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Streaming Music Income, Songkick and Shazam Merger and BMI Consent Decree Appeal News, November 15, 2016

Artists discussed the paradox of streaming at the Web Summit. Also, Songkick announced it is merging with Shazam. And the Department of Justice appealed the September BMI fractional licensing ruling.


50s mic over stage light background.


Artists Struggling with the Future of Technology and the Music Business


Several high-profile musicians expressed frustration with streaming services, record labels and regulators at last week’s Web Summit in Lisbon. According to CNBC, while many creators are frustrated by not being properly compensated, they still recognize that new technology is the future of the industry.


Music streaming has brought the cost of music way down for consumers, but has also decreased artists’ recorded music income.


In an interview, Grammy award winner Ne-Yo said, “It’s a good thing in that music is being consumed more now than every before, it’s easier to get the music out to the fans. The thing that has to catch up is the licensing laws. They are literally 74-years old which makes no sense because everything about music evolves daily … That has me in a negative place … All songwriters are asking for is a level playing ground, we just want what we are owed.”


Streaming has continued to grow at a quick pace. According to the IFPI, digital music revenues overtook physical format sales for the first time in 2015. Streaming revenues make up approximately 43 percent of the $6.7 percent made from total digital music sales.


A large number of artists still say they are not getting paid, and clashes between artists and streaming services like Spotify have become numerous. Still, artists realize that they need to embrace the new digital space in order to build their careers.


In a panel last Thursday, award-winning U.K. artist Tinie Tempah said downloading was what helped him rise in the 2000s, and that the climate is especially good for undiscovered artists: “I was at a point where I was willing to give my music away for free … Now we’re in a streaming era, I don’t feel artists are being compensated, but I think it’s a good time for an artist who hasn’t been developed in the past five years … I think anybody has a shot at becoming a big star … that’s a big plus.”


Tempah also said that if labels had been more excited about streaming when it first hit and had embraced it, the industry might be “in a better place.”


Streaming services have said the technology is a big opportunity, especially given all the data that exists to help artists grow their careers and reach their fans.


At the conference, chief executive of Deezer, Hans-Holger Albrecht said, “The truth of the matter is we can’t go back to the old days … if you look at stats nowadays in terms of growth … it is a massive opportunity for the industry and for the artists as well … Streaming services can do much more with artists in temrs of access to clients.”


In a separate interview, Albrecht revealed that Deezer is looking at artificial intelligence features that will help bring more relevant data to artists who are looking for a location for their next gig or just to find out more about where their biggest fan bases live.


Ne-Yo admitted that even though artists and streaming providers are not the best of friends, he is ready to see where technology will go and how it can help the industry thrive as a whole: “I love the idea of an app in real time that says who is listening to records, how often it is being played, what areas it is being played, that will be really helpful for us.”


Songkick and Shazam Merging


Ticketing and concert discovery platform Songkick said it is being integrated into Shazam.


Music Business Worldwide reported that the new partnership will feature Songkick’s list of hundreds of thousands of upcoming shows and events within the Shazam app.


The new suite will launch in 2017. Songkick’s concert data and information will make hundreds of thousands of upcoming artists’ tour dates available to users as they identify and tag songs.


Songkick will gain Shazam’s user base. Shazam has been downloaded more than a billion times worldwide.


Songkick joined together with CrowdSurge in 2015 and since then has made its mission to decrease the number of tickets sold to scalpers. Artists including Adele and others have used the platform in order to make sure primary tickets get directly into the hands of fans.


CEO of Songkick Matt Jones explained, “The moment of discovery is such an important time to educate the fan about a show … I’m proud to say we’ve built a technology platform that will enable every artist we work with, and every fan who uses us, a chance to seamlessly discover new artists and immediately have the opportunity to see them live.”


He added, “Shazam plays such a pivotal role in music discovery, and we’re excited to expand our reach to millions of more live music fans around the globe, ensuring Songkick is available wherever fans are engaging the most.”


Chief Product Officer at Shazam, Fabio Santini said, “In partnering with Songkick to create this new offering, we are able to further connect the dots from discovery to fandom that make up a strong artist-to-fan relationship.”


Songkick’s concert discovery platform is visited by over 12 million music fans each month. It targets over 60 global markets with notifications and tickets when a fan’s favorite artists are playing nearby shows.


DOJ Appealing BMI Consent Decree Ruling


The Department of Justice filed a notice to appeal a September ruling that declared fractional licensing is permissible under the BMI consent decree, reported Billboard.


The appeal was anticipated after Judge Louis Stanton threw out the DOJ’s interpretation that the consent decree depends on 100 percent licensing or “full-works” licensing.”


The Department of Justice arrived at its conclusion after spending two years reviewing the consent decree requested by publishers and songwriters who were waiting for the 75-year old decrees to be amended for the digital climate. They were hoping amendments would let publishers partially withdraw digital rights from blanket licenses. However, the DOJ decided not to change anything and said the consent decree requires ASCAP and BMI to give 100 percent licensing.


In the case of songs with multiple writers, partial licensing lets a licensee to get a license from every rights owner in a song. Under full-work licensing, someone only needs a license from one of the rights holders. Publishers have been saying for years that the industry’s practice is to exercise fractionalized licensing. Licensees like radio and digital services have said they only need a license from one rights holder of a song.


Licensees were happy about the DOJ statement. However, when BMI challenged the Department’s findings in court, the BMI rate court judge disagreed with them. He said that fractionalized licensing is allowed under the consent decree.


The Department of Justice appeal means the September 16 judgment will be reviewed closely by the U.S. Court of Appeals for the Second circuit.


Mike O’Neill, president and CEO of BMI said, “It is unfortunate that the DOJ continues to fight for an interpretation of BMI’s consent decree that is at odds with hundreds of thousands of songwriters and composers, the country’s two largest performing rights organizations, numerous publishers and members of the music community, members of Congress, a U.S. Governor, the U.S. Copyright Office and, in Judge Stanton, a federal judge. We believe Judge Stanton’s decision is correct and look forward to defending our position …”


ASCAP’s statement was as follows: “The Second Circuit’s ruling in this case will affect the rights of more than a million American songwriters and composers, thousands of whom have expressed strong opposition to the DOJ’s position, and we are hopeful the Court will affirm Judge Stanton’s decision.”

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