Publishing
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Tape Room Music has entered a strategic partnership with Red Light Ventures and Firebird Music, which purchased more than 350 songs from various Tape Room Publishing catalogs as part of the transaction. The catalog sale includes “Body Like a Back Road” (recorded by Sam Hunt), “Do I Make You Wanna” (Billy Currington), “Sunrise, Sunburn, Sunset” […]
Producer extraordinaire and Bleachers frontman Jack Antonoff has signed an exclusive, global publishing agreement with Universal Music Publishing Group. The move follows his weekend wedding and reunites him with UMPG executive vp Jennifer Knoepfle, his longtime publishing A&R during the songwriter’s lengthy — and fruitful — stay at Sony Music Publishing.
“Jack is honestly one of one,” noted Knoepfle. “To continue being his publisher is an honor we don’t take for granted. He’s even more creative and prolific than when I first met him over a decade ago – and that’s saying a lot! I look forward to this next chapter for him with UMPG by his side.”
That hard-working ethos has gotten Antonoff far over the years, having collaborated extensively with Lana Del Rey, Lorde, Sia, Florence + The Machine, Tegan and Sara, St. Vincent, The Chicks, Carly Rae Jepsen, Pink, Olivia Rodrigo, FKA Twigs, Spoon, Zayn, Cam, Clairo, The 1975, Kevin Abstract and Sara Bareilles, among many others.
Then there’s Taylor Swift, whom Antonoff calls “the first person who recognized me as a producer.” They first collaborated in 2013 on “Sweeter Than Fiction” from the film One Chance, and have since gone on to produce Billboard 200-topping records 1989 (2014), Reputation (2017), Lover (2019), Folklore (2020), Evermore (2020), Fearless (Taylor’s Version) (2021), Red (Taylor’s Version) (2021), Midnights (2022) and Speak Now (Taylor’s Version) (2023).
Antonoff has been rewarded with eight Grammy Awards, including back-to-back producer of the year nods in 2022-2023.
As a performing artist, Antonoff rose to prominence in the early 2010s as the guitarist and multi-instrumentalist in Fun., who scored hits with “We Are Young,” “Carry On” and the title cut off the band’s second album, Some Nights. He later formed Bleachers, whose hits include “I Wanna Get Better” and “Don’t Take the Money,” among others.
Performance Rights Organization BMI is engaging with outside parties over the possibility of a sale, as the organization seeks to continue its transition into a for-profit entity. But where those profits will come from is of concern to several groups that advocate on behalf of songwriters, who have sent an open letter to BMI CEO Mike O’Neill addressing the issue.
Chief among those concerns is whether any profits that BMI does accrue will come at the expense of royalties that would otherwise be paid out to songwriters for the exploitation of their works, which is the business in which BMI has operated for more than 80 years. In its most recent annual report, for the year ended June 30, 2022, BMI — which represents repertoire by songwriters like Kendrick Lamar, Taylor Swift and Rihanna, among some 1 million others — reported that its revenue reached $1.573 billion and that it distributed $1.471 billion to songwriters, its highest mark ever. (While BMI has always been a private company that could have operated to reap profits, it has up until last year chosen to operate as a not-for-profit entity. ASCAP, its main competitor, is a non-profit 501-C corporation.)
“Songwriters have a vested interest in changes at BMI and in any proposed transaction which is wholly dependent on songs they have written,” reads the letter, signed by the Black Music Action Coalition, the Music Artists Coalition, Songwriters of North America, the Artist Rights Alliance and SAG-AFTRA, and which was obtained by Billboard. “BMI does not own copyrights or other assets; it is a licensing entity for copyrights owned by songwriters and, by extension, publishers. Songwriters have a right to understand these decisions and how it impacts us.”
The letter outlines three areas of concern: BMI’s profits; the proceeds from any potential BMI sale; and what may happen operationally at BMI in the event that the organization is, in fact, sold.
Under the first heading, the groups ask to verify whether BMI generated $135 million in profit since the shift to the for-profit model; how those profits were generated; whether that increase in profits would benefit songwriters; and whether any future profits might come at the expense of distributions to songwriters.
The second heading questions whether songwriters, publishers or broadcasters would receive any proceeds from any potential BMI sale; and if it were the latter, if that would not be effectively a rebate on the licensing fees they pay to broadcast songs, essentially lowering the cost to their businesses.
And on the final point, the groups ask whether any writers or publishers would receive benefits that are not extended to others; ask for assurances that writers will not be driven away or discouraged from joining BMI; and whether, if BMI is sold to private equity investors, the new owners would seek profits at the expense of disbursements to songwriters.
A spokesperson for BMI did not provide a comment at time of publishing.
