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Capitol Records building

Photo: Bettmann Archive/Getty Images

News
Tech Equity Shares Open Up Possibilities For Artis how-equity-shares-are-emerging-fair-and-just-business-model-artists

How Equity Shares Are Emerging As A Fair And Just Business Model For Artists

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Learn why shared equity in digital innovation opens up intriguing directions for artist-label rights deals
Philip Merrill
Advocacy
Nov 28, 2018 - 2:34 pm

At the Recording Academy, our members have championed the financial interests of music creators for generations. But with digital platforms, new dimensions are emerging in label-artist relations that could provide new streams of compensation.

Enter Taylor Swift's recent UMG deal, which stipulates that all UMG artists — not just herself — will receive shares of any future Spotify payouts resulting from the label’s sale of its equity in the streaming giant, marking a major step forward in artist-label relations.

"Last week's announcement by Taylor Swift and @UMG provides yet more evidence of the ongoing trend towards creators becoming more empowered in their business partnerships. (1/2)

— Music Managers Forum (@MMFUK) November 26, 2018

"As part of my new contract with Universal Music Group, I asked that any sale of their Spotify shares result in a distribution of money to their artist, non-recoupable," Swift wrote on Instagram. "They have generously agreed to this, at what they believe will be much better terms than paid out previously by other major labels."

While the particulars of the deal have not been revealed, the deal goes far to accomplish Swift's stated goal of "positive change for creators," but as Reed Smith attorney Gregor Pryor noted, this trend goes beyond the details of how one major distributes proceeds from its sales of Spotify stock. In an interview with The Guardian, Pryor said, "The world is changing very quickly, and part of that is artists taking control of their own business interests."

The creation of Tidal by Jay-Z is another example of how the next steps in digital disruption might include rights deals where artists have each other's backs.

Once upon a time, it was considered revolutionary for artists to administer their own publishing or control their master recordings. Artists were isolated, and the deals they reached with music labels were strictly individual. It remains true that sales are a vital way to repay advances and that even successful artists face financial challenges impacting their ability to create. But in 2018, an artist’s work with a label can take many forms including personal imprints, creative control, and business arrangements where artists benefit from greater ownership. Given the way music is leading the growth of high-tech tie-ins, the time could be ripe for new deals embracing the business end of label-artist creative partnerships.

Many of the developing topics we track point to this new dimension of artist-business crossover due to music's starring role. Music is what engages social media users most. The most common activity for early adopters of voice-navigated smart speakers is music streaming. In-car powerhouse SiriusXM acquired Pandora Media, reaching outside the car. Even with the uncertainty surrounding competition between internet platforms, their investment was directed toward future tech-based innovation. They could have focused their dollars in the automotive sector instead. Even business-to-business music licensing is an area where fresh possibilities, powered by the internet, point to new dimensions and platforms ahead.

Audio art and entertainment has long provided the soundtrack of our lives, but 24/7 engagement online is opening up new spaces for how our lives and dollars will be spent. Rights-deals and artist-label relations are not just trailing behind these developments. Equity shares in developing high-tech businesses offer a new frontier where artists and labels can pursue their common interests together.

The intersection of art and business has always been an edge-space where new things can happen, and Swift's big "positive change for creators" could lead to investments in innovation that open up new types of remuneration for artists in our ever-evolving music ecosystem,

Celebrating District Advocate Day Engagement & Looking Ahead

Spotify

Photo: Jaap Arriens/NurPhoto/Getty Images

News
Songwriters Take On Digital Giants Over Royalties songwriters-take-digital-giants-over-royalties

Songwriters Take On Digital Giants Over Royalties

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Spotify is standing tallest against higher royalties but Amazon, Google and Pandora have their back – what does this mean for songwriters?
Philip Merrill
Advocacy
Mar 15, 2019 - 10:59 am

Amazon, Google, Pandora, and Spotify chose to appeal a recent royalty increase by the Copyright Royalty Board for songwriters, leading to spirited reaction and rebuttal from songwriters and publishers. As news of the appeals appeared on March 7, songwriter advocates such as Songwriters of North America along with the National Music Publishers Association swiftly responded in defense of the much needed royalty raise.

