male-dominated industry. That’s why camps like these — also including Spotify’s GLOW camp for LGBTQ+ writers, Spotify’s Frequency camp for black writers and ASCAP’s She Is the Music camp for women songwriters — are so important.
When chatting about my intention to create writing environments that reflect the world we live in, the response from some industry professionals is usually one of surprise. While that response isn’t necessarily bad, it proves this inclusive approach is far from the norm. But it shouldn’t be. What the industry is blinded to is the potential to miss out on this generation’s next big artist/songwriter/producer — all because its leaders aren’t investing in underrepresented songwriters. All companies need to prioritize this issue, and I feel incredibly lucky to have the Angry Mob team behind me, championing my passion and continuously working alongside me to ensure we’re building a diverse roster of clients and organizing diverse writing camps.
It’s obvious that the music industry has a lot of growing to do, and I could have given up on it a long time ago due to my own experiences with close-minded gatekeepers — but I know that my work, however small, can really move the needle in the right direction. I am extremely proud to be a Filipino American, and it’s important to me to create spaces in the industry where the AAPI community and other underrepresented POC can grow and pursue opportunities that are often not given to them, helping ease the need to work twice as hard to even be considered.
My hope for the future of our industry is equity. I am honored to write about this topic and even share my experience, but I would also like for opportunities in the music industry for underrepresented groups to look the same as everyone else’s. Harkening back to the name of the songwriting camp I launched at Angry Mob, I’m optimistic that we can make diversity in songwriting camps the new normal and not something we need to push for any longer. When combined together, the small steps we take within the industry to provide opportunities to underrepresented groups will impact the future of music in immense ways.
Ralph Torrefranca is the senior director of A&R at Angry Mob Music. He is also a songwriter and the singer/guitarist in the post-punk band Cuffed Up.
Since the end of August, there have been reports that BMI is in advanced talks to sell itself to the private equity firm New Mountain Capital. A deal has yet to be signed but the possibility has raised concerns among songwriters about what it will mean for the collective management sector if one of its largest organizations becomes a business owned by private equity.
Such a move would take BMI in a new direction, away from the traditional model – based on non-profit and transparent operations—of the CISAC community. For CISAC and our global network of 227 Collective Management Organisations (CMOs, or societies), however, it also highlights the strength and value to creators of the global collective rights management system. The collective management model has been successful for over a century, remaining faithful to its core principles, while transforming and adapting to keep pace with the rapidly changing business environment.
BMI will stay connected to this community. In anticipation of the new direction it has taken in the last year, it has moved from being a full CISAC member to a CISAC “client,” a new category that was established in 2020 to accommodate the new types of rights management entities — including SESAC, Soundreef and Nextone – which have emerged.
Clients make up a very small group of “for-profit” entities that differ from the overwhelming majority of CISAC members, which operate on a non-profit basis. Clients are not subject to all of the traditional transparency and business rules that full CISAC members abide by, but still have access to CISAC’s systems and data exchanges that help the global music market function
By accepting for-profit entities as clients, CISAC maintains its inclusiveness and diversity, while not compromising on the core conditions of membership.
It is those core membership conditions which provide the unique value of the global network. Full members, such as ASCAP in the US, PRS for Music in the UK or GEMA in Germany, are required to meet key fundamental rules:
to operate on a non-profit basis or be controlled by their affiliates
to respect CISAC’s global standards of governance and professional rules
to be fully transparent in their financial reporting and share information with the rest of the CISAC members
As a global confederation, CISAC respects individual creators’ decisions on whom they entrust their rights to. It equally respects members and clients’ decisions on how they manage creators’ rights. The global song rights market is changing rapidly, with growing competition between different types of royalty collection bodies at a time when the cost pressures of managing digital collections and distributions has never been greater.
These changes are inevitable and they are good, if they have the end of result of better serving the creators who are at the center of our business.
In this transforming landscape, the vast majority of CISAC’s member societies remain non-profit entities which abide by all CISAC rules. Full CISAC members work only for creators and rightsholders, not shareholders. Their transparency obligations ensure high levels of integrity and best practice across the network. Creators and rightsholders, not financiers and investors, are assured a controlling role in their decision-making. Creators sit on our societies’ Boards of Directors. You’d be hard pressed to find other entities in the music industry which have music creators as their Board members.
The global collective management system gives creators a strong, united voice to lobby for creator-friendly legislation, develop modern systems for data exchange, adopt best practices and maximize collections and distributions. From turning around failing markets such as Greece, Turkey and India, this community continues to play an indispensable role for creators and publishers worldwide.