Last month, in a memo to staff, O’Neill sought to explain reports about BMI reopening talks for a sale, after initial conversations had stalled out last year. “Delivering for our affiliates is always our top priority, and we have a responsibility to engage in discussions with outside parties if they can help further that mission,” O’Neill wrote in the memo. “That is exactly what we are doing right now, and no final decisions have been made.”
Following that news, publishers quietly began grousing about BMI’s intention to switch to profitability, but only privately. The only major publisher who has responded to a request for comment on BMI’s move to convert to profitability was the Universal Music Publishing Group. “We don’t comment on rumor or speculation, but to be very clear, we will only support changes that increase value for songwriters and will not stand for any that result in our songwriters being paid less than what they deserve,” UMPG chairman and CEO Jody Gerson said in a statement to Billboard at the time. “We have a long history of successfully fighting for our songwriters and will continue to do so.”
Read the letter in full here:
August 17, 2023
Mr. Mike O’Neill Broadcast Music, Inc.
Re: BMI Proposed Transaction
Dear Mike:
As you know, there is no BMI without songwriters. Songwriters have a vested interest in changes at BMI and in any proposed transaction which is wholly dependent on songs they have written. BMI has been very active: BMI announced a shift to a “for-profit” model and engaged Goldman Sachs to explore a transaction where a private equity company would purchase BMI. BMI does not own copyrights or other assets; it is a licensing entity for copyrights owned by songwriters and, by extension, publishers. Songwriters have a right to understand these decisions and how it impacts us.
As advocacy organizations representing songwriters, we have questions about the impact of a proposed transaction on our songwriter members. In the spirit of transparency, we hope that you will answer the following questions:
BMI Profits
We heard that BMI has reported $135m in profits since it shifted to a “for profit” model. Is that accurate?
If so, how did BMI increase its profits so dramatically?
Will songwriters benefit from this increase in profits?
What does BMI project its future profits to be?
We all know that the way to become more profitable involves increasing revenue and/ordecreasing expenses. If revenue increases, shouldn’t that money go to songwriters? Will BMI need to reduce its distributions in order to drive future profits?
Proceeds from a BMI Sale
If BMI sells, will writers or composers receive part of the sale proceeds?
If BMI sells, will the broadcasters on BMI’s Board receive the sale proceeds?9420 Wilshire BlvdBeverly Hills, CA 90212
If so, why should broadcasters be the biggest beneficiary from a sale of a company whose only asset is songs that belong to songwriters?
If broadcasters benefit from the sale of BMI, aren’t they essentially receiving a rebate on the licensing fees they’ve paid? In other words, they got to play songs for free?
If BMI sells, will publishers receive part of the sale proceeds?
If BMI were to sell who else would receive a share of the sale proceeds?
Proceeds from a BMI Sale
If BMI sells, will writers or composers receive part of the sale proceeds?
If BMI sells, will the broadcasters on BMI’s Board receive the sale proceeds?
If so, why should broadcasters be the biggest beneficiary from a sale of a company whose only asset is songs that belong to songwriters?
If broadcasters benefit from the sale of BMI, aren’t they essentially receiving a rebate on the licensing fees they’ve paid? In other words, they got to play songs for free?
If BMI sells, will publishers receive part of the sale proceeds?
If BMI were to sell who else would receive a share of the sale proceeds?
BMI Operations after a Sale
If BMI is sold, will any writers receive a benefit that is not extended to all writers (e.g., equity or profit participation)?
If BMI is sold, will any publisher receive a benefit that is not extended to all publishers and writers?
Private equity companies have aggressive return on investment goals. Since BMI is for profit, private equity owners will demand increased profits to meet their expectations. How can writers and composers be assured that private equity owners of BMI won’t drive more profits for themselves at the expense of songwriters?
Can BMI assure writers and composers that BMI’s profit margin will not exceed what BMI currently charges writers and composers as overhead?
We have concerns that increased profits for a private equity owner could come from lowering distribution rates or decreasing distributions by driving writers away from BMI. Can you assure songwriters that neither of these things will happen?
BMI is required to provide a home to any writer who wants to join. Can BMI confirm that they will not seek to drive writers away from BMI or discourage writers from joining BMI?We appreciate your attention. We will make ourselves available so that we can better understand this process and explain it to our members. We look forward to hearing from you prior to the completion of any proposed transaction.
Sincerely,
Black Music Action CoalitionMusic Artists CoalitionSongwriters of North AmericaSAG-AFTRAArtist Rights Alliance
Additional reporting by Ed Christman.
