licensing

Blip.fm- and Fuzz.com founder unveils new service to handle online music licensing

Friday, September 13, 2013 - 11:55am

Entrepreneur Jeff Yasuda -- of Blip.fm and "people-powered" online radio Fuzz fame -- has launched a new company with the aim of taking "all the complication out of music licensing" for webcasters, online retailers, and more. 

Feed.fm (we last reported on Yasuda's Feed Media, parent to Blip.fm and Fuzz.com, here) will handle the regulatory and payment issues for entrepreneurs and site owners looking to license music online, such as Internet radio.

TechCrunch writes that for a monthly fee, Feed.fm will "add the service’s stations to their site or app. They can also build stations from their own personal collections. And Feed.fm offers an analytics dashboard and A/B testing so publishers can quantify that the music is improving engagement and see how their visitors are engaging with the music."

Yasuda told TechCrunch early testing reveals sites that use music from the Feed.fm service got a 20%-400% bump in average time-on-site, and some e-commerce sites saw sales increase as much as 20%.

Read more in TechCrunch here.

Radio and label groups react to Clear Channel licensing pact with Warner

Friday, September 13, 2013 - 11:55am

Yesterday the nation's largest radio broadcaster announced a deal with one of the big-three label groups to pay for the on-air use of sound recordings (see our coverage here). The Clear Channel/Warner Music Group agreement isn't the first, but it's the largest so far, and the first involving a major label group.

Performers and copyright owners have long fought for compensation for the use of their work by broadcast radio. On the other hand, it's pretty clear that the biggest obstacle to the growth of Internet radio has been this very compensation, which online and satellite operators do pay. So, one interpretation of the deal is that it's a start towards bringing this situation into equilibrium.

When Clear Channel Media Holdings CEO Bob Pittman began making these deals with independent labels and label groups like Big Machine, some observers felt it was actually simply a ploy to turn down the heat from Congress, as more and more lawmakers clamored to make on-air performance rights a law. But with a royalty pact with as significant a player as Warner, some feel perhaps Pittman is indeed fully committing to a digital future for radio. Pittman himself said this deal (and the previous indie deals) are about building a successful digital broadcast business -- which isn't possible under the current royalty structure.

The actual terms of the WMG agreement aren't public. Thirty Tigers' David Macias writes he's heard press rumors of 1% of advertising revenue for on-air plays, 3% for digital plays. Billboard sources say the earlier indie deals were for 1% of terrestrial/2% of digital -- terms all three majors, including WMG, turned down (Economist David Touve has some "back of the napkin" calculations of "the value of a radio performance" based on these numbers here). The Wall Street Journal Corporate Intelligence blog says whatever the percentages, "Clear Channel will pay Warner Music close to $50 million over the next three years... including a portion of that upfront."

Entercom, a broadcast competitor to Clear Channel, has made on-air/online royalty deals with independents as well. Entercom President and CEO David Field applauded Pittman's agreement as "smart, bold and visionary," calling it "another important step forward in establishing a new business model that aligns the interests of artists, labels, consumers and broadcast radio." [Programming note: David Field will keynote Tuesday's RAIN Summit Orlando, more here]

The RIAA, which represents major and some indie labels, seems more skeptical. "It’s important to understand that there is no substitute for actual legislation establishing a legal performance right," spokesman Jonathan Lamy said.

Another music industry lobby, MusicFirst Coalition, called on Clear Channel to break with the National Association of Broadcasters and its opposition to a federal law estabishing a broadcast right for sound recordings. "Unfortunately, Clear Channel and (the NAB) have been the principal roadblocks to ending the loophole that allows AM/FM broadcast radio alone to take music without paying artists or labels," said executive director Ted Kalo.

David Macias, co-founder of indie label Thirty Tigers, wrote in an op-ed in Hypebot that he's worried deals like yesterday's may simply make it even harder for independent artists and labels to get on the air. He worries over "a future where the exposure via public airwaves and public bandwidth for music will be in large part governed by the financial relationships between media companies and larger content providers. This will have a chilling effect on the independent music community from a business standpoint and will increase the likelihood that most of the music that you will hear on the public’s airwaves will be music that a corporation feels can be commoditized."

Like the RIAA and MusicFirst, he feels a "compulsory license" -- where broadcasters could license any music simply by paying an industry-wide mandated rate -- is a better solution. He also brings up the fact that "direct deals" like this circumvent the legal requirement that copyright owners split royalties with performers 50/50.

"Hey artists. So when those payments for non-interactive radio streaming start going to your label through negotiated deals that you’re not a party to because you don’t own your master, rather than going through Sound Exchange, what percentage of those payments do you think you’re going to get? You should call your label now and ask," Macias wrote.

We're looking forward to analyzing this deal further, when/if its terms leak...

Read more in Billboard here, Touve's Rockonomic here, Corporate Intelligence here, and Hypebot here.

In biggest deal of its type yet, WMG gets paid for all CC use of music, presumably for online royalty discount

Thursday, September 12, 2013 - 12:55pm

Radio broadcasters aren't legally obligated to pay for the on-air use of copyright sound recordings. The owners of those copyrights, by and large record labels, have long pressed to change that.

