• Manager article part 5

Music Business News, December 27, 2017

Facebook signed a sweeping licensing deal with UMG. Also, Apple Music faced a class-action lawsuit. And YouTube signed new agreements with major labels.


Facebook Sealing the Deal with Universal Music Group (UMG)


Facebook and UMG revealed they had signed an “unprecedented, global, multi-year agreement,” reported Music Business Worldwide.


Under the agreement, UMG will be licensing its recorded music and publishing catalogs for videos and additional “social experiences” on Facebook, Instagram and Facebook’s VR platform Oculus.


The press release stated: “The partnership will facilitate deeper engagement between artists and fans, empowering users to express themselves through music, share the songs they love and build communities around music-fueled culture. Enabling a variety of features across Facebook’s platforms, the agreement is intended to serve as a foundation for a strategic partnership roadmap that will deliver new music-based experiences online.”


The partnership will let users upload videos featuring licensed music and “personalize their music experiences” across the social media company’s various platforms. Future features will include “access to a vast library of music across a series of social features.”


Facebook’s Head of Music Business Development and Partnerships Tamara Hrivnak explained, “There is a magnetic relationship between music and community building … We are excited to bring that to life on Facebook, Instagram, Oculus and Messenger in partnership with UMG. Music lovers, artists and writers will all be right at home as we open up creativity, connection and innovation through music and video.”


Executive VP of Digital Strategy at UMG Michael Nash added, “Together, Facebook and UMG are creating a dynamic new model for collaboration between music companies and social platforms to advance the interests of recording artists and songwriters while enhancing the social experience of music for their fans …This partnership is an important first step demonstrating that innovation and fair compensation for music creators are mutually reinforcing – they thrive together. We look forward to Facebook becoming a significant contributor to a healthy ecosystem for music that will benefit artists, fans and all those who invest in bringing great music to the world.”


The companies confirmed that they intend to “experiment experiment hand-in-hand to introduce new music-based products to these Facebook platforms, including Messenger, with the goal of catalyzing innovation to develop the next generation of music products that best engage social consumers.”


Sir Lucian Grainge sent an internal memo to the employees of UMG that read, “I’m proud to announce this morning the first partnership between a major music company and Facebook, the largest social media company in the world.  We’ve entered into a global multi-year agreement which licenses UMG’s recorded music and music publishing catalogs for use in video content created by users across Facebook, Instagram and Oculus … As our new relationship with Facebook demonstrates: by continually re-evaluating how to bring our artists’ music and videos to global audiences, by developing new and increasingly progressive business models and by spurring competition among both established tech players and startups alike, UMG has been and will continue to be the most significant catalyst for our industry’s growth … As with our deal with Spotify earlier this year and our license renewal with YouTube, our deal with Facebook leverages the experience we’ve gained and the wealth of data we’ve amassed to win both greater flexibility as to how our music is offered to the public as well as fairer compensation for our artists—as we continually refine the balance between direct promotion and monetization.”


It continued, “Of course, in an environment this dynamic, our work is never done.  Nor would we want it to be.  Innovation and imagination are critical — in both music and the music business.  As technology keeps evolving, we’ll keep fighting for our artists to ensure that their music earns for them what it so richly deserves … I’d like to thank the invaluable contributions from every member of our team in making this agreement a reality.  Thanks to all your work we’ll remain the world’s leading music company for many years to come.”


Apple Sued for Missing Independent Artist Royalties


Apple got hit with a class action lawsuit filed on behalf of independent artist Bryan Eich.


According to Billboard, the lawsuit was filed by a lawyer at Garbarini Fitzgerald and asked for $30,000 per song the company infringed. It alleges that Apple did not license mechanical rights for the compositions it played.


Lawyer Richard Garbarini also asked the court to certify a class of songwriters who own publishing rights to recordings the sent to Apple through CD Baby and other aggregators.


The allegations in the lawsuit have been brought up before by other artists across platforms, as no streaming service has obtained all the mechanical licenses required to stream music. Several have been sued.


There was a punitive class-action case filed against Spotify, and the court was asked to approve a settlement. Rhapsody was also hit with a class-action suit last March. And Garbarini previously filed class-action suits against Tidal, Slacker and Google Play. However, this is the first of these lawsuits to be filed against Apple.


Other streaming services have complained not being able to identify or find rights holders when trying to license their compositions. When this occurs, U.S. copyright law dictates that distributors can file Notices of Intent (NOI) with the Copyright Office. The lawsuit said that Apple failed to do this for Eich’s songs.


Eich is not well known, but statutory damages for copyright infringement are assessed per work. The proposed class is limited to songwriters who ran their work through aggregators and could have thousands of members.


Garabini and Apple did not respond to Billboard’s request for comment.


YouTube Signing Licensing Deal with Two Remaining Major Labels


YouTube signed a licensing deal with UMG and Sony Music for royalties and copyrighted materials, joining Warner Music Group, who signed a deal in early December.


The Verge stated that the deal secured better royalty rates for music rights holders. The companies also agreed there would be “stronger policing” of user-generated content.


YouTube confirmed the UMG deal in an email from CEO Susan Wojcickisaid: “We’re thrilled to strengthen our partnership with Universal Music Group … This agreement means we can drive more value to the industry, break and support more artists, and deliver an incredible music experience to fans around the world.”


This agreement howed that YouTube’s music streaming service is likely closer to launching, as it was dependent on agreements with major labels. Though the field for streaming music is crowded, YouTube has a huge audience, which will help its chances.


Last summer, YouTube’s head of music Lyor Cohen explained that the platform intended to provide a better environment than it had before for breaking new acts: “YouTube is not only going to build a fabulous subscription business to complement its advertising business, but it’s going to work with the industry to help break their acts.”


Those close to the situation have indicated that YouTube’s streaming service is likely to be a combination of Google Play Music and YouTube Red. It is expected to launch in March 2018, though no official announcements have been made.

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