Publishers should get ready to welcome a royalty windfall now that the Copyright Royalty Board has printed its Phonorecord III final determination in the Federal Register — the last step to make the new rate structure official, concluding a more-than-four-year royalty row between publishers and streaming services.
The question is, how much that bonus will be.
While various industry estimates are all over the place with some even reaching another $400 million, by Billboard estimates, the just announced determined rates — finalized eight months after the 2017-2022 term expired — could yield up to another $250 million in underpaid mechanical royalties flowing from digital services to publishers and songwriters.
Now, digital services like Spotify, Amazon Music, YouTube and Pandora have six months to review and adjust past payments made for U.S. mechanicals to the new rates. Doing that will take a complicated assessment of past payments and applying them under the new finalized structure.
The ruling increases U.S. mechanical royalties each year during the five-year period using a multi-pronged formula based on choosing between either the royalties calculated using a “headline rate” tied to a percentage of the streaming service’s total revenue; or another pool that is calculated by using the lesser of either a percentage of total content cost — i.e. what’s paid to labels — or 80 cents per subscriber. Under the new finalized determination — which for the percentage of service revenue prong, is the same as the initial determination for the 2018-2022 term — the headline rate increased from 11.4% of service revenue in 2018 to 12.3% in 2019 to 13.3% in 2020 to 14.2% in 2021 and to 15.1% in 2022.
From there, performance royalties that are negotiated with and paid out to rights organizations like ASCAP and BMI are subtracted from the all-in pool, leaving just the mechanicals behind. The mechanicals are then measured against a 50-cents-per-subscriber floor, and whichever is bigger becomes the final mechanical royalty pool paid out to publishers and songwriters.
Until an appeal of the initial CRB rate determination initiated by independent songwriter George Johnson and joined by most of the big digital services sent it back to the CRB in July 2020, most of the streamers had been paying royalties under the high escalating rates from the initial Phonorecords III determination. But with the remand, in the fall of 2020, most services reverted to paying music publishing royalties using Phonorecords II rates from 2013-2017 while the appeal was sorted out. As an example, looking at just 2020 rates, that meant digital services abandoned the royalty structure that paid 13.3% of service revenue or 24.1% of total content cost and switched back to using the prior headline rate of 10.5% of service revenue and 21% of total content cost.
(This article uses rates and math associated with what’s known as the stand-alone portable streaming model — i.e., a single paid subscription — because it’s the dominant model that produces the most revenue in the U.S. marketplace. The rate formula has different percentages and parameters for other models like bundled, ad-supported, family or student tiers.)
Under the CRB judges’ final determination published in the Federal Register, the Phonorecords III royalty calculation keeps the escalating rate structures for on-demand streaming for the percentage of revenue prong in the formula but abandons an escalating rate structure for the cost-of-content prong. So, in the case of a single paid subscriber, that prong will apply 21% of total content costs to build an all-in pool to cover both mechanical and performance royalties, instead of the previously used — from the initial 2018-2022 determination announced in 2019 — annual escalating rates that in 2022 would have culminated at 26.1% of total content costs. That means in months where the total content cost became the all-in prong, the streaming service most likely overpaid publishers under the new rate structure.
In addition to eliminating an escalating rate structure for that prong, the CRB judges reapplied a ceiling for the total content bucket limiting what digital services would have to pay publishers. The initial 2018-2022 determination took out the ceiling mechanism, which would have meant that every time labels negotiated a higher rate, the music publishers and songwriters would also automatically benefit by a higher rate. Now, services reviewing their previous payments will need to measure the total cost of content bucket against the 80-cents-per-subscriber ceiling. Whichever of those two buckets is lower is then measured against the headline bucket and, this time, whichever is larger is chosen as the all-in bucket.
Reinstating the ceiling and jettisoning the escalating rate structure for the total content all-in pool could mean publishers were actually overpaid tens of millions of dollars for the 2018-2020 years, Billboard estimates based on Mechanical Licensing Collective and Harry Fox Agency royalty calculations data obtained from publishing sources. That amount, however, will be more than offset by the hundreds of millions of dollars in additional payouts that digital services will have to make for 2021 and 2022.
Billboard doesn’t have all the data necessary to calculate mechanical revenue on a month-by-month basis for each digital service, but looking at overall payments and reports to the Mechanical Licensing Collective can provide a simplified ballpark estimate on how much is owed to publishers and songwriters over the Phonorecords III five-year period.