Our sector remains the only part of the music industry that puts the creator front and centre of everything it does. While more commercial ventures may be tested in our fast-evolving market, the fact remains that the collective management system is the most robust, reliable and fit-for-purpose model in serving creators.
Gadi Oron is the director general of the International Confederation of Societies of Authors and Composers (CISAC), a Paris-based rights organization.
September marks the 20th anniversary of the RIAA launching litigation against consumers in a bid to extinguish — or at least dampen — the flames of peer-to-peer (P2P) file sharing. The consumer litigation was part of a multi-pronged effort that targeted internet service providers, the P2P providers like Napster and Limewire and music fans. In early 2003, nearly 40% of internet users in the United States had used a P2P service to download music, or an estimated 54 million individuals. Upon the RIAA’s announcement of consumer suits, parents began asking their children what they were doing with those stacks of blank CDs; coverage of the pending litigation stifled file sharing before the first notice was filed.
Much has been written about the P2P era, but one thing is for sure: The vast majority of downloaders knew it was illegal. If there was any uncertainty in consumer’s minds, the RIAA litigation helped to clear it up. Perhaps that is the greatest legacy of the consumer litigation, which ended in 2008. The actual law was contested for some time, with arguments about technological innovation and the promotion of that technology for purposes of copyright infringement.
By the 10th anniversary of the consumer litigation in 2013, the record labels had largely won the battle against P2P file sharing. After settlement of the Limewire copyright infringement case in May 2011, the number of people using the remaining services rapidly fell in the United States, and by 2013 had dropped 60% from the peak in 2003. Litigation was one of many contributing factors. The P2P file sharing experience was awful for users, fraught with spoofed files, pop-ups, malware, incomplete and incorrect files, and other maladies. iTunes downloads revived the singles era by offering $.99 tracks. Pandora had been at the top of app store charts for several years, and Spotify was gaining momentum. By 2013, half the U.S. internet using population was streaming, and a handful were beginning to pay for subscriptions. The RIAA moved on to other battles, notably the YouTube “Value Gap.”
As the 20th anniversary of the consumer suits approaches, there has been a stunning reversal in progress in the war to limit consumer access to unlicensed music. An estimated 55 million people in the U.S. acquired or accessed “free” music files in the past year, according to MusicWatch research — the same amount as in 2003. What went wrong? There is an abundance of apps and sites that permit consumers to obtain unlicensed music. Apps that permit YouTube stream-ripping are widely available. Mobile apps available with “free downloads” frequently contain unlicensed content. The very social platforms that the industry relies on to promote artists also harbor unlicensed content. Unlike in the P2P era, the law is clear when it comes to these forms of copyright infringement and licensing requirements, though the DMCA still provides a shield to services that rely on content uploaded by fans.
The problem is the consumer. The teenager who knew that they were committing piracy while downloading In Utero from Limewire is now an adult. Today, they can be easily confused. Their Google music searches may include content that infringes on copyright. Same for the app store on their phone. The recent spate of Taylor Swift Eras tour livestreams on TikTok, while technically the same as a stream-rip of “Cruel Summer,” does not register the same in fans eyes. On top of the unlicensed content, MusicWatch studies indicate 20 million streamers are sharing logins to music streaming services.
The industry has not been silent. The RIAA has litigated against stream-rippers. Mixtape app Spinrilla was successfully sued for infringement and shut down in May. Sony and Universal just sued the Internet Archive for copyright infringement. And as an alternative, streaming companies offer family plans, which raise ARPU and blunt the impact of unauthorized account sharing.
Unlike 2003, however, the industry isn’t paying much attention to the infringing consumer. And why should it? There hasn’t been a collapse in revenues as was experienced during the aughts. Most infringing consumers are active streamers and many pay for a subscription — and a vinyl record or two. There’s not much reason to target music fans. But that doesn’t mean that more shouldn’t be done to educate consumers and further protect the rights of artists and copyright holders.
Russ Crupnick is the principal at market research firm MusicWatch.
The music industry has progressed rapidly over the last decade. TikTok is launching music careers, sites like YouTube are creating new distribution channels and artists like Grimes are open-sourcing their vocals for generative AI creation. But for all of that progress, the opaque systems that control the industry are not in favor of artists driving culture. As listeners, we’ve seen the tip of the iceberg with Taylor Swift’s highly publicized re-recording of her masters and Megan Thee Stallion’s legal dispute with her record label over unpaid royalties.
