Publishing
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For the past several years, the organizations that collect public performance royalties have been growing far faster than most of the music business, especially in Europe. Revenue at the French collective management organization SACEM rose 34% in 2022, while its UK counterpart, PRS for Music, doubled its revenue since 2014. The growth is fast enough to make the whole alphabet soup of initials exciting to the point of attracting investment-backed rivals to the traditional nonprofits — think BMI, which just took on outside investment, or Kobalt’s AMRA.
Until about a decade ago, the traditional collective management organizations, known as CMOs, licensed rights within a given territory for compositions played in public — at concerts, in stores and restaurants, on television and radio, and eventually from streaming services. (Some also collect for mechanical rights or neighboring rights and remit that to rightsholders through related organizations.) And while European CMOs still do that, for the last decade they have also competed against one another to represent and license online rights in Europe and some other territories (not including the U.S.). This has made the most complicated part of a complex business even harder to understand, since it allows publishers and songwriters to assign different kinds of rights in different territories to different CMOs. In the U.S., for example, songwriters can join ASCAP or BMI, then assign certain rights in other territories to different organizations, in order to collect that money directly instead of indirectly, although only very successful creators tend to do this.
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As the pandemic subsided in 2021, CMO growth turned to hypergrowth, fueled by increases in online revenue, the reopening of restaurants and stores, and the roaring comeback of the concert business. The annus mirabilis was 2022, especially for the European societies that represent the most U.S. repertoire: SACEM grew 34%, PRS 23%, Sweden’s STIM 20% and Germany’s GEMA 13%. Now growth is coming down to earth, but it’s still healthy — last year, revenue grew 5% at SACEM (where distributions grew 19%), 12% at PRS, 8.4% at GEMA and 14.2% at STIM. So I was eager to write a column about how important this is for songwriters and the music publishing business that supports them, what this means for the future, and how creators can figure out which CMO would be the best for them. Instead, I ended up spending a few days staring into an abyss of uncertainty.
Growth in CMO revenue means that either the publishing business is growing, a given CMO is faring better than its competitors, or some mix of the two. But although the European Union mandates transparency, each CMO accounts for revenue so differently that it’s very hard to compare them. For example, STIM categorizes revenue collected from online licenses in foreign territories as “foreign income”; SACEM considers this “online”; while PRS treats this income as online when it licenses rights directly and foreign when it doesn’t. It gets considerably more complicated from there.
As competition among societies heats up, the most important few are pulling away from the rest. PRS, GEMA and STIM operate ICE as a Berlin-based pan-European licensing hub, and most publishers and other societies license online rights in Europe and other countries either through it or SACEM, which is a hub in its own right. That means at least some of the growth at those societies is coming at the expense of their European competitors, although it’s hard to tell how much.
Even as CMOs compete, they also cooperate in various ways — including remitting money to one another. Some of the success of societies actually depends on their rivals: GEMA members will make more if SACEM maximizes the money it collects on their behalf in France, for example. The closest analog I can think of is world trade, where countries drive prosperity by boosting the success of their counterparts while also trying to outcompete them. Consider that every CMO wants to account to its members faster than its rivals, but final accounting is only possible once numbers come in from other markets. It’s a game that can only be won by both beating and boosting rivals. At this point, the abyss starts to stare back.
Perhaps since the CMOs depend so much on one another, the top executives agreed on a few points — most important that growth will come back to earth and that as it does, cost efficiency will become more important. “I think we will continue to see growth but not at as fast a pace as during the pandemic,” STIM CEO Casper Bjørner told me. As that happens, “I think cost ratio becomes really important,” GEMA CEO Tobias Holzmüller added, referring to the percent of revenue that goes to expenses, which has historically been between about 10% to 15% and is generally declining. And since the CMOs collect relatively similar per-play payouts from streaming services, Holzmüller said, “You compete on cost and services.”
SACEM CEO Cécile Rap-Veber said the same: “What matters to me is value for our members.” PRS CEO Andrea Czapary Martin has also prioritized efficiency, setting a goal of getting the PRS cost ratio below 10%, which it did in 2023 for the second year in a row, in addition to cutting its administration rate for royalties from online services by 20%. “We can do this,” Martin said recently, “because we are surpassing our targets.” The idea is that, amid the accounting chaos, cost ratio might emerge as a comparison that’s easy for songwriters and publishers to measure.
Cost ratio may be an easy way to compare CMOs — but even that gets complicated because different sources of royalties come with very different costs. For example, general licensing revenue for music played in stores or restaurants is relatively expensive, since signing licensing deals with new businesses is relatively labor intensive. Revenue that comes in from online services costs less, while income from foreign counterparts is cheaper still. That gives an advantage to CMOs that depend more on foreign revenue relative to their size — and it helps STIM and PRS reduce their costs. (This isn’t the whole story; these societies are also very well-run.) It also makes SACEM’s 10.76% cost ratio even more impressive.
