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Music Business News, December 13, 2017

Hundreds of musicians and record labels signed a letter to save net neutrality. Also, SONGS Music Publishing sold its entire catalog to Kobalt. And insiders said Tidal is having money trouble.

 

Hundreds of Musicians and Record Labels Signing Letter to Save Net Neutrality

 

Prominent artists including Killer Mike, Wilco’s Jeff Tweedy, Neko Case and hundreds of others plus labels Sub Pop, Third Man Records and Secretly Group signed a petition asking the Federal Communications Commission to keep net neutrality rules established by President Obama.

 

Billboard quoted pieces from the letter: “We’ve built careers and big parts of our lives around our passion for music — creating it and connecting with listeners. Today, the internet is one of the primary places this work happens … The fundamental principle of openness online has enabled artists to connect directly with each other and with audiences, empowering us to distribute our work and reach fans in a multiplicity of ways. At its best, the open internet has allowed for a flourishing of diverse voices, allowing to compete alongside the biggest companies, creating connections across geographic barriers, offering choice, flexibility, and creative autonomy.”

 

The letter was also signed by My Morning Jacket, Deerhoof, GWAR, R.E.M. and YACHT and was put together by the Future of Music Coalition and CASH Music.

 

The petition added, “To truly make good on the remarkable democratic potential of the internet, the fundamental infrastructure underpinning it all must be neutral and nondiscriminatory … Unfortunately, the FCC’s current proposal would amount to a sharp turn in the opposite direction.”

 

FCC chairman Ajit Pai said earlier in December that the FCC would vote Thursday to overturn the current net neutrality rules that require internet service providers to treat all web traffic equally. If overturned, it would give oversight of service providers to the Federal Trade Commission. Republicans hold three out of the five seats of the FCC, so the overturn of the rules is likely to pass.

 

Artists and labels who signed the statement said that overturning these rules would allow companies like Verizon, Comcast and AT&T to block or change access to certain content or require that websites buy into internet “fast lanes” to give them priority over other businesses.

 

The letter continues, “Allowing broadband providers to control this once-open platform shifts leverage away from individual artists, creators, and small businesses, and interferes with freedom of speech and expression … Without strong net neutrality protections, digital retailers will have to compete to better meet the needs of the ISPs that can block, throttle, or slow down access to their offerings. These services should instead be competing to better serve the needs of diverse musicians and listeners. Artists and labels’ choices about how and where to bring their work to the market could likewise be constrained by what the ISPs prefer, rather than what works best for their individual business and creative goals.”

 

SONGS Music Publishing Selling Entire Catalog to Kobalt

 

SONGS Music Publishing sold its catalog to Kobalt Capital Ltd (KCL), said Music Business Worldwide.

 

The deal was for approximately $160 million. The SONGS catalog will be administered and serviced by Kobalt Music Publishing going forward.

 

KCL raised $600 million in recent years to spend on music copyrights and is separate from the primary Kobalt Music Group business. The fund it manages has been collected by undisclosed private investors.

 

Thanks to the deal, Kobalt will have control over some of biggest global hits, including “Royals,” “The Hills,” “Starboy,” “Panda” and “Uptown Funk.” SONGS has exclusive deals with writers and artists including The Weeknd, Lorde, Diplo/Major Lazer and more.

 

SONGS President Ron Perry is rumored to become the new head of Columbia Records in New York City.

 

SONGS CEO and founder Matt Pincus recalled, “I met Willard when I first started SONGS in 2004. He was one of the first people to believe in our vision of a music publishing company providing revolutionary creative service to contemporary songwriters … At SONGS, music publishing is first and foremost a people business. We’ve had the opportunity to work intimately with groundbreaking songwriters at a time when the music business of tomorrow is being created.”

 

He added, “In addition, we’ve been able to build the most talented team of young professionals in the business. That the result of our work is a catalog we created writer by writer and song by song, representing a decade of popular music in all formats – including many of tomorrow’s evergreens – is a testament to our approach … Carianne Marshall, Ron Perry and I built SONGS with a forward-thinking stance, a fierce commitment to songwriters and their compensation, and a focus on long-term relationships. SONGS is a truly independent company – 100% owned and operated by us since its inception. After many years of hard work and personal investment in the company, we decided that it was time for us to look for new horizons.”

 

Pincus also said, “That is why I feel so fortunate to now hand SONGS to Willard, Laurent and the entire Kobalt team, who together have demonstrated a time-tested commitment to songwriters through their dedication to transparency, honesty and independence. It’s because of these characteristics and our longstanding relationship that we are confident there is no better partner than Kobalt with which to continue our legacy.”

 

SONGS has been publishing over 3.5-percent of all music played on U.S. radio for 10 out of the last 12 quarters. In the last quarter of 2016, SONGS was responsible for 5.41-percent of all songs played on U.S. radio.

 

The publisher’s catalog houses 50 Platinum or Multi-Platinum songs and more than 100 Top 5 singles, plus 65 Number One singles. SONGS was also named ASCAP Independent Publisher of the year in 2016.

 

President of SONGS Ron Perry stated, “Today is the bittersweet culmination of a journey that I joined Matt on 14 years ago. From the very first writer signing, to many of today’s premier writers, artists and producers, I couldn’t be more proud that we were able to build a company that has substantially impacted the creative discussion around music publishing. I thank each and every one of the songwriters who entrusted us to play vital roles in their careers, and I know they are all in great hands at Kobalt.”

 

Head of Creative Licensing at SONGS added, “It’s been my great privilege to work at SONGS, a company we built around the idea of empowering songwriters.  It’s been an incredible journey that I owe to our amazing writers and our dedicated team both past and present, along with the people in the industry I get to work with every day.  I have great faith that our songwriters and catalog will continue to flourish in Kobalt’s trusted hands.”

 

Tidal Facing Money Problems

 

A report from Dagens Næringsliv in Norway said Tidal is running out of money and failing to add enough users to stay afloat. According to The Verge, the report speculated Tidal only has six months of capital remaining.

 

When asked about the rumors, a Tidal spokesperson explained, “We have experienced negative stories about Tidal since its inception and we have done nothing but grow the business each year.”

 

Figures indicated that Tidal has lost $44 million before taxes in 2016. Spotify’s losses in 2016 were much higher at $581 million, but it made up for it with a revenue of $3 billion.

 

Early in 2017, Spring bought a 33-percent stake in Tidal. Jay Z’s business partner Juan Perez of Roc Nation reported at the time that the Sprint investment was enough to give Tidal working capital for the next 12-18 months. Tidal continues to claim it will break even in a matter of months and become profitable midway through 2018.

 

Tidal has not released information about subscriber numbers since prior to Sprint’s investment. In spring 2017, Dagens Næringsliv said that Tidal was over-estimating subscriber numbers, saying it had three million subscribers when it only had one million. Jay Z admitted the company that sold him Tidal was responsible.

 

As of summer 2017, Spotify had over 60 million subscribers, whereas Apple Music had 30 million.

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