Broadcasters and pureplay webcasters alike, however, are legally obligated to pay for the same recordings for online listening. In some cases, these royalties can amount to large percentages of operators entire revenue. As broadcasters see a future with a higher and higher percentage of their listeners consuming content online and via mobile devices, they've joined with pureplay operators in working to reduce these obligations.

Today Clear Channel, the largest U.S. broadcaster, announced it has secured a licensing deal with Warner Music Group designed to work towards both these ends. It's the latest and by far the largest in a series of licensing deals between major U.S. broadcasters and sound recording copyright owners.

Like the previous deals, Clear Channel will "share revenue" (that is, pay a royalty) "from all platforms" (including AM/FM, where the vast majority of the broadcaster's listening still happens) for the use of recordings. Though the details of these deals are never made public, most believe that Clear Channel will benefit through a reduced royalty obligation for online streams, and perhaps reduced uncertainty over on-air royalties. The record industry has the support of several members of Congress to create a licensable right for on-air use of sound recordings (N.C. Rep. Mel Watt promises to introduce a bill to do just that -- see RAIN here).

CNet writes (here), "The pact, Clear Channel's first wide-ranging strategic alliance with a major label, underscores how both labels' and traditional radio are testing new ways to ensure self-preservation in the digital age."

Clear Channel's on-air/online music licensing deals, to this point, have been with independent labels and labels groups. WMG is one of the "big three" record label groups, including labels like Asylum, Atlantic, Elektra, Nonesuch, Parlophone, Reprise, Rhino, Sire, Warner Bros., Warner Music Nashville and more, with a catalog of more than one million copyrights worldwide.

The deal also includes increased Clear Channel promotion of WMG recordings and artists via its over 850 radio stations nationwide (with a monthly audience topping 243 million listeners), its iHeartRadio online radio platform, and more. Clear Channel says WMG will benefit from "programs to dedicate commercial time specifically to launch new music," and promises special digital and online programming, as well as new targeted user interfaces to promote music purchasing.

Artist Aimee Mann sues content provider to music services MediaNet for infringement

Wednesday, July 24, 2013 - 12:35pm

Singer-songwriter Aimee Mann has filed suit against a company called MediaNet, described by Billboard as "essentially a white label that serves up more than 22 million songs to over 40 music services including Yahoo Music, Playlist.com, eBay and various online radio services."

Mann claims the service has willfully infringed on her copyrights through the unlicensed use of her music, and induced copyright infringement by its partners. She's asking for statutory damages which could end up as high as $18 million.

MediaNet CEO Frank Johnson says Mann's claim is without merit, and says his company has properly licensed Mann's music since 2003, and have made regular royalty payments.

Formerly known as MusicNet, the company was founded in 1999 and backed by music label groups BMG and EMI, along with AOL and RealNetworks. It was on online music store and the music industry's poorly-received answer to the then popular filesharing service Napster. MusicNet and the rival UMG/Sony Music-backed Pressplay were named two of PC World's "25 Worst Tech Products of All Time."

After being acquired by private investors, "the company appears to have had an interesting, legally contentious road toward becoming some form of back office aggregator of music for dozens of online music services," Billboard wrote.

For its coverage, GigaOm commented, "In the bigger picture, the MediaNet affair looks like part of a long and unfortunate history of middlemen in the music industry who have exploited, or outright robbed, the musicians they’re supposed to represent." Such cases "show how musicians’ financial woes arise not just from low streaming royalties, but from the complicated way in which music money is collected and distributed... Going forward, musicians can’t simply rail that streaming services should pay higher fees. They must also explain how to create a more rational system of payments to ensure they receive those higher fees in the first place."

Read Mann's complaint here. Billboard's reporting is here. And there's more from GigaOm here.

AdAge says better targeting of iAds on Apple net radio service will make them more lucrative

Friday, June 7, 2013 - 10:50am

Apple and Sony Music have reportedly reached an agreement to license Sony-owned sound recordings for Apple's upcoming Internet radio service. Sony Music was the final major label holdout; Warner Music and Universal (including EMI) are already in.

"As of earlier this week, the company had yet to sign up Sony/ATV, Sony’s music publishing arm," All Things Digital Peter Kafka wrote today (here), meaning it's not yet full-steam ahead for what the press has called "iRadio."

"But the gaps between Sony/ATV and Apple were supposedly smaller than the ones Sony Music and Apple were looking at a few days ago."

It's expected that Apple will announce the service at its Worldwide Developers Conference on Monday, and make the service public later this year. As an Internet radio service, it's most obvious competitor out of the gate would be webcasting giant Pandora.

Paul Resnikoff at Digital Music News points out (here): "So, kill Pandora, kill? Not exactly: just recently, Pandora CEO Joe Kennedy noted that Pandora's extremely-huge audience makes it nearly-impossible for Apple to boot the app off its iOS deck. Then again, that's what they said about YouTube."