For all their competition, in fact, the big European CMOs aren’t always even playing the same game. STIM gets 73% of its income from foreign and online royalties, so to some extent its success is tied to that of Swedish songwriters who write for global pop stars, although it has to make sure they can’t get a better deal from another CMO. GEMA is at the opposite end of the spectrum — more than a third of its revenue comes from general and concert licensing, for which it takes in more than its rivals, presumably partly because the German economy is the biggest in Europe. PRS collects more online and foreign income, partly because English-language repertoire travels globally. SACEM, the oldest CMO and the biggest outside the U.S., benefits from operating its own hub. Breaking this down to determine the best deal for a given creator gets even harder, and it may just depend on which of those specialties offers the most appealing advantage.
That doesn’t mean competition isn’t working, though — even if some executives said that they measure themselves against their performance in previous years more than that of rivals. “Competition has forced a lot of us to improve our efficiency,” Rap-Verber told me when SACEM announced its results. And that benefits creators who join any CMO.
Tom Petty‘s estate and Warner Chappell Music announced a new worldwide administration deal on Monday (July 1), covering what’s described as the “vast majority of songs” dotting his long and winding catalog, including his decades fronting the Heartbreakers and as a solo tunesmith.
The deal, terms of which were not disclosed, covers dozens of Heartbreakers-backed songs including “Refugee,” “Here Comes My Girl” and “Even the Losers” off the band’s commercial breakthrough, Damn the Torpedoes, along with all-timers like “The Waiting,” “Learning to Fly” and Mary Jane’s Last Dance” off later efforts. (The pact does not include “American Girl” or the band’s first album, Billboard can confirm.)
Petty packed a lot of punch in his solo albums as well, and the estate’s deal with WCM covers hits including “Free Fallin’”, “I Won’t Back Down” and “Run-in’ Down a Dream” off the five-time platinum Full Moon Fever, and “Wildflowers,” “You Don’t Know How It Feels” and others off his three-time platinum Wildflowers release.
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The pact also encompasses Petty’s contributions to his pre-Heartbreakers band Mudcrutch and with roots rock supergroup Traveling Wilburys, Billboard has learned. The latter band had a relaxed and collaborative songwriting process, however Petty was main writer on the Wilburys classic “Last Night.”
Petty was only 66 and coming off a 40th anniversary tour when he died in Oct. 2, 2017 of cardiac arrest. Over the course of his 40-year career he released 13 studio albums with his famed band and another three as a solo act, going on to sell over 85 million albums and earning inductions in both the Songwriters Hall of Fame and Rock & Roll Hall of Fame. Along the way he scored hits with fellow icons like Stevie Nicks (“Stop Draggin’ My Heart Around”), earned MusiCares Person of the Year and performed during the Super Bowl. He also dabbled in acting, including a memorable cameo as a future version of himself in Kevin Costner’s The Postman.
The Petty estate praised the new partnership as it looks to “expand the reach” of the singer-songwriter’s expansive catalog and bring in new fans to his work. “This partnership will open the door to new licensing opportunities and serve to introduce his music to a new generation across the globe,” the estate shared. “We’re excited for this new chapter of growth, and the preservation of Tom’s legacy both at home and abroad.”
WCM co-chair and COO, Carianne Marshall, and co-chair and CEO, Guy Moot, added: “Tom Petty’s music is woven into the fabric of our lives, not just across America, but around the world. He captured the full range and resilience of the human spirit in songs about freedom and dreams, outcasts and rebels, relationships and heartbreak, the personal and the universal. Tom’s unmistakable sound and lyrics remain as timeless and vital today as ever, and all of us at Warner Chappell Music are honored to be joining with his estate to help amplify his extraordinary legacy on a global scale.”
The Petty catalog is the latest big get for Warner Chappell following catalog deals in recent years with the estates of Davie Bowie and George Michael, and new stars including Zach Bryan, Morgan Wallen, Dua Lipa and Gerardo Ortiz, among others.
As recently as 2022, Petty’s catalog was administered by Wixen Music Publishing, which went after an Arizona politician for their unauthorized use of his anthem “I Won’t Back Down.”
Fly Me to the Moon,” “This Land Is Your Land,” “We Shall Overcome,” “Are You Lonesome Tonight,” “Space Oddity” — the list reads like the top titles in a major music company’s catalog.
But it’s actually a list of just a few of the copyrights in the catalog of the quiet independent publishing giant TRO Essex Music Group. Founded in 1949 by Howie Richmond, a former press agent for the day’s biggest stars like Frank Sinatra, Glenn Miller and Gene Krupa who went on to become a pioneering music publisher (and co-founder of the Songwriters Hall of Fame), today’s TRO Essex started under the name Cromwell Inc. and quickly grew into a collection of 22 publishing companies under The Richmond Organization (TRO) umbrella. It became a titan of indie publishing, particularly in the 1950s, ’60s and ’70s, finding success in jazz with Bill Evans and Alec Wilder, folk with Pete Seeger, Lead Belly and Woody Guthrie, and rock with Pink Floyd, Black Sabbath, Marc Bolan of T. Rex, The Who and Pete Townshend.