First, let’s look at the first three years when it’s likely that services overpaid publishers and songwriters because they used the since-abandoned initial determination’s escalating percentages for the total content pool when calculating royalties. With Spotify, for example, according to data obtained by Billboard for the streamer’s Premium Individual tier, the headline rate royalty bucket won out most of the time for two of those years — 2019 and 2020 — to become the all-in bucket. Since the headline bucket rates are the same before and after the remand, it’s likely there were relatively minimal overpayments during that period. In 2018, however, Spotify’s total cost of content bucket appears to have won out all year — and that was at a higher rate of 22%, not the remanded 21%, and without a ceiling. So, in that year alone, Spotify likely overpaid by as much as $10 million on that tier alone, Billboard estimates, and is due to receive that money back from publishers and songwriters.
Based on that, and not knowing what kind of label licensing deals all digital services have, Billboard calculates — and some industry financial sources agree — that as much as $50 million in over-payments might have been paid by the digital services to publishers and songwriters overall during the 2018 through October 2020 period.
For that period, any overpayments will mostly be sorted out directly between the digital services and the publishers because the Mechanical Licensing Collective — created following the Music Modernization Act was signed in 2018 — hadn’t begun operating yet. Though, the organization will need to be involved in in recalibrating royalty payments that came from unmatched and unpaid royalties, which digital services turned over for those years at the MLC’s inception.
For 2021 and 2022, however, once the MLC began operating, the organization will be responsible for managing any royalty adjustments, once the new data and additional funding is received from the digital services.
In 2021, U.S. digital services reported $9.76 billion in estimated service revenue to the MLC, while the all-in publishing revenue totaled $1.31 billion — or 13.38% of service revenue — according to Billboard estimates based on MLC data obtained by Billboard. Taking a simplified across-the-board approach applying that year’s 14.1% headline rate against the total revenue of $9.76 billion would deliver nearly $1.39 billion in mechanical royalties — a $80 million bonus to publishers and songwriters.
For 2022, the payouts will likely be even greater. That year, digital services reported $10.78 billion in service revenue to the MLC and paid out a total of $1.45 billion in mechanical and performance royalties — or 13.5% of total revenue. Applying the 15.1% headline rate for that year produces about $1.63 billion in all-in publishing revenue — making for an extra $175.1 million in mechanical royalties.
Combined, 2021 and 2022 could yield an additional $255 million in mechanical royalties, by Billboard‘s best estimates. Depending on how much services can claw back from overpayments made during 2018 through October 2020, Billboard estimates publishers and songwriters will receive a windfall of $200 million to $250 million.
Once those payments are settled, it will be up to publishers to figure out payments to their songwriters under the new rate structure.
Beyond the windfall expected due to adjustments for over payments in 2018-2020 and the much larger underpayments in 2021-2022, Billboard estimates that the MLC holds an additional $350 million or so in unmatched or unclaimed royalties. In March of this year, the MLC reported to Billboard that it had paid out over $200 million of the $427 million pool in mechanical royalties it was handed from the years prior to when it began operating on Jan. 1, 2021. Sources say that since then, the prior 2021 unclaimed and unmatched pool has been further reduced with a total of almost $300 million now paid out. That leaves around $130 million in unclaimed royalties.
But what about 2021 and 2022? Since the MLC began, it has been matching about 90% of royalties from recordings to songs. In addition to the remaining 10% of songs that are not yet matched to recordings, there are songs building up the unpaid royalties pool because their credit claims do not add up to 100%. If a portion of a song’s credits are not claimed, that portion of the song’s royalties goes into the unclaimed and unmatched pool. Consequently, the overall payout rate the MLC is making nowadays comes out to about 84% of mechanical royalties received from digital services, according to sources, which is a considerable improvement compared to the 68–72% digital services matched and paid prior to the MLC’s launch.
In 2021, digital services paid the MLC about $675 million in mechanical royalties, Billboard estimates, and in 2022, they paid about $740 million. If 16% of the royalties for those two years are unmatched or unclaimed, that would make for another $225 million. And when 2018-2020 is added in, the MLC has a little more than $355 million in unmatched or unclaimed royalties still to be doled out to publishers and songwriters.
In addition to the publishing royalties still held by the MLC, Billboard estimates the finalized CRB rate determination will result in $50 million in overpayments to publishers for the 2018-2020 period and about $250 million in underpayments for 2021-2022. Within those totals, some of those adjustments will impact the $350 million or so unmatched and unclaimed royalties still held by the MLC.
BMG has partnered with pioneering UK electronic duo The Chemical Brothers and will now administer and represent the band’s entire song catalog, building upon their previous arrangement to represent all of the duo’s works from 2015 onwards. The news comes just weeks before the duo will release their tenth studio album For That Beautiful Feeling.
Primary Wave Music has purchased the publishing rights of Styx member Dennis DeYoung, encompassing the majority of his compositions and master recordings. This includes Styx hits “Come Sail Away,” “Babe,” “Mr. Roboto,” “Lady,” “The Best of Times,” and more.
