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Music Business News, January 16, 2018

Prominent legacy artists filed a brief in the Pandora copyright lawsuit. Also, Facebook signed a licensing agreement with several additional music companies. And Warner Music Group began re-shaping its physical product department.

 

Legacy Artists Filing a New Brief in Pandora Lawsuit Over Pre-1972 Recordings

 

A group of musicians filed an amicus brief on January 12, adding to an on-going California lawsuit against Pandora for allegedly unlawful use of sound recordings made prior to 1972, Billboard reported.

 

The brief was submitted as Congress readies itself to debate legislation on this issue. The lawsuit was initiated by Flo & Eddie, Inc., owners of the Turtles catalog. Amici artists are Carole King, Melissa Etheridge, Doors drummer John Densmore, the estates of Hank Williams and Judy Garland as well as Apple Corps., owners of the Beatles recordings, Grateful Dead Productions and Experience Hendrix.

 

In questions is how and if non-interactive streaming services such as Pandora must pay royalties to performers and labels for using older recordings still protected under state law. The music industry has continued to lobby for legislators to decide on this issue. If implemented, the recent CLASSICS Act (Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society Act) will force digital services to pay for use of recordings made prior to 1972. The House Judiciary Committee scheduled a “field hearing” for January 26 in New York in order to discuss this and other copyright issues related to the music industry.

 

Prior to 1972, federal copyright law did not cover sound recordings, though some state copyright laws covered them. For many years, SiriusXM did not pay to broadcast recordings before 1972, and these recordings made up a large percentage of programming. Flo & Eddie of the Turtles, owners of their own recordings, sued SiriusXM in 2013 in California, followed by Pandora in 2014, stating that the state’s laws require services to pay them. Major labels also sued, and SiriusXM settled all of the lawsuits. Other suits have been filed in other states. The outcome of a few of these lawsuits was that their state laws do not require payment.

 

The outcome of the current case against Pandora may set the tone for others that are pending in California and also influence new legislation. The RIAA submitted its own amicus brief and helped polish the one submitted by the group of artists.

 

The brief from the RIAA dives into the legal issues, while the artist’s brief makes a “more accessible argument” about how important music is to California and why performers must be paid appropriately. Grace Slick of Jefferson Airplane explained, “It’s basically simple … If you are making bucks off my stuff, guess what? I deserve a portion of it.”

 

The music industry as a whole supports the CLASSICS Act. Pandora said it also supports the Act, as it would clarify laws that are currently ambiguous. SiriusXM, however, opposes it.

 

RIAA’s general counsel and chief of digital business Steven M. Marks said, “There is an historic injustice being done to legacy artists from California and the entire country … What this shows is artists and the entire music community are mobilizing, speaking out, telling the story of music’s value and vigorously working to right this wrong wherever we can.”

 

Facebook Signing Agreements with Music Entities

 

Facebook signed three music licensing agreements with SESAC’s HFA/Rumblefish platform, Kobalt Music Publishing and Irving Azoff’s Global Music Rights.

 

According to Music Business Worldwide, the deals will allow Facebook to add social features involving Rumblefish, Kobalt and GMR-managed music on Facebook, Instagram and Oculus.

 

Rumblefish was acquired by SESAC during the 2015 Harry Fox Agency (HFA) buyout. The entity provides services to U.S.-based independent publishers: composition and recording administration; data and royalty management; licensing and network monetization.

 

SESAC’s agreement with Facebook is a deal that stipulates that indie publishers can opt in on. It will offer “streamlined music licensing and administration for the independent publishing market.”

 

Kobalt Founder & CEO Willard Ahdritz commented on the multi-year agreement: “In the spirit of a true partnership, Facebook will ensure songwriters are paid fairly and new revenue streams are created for user uploaded video …We look forward to working closely with Facebook throughout our partnership. And, Kobalt is committed to distributing royalties in a fully transparent way.”

 

Irving Azoff’s U.S. Perormign Rights Organization, Global Music Rights represents Pharrell Williams, Bruno Mars, Drake, Bruce Springsteen, Smokey Robinson and many others.

 

About the deal, Azoff said, “Our partnership with Facebook reflects that when music is valued properly, it’s easy for both sides to view it as a win-win.”

 

Scott Sellwood, who is Head of Commercial Music Publishing Partnerships at Facebook, added, “Facebook and SESAC’s HFA/Rumblefish are excited to offer the vibrant independent publishing community the opportunity to participate in a new licensing program with Facebook … The program will enable users to upload and share videos with music on Facebook, Instagram and Oculus and allows publishers to be compensated for the use of their music … Rumblefish will also help Facebook optimize the identification and clearance of musical works through an innovative data-sharing agreement. This partnership with HFA/Rumblefish and an opt-in for independent publishers opens as of today.”

 

President and CEO of NMPA David Israelite stated, “This new partnership between Facebook and the music publishing industry is a great step forward for the platform and for songwriters. Music provides value to Facebook and its users and ensuring that the creators of that music are compensated is paramount … We appreciate Facebook’s willingness to recognize the economic contribution of songwriters as well as its effort to create a system that properly streamlines payments moving forward. Other digital services should take note and follow suit.”

 

Warner Music Group Proposing Buyouts to Physical Product Employees

 

The global distribution, marketing, sales and outreach division of WMG sent buyout letters to 130 employees who work with physical product, said Billboard.

 

The move is said to be intended to streamline the functionality of the company amid a rapid decline in CD sales and the rise of streaming.

 

WMG did not comment on its overall plan to reduce staff, but experts indicated it will be in line with the 19.6-percent decline in CD sales, reported by Nielsen Music, for 2017. The plan will likely also involve anticipating next year’s decline.

 

Warner will put the money saved by WMG through layoffs into funding streaming music efforts. Those close to the situation indicated that employees offered deals have 45 days to make a decision.

 

WMG will continue creating physical product for retailers while keeping an eye on the decline of the CD format.

 

The recent Nielsen report on the 2017 music industry indicated that Ed Sheeran’s Divide and Bruno Mars’ 24K Magic were WEA’s top-selling CDs last year.

 

WEA president Tony Harlow stated in a letter to employees, “WEA has always been at the forefront of evolution in the industry, and the current shift towards digital and streaming is no exception. As our business continues to evolve, and in order to maximize our artists’ impact globally, we are realigning resources within WEA.”

 

The company offered what it termed its “valued colleagues” within the physical product arm the opportunity to voluntarily resign in exchange for a severance package.

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