At 75, TRO Essex is still going strong, managing its formidable catalog of publishing and recorded-music interests through its international offices in Hamburg, Germany; London; Paris; and elsewhere. After a few decades of taking on more of a catalog management role, TRO Essex is returning to frontline signings, using proceeds from past evergreens to fund new development.
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“For our 75th anniversary, we started to think about ways we could celebrate our past and move into our next chapter,” says Kathryn “Kathy” Ostien, COO of global music operations. “So we restructured and brought in a whole new A&R team. In 2023, we signed 26 new writers to the publishing catalog. We then launched a new record label called Shamus Records at the end of the year to manage their masters.”
This includes betting on albums arriving this year by newcomers of all genres, including alt-pop talent Sam Louis, indie pop artist Casii Stephan and jazz producer Matt Stevens.
The company is also rolling out the latest album installment in its series Evergreens Reimagined, under Shamus, enlisting its new talent to cover older hits. “It’s an exciting time,” Ostien says. “We are building fast on top of our already incredible base, but we are ready for the future, too.”
Kathryn Ostien
Sabrina Asch Photography
You look after such a rich back catalog, which you administer in-house. What is your strongest income stream?
I feel like it changes every five years, mostly because of the technology that we’ve seen. Obviously, it used to be CDs, tapes, LPs. Mechanicals were everything. Performance has always been strong, too. Overall, I think mechanicals have always remained very steady. Our most iconic catalogs continue to do well with mechanicals as well as synchronization.
When I first came to TRO Essex [in 2000], the synch market wasn’t much of anything. We were outsourcing it. Now it’s a huge amount of what we are doing — talking to the studios in Los Angeles, New York. Any type of synch is important for us — commercials, films, TV shows. The Hollywood strikes did not help last year.
Has synchronization risen now that the strikes are over?
We have definitely seen some nice pickup in the past few months.
Do certain genres in your catalog fare better for synch than others? I’ve heard rock is particularly of interest for synch.
I don’t know that I see it that way. There was a period in the early 2000s where rock was really, really desirable for commercials. Every ad agency wanted a Pete Townshend song. It ebbs and flows and all comes from the studios — sometimes they want hard rock, sometimes they want a standard. It depends. During COVID, we did really well with synch, ironically because we have a lot of wartime peace songs, hopeful songs. Everybody wanted that. It did well with commercials and productions during that time.
Your catalog includes some of America’s most essential protest anthems, and the last five years or so have seen the rise of several social movements. Do you look after those songs with particular care?
We do have a lot of protest songs. It’s interesting, especially with the political climate that we’ve had in the past several years. One of the things we take a lot of pride in is protecting those songs and making sure that they’re being used in the way that they were originally written — you always want to stay true to that. You want to keep songs like “This Land Is Your Land” within the time and [context] it was important. We also represent “We Shall Overcome,” which is very iconic. That song in particular is curated the most heavily because it’s so special to [the Civil Rights] movement.
How has the popularity of sampling, interpolating and more influenced your catalog in the last few decades?
Sampling really started taking off with hip-hop and rap in the late ’90s, and then it really took off in the mid-2000s. It has been great for our back catalog, though, to have new copyrights established on top of songs. A great example is how Joe Cocker’s “Woman to Woman” became 2Pac’s “California Love.” We work with a lot of hip-hop and rap managers to use some of these iconic songs and bring them to life.
The catalog market has been red hot for the last five or so years. Does TRO Essex ever try to acquire more catalogs?
We don’t do acquisitions — we’ve never needed to. We want to grow our company by following our own history, which was always based on discovering new, incredible songs that don’t have a home and seeing what we can do with them.
Was there a period where you completely stopped signing frontline acts? Or was it just a slowdown up until the founding of Shamus Records?
I don’t know if I would say it fully stopped, but [it slowed in] the ’80s to ’90s. This is a large catalog to manage independently. We’re trying now to restart that signing process.
Is there a particular identity you’re trying to build with the Shamus signees?
It’s still so new, and our team here is still so new. Mostly, we’re just trying to do what [founder] Howie [Richmond] did — find songs and acts that we like and see what we can do with them. I don’t know if we really have a brand in mind with our roster, but we were thinking that we wanted to bring some newer sounds to the catalog.
What is one of the most important things you can offer to an act looking to sign to Shamus Records/TRO Essex?
It’s an interesting time right now because metadata is everything. We feel that metadata management takes away from the creativity that writers and artists might have if they didn’t have to sit there and go through all these different portals to try to get their money. That’s something we excel at.
Having accurate and complete metadata — like the names of all the songwriters, the performing rights organizations and publishers they use — is important to keep track of as a publishing administrator. Do you think it is more important than ever to manage metadata closely to ensure you and your talent are paid?
Yes, exactly. We had to bring in new staff just to handle the metadata management. This is true for all publishers. It has been an incredible thing, what happened with [the Music Modernization Act] and the creation of the [Mechanical Licensing Collective]. The MLC has built this portal that so easily allows you to go match and claim royalties for your songs. It has really made it so much easier. There was nothing there before. It has made it much more universal and cleaner.