Concord has purchased a portion of the song catalog of Plain White T’s frontman Tom Higgenson, including his share of “Hey There Delilah.”
BMG has acquired the writer’s share of royalties for Michael Münzing of SNAP!, building on the company’s pre-existing partnership with the 90s Eurodance troupe. The two parties’ relationship began in 2018 when BMG acquired SNAP!’s recorded music catalog.
Simon Cowell and Syco Entertainment have launched Syco Publishing in partnership with UMPG.
Warner Chappell Music and the Warren Brothers have joined together to sign Jet Harvey to a worldwide publishing deal. Most recently, Harvey co-wrote Bailey Zimmerman’s “Rock And A Hard Place,” which ranked at No. 1 on Billboard’s Country Airplay chart for six weeks.
peermusic Australia has signed Ziggy Ramo to a worldwide publishing agreement. This is Ramo’s first-ever publishing deal, encompassing his back catalog and future works.
Sony Music Publishing hosted its first-ever SMP x BeatStars Hitmaker Week in Stockholm, Sweden at the House of Creatives. Bringing together 27 BeatStars Publishing hitmakers from 10 different countries, the camp marked the three-year mark in SMP’s partnership with the beat marketplace.
Position Music has signed producer, writer and instrumentalist Keith Varon (Machine Gun Kelly, Joji, Kenny Hoopla, Travis Barker) to a publishing deal. News of the deal arrives soonafter the talent scored RIAA Gold for “Angels and Demons” by jxdn and Platinum for “Banyan Tree” by Machine Gun Kelly.
Reel Muzik Werks has signed songwriter Jennifer Adan to a publishing administrative deal. This includes the administration of her previously existing catalog, including “She Wouldn’t Be Gone” by Blake Shelton.
While the Radio Music Licensing Committee awaits an appeals court decision in its so-far unsuccessful attempt to combine rate court proceedings with ASCAP and BMI under a single judge, the trade group has filed federal petitions to begin the processes separately in the Southern District of New York.
Usually, such rate proceedings petitions are initiated after negotiations between the performance rights organizations and the RMLC prove fruitless. Under these petitions, the PROs will each make the case for what rate it thinks their songwriters and publishers are entitled to receive when their songs are played on the radio. This time out, for the period of 2022-2026, the RMLC is seeking to maintain the same rates it had under the prior agreement which covered 2017-2021.
In July 2022, the RMLC tried to get ASCAP and BMI combined into a single rate proceeding, thus showing its hand that it felt rate negotiations had failed. For decades, each PRO had its own separate rate proceeding, but about seven or eight years ago, the RMLC began a new rate court strategy of trying to assign market share to the four U.S. PROs — ASCAP, BMI, SESAC and Global Music Rights — in attempt to keep the rates in parity with market share, irrespective of each PRO’s song catalog. In filing its petition to consolidate the rate proceedings to the Southern District of New York, which oversees both rate proceedings and the ASCAP and BMI consent decrees, the RMLC said the act was justified by the Music Modernization Act of 2018 that changed how the the Southern District assigns the rate court proceeding.
The step to combine the rate proceedings into one was seen by some music industry executives as a further attempt to pursue that rate strategy. Having a single judge, instead of bifurcated rate court proceedings, could benefit the RMLC because it would likely pit BMI and ASCAP against each other, vying for a higher rate than the other with both PROs arguing over market share.
But in May this year, Southern District Court Judge Stanton ruled against the RMLC’s consolidation petition so the radio trade group subsequently appealed that decision. The Second District Appeals Court has yet to issue a ruling on the RMLC motion, but in the meantime, the RMLC is getting the ball rolling with the rate court by filing amended petitions on BMI on Aug. 10 and on ASCAP on Tuesday.
Despite filing petitions for the two rate court proceedings, the RMLC petition for the ASCAP rate court proceeding says that if the Second Circuit Appeals Court ultimately agrees with the RMLC position to combine the two rate court proceedings into one, “it reserves all rights at the appropriate time” to pursue a unitary action against ASCAP and BMI.
The ASCAP rate proceeding covers the current five-year term which began on Jan. 1, 2022. In the prior term (2017-2021), RMLC said it paid a combined 3.51% of net revenue as a royalty pool for the two PROs, with ASCAP getting 1.73% of that based on market share claims it made at the time — which the RMLC now says was “a representation that turned out to be false.” Meanwhile, BMI received 1.78% of radio stations’ net revenue.
Nevertheless, in May 2022, according to the petition, the RMLC asked ASCAP and BMI if they would be willing to roll forward the combined 3.51% of net revenue royalty pool, provided that ASCAP and BMI would agree on a mechanism for assessing each of their market shares.