The new Apple service will compete with Pandora not only for listeners, but for advertisers as well. Earlier this week we reported (here) that Apple was retooling its underperforming iAds program to support the webcasting service. AdAge says (here) using the iAd service for the Net radio product will allow Apple "to retain a higher percentage of that ad revenue compared with other iAd inventory. Currently, 70% of iAd revenue is given to publishers who monetize their apps using the service, according to Apple's iOS developer program." According to sources, Apple's deal with music rights holders calls for the company to turn over 10% of ad revenues.

AdAge also reported Apple's service will allow advertisers more accurate consumer targeting than would-be rival Pandora. Pandora steers appropriate ads to listeners based on age, gender, and area code (as supplied by listener). "If a Pandora user changes his or her permanent residence and fails to update their zip code in his or her Pandora account, the ability to target ads based upon location is nullified," AdAge wrote. "Using iRadio on an iPhone will give iAd the ability to more precisely target ads to users based on location." And better targeting can command higher advertising rates.

RAIN Summit West recap: The royalties panel

Friday, May 24, 2013 - 1:20pm

The annual spring RAIN Summit West gathering in Las Vegas last month closed with a discussion of the evergreen topic of music licensing costs and the effects on services. Somewhat encouragingly, the on-stage participants -- representing webcasters, the music industry, rights organizations, and performers -- seemed to agree on more than disagree. The panel, "The Song Plays On," was moderated by attorney and webcasting legal expert David Oxenford.

Attendees heard from artist Patrick Laird, a cellist in the classical/rock outfit Break of Reality. A strong advocate for webcasting, he says his band's experience has led him to believe play (that is, exposure) on Internet radio is far more valuable than the royalties his band earns from that play.

"I'd much rather be played," Laird said. "We've had over 16 million plays in a year on Pandora... we wouldn't get radio play otherwise... but our record sales tripled." He told a story of a promoter finding Break of Reality on line and booking them for a show which paid them more than all their royalties for an entire year.

When the discussion swung to the promotional value of Internet radio versus that of on-demand streaming, Laird (left) said, "Internet radio is what radio has always been, a discovery tool, a way to sell tickets, to fill concerts, to sell music, to get more fans. Internet radio is a better version of radio, it does all those things better. What's important is the growth of the medium. We need to support Internet radio, it's the future of the way people discover music... especially independent artists."

Consultant Ted Cohen, of TAG Strategic, while maintaining that "radio should pay," respects the benefit to artists of being played on services that can now reach "a hundred, two hundred million people." He said, "We're somewhere in the sweet spot -- I don't think the artists and labels are entitled to more... I'm not sure how much less they're entitled to."

This led to panelists considering how services could be even more beneficial to artists. Laird really liked the idea of linking directly to artists' presences on Facebook or YouTube ("that's money right there"), and suggested giving tghe artists themselves an interface to maintain those links.

But SomaFM GM/Program Director Rusty Hodge (right) feels the statutory license is a barrier to some of these methods of promoting new music. He suggested the need for a wider range of licenses, that could, for example, allow for use of music that's currently prohibited by the "performance complement" of the law (such as a rule forbidding play of more than three songs by a single artist in two hours, among others). It "keeps you from doing a lot of creative things," Hodge explained.

Cohen agreed that constraints on webcasters' use of content, even when promoting artists, held back creativity.

Moderator Oxenford then brought up the fact that some services like iHeartRadio and Apple's upcoming service are negotiating directly with copyright owners (and going around the statutory license) to, among other things, avoid the constraints of which Hodge complained. And while services going this route would lose the convenience of a "one-stop" for all their licensing, Cohen said the process of direct licensing has become much easier in recent years: "The goalposts have gotten wider."

Getting back to the statutory license, Oxenford asked if a "percentage-of-revenue" royalty model, such as those employed by publishing performance rights organizations, makes more sense for a young industry like Internet radio (The statutory rate is based on a "per performance" rate, a performance being one song/one listener.).

SoundExchange Senior Counsel, Licensing & Enforcement Brad Prendergast explained "the beauty of a per-performance" royalty is that "every transmission of a track is valued the same -- it's 'delivery mechanism neutral.'" It helps protect the value of the music from an operator that would use a high volume of music but make very little money from the service. (He also reminded the panel that there are indeed some statutory agreements to which SoundExchange is a party that use a percentage of revenue, such as the small webcasters' license).

One recent development the panel brought up was the announced withdrawal of digital rights by some publishers from performance rights organizations (PROs) like BMI and ASCAP. BMI VP/New Media & Strategic Development David Levin (left) explained that publishers are seeing record labels making much more licensing music to services than they are, because the PROs operate under federal regulations that they feel supress the rates they can charge. The publishers tell BMI, Levin said, "Because of the government structure you operate under, we can get a better rate outside of this monopoly, by going direct."

Cohen empathized with the sentiment. "The labels are getting 90% of the revenue, the publishers are getting 10%. That pendulum has to swing a little bit."

We have audio for all of our RAIN Summit West content (including this panel) available via SoundCloud. Look for the links in the right-hand side of kurthanson.com.

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