Doing administration in-house with the caliber of the catalog TRO Essex holds must be a lot of work. How do you keep up with it as an independent player?
It is one of the hard things about remaining independent because as the revenue increases, the administration costs increase as well, if you’re doing it correctly.
I’m sure anyone would be interested in buying or administering this catalog for TRO Essex. Why was it important to make sure that you are always independent, always doing your own administration despite the challenges that come with it?
I’m not the right one to speak about why we never sold, but the motivation was just never there for us. We’re proud of what we do. We’re strong. We’re financially very healthy. We don’t think anybody else knows these copyrights as well as us, and we’re good at what we do.
There are several emerging revenue streams in music, particularly in social media licensing. TikTok has made headlines this year for its strained negotiations with Universal Music Group. Are these sources of income good moneymakers for your catalog?
I haven’t seen that [TikTok payments] make a huge [boost] to us financially, but every way you can get a catalog out there is important, especially with a vintage catalog. It’s a new way to introduce it. We just need to be paid appropriately. We follow the guidance of the [National Music Publishers’ Association].
Another emerging area of the music business is artificial intelligence, which could provide risks and benefits to catalog holders. Some are even using AI to market catalogs. Do you have any estates interested in leaning into AI for this purpose?
There’s so much more to understand about AI. At this point, I don’t believe it affects us as greatly as it would probably some of the current recording artists, mostly because of the copying of the voices and likenesses. For us, our copyrights are much more secure bedrocks. It’ll be interesting to see how AI develops and what that true impact is on copyright. We haven’t had anyone really concerned from an estate or writer perspective. As I said earlier, though, every five years it seems there’s a sea change. We’re watching it.
Given that you have such a strong back catalog, it would be easy to say, “That’s it.” You’re just going to keep doing the administration and not push forward into signing new acts. Frontline is so risky. Why was it important to continue to sign new talent?
It’s a lot of work managing a catalog like this, and it presents different, evolving challenges around the world, so for a long time that’s what we did. However, looking at the 75th anniversary, we decided we wanted to breathe new life into it. We wanted to create these new covers, explore a new sound and see what we could do to reinvigorate it. While we were at it, we just thought, “OK, let’s see what else we can sign.” It’s an exciting time to celebrate this incredible history of the past 75 years and then look at the next 75 years with so much hope and excitement.
This story originally appeared in the June 22, 2024, issue of Billboard.
Sony Music Publishing Nashville has inked a go-forward and catalog deal with singer-songwriter Clint Black. The company will administer songs from the bulk of Black’s catalog, including hits such as “A Good Run of Bad Luck,” “Like the Rain” and “Nothin’ But the Taillights.” The deal does not include his first three albums. “Clint Black […]
Primary Wave Music has forged a partnership with the alternative rock band Spin Doctors. The company will now collect the group’s publishing and artist royalties as well as administer their new album, coming later this year. As part of the partnership, Spin Doctors will also have access to Primary Wave’s marketing team and publishing infrastructure, including digital strategy, licensing, synch opportunities, and TV production. The NYC-based band shot out of a cannon in the early 1990s with their debut album, Pocket Full of Kryptonite, which yielded the hits “Two Princes” and “Little Miss Can’t Be Wrong” and went on to be certified 5x platinum by the RIAA. A follow-up LP, Turn It Upside Down, also went platinum and the Chris Barron-led band has gone on to release four more studio albums, the latest being 2013’s If the River Was Whiskey.
Cutting Edge‘s White Stork Music division, the publishing company founded by UK composer Tom Howe, has entered a partnership with UK production company Touchdown Films. White Stork will now provide Touchdown with finance, world-class music services and access to White Stork’s catalog of music for current and future productions. White Stork retains IP rights to its original music composed for Touchdown’s slate of projects.
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OTM Music, a boutique publishing company, has signed Stones Throw’s violinist and singer Sudan Archives, Metronomy, Still Woozy, and HONNE to new publishing deals. The deals encompass each act’s back catalog and future works. Launched in 2017 by CEO Alex Sheridan, OTM Music has a curated roster that includes Dot Da Genius and Gianluca Buccellati. Within a year, the company courted investment by Sony Music Publishing. Later, after recouping SMP’s initial investment many times over, it partnered with Firebird Music Holdings with support from Raine Group.
Concord Music Publishing has signed electronic duo Mount Kimbie (Dom Maker, Kai Campos) to a global publishing deal. The deal covers all works made by the duo moving forward, including its new album The Sunset Violent which released earlier this year. Additionally, Maker and Campos have both signed individually to Concord for publishing.
BeatStars celebrates winning two BMI Pop Awards with producer Dan Darmawan for the 3x platinum “Romantic Homicide” and 2x platinum “Here With Me” by d4vd, both of which were licensed on its marketplace. The company has surpassed $325 million in payouts to its 10 million creators, highlighting its commitment to empowering artists globally.