Although the rate level would be the same, the RMLC implies it is actually an increase because the combined ASCAP and BMI share of total performances on RMLC stations likely has diminished since when the prior agreements began, the RMLC argues in its petition.
Meanwhile, it looks like BMI is requesting a rate increase from 1.78% to 2.95%, according to what the RMLC states in the BMI petition; while the RMLC ASCAP petition doesn’t disclose the rate ASCAP is seeking.
The RMLC didn’t immediately respond to a request for comment.
“The RMLC would rather continue to waste time and money on expensive litigation than simply paying songwriters a fair royalty for the use of their music,” ASCAP CEO Elizabeth Matthews said in a statement. “It’s not that complicated. Simply treat music creators who support your successful and profitable businesses with dignity and respect and everyone wins.”
While the PROs and the RMLC wait for the rate court proceedings to make a determination, all parties have agreed to an interim rate that allows radio to continue to play music without copyright infringement.
The Copyright Royalty Board’s final determination for royalty rates for making and distributing phonorecords for the 2018-2022 term (aka Phonorecords III) were published by the Federal Register late last week, following a legal review — and close check for typos — by the office of Register of Copyrights Shira Perlmutter.
The majority of the rates determination is no surprise. Since the official remand by an Appeals Court in October 2020 — which followed a March 2019 appeal by digital services of the CRB’s February 2019 rates determination for the 2018-2022 term — the CRB judges had been wrestling with different aspects of the complicated mechanical rate formula cited by the appeal courts, with various aspects of the rates determination coming out in dribs and drabs over the last eight months.
As is already known, the CRB judges stayed with the escalating rate structure for the all-in percentage of revenue prong, which covers both mechanical and performance royalties, for on-demand streaming for the 2018-2022 period.
(The 21% of total content cost is for performance royalties are determined by a separate process but whatever was agreed to be paid to ASCAP, BMI and the other performance royalty organization is subtracted from the all-in bucket in one step of the process to determine one of the mechanical rates bucket.)
That rate structure escalated from 10.5% in the prior five-year term of 2013-2017 to 11.2% in 2018, 12.3% in 2019, 13.4% in 2020; 14.2% in 2021, and 15.1% in 2022. But in moving to the other all-in prong — the total cost of content prong, i.e. what the services pay the record labels — the CRB judges re-installed the ceiling, which prevents publishers and songwriters from automatically being rewarded when labels and artists negotiations higher rates from the services; and the judges abandoned the earlier escalating rate structure from its initial 2019 determination for the total cost of content prong, which similarly rose in annual increments from 21% of what’s paid to labels to 26.1% over the five year term. Instead, the judges stuck with 21% of total content cost for the full five-year term — the same percentage it had been in the previous five years.
(This article mainly uses the percentages from what’s known as the stand-alone portable streaming model, i.e. the main on-demand streaming vehicle, which at Spotify is known as the paid subscriber tier. The ad-supported rate is 22% of what’s paid to labels.)
In other moves, the CRB stuck with 9.1 cents per song for physical and downloads and 24 cents per ringtone for Phonorecord III. In Phonorecords IV, for 2023-2027, the royalty rate for ringtones would remain the same but the per song rate will earn 12 cents per track or 2.31 cents per minute of playing time or fraction thereof, whichever amount is larger for physical products and permanent downloads. Also, that rate will be subject to an annual cost-of-living adjustment.
Before an Appeals Court remanded a significant part of the CRB rate determination for 2018-2022 back to the CRB, digital streaming services were adhering to the structure of the initial determination which means that for some 33 months the formula applied the higher rates for the total cost of content prong without a ceiling. As such, industry sources speculate that some digital services overpaid during that period — and Billboard estimates that they might have over paid by $50 million.
But after the remand most services reverted back to the 2013-2017 rates of which used the headline rate of 10.5% of revenue, and consequently most industry financial sources suggest that the service underpaid from October 2020 through December 2022. Consequently, Billboard estimates that digital services collectively might owe $200 million to $250 million for the latter period. Looking at the two period, with the earlier one 2018-2020 partially offsetting the later period of 2021-2022, that could mean a $200 million windfall for publishers and songwriters.
Now that this has all been settled, the Mechanical Licensing Collective—working with required updated information from the digital services—has six months from the Aug. 10 date to make adjustments in what has been paid and what may still be owed from 2021 and 2022, the two years the MLC has been in operation. It will also have to rectify any under or over payments for unclaimed and unpaid royalties from the earlier periods before it began operations— a responsibility it was handed as part of the Music Modernization Act.