"[Without] songs these tech companies have nothing to stream/sell. Shameful," said Recording Academy Los Angeles board member and hit songwriter Justin Tranter. "For the first time in 110 years songwriters get an increase in royalties based on how much the music business has changed in that time, and this is how tech companies react. Wow."

A subsequent blog post from Spotify defending their decision to appeal was torn down by NMPA on March 12. Spotify tried to turn down the volume by offering a carefully parsed statement endorsing remuneration for musicians and songwriters in general. The NMPA went through the statement point by pointdismantling them, especially Spotify’s complaints about licensing "scope."

https://twitter.com/rossgolan/status/1104037407173705729

WE ARE NOT SECRET GENIUSES!

WE ARE HUMANS!

SONGWRITERS, MANAGERS, PUBLISHERS, DON’T LET THEM EXPLOIT YOUR NAME AND THEN STAB YOU IN THE BACK!https://t.co/YmkrFVG2IK

— Ross Golan (@rossgolan) March 8, 2019

"It is unfortunate that Amazon and Spotify decided to file an appeal on the CRB's decision to pay American songwriters higher digital mechanical royalties," said Nashville Songwriters Association International Executive Director Bart Herbison. "Many songwriters have found it difficult to stay in the profession in the era of streaming music. You cannot feed a family when you earn hundreds of dollars for millions of streams."

Clearly there will be more discussion and debate ahead as court dates approach and company statements seek to persuade the public. The ability to have its determinations supported in court is essential to the CRB's power, and such tests are usually unavoidable. The tech companies who appealed first will have an awkward time trying to argue that their objections are independent of their supposedly deep commitment to see musicians and songwriters get paid fairly, someday, somehow, just not following the CRB's most recent determination.

Little Big Town, Lawmakers Champion Music Modernization Act: 2018 GRAMMYs On The Hill Awards

GRAMMYs

Photographer: Al Drago/Bloomberg via Getty Images

News
Supreme Court Rules On Copyright "Registration" supreme-court-ruling-copyright-registration-harms-timely-enforcement

Supreme Court Ruling On Copyright "Registration" Harms Timely Enforcement

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Without Congressional action, most music plaintiffs must now wait six months or more for enforcement action to protect new works
Philip Merrill
Advocacy
Mar 8, 2019 - 4:37 pm

On March 4, the U.S. Supreme Court unanimously affirmed a lower court ruling that narrowed the definition of making a "registration" with the Copyright Office, requiring federal processing to be completed by the agency before permitting the judiciary to deem that a work has been registered. Justice Ruth Bader Ginsburg wrote the opinion in the case titled Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC.

While some provisions for pre-registration copyright enforcement exist, the logic of her ruling makes clear that a strict interpretation of the statute prevents mere copyright applications for registration from being given the same status as those completely processed by the Copyright Office itself. The delay this forces on the music community is likely to be damaging, and new litigation can be expected to address the need for more robust enforcement provisions during what is now clarified as the pre-registration period.

The Copyright Alliance, Authors Guild, and RIAA all expressed their unhappiness with the outcome.

"We are disappointed in the Supreme Court's ruling requiring the Copyright Office to issue a registration certificate before meaningful action may be brought by creators to enforce their rights in court," said RIAA Chairman/CEO Mitch Glazier.  "This ruling allows administrative backlog to prejudice the timely enforcement of constitutionally based rights and prevents necessary and immediate action against infringement that happens at internet speed.  Given this ruling, the Copyright Office must also work at internet speed to ensure adequate enforcement protects essential rights."

After celebrating the signing of the Music Modernization Act into law on Oct. 11, the Recording Academy's District Advocate Day provided a defining moment of its own, looking ahead to pressing issues that the MMA did not address. One of these is the incomplete modernization of the Copyright Office itself. These include digitization of legacy tasks and upgrading of the agency's infrastructure, two separate modernizations that are mid-way and challenging.

