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Music Business News, October 11, 2017

Twickets announced its U.S. launch. And a new streaming startup signed a direct licensing agreement with WMG. Also, NMPA president and CEO David Israelite encouraged songwriters and publishers to fight for better sync deals.


Face-Value Ticketing Coming to the U.S.


Twickets announced it is launching today in the United States, reported Billboard.


The European face-value concert ticketing platform has been supported by artists such as Adele and Ed Sheeran. Founder Richard Davies said the new U.S. service, Twickets USA will make it so fans can both buy and sell spare tickets to live events at face value or lower.


The company is partnering with Niall Horan of One Direction, Pixies and PVRIS for their upcoming U.S. tour dates.


Thanks to Twickets, fans overseas have saved over $20 million in inflated ticket prices and fees for event tickets. The service started in the UK in 2015.


Streaming Startup Mixcloud Signing Deal with Warner Music Group


Streaming startup Mixcloud signed a direct licensing agreement with Warner Music, according to Music Business Worldwide.


This deal will allow the company to create new subscription-based products.


Mixcloud is a SoundCloud competitor with approximately 17 million monthly users. The platform currently houses 12 million radio shows, podcasts and DJ sets, uploaded by over a million “curators,” who include Carl Cox, Moby, Erykah Badu and David Byrne. It launched in 2008.


The platform has begun negotiations with Universal and Sony in order to snag licensing agreements with all three major labels. It previously used statutory radio licenses.


While not officially announced by anyone at the company, the WMG direct deal will make it possible for Mixcloud to offer additional on-demand services to its listeners and charge subscription fees for them.


Nico Perez, co-founder of Mixcloud said, “We don’t want to do the $9.99 a month. That’s done. That market is served. What we’re building is going to be very customized.”


The Financial Times originally reported that “details of [Mixcloud’s] subscription product are still being worked out,” but it is not going to be a flat fee “all-you-can-eat” type of service.


Co-Founder and Commercial Director of Mixcloud, Nikhil Shah recently wrote an op/ed piece for Music Business Worldwide and explained, “[We believe] more streaming music companies ought to be built and managed in a responsible way … A lean team, careful management of costs, and effective monetization of the platform can go a long way in keeping streaming services afloat.”


He also said, “Silicon Valley often preaches ‘scale first, revenue second.’ This is simply not the right approach in music … It’s not fair for creators and creates too much risk for young companies, which in turn imperils the creators who feed them.”


David Israelite, on Demanding Fair Sync Licenses


CEO and president of the National Music Publishers Association (NMPA) David Israelite said songwriters, publishers and other artists and creators need to fight for their rights and the value of their work, especially when it comes to sync licensing.


Variety reported the key points he made in a speech at the 2017 Production Music Conference in Hollywood.


Sync licensing is now a major source of songwriter revenue, having surpassed mechanical licensing. The U.S. publishing and songwriting industry was valued at $2.652 billion in 2016, jumping up 20-percent since two years prior. However, many large production companies and houses as well as film studios are trying to edge out independent songwriters.


In his keynote speech at the conference, Israelite criticized studios and networks for demanding to take total control over songwriters’ work as part of licensing deals.


He said, “You’re basically being put in a situation that is blackmail … Our best weapon is sunlight, exposure, public pressure on these companies that are asking creators to pretend that somehow the motion picture studio or network had anything to do with the creative process, and therefore deserves any of the downstream performance money.”


Other companies change titles of works in order to perpetuate “the false narrative that somehow they were part of creating it.”


He said that creators have to start pushing back against this phenomenon: “We’re in a battle over the value of music. We’ve been in that battle for a long time, it’s had its ups and down. It’s a battle that will never end.”


And prices paid for song libraries are way up due to the rising value of the music industry.


He said that sync revenue’s rise is being sparked by a growing number of songwriters entering the marketplace and putting out quality work. Israelite’s audience was mostly NMPA members who sell marketing music for trailers, commercials, background music for television and films.


Israelite also said that the climate has to change, particularly surrounding music with lyrics: “Consumers love lyrics, and as an industry we used to give them away. Now they have real value … Amazon put out a list of the top requested lyrics from [Alexa] devices, and on YouTube often the most popular videos are lyric videos, not the official video from the artist.”


A performance license must be obtained by artists and labels. Songwriters and publishers, on the other hand have to get both performance and mechanical licenses. Performance licensing rules use of an artist’s recording of a song and brings in 65-percent of the revenue.


Israelite explained, “Record labels have been very successful in the free market, getting fair value for their sound recordings.” About 50-60-percent of revenue brought in by streaming companies goes to labels. He added, “And in some instances, like with Spotify, they’ve taken equity stakes in a company that may go public for $16 billion.” Songwriter rates are regulated by the government.


Even though streaming and other digital revenue has been booming in the music industry, Israelite noted that “a lot of the traditional sources,” including television, broadcast radio and cable are also experiencing growth: “Mechanical, at 19 percent, is fascinating to me because, as mentioned earlier, you are seeing the near-death of downloads, the continued path toward extinction of physical product, yet we had growth in mechanicals from 2015 to 2016 because of the mechanical part of interactive streaming.”


Israelite also said he expects the music business to continue to grow this year. But this situation is complicated by a “broken” licensing system that makes obtaining licenses for even the good willed difficult and leads to copyright infringement: “Anyone who enters this space is going to get sued because it’s practically impossible to license content properly. In the old days, when music was physically sold, the record labels would be the ones seeking the mechanical license … They’d come to us and say, ‘We need these 10 songs.’ Today, I have Amazon in my office saying ‘How do we license 40 million songs tomorrow?’”


Israelite stated he supports a solution for the industry that includes “a transparent database paid for 100 percent by the digital companies that use it but managed by creative community.”


Israelite said improving relationships with huge digital companies will not be easy for artists and creators, as many of these companies are still taking advantage of loopholes to pay less for music.


He stated, “I don’t think it’s a good idea to try to take songs out of their libraries when we’re in a battle for the hearts and minds of music consumers to pay for a music service every month … You’ve got YouTube out there for free that pays us crap. You’ve got Spotify that has a free service to the consumer that’s based on ad dollars which, we can debate, does not pay us well. Then there are paid subscriptions that are offered by Apple and Pandora and some by Spotify, and that is what’s going to save our industry.”


His main advice to music makers was to take any steps to get paid more for their work: “We can fight about the rate, and we should because they’re not paying us enough, but because the licensing system is broken everybody’s talking about the process instead of whether we’re getting paid fairly. This is a situation that needs to be fixed.” He urged creatives “fight about value and work together over how we license.”

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