But besides the unpaid royalties, any needed adjustments to the rest of the payments made to publishers and songwriters during the 2018-2020 period will be handled by the digital services, likely with the help of their third party vendors, i.e. Music Reports Inc and the Harry Fox Agency.
The Phonorecords IV rate determination for 2023-2027 preceded the final determination for Phonorecords III, as it was published in the Federal Register on Dec. 16, 2022.
Round Hill Music has acquired the remaining share of Big Loud Shirt’s catalog of music publishing rights, bringing Round Hill Music’s ownership of Big Loud Shirt’s music catalog to 100%. Round Hill previously acquired a share of the Big Loud Shirt catalog in 2014.
Round Hill has also acquired 50% of the writer’s income streams from songwriter/producer Craig Wiseman, the founder/owner of Big Loud Shirt.
The Big Loud Shirt catalog comprises more than 1,200 songs recorded by artists including Blake Shelton, Dierks Bentley, Carrie Underwood, Faith Hill, Luke Bryan and Tim McGraw. The majority date prior to 2015, with 75% of them at least seven years old.
According to a press release announcing the deal, streaming income generated from Big Loud Shirt’s catalog increased approximately 200% from 2017 to 2021.
The deal brings new rights into Round Hill’s portfolio and expands its existing interests in songs including McGraw’s “Live Like You Were Dying” (co-written by Wiseman), Underwood’s “Before He Cheats” and “Blown Away” and Strait’s “I Saw God Today.”
According to a release, this acquisition also increases Round Hill’s exposure to the country music market, which as of December 31, 2022, comprised 11% of their portfolio.
Round Hill Music CEO Josh Gruss said in a statement, “Craig Wiseman and his publishing company, Big Loud Shirt, have produced some of the highest profile, most recognizable and enduring country music hits of the last three decades, bringing them firmly in line with the song profile of the Company’s portfolio. We have a terrific working relationship with Craig, who we have known for many years, and are deeply familiar with these songs. This investment not only enables us to further increase Round Hill Music’s exposure to the fast-growing Country music genre but also provides an exciting opportunity for us to leverage our in-house platform to manage these incredible songs, maximizing their income streams and further growing their value.”
Wiseman added, “I have known and been working with Round Hill for a decade and I’m thrilled to be expanding our relationship by sharing these incredible pieces of art with them. I know they will manage these songs carefully and effectively, identifying creative opportunities to bring them to new audiences worldwide.”
For roughly half a century, John Fogerty had tried to recover the rights to dozens of hits he wrote for Creedence Clearwater Revival. At the age of 77, he had almost given up hope, when he and his wife, Julie Fogerty, who also works as his manager, realized they were on the cusp of a second chance thanks to the Copyright Act of 1976.
That law–specifically sections 304(c) and 203–are intended to give musicians, songwriters and other creators a second bite at the apple by enabling them to recapture the copyrights to compositions and recordings, in the United States only, that they may have signed away earlier in their careers. Songs dating from before 1978 can revert to their creator or heirs after 56 years, and songs from after 1978 can revert to the creator or heirs after 35 years, provided they file the proper paperwork.
Realizing that many of John’s songs were nearing that 56-year threshold, Julie reached a deal with Concord in January that returned majority control to her husband of worldwide publishing rights to over 65 Creedence classics.
Although clearing the legal and corporate hurdles to recapture rights can be significant and compromises are often negotiated, some industry insiders say that same law could lead to artists putting up for sale their newly recovered catalogs in a way that stokes the already hot market for publishing and recording rights.
“You have this interesting confluence of the big, big moment in classic rock, and you’re also getting to the 35-year window for late-1980s songs,” says Concord CEO Bob Valentine, who mentioned the mutually “happy outcome” with John during a discussion about works from the late ’60s and late ’80s approaching their reversion dates.
“Those are two huge windows for multiple genres,” he adds. “It makes the [catalog investment] market really interesting at this moment in time.”
Clearing the hurdles — both within the law and presented by music companies — to recapture rights is complicated, but there is some precedent to support this optimism. In 2013, when the first wave of post-1978 works approached the 35-year threshold, Billboard reported that nearly 20 of the world’s most famous songwriters had filed termination notices with the U.S. Copyright Office, including Paul McCartney, Bob Dylan, Brian Wilson, Gerry Goffin & Carole King, Willie Nelson, Daryl Hall & John Oates and the estates of Buddy Holly and Bo Diddley.
Lisa Alter, a founding partner at Alter Kendrick & Baron in New York and an expert in rights reversion negotiations, says a new surge has already begun. “Commerce has definitely increased in this area,” she says. “It will continue to increase, and at some point, maybe 10-plus years down the line, things will start to level off.”