Producer/writer Rogét Chahayed‘s TruSauce Publishing has signed artist Amindi to its expanding roster of songwriters. The Jamaican American artist calls her melodic rap and dancehall inspired style of songwriting “pastel rap.” She is perhaps best known for her feature on Isaiah Rashad’s The House Is Burning and for touring with the likes of Amaarae, Dreamer Isioma and Saba.
Warner Chappell has signed South Carolinian singer-songwriter Ricky Young to a global publishing deal. An up-and-coming country act, Young has already collaborated with Lee Brice (“I Carry It With Me”), Bubba Sparxx (“Baby Wussup”) and John Driskell Hopkins. He also toured with Luke Combs, Luke Bryan and Darius Rucker.
Concord Music Publishing ANZ has inked a new publishing agreement with Aussie songwriter John Butler. The deal includes representation for his whole catalog in all territories, apart from Japan. This includes back catalog hits like “Better Than,” “Zebra,” and “Ocean.”
Rema, Steve Mac, Lostboy and Daniel Pemberton are among the top winners at ASCAP London Celebrates, a private event that is being held on Tuesday (June 18) at The Shard in London.
British songwriter and producer Peter Rycroft, aka Lostboy, captures four ASCAP awards, including songwriter of the year. 2023 was a big year for Lostboy, which saw him co-write a string of hits including Tate McRae and Tiësto’s “10:35,” Calvin Harris and Ellie Goulding’s “Miracle” (co-written by fellow winner Pablo Bowman Navarro), which spent eight weeks at No. 1 on the Official UK Singles Chart; and Kylie Minogue’s “Padam Padam,” which earned him a Grammy for best pop dance recording. Each song earned him an ASCAP award in the hot dance/electronic song category.
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Continuing a breakout year which has seen him release his fourth EP and perform “Calm Down” (a nominee for best international song) at the BRIT Awards, Rema is honored with two ASCAP awards – song of the year and top streaming song, also for “Calm Down.” Co-writers Michael “London” Hunter and Andre Vibez were also winners. “Calm Down,” a collab with Selena Gomez, reached No. 3 on the Billboard Hot 100.
Producer, songwriter and musician Steve Mac wins top hot dance/electronic song for his work on “Baby Don’t Hurt Me,” a collaboration by Anne-Marie, David Guetta and Coi Leray.
Eddie Jenkins, Andy Sheldrake, Camden Cox and Hayla receive a hot dance/electronic song prize for “Where You Are” by John Summit & Hayla.
In the world of TV, film and streaming, Daniel Pemberton lands top box office film of the year for Spider-Man: Across the Spider-Verse. Pemberton’s score, which was shortlisted for an Oscar for best original score, draws on disparate strains of music, including punk rock, electronic music and traditional Indian instruments.
Julian Gingell and Barry Stone receive the top network series award for the second year in a row for their theme to American Idol.
2024’s top box office film awards go to composers Martin Phipps, for Napoleon, Patrick Jonsson for The Boogeyman and Joby Talbot for Wonka.
Paul Leonard-Morgan receives the prize for top streaming film for real-life crime thriller The Boston Strangler. Awards for top streaming series go to Anne Nikitin and Wil Malone for Apple TV’s Hijack, Natalie Holt for Loki and Andrew Skeet and Nathan Klein for Netflix docuseries MH370: The Plane That Disappeared.
As previously announced, South Africa-born British singer-songwriter and producer Kenya Grace receives the ASCAP Global Impact Award, in recognition of her success in the dance music world. Irish indie-pop singer-songwriter Cian Ducrot takes home the ASCAP Vanguard Award, which recognizes artists whose innovative work is helping to shape the future of music.
This year’s winners join a string of previous UK-affiliated ASCAP award recipients including Charli XCX, Dua Lipa, MNEK, Lewis Capaldi, Dev Hynes and Becky Hill.
ASCAP’s private event on Tuesday night for its winning songwriters and composers is set to include a brief performance from rising R&B/soul star Elmiene. The event is designed to shine a light on ASCAP’s UK-affiliated talent for their success in the U.S.
A full list of ASCAP London Music Award winners is available at https://www.ascap.com/londonawards24.
During the National Music Publishers’ Association (NMPA) annual meeting on Wednesday (June 12), the trade organization said it had calculated total U.S. publishing revenue at $6.2 billion in 2023, up 10.74% from the previous year.
The event, held at Alice Tully Hall at Lincoln Center in New York, is thought of as a state of the union for the U.S. music publishing business. During the presentation, it’s also common for NMPA president/CEO David Israelite to announce major actions it’s taking against tech companies on behalf of publishers. This year, he targeted Spotify, sending an official complaint to the Federal Trade Commission (FTC) as well as letters to the attorneys general of nine states and a list of consumer groups — urging them to stop Spotify’s efforts to bundle music and audiobooks into its premium tiers. It’s the first time the NMPA has involved the FTC in its fight with a tech company.