Another pending issue builds on years of effort to secure a small claims enforcement channel for independent songwriters and artists unable to afford the costs of federal litigation. These reforms or important to ensure that the Copyright Office is able to adequately support the copyright industries that provides so much value to the United States economy. The Fourth Estate ruling itself points to the gap that the RIAA's Glazier called out as needing to be addressed, namely "timely enforcement" versus "delays."

https://twitter.com/AuthorsGuild/status/1103044034065588231

Copyright Owners Must Wait to Sue https://t.co/ajMMZ2fZky

— The Authors Guild (@AuthorsGuild) March 5, 2019

Key concluding language in Ginsburg's ruling reads, "Delays in Copyright Office processing of applications, it appears, are attributable, in large measure, to staffing and budgetary shortages that Congress can alleviate, but courts cannot cure." For example, if the average processing time for an application is seven months, blame Congress because the Court's hands are tied by its own strict interpretation of how "registration" must be defined.

One potential alternative is to apply for status within a category of claimants who can bring enforcement actions before distribution and before registration is "made" and completed. It seems likely potential plaintiffs will explore how far this category can be stretched, perhaps applying for pre-registration status to sue at the same time they apply for copyright registration. The gap between this lengthy, expensive process and intellectual property protection is unfortunate, but the Supreme Court has decided.

Now that the MMA has passed, modernization continues to be an important issue, now for the Copyright Office in particular. Justice must serve the timely enforcement needs of America's intellectual property owners. The delay this unanimous ruling imposes must focus our attention on how we will work with lawmakers and music stakeholders in the future to ensure that intellectual property is protected.

Celebrating District Advocate Day Engagement & Looking Ahead

Arts Advocacy Day

Arts Advocacy Day 

Photo: Americans For The Arts Twitter

News
Arts Advocacy Day Galvanizes Hundreds In D.C. arts-advocacy-day-galvanizes-hundreds-activists-they-meet-congress

Arts Advocacy Day Galvanizes Hundreds of Activists As They Meet With Congress

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The Recording Academy is a co-sponsor of this annual event that equips advocates for meetings with policymakers
Philip Merrill
Advocacy
Mar 6, 2019 - 4:33 pm

Capitol Hill was the center of the arts world this week as Americans for the Arts welcomed hundreds of artists, students and teachers to Washington, D.C. for the 34th annual Arts Advocacy Day. Arts activists spent their time in the nation’s capital championing key arts policies including music licensing reform, arts funding, the charitable tax-deduction, and ongoing efforts to improve arts education.

On March 4 at the beginning of the two-day National Arts Action Summit, more than 500 grassroots advocates spent the day absorbing the research they need to express arts policy arguments. It also provides a unique environment for networking and strategizing with fellow activists in the Arts Advocacy Day community.

Michael Lewan and Brian Stokes Mitchell

Recording Academy Director of Government Relations Michael Lewan and actor Brian Stokes Mitchell at Arts Advocacy Day

The Recording Academy is among Arts Advocacy Day's National Partners, and our Director of Government Relations Michael Lewan serves on the Summit's Legislative Planning Committee. Lewan addressed the gathering of arts advocates that day, thanking them for supporting the Music Modernization Act and discussing the next battle to secure a terrestrial performance right for recording artists.

The evening of March 4 featured the Nancy Hanks Lecture on Arts & Public Policy at the John F. Kennedy Center for the Performing Arts. It was delivered this year by GRAMMY winner Rita Moreno, who also enthusiastically Instagrammed a selfie with her daughter and U.S. Supreme Court Justice Sonia Sotomayor, who introduced Moreno.

At Tuesday's Congressional Arts Kick Off Event, Ben Folds, Brian Stokes Mitchell and Moreno spoke about how vital music and music education was for them when they were younger. Lawmakers as well as National Endowment for the Arts Acting Director Jen Hughes and National Endowment for the Humanities Chairman Jon Parrish Peede spoke to the group, thanking the Arts Advocacy Day assembled community for supporting vital policy issues. 

https://twitter.com/Americans4Arts/status/1102960061012422656

Would you look at this group of arts advocates? The future of the arts is looking bright indeed. #artsadvocacy pic.twitter.com/YcR7lx131P

— AmericansForTheArts (@Americans4Arts) March 5, 2019

Congressional champions for education also weighed in with their support of the arts. Senator Tom Udall (D-N.M.), Congresswomen Chellie Pingree (D-Maine), Betty McCollum (D-Minn.), Debbie Dingell (D-Mich.) and Suzanne Bonamici (D-Ore.) all spoke about increasing investments in arts in the communities and funding for the NEA, NEH and music education. 

