Music Business News, May 16, 2017

YouTube continued to get into hot water over full-length albums on the platform. Also, SoundExchange entered the music publishing market. And Indie labels and Warner saw market shares rise in 2016.



YouTube Hosting a Large Number of Copyright-Infringing Full-Length Albums


Simple searches of the platform indicated that YouTube continues to host a large number of full-length albums, according to The Verge, despite YouTube’s global head of music Lyor Cohen’s recent assertion that YouTube “had a solution” to immediately improve its ContentID system.


In an interview with Recode, Cohen said, “When I told [the Content ID team] about the albums, they said, ‘Yeah, they jumped over our Content ID by speeding up the tempo of the music, slightly. We’ve already got a solution for it.’ I had them walk me through the process. I felt so proud that I could really talk to people in the industry that had this feeling about Content ID, and finding bad actors, and confidently say, ‘We’ve got a team that is dedicated to fixing this.’”


However, a search of the platform indicated that albums are still widely available and being monetized by non-copyright holders. Some of these include Bob Marley’s Legend, Nirvana’s Nevermind, A Tribe Called Quest’s Low End Theory plus new releases like John Mayer’s The Search for Everything and Humanz by the Gorillaz. 50 Cent’s Get Rich or Die Tryin’, Lady Gaga’s The Fame and albums by Jessie J, Ariana Grande, Carly Ray Jepsen, Katy Perry along with Imagine Dragons’ whole catalog are also available.


While some of these videos are monetized by the labels, the licenses for the videos are attached to a single song off the project and not the entire album. Therefore, if one user uploads an entire album and another just one song from the album and they both get the same number of views, the payout is equal. This negatively impacts the return on investment for labels and can add up to massive losses depending on how many tracks an album has.


The music industry has already expressed its discontent about this state of affairs. One source indicated that “literally nothing has changed” with YouTube’s ContentID system and policies since Cohen made a promise to reshape them.


SoundExchange Entering Music Publishing with CMRRA


SoundExchange completed its acquisition of the Canadian Musical Reproduction Rights Agency (CMRRA), which will allow it to perform rights licensing and collections on behalf of labels and publishers, reported Billboard.


SoundExchange was created by Congress to collect master recording performance royalties on behalf of labels and artists for the purpose of digital radio. CMRRA is a Canadian mechanical licensing agency similar to the Harry Fox Agency. It licenses songs to labels for reproduction on CDs, vinyl and digital downloads and collects royalties for them for publishers and songwriters.


The “bundling” of multi-rights licensing across several sectors is expected to evolve, according to experts, and collection rights agencies like SoundExchange are already positioning themselves to prepare for that shift. As an example, SESAC acquired HFA, Rumblefish and Christian Copyright Licensing International. And SOCAN acquired Audiam and MediaNet.


The CMRRA side will continue to be led by president Caroline Rioux, whereas SoundExchange president and CEO Michael Huppe will be chairman of the SoundExchange subsidiary SXWorks, which will house the new operations. The two agencies will handle the administration and distribution of recording and music publishing royalties.


Huppe explained, “We have a simple, yet ambitious goal: to maximize the value of music for all creators – for musical works and recordings alike – wherever their work is used … The acquisition of CMRRA helps us increase efficiencies while also extending service to the publishing sector. This exciting partnership builds on CMRRA’s great relationships with music publishers and licensees, its long record of accomplishments and its stellar reputation.”


SoundExchange’s database houses 30 million recordings, and CMRRA’s has 20 million songs. Eventually the plan is to link the songs to the recordings, which will help streamline the licensing and payment process, according to SoundExchange’s chief external affairs officer Richard Conlon.


Chair of the CMRRA board of directors and president of Sony/ATV Music Publishing Canada Gary Furniss stated, “The board initiated its search for a strategic partner for CMRRA nearly a year ago … The board was committed to finding a firm with the right mix of music industry know-how and a culture of digital entrepreneurship … Additionally, the opportunity for data collaboration will inevitably increase the speed, efficiency and accuracy of royalty payments for everyone.”


SoundExchange paid $884 million to rights holders in 2016, and CMRRA collected approximately $45 million. The terms of the deal between the two entities has not been revealed.


Indie Labels and Warner Music Group Took Market Share in 2016


Warner Music Group and independent labels saw the biggest gains in the global music market last year, according to the figures from the annual Music & Copyright/Ovum report. The numbers are based on revenues in both recorded music and publishing, according to Music Business Worldwide.


In 2016, M&C’s data indicated that when it came to physical and digital recorded music performance, Universal Music Group got a 32-percent market share, down .9-percent year-over-year. Universal’s shares have dropped 3.9 percent since 2013.


Sony also lost .4 percent.


Warner was up .8 percent and the indie sector up .5 percent. Gains in the independent arena – which was the second-largest market, taking up 26.9 percent – were driven by artists like Radiohead. Warner held 18.1 percent of the total market.


When looking only at digital revenues, Music & Copyright showed that Universal came in first with 34.6-percent of shares, down a full percentage point from figures in 2015. Sony also lost .3 percent on digital during the year.


Warner gained the most in digital, up .7 percent, while indies grew .6 percent, coming in with 24.4-percent of total shares.


The independent publishing sector includes companies like BMG, Kobalt, SONGS, Imagem, peermusic and others. Indies enjoyed market growth of .9 percent, up to 41.2 percent, while both Universal Music Publishing Group saw decline.


Warner/Chappell was the only major publisher with growth, up .6 percent year-on-year.


Warner/Chappell head Jon Platt said late last year, “What defines us is our dedication to our songwriters … I’ll tell any songwriter: if you’re just looking for big money, you should go elsewhere. If you want a career, come with us.”

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