For publishers and songwriters, Spotify’s decision to include audiobooks in its premium tiers and categorize those tiers as “bundles” — a type of plan that qualifies for a discounted rate on U.S. mechanical royalties given that multiple products are offered under one price tag — means a lower royalty rate for music given that both music and audiobooks must now be paid out from the same royalty pool. In May, the NMPA launched its war with Spotify by sending a cease and desist letter to the streamer for allegedly hosting lyrics, music videos and podcast content that contain their members’ copyrighted musical works without proper licenses.
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In Wednesday’s FTC complaint, the NMPA says Spotify “has deceived consumers by converting millions of its subscribers without their consent from music-only subscriptions into ‘bundled’ audiobook-and-music subscriptions, publicly announcing increased prices for those subscriptions, failing to offer an option for subscribers to revert to a music-only subscription, and thwarting attempts to cancel through dark patterns and confusing website interfaces.” (For more on this, check out Billboard‘s full coverage of the FTC complaint here.)
Aside from Israelite’s big announcement, the event also honored top songwriters for their contributions to the music business — including an opening tribute to songwriter and outgoing NMPA board member Ross Golan. The NMPA also issued awards to Lana Del Rey, this year’s Songwriter Icon recipient, and Savan Kotecha, winner of the Non-Performing Songwriter Icon award. Elsewhere, “Can’t Help Falling in Love” was honored with NMPA’s Iconic Song award, featuring a performance of the song by Ingrid Michaelson.
The event additionally featured fireside chats with Robert Kyncl, CEO of Warner Music Group, and Shira Perlmutter, register of copyrights and director of the U.S. Copyright Office.
NMPA’s annual meeting comes amidst a busy year in the music publishing business. At the start of 2024, the MLC, which collects and distributes U.S. mechanicals, began its first-ever redesignation process — a routine five-year review of its operations to determine if any changes need to be made to the organization.
The same month, UMG pulled its music catalog from TikTok, including its publishing interests, alleging that the short-form app did not pay the “fair value” of music while also raising concerns regarding AI and artist safety. The NMPA showed its support for UMG regarding the move and even joined the music giant by letting the NMPA’s model license with TikTok, used by a number of indie publishers, lapse at the end of April. (UMG and TikTok eventually made a deal.)
The National Music Publishers’ Association’s (NMPA) war with Spotify continued at its annual meeting held Wednesday (June 12) at Lincoln Center’s Alice Tully Hall.
In an address to the publishing executives in attendance, NMPA CEO/president David Israelite announced that the organization has filed an official complaint with the Federal Trade Commission (FTC) and sent letters to the attorneys general for nine states as well as consumer trade groups to try to stop Spotify from reclassifying its premium tiers as “bundles” — a classification that allows the streamer to pay a lower mechanical royalty rate in the United States.
The NMPA alleges that Spotify has violated the Restore Online Shoppers’ Confidence Act (“ROSCA”), section 5 of the FTC Act and various consumer protection laws. Spotify has not returned Billboard’s request for comment.
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As Billboard previously reported, publishers anticipate a $150 million loss in U.S. mechanicals in the first year of the bundling reclassification compared to what publishers would have been paid had it never happened. The decreased payments began in March with no prior warning, according to the NMPA and the Mechanical Licensing Collective (the MLC). Spotify, however, believes it is playing by the book in making the change to how it pays out U.S. mechanical royalties given that it has “bundled” audiobooks in with the other offerings included in the streamer’s premium plans.
“Spotify has declared war on songwriters,” said Israelite at Wednesday’s meeting. “Our response shall be all-encompassing.” Israelite noted that the NMPA (as well as the MLC) has taken multiple actions to stop Spotify’s bundling reclassification already. The organization’s all-out retaliation began with statements made against the company in March, followed in May by a cease and desist letter in which the NMPA threatened to file a lawsuit against Spotify for allegedly using music and lyrics in some of its podcasts and videos without permission. (Spotify called the move a “press stunt” by the NMPA).
“Our letter was not just a warning shot, and the NMPA has never lost a lawsuit. So you’ll want to stay tuned,” Israelite added on Wednesday.
Only days after the NMPA threatened legal action, the MLC filed a lawsuit against Spotify for “improperly” reclassifying its premium tiers as bundles.
The following week, the NMPA sent a letter to the Judiciary Committees in both the U.S. House and Senate asking for an overhaul of the statutory license in section 115 of the Copyright Act, which binds publishers to strict regulations and rules over what they can charge streaming services for U.S. mechanicals.
In the NMPA’s letter to the FTC, obtained by Billboard, general counsel Danielle Aguirre wrote: “The [NMPA] writes to urge the FTC to address unlawful conduct by Spotify that is harming millions of consumers and the music marketplace… Spotify has deceived consumers by converting millions of its subscribers without their consent from music-only subscriptions into ‘bundled’ audiobook-and-music subscriptions, publicly announcing increased prices for those subscriptions, failing to offer an option for subscribers to revert to a music-only subscription, and thwarting attempts to cancel through dark patterns and confusing website interfaces. This bait-and-switch subscription scheme is “saddling shoppers with recurring payments for products and services they did not intend to purchase or did not want to continue to purchase.”