In all, more than 85 organizations got involved in this year's Arts Advocacy Day as co-sponsors. This event serves as a nice opportunity to look ahead at the Recording Academy's own annual Advocacy celebration and day of action, GRAMMYs On The Hill, which is set to take place on Capitol Hill in April.

Quincy Jones, Linda Perry & More: 61st GRAMMY Nominees Who Put Music Advocacy In Action

streaming_music_advocacy-1083228860.jpg

Photo by Thomas Trutschel/Photothek via Getty Images

News
What Streaming's Record Year Means For Radio streaming-earns-major-labels-record-income-radio-lobbies-outdated-loopholes

Streaming Earns Major Labels Record Income As Radio Lobbies For Outdated Loopholes

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Under the newly passed Music Modernization Act, artists and songwriters alike will benefit from streaming profits, yet radio still seeks unfair privilege to pay no performance royalties
Philip Merrill
Advocacy
Feb 27, 2019 - 12:57 pm

Music's big three labels had a landmark year in 2018. Reviewing data compiled by Music Business Worldwide, Rolling Stone reported $19 million per day of major label revenue from streaming in 2018, which can easily be considered as a massive triumph for major labels. Thanks to the Music Modernization Act, which was signed into law last year, this money will not only be shared with the artists but a fair market share will now go to the songwriters, too.

This is good news all around for monetizing the new industry. Looking at reported revenue from Sony, Universal and Warner, MBW tallied more than $6.9 billion in 2018 revenue from streaming. Compared to 2017's total of $5.3 billion, that is a $1.6 billion increase. These figures prove that, even in the music business economy where technical innovation can outpace due compensation legislation, there is real growth to be made.

But as streaming platforms find their footing, older formats struggle to evolve. In what has become a meaningful tradition for radio broadcasters, Congress has reintroduced the Local Radio Freedom Act (LRFA) once again, a resolution seeking to exempt broadcast stations from the burden of paying musical performers anything for playing their recordings. Meanwhile in the same world where streaming and innovation have made growing revenues real, it seems hard to believe that the past is a safe guide for terrestrial radio’s future, but still believers in LRFA seem to reject doing things differently.

On Feb. 14, the non-binding Local Radio Freedom Act was introduced into the Senate with its House companion introduced on Feb. 19. The National Association of Broadcasters expressed the gratitude of “America’s hometown broadcasters” on Feb. 20 in support of LRFA resolutions. However, this is a strange ritual that continues Congress after Congress in an attempt to deny paying artists, musicians and producers for the use of their sound recordings. The resolution seeks to entrench the U.S. as the only free market country in the world without a performance right for artists, joining North Korea, Iran, and China. As the industry, and the world, embrace innovative new platforms that benefit artists, platforms and fans, the radio industry doubles-down on outdated laws and technologies. 

https://twitter.com/musicFIRST/status/1098963875964375040

ICYMI: “The NAB will dedicate months and spend millions accumulating names on a motion that falsely protects ‘local radio’ and that will never become law.” Our full statement on @nabtweets’ Local Radio Freedom Act here: https://t.co/eOiN9Rc5zG

— musicFIRST (@musicFIRST) February 22, 2019

Music Business Worldwide's report also shows declining physical sales, which is nothing new, but its numbers surrounding streaming give cause for hope in fairly monetizing and compensating the platforms replacing physical. Radio, on the other hand, has seemed to resist this type of progress. Holding back an industry and then using its money troubles as a reason to fight change is what the LRFA stands for, not love of radio.

Radio Station Owners Petition For Greater Consolidation 

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Some of the content on this site expresses viewpoints and opinions that are not those of the Recording Academy and its Affiliates. Responsibility for the accuracy of information provided in stories not written by or specifically prepared for the Academy and its Affiliates lies with the story's original source or writer. Content on this site does not reflect an endorsement or recommendation of any artist or music by the Recording Academy and its Affiliates.