Sources cautioned, however, that rights reversions — particularly for master recordings — rarely work out so cleanly as the law implies, and that likely only a fraction of the hit song catalogs reaching the 35-year or 56-year milestones will revert to their owners.
While John was able to regain a majority share of his worldwide publishing rights, Concord retains the Creedence master recordings in its catalog and, as of January, was still administering the rocker’s share of the publishing catalog. (Concord obtained Creedence’s recordings through the 2004 acquisition of Fantasy Records.) While John regained only publishing rights this year, Concord reinstated and improved his artist royalties shortly after the acquisition.
A key argument used by industry observers who predict the spate of copyright reversions will superheat the catalog investment market in the coming years is that superstar artists and songwriters who were behind hit records in the ’60s, ’70s and ’80s are aging and may be considering selling their rights to pass down a simpler inheritance to their heirs.
Before that can happen, however, artists and songwriters — or their heirs, if they are deceased — are required to serve the U.S. Copyright Office and their current music publisher or record company a termination notice at least two years before the songs turn 35 or 56, and they cannot enter any agreement with a third party before their current contract is terminated. Whoever has been holding those rights has the right of first refusal to acquire them.
While that option often leads the incumbent rights holder to negotiate new deals with the artists seeking to recover their rights, Alter says that since 1978, publishers have usually acquiesced when artists seek to reclaim their publishing rights, and labels have largely sought to block attempts to reclaim sound recording rights.
“There has been almost universal opposition on the part of the labels to the [termination] notices,” she says, with labels often arguing the notice was not validly served or the artist or songwriter produced the song as a work for hire. “While some artists have successfully gotten their rights back, in the majority of cases, the record label has renegotiated the leases.”
Many artists have attempted to sue major labels for their responses to termination notices — so far almost always unsuccessfully. One closely watched case was brought by “Missing You” singer John Waite, who sought class action status for hundreds of artists to sue Universal Music Group to regain control of their masters. The class action request was denied in January after a judge said there were complex and unique issues raised by each artist’s relationship with UMG that could not be resolved on an “aggregate basis.”
Round Hill Music co-founder Josh Gruss, who was an early investor in songs as an asset class, says he questions whether the rights reversion trend will result in more copyrights coming to the investment market.
“It’s really hard for significant recordings to fall out of the major-label system,” he says.
That said, Gruss acknowledges that attractive copyrights that have reverted to an artist or songwriter frequently come up for outside investment. For example, songwriter Eddie Schwartz, who wrote 100% of Pat Benatar’s 1980 top 10 Billboard Hot 100 hit “Hit Me With Your Best Shot,” reclaimed his publishing rights to the song in 2015 and sold them to Round Hill. Gruss says they’ve both been happy with the result.
When it comes to master recordings, however, Gruss agrees with Alter’s assessment.
“The labels have always done a masterful job of not letting the recordings revert,” he says.
With the launch of a music publishing venture, Simon Cowell returns to the business where he honed his own talents in pop.
Unveiled this week, SYCO Publishing, a collaboration between Syco Entertainment and Universal Music Publishing Group, will sign and develop songwriters and catalogs that will be administered and supported exclusively through UMPG globally, reps say.
At launch, SYCO Publishing is home to Lucy Spraggan and John Samuel Gerhart, as well as song catalog from Camila Cabello, James Arthur, Grace VanderWaal, Fifth Harmony and others.
The record executive, TV personality and current judge on America’s Got Talent got his break in publishing.
“There is nothing more important than a great song. I started my career in music publishing,” comments Cowell on the unveiling of his new venture. Paying tribute to Mike McCormack, managing director of UMPG U.K., and the music publishing giant, Cowell says he’s been given “the chance to build a music publishing company. They are a brilliant company and share my wish to work with amazing songwriters.”
SYCO Publishing will also create new opportunities for its writers to work across Cowell’s network of media formats and projects, reads a statement.
“Simon has been a good friend for decades and I’m thrilled he has finally decided to launch a publishing business with UMPG,” adds McCormack. “His track record is incredible – he’s always had great instincts and passion for outstanding songs, and brings incredible value to every songwriter, producer and catalog he works with.”
It’s the second songwriting-focused project in the past year that has brought together Cowell’s entertainment venture and Universal Music Group. In 2022, both companies got behind StemDrop, a creative platform for musical collaboration, curation and artist discovery, which launched exclusively with TikTok and Samsung, by providing users with access to music “stems,” the isolated components of a song, from an exclusive track, which creators could then use to record and share their own versions.
Syco Entertainment is the independent company which created and owns TV formats such as “Got Talent” and “The X Factor”.