Aguirre continued, “Indeed, it has all the red flags of problematic negative-option practices that the FTC has consistently warned companies about: (1) Spotify has failed to give consumers all material information about its subscription plans up front; (2) Spotify has billed consumers without their informed consent; and (3) Spotify has made it hard for consumers to cancel.”
Other letters of complaint were also sent to the attorneys general for nine states, including California, New York, Tennessee, Colorado, Georgia, Connecticut, Illinois, North Carolina, Oregon and Washington, D.C. In the NMPA’s letter to both the New York bureau chief of the consumer frauds and protection bureau as well as the state’s assistant attorney general, obtained by Billboard, Aguirre wrote: “We urge your office to investigate and address Spotify’s conduct as well.”
Letters were also sent to consumer groups including the National Consumers’ League, the Consumer Federation of America, Public Citizen Consumer Action and the National Consumer Wealth Center in hopes of sparking a class action lawsuit.
The NMPA’s recent moves are being supported by representatives Ted Lieu (D-CA), Adam B. Schiff (D-CA) and Marsha Blackburn (R-TN) via a letter sent Wednesday to Shira Perlmutter, register of copyrights and director of the U.S. Copyright Office.
In the letter, the three representatives wrote: “As members of the Judiciary Committee, which originated the Music Modernization Act, we want to see the law faithfully implemented and copyright owners protected from harm arising from bad faith exploitation of the compulsory system. Digital service providers should not be permitted to manipulate statutory rates to slash royalties, deeply undercutting copyright protections for songwriters and publishers. A fair system should prevent any big tech company from setting their own price for someone else’s intellectual property, whether the owner wants to sell or not.”
Each year, the NMPA is known for announcing major breaking news at its annual meeting — typically against tech companies that, in its view, are not properly paying for songs. Last year, Israelite announced a $250 million lawsuit against Twitter, which is still in progress. In previous years, the NMPA has gone after Twitch, Peloton, Roblox and more.
“We will see what the Federal Court in the Southern District of NY, the United States Congress, the Copyright Office, the Copyright Royalty Board, the FTC, multiple State Attorneys General and consumer advocacy groups have to say,” Israelite told the crowd on Wednesday. “Most importantly, we will see what the songwriters and music publishers who make the product that allows Spotify to exist have to say.”
Around the time that ChatGPT was first released to the public, Alex Bestall, CEO of Rightsify, a music production library, discovered that he was sitting on a new, lucrative business opportunity. “I realized all the songs and all the metadata we have around the songs had a lot of value for AI,” he says. “It was a pretty quick and easy choice for us to license our library out.”
Hundreds of thousands — if not millions — of songs or other musical content are needed to train a competitive AI model to generate music. Though a number of AI companies believe they don’t need to pay for the music that their models train on, citing “fair use,” others have taken a more musician-friendly approach by paying artists and rights holders when using their music to train AI models.
On the surface, the AI industry seems like a perfect new customer for music production libraries — affordable, pre-cleared catalogs of songs in a variety of styles. Historically, production music has been popular among advertisers, social media creators, podcasters and low-budget film and TV producers who need music to soundtrack their creations but lack the time or money to license big-name hits, which often have multiple rights holders and hefty fees. As use cases for production music have grown, so has that sector of the publishing business. As of 2022, MIDiA Research says production music is worth about $1 billion across recorded music and publishing combined.
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While many artists’ rights advocates consider licensing songs to be the “ethical” way to train an AI music model, it still poses a legitimate threat to the existing music business: “Once the [licensing transaction] is made, that model is going to end up totally competing with you for the same customers,” says Antony Demekin, CEO of Tuney, an AI music company that makes songs intended for social media creators and podcasters. “Over time this could degrade your whole business if you’re not careful about the deal you make.”
No standard contract exists for the licensing of production music for AI training. Despite the long-term risks, Bestall says he has licensed his back catalog to multiple AI companies. (Non-disclosure agreements prevent him from revealing which ones.) “Usually we license our back catalog and then we have an ongoing commitment to deliver a certain amount of music over the next two or three years of the agreement,” he says.
In the short term, these new deals between music production libraries and AI companies have actually created jobs for more human musicians. Given his new customers’ desire for more music during their deal terms, Bestall now has 24 full-time musicians — and almost 100 contractors — employed to make more music and grow Rightsify’s library, which already has over 1 million copyrights.
Lee Johnson, CEO and founder of production library Audiosparx, says AI has also allowed him to grow his business. Audiosparx is best known for licensing its catalog to train Stability AI’s Stable Audio model beginning in 2023, and Johnson says he received permission from the musicians represented in his catalog before he agreed to license their music to the AI company. Audiosparx acts as the licensor for production musicians, but unlike Bestall’s library, it does not acquire the songs in its catalog outright. “We took the deal to our artist community and about 90% of the artists opted into it,” he says. “About 10% decided to stay out of it. It was encouraging to see that much uptake because a lot of people are very passionately against [AI]. … We just felt it made more sense to have a seat on the train and ride the train to the future, rather than getting run over by [it].”