Music is the most consumed category of art on the planet, and it’s time to evolve the system so that all artists — from top recording stars to indie creators to those who are just getting their careers started — are set up to succeed. But to really grasp what’s needed to shift the power dynamic in the direction of artists, it’s important to peel back the complexities of music revenue.
Changing the narrative on music revenue
There’s a false narrative that is pervasive in the media that says music doesn’t generate any money, driven in large part by the litany of really bad record deals that draw public attention (like the aforementioned Megan Thee Stallion example). But in reality, music makes money — it’s the artists who don’t get paid what they deserve.
The streaming revolution of the 21st century has transformed the way people consume music. But despite streams making up 80-90% of the industry’s revenue, artists see few of those dollars after industry players take their inevitable cuts. Though record labels serve a valuable role in the music ecosystem (from marketing and developing an artist to licensing and distribution), artists can be haunted for decades by bad deals signed early in their careers that unknowingly give away creative control and a significant portion of their future earnings. Artists who have signed contracts with unfavorable terms typically don’t earn negotiating power until they’ve amassed a large following and a fruitful career.
Why the bad deals?
Most artists simply don’t know what they’re signing — it’s not necessarily that they’re making a bad decision. As an artist myself, I experienced this firsthand early in my career. It would take years for me to get paid for my songs — and as someone who’s proficient in accounting from my time studying business in college, my inability to see how much I made from my music was mind-boggling.
The reason that deals are so opaque is that music revenue is growing and coming from more sources than ever before, which creates a complex web of intermediaries within the ecosystem. Every different distributor has a different deal with every different streaming service, and every label has a different deal with every streaming service. And the streaming services are not transparent about how their rates differ across these various deals. Beyond that, there are numerous types of royalties — from performance royalties to mechanical royalties to in-app streaming royalties. Therefore, when it comes to signing on the dotted line, artists must blindly place their trust in a network of counterparties, lacking any real visibility into their actual earnings once every entity has taken their cut. All of this is perpetuated because record labels are incentivized to control information so they can make more competitive deals with artists.
As a result, artists gravitate to what comes naturally — the music. They don’t want to worry about the business side of things because the system isn’t set up in a way that empowers them to ask questions or negotiate favorable deals, and it distracts them from doing what they love.
Finding the opportunity in technology
To rewrite the way music institutions approach music revenue and income, we need to make it as transparent as possible. It seems like a lofty goal for an industry that has long been set in its ways, but technology is making it possible. My company Royal recently launched a free tool that allows any artist to estimate the streaming revenue for their songs. The hope is that artists become more empowered to make deals that uplift their careers.
I’ve also been bullish on crypto since its earliest days, for a variety of reasons, including its ability to transform the music industry with transparency. Blockchain is inherently transparent — in fact, the one thing you can’t do on a blockchain is hide information. It’s all there, at all times. It’s also time-stamped which establishes a clear provenance (traceability of ownership over time). This is especially useful in the music business, where copyright infringement plagues artists and record labels alike. Perhaps most importantly, leveraging tokens that represent rights enables artists to see the value of their songs and create tangible benchmarks upon which to negotiate better deals. With more information always comes more power.
Artists don’t know how much money they’re missing out on, but they could. And it doesn’t have to be a public battle when they do find out. If we embrace technological progress to improve outdated systems, we can create an open data ecosystem that gives artists not only more transparency into their earnings and fan bases but more control over their artistic careers. Better deals alongside more creative freedoms is a winning combination that can define the next 30 years of music — we just have to be willing to change.
Why should artists even care?
As much as streaming has changed the music industry for the better, there are still unanswered questions about how value accrues in this system. Do we equate the value of passively listening to a sleep playlist in the background to actively listening to your favorite album with friends?
This talk of numbers and questions of value may seem like a distraction for artists who just want to spend their time making music — but ignoring this topic completely opens the door to predatory industry practices that threaten musicians’ longevity and entire legacies.
More industry transparency should improve all the variables that play into an artist’s career and result in musicians keeping more ownership of the art they create. Having the humility to acknowledge what music is actually worth is the first step in unlocking more value in this new era of the industry.
Justin Blau is CEO of Royal and a world-renowned musician and producer, known as 3LAU. An early crypto adopter, Justin has been advocating for building the investable layer of music on blockchains since 2017. In 2021, he founded Royal to empower artists to share their music with fans and give people the opportunity to invest in music.