Bestall and Johnson say that, so far, partnering with AI companies has not yet affected their other business. Bestall, however, remains sober about the changes that may occur in the next few years. “I know it’s a threat to our existing business lines, but a huge opportunity for the future,” he says. “I think if people are too married to the exact business model of the past, they may struggle.” Johnson, who has pivoted Audiosparx’s business multiple times over its 20-year existence, expresses a similar view about being open to change.
Not everyone agrees. “I think this is short-term money for a long-term loss,” says Henry Phipps, an emerging film composer who previously held a full-time job writing songs for a production library. After surveying the future of AI music, he left his post to try working for an AI music start-up. Now, he’s back writing for libraries and working toward his dream of being a film/TV composer. (Phipps spoke to Billboard under the condition that his former employers’ names would be kept private.) “But you can’t blame anyone for taking the opportunity to include their music in these datasets because you’d be missing out on a short-term paycheck, and everyone else would go ahead,” he says. “It’s kind of futile to try to stop the tide. Someone will always take the deal.”
To Phipps, the way production music is made is already similar to the way AI music is prompted. “I get a brief, which feels like a prompt,” he says. “Recently, one of those prompts was for reality TV with a bunch of adjectives, and then my job is to return a piece of music. It already feels like machine work in a way.”
While “very few people aspire to be production library composers long-term,” Phipps explains, “it is a way into [the music business] — to survive, eat and pay rent and work towards projects that are more creatively fulfilling.” Phipps says working at an AI music start-up made him “more nervous” for his future opportunities as a composer for film and TV. As he sees it, AI music could augment, but not entirely replace, the compositions of blockbuster film scorers — but it might “cut off the bottom rungs of the ladder” by decreasing opportunities for young upstarts like him.
Ed Newton-Rex, former vp of audio for Stability AI and founder of non-profit Fairly Trained, which certifies AI music companies that properly license their training data, advises that “if a library wants to take a deal like this, the terms should be very well thought through.”
Particular areas of concern Newton-Rex identifies include making sure that once a deal term ends, the AI model that used it will be retired or re-trained without the library’s material. “There’s no current way to just untrain a model, but you can add clauses to control what happens after the license is over,” he says. Newton-Rex also advises libraries to be careful about licensing their data to an “open-source model” — a move he calls “totally irreversible” because it makes the model available for public use.
Still, Newton-Rex admits there is “absolutely” still risk ahead. “Musicians making production music are hugely at risk,” he says. “Ultimately, generative AI is faster, cheaper and the quality is already very good.”
Just in case, Bestall is covering his bases by launching his own AI model, Hydra II, to generate royalty-free background music for cafes, hotel lobbies and other public spaces, should his customers ever prefer AI music to his current repertoire of background library music. Still, he feels his library will always be essential: “We’re not too concerned about the possibility of AI companies saying they don’t need production music anymore. Human data is so valuable for AI.”
On Tuesday (June 11), the Association of Independent Music Publishers (AIMP) held its annual global music publishing summit at 3 West in New York. Boasting panels on a wide-ranging list of publishing hot topics, from fraud to film/TV synchronization, the one-day event featured executives from ABKCO, Rimas Publishing, Spirit Music Group, Warner Chappell, CD Baby, Pex and more.
One highlight of the day included the panel Opportunities Abroad: Maximizing Overseas Collection featuring Michael Simon (Harry Fox Agency), Alexander Wolf (SESAC International), David Alexander (MusicIndustry.Africa), Mark Chung (Freibank Music Publishing, IMPF) and Tomas Ericsson (AMRA).
During the panel, the experts, who hail from around the world, discussed the increasingly globalized music market, which regions hold the most value and how to maximize that value. “It can’t be like it was in the 90s,” said Simon. “Back then the answer was to sit back and wait for checks to arrive in your mailbox — that world seems to be disappearing.”
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Some experts stressed the importance of leaning on sub-publishers with local knowledge to ensure proper collections. Ericsson, whose company AMRA collects digital royalties on a worldwide basis, explained that using AMRA can also be a solution to pain points in collection worldwide because “the majority of societies do not have the capital incentives to invest in better technology and therefore use whatever means they have to process this money to others.”
“My bet is on Asia,” said Wolf of the region with the most untapped potential for publishers. “They’re knowledgeable, and they’re making money… Africa as a continent is more troubled. Countries like Nigeria are especially great countries, great musicians but in the last thirty years, Nigeria had seven different collection societies. There is value there, but we need patience.”
The AIMP event coincided with what’s known as New York Music Month (NYMM) — a collection of events across the five boroughs to support the city’s local music scene. Though the festivities continue throughout the entire month, the bulk of NYMM events happen the week of June 10-15. In the publishing business, the annual gathering is fondly known as “Publishers’ Week” or “Songwriters’ Week” in reference to events like AIMP, the National Music Publishers’ Association’s annual meeting and the Songwriters Hall of Fame — all of which take place in the same five-day period. Others also call it “Indie Week,” a reference to the Association of American Independent Music’s five-day conference of the same name.