This week In the Hot Seat with Larry LeBlanc: Monica Corton, Founder & CEO, Go to Eleven Entertainment / Go to Eleven Entertainment Music Royalty Fund.
Anyone short-changing songwriters or music publishers can expect committed publishing activist and music internet theorist Monica Corton to come down on them like a ton of bricks.
Corton‘s deep-rooted music activism is centered on the premise that ongoing problems facing the music publishing community do not result from a lack of effective solutions, but from a lack of power to implement these solutions; that the way for the creative community to build long-term power is by lobbying legislators for constructive changes, and by organizing around a common vision that will serve the diverse interests of music users and creators.
Corton is the founder and CEO of New York City-based Go to Eleven Entertainment/ Go to Eleven Entertainment Music Royalty Fund, a women-led full-service music company focused on servicing female songwriters, artists, and producers through its publishing, artist services, and production divisions.
Corton is also the president of Monica Corton Consulting, a full-service music consulting company focusing on music publishing, copyright, licensing, master licensing, royalties, and business strategies.
Until 2018, Corton was the senior executive VP of Creative Affairs and Licensing at Next Decade Entertainment. Her responsibilities, over a 27-year run, included creative exploitation of Next Decade’s catalogs, signing new talent, negotiating, drafting, and licensing works published and administered by the company, as well as overseeing the distribution of royalties.
Before joining Next Decade Entertainment, Corton learned her trade in junior positions during short stints at Cherry Lane Music, and Boosey and Hawkes.
Corton is a magna cum laude graduate of the Hartt School of Music at the University of Hartford in West Hartford, Connecticut, and holds a Bachelor of Music in Flute Performance and a Bachelor of Music in Music Education. While at Hartt, she obtained certification from the Kodaly Musical Training Institute. Corton, who studied flute with John Wion and Bert Lucarelli, has performed at classical and jazz concerts, and conducted master classes throughout the North East.
Are you optimistic about the music business post the COVID-19 pandemic?
Yeah, I think that the sky is the limit. It is an incredible time to be in music publishing. With all of the things that are happening in North America, and there are lots of interesting new apps, and new games, video games in general. All of the incredible things that you can do with music in a video game. We have AI (artificial intelligence), the great frontier. You can put on a visor, and look at the world in 3D, and hear it in a 360 way. How exciting is that going to be? Where you will be able to feel like you are at a live concert, even though you are not there. That is going to solve so many problems for people living in remote areas.
I see a lot of live music, and my friends over the years have come and gone without that because once they have a family, it is much harder to go to Jazzfest every year. But if they could be in an artificial intelligence program that allowed them to be at Jazzfest at the same time that I was there physically, and they (the promoter) could sell millions of tickets to go, and see those bands, that is new income that we’ve never had before. It is really exciting. I can’t wait for that to really start happening. It has started, but it is really going to kick in over the next 5 years.
If you can dream it, you can make it up. And I think the direction we are going is more toward an integrated market. That is why our (Go to Eleven Entertainment) platform has branding, social media, artist services, and music publishing. We are doing all of those things together. That is how the world functions now. At the same time, with emerging (international) markets, we can embed our songwriters to be writing with the best songwriters in Turkey or in any place around the world. We never had that access before.
Once the COVID-19 pandemic is brought under control……
We can have live again. That is like the thing I miss; hugs, and live music. Those are my two biggest misses with COVID. I can’t wait for it to end, but it has taught us to appreciate things in a very different way.
Why are we seeing such a frenetic buying spree of publishing catalogs by the likes of the Hipgnosis Songs Fund, Primary Wave Music, Downtown Music Holdings, Round Hill Music, Shamrock Capital, Vine Alternative Investments, and others?
Go to Eleven Entertainment is about to be buying too. My company is equity-funded. I am the head of the Go to Eleven Entertainment Music Royalty Fund.
Why such a buyers’ market in music publishing today?
It is because equity figured out music royalties are safe investments that they can do well in, and they are jumping into the market. And it is. We just did an October update for the Go to Eleven Entertainment Music Royalty Fund, and in that update music royalties, as far as alternative investments, were second only to transportation; and only second to transportation by several tenths of a percent. That’s pretty good. People are looking for a safe investment now. The market is all over the place. Interest rates aren’t going to go up. So where do you park your money in an investment that can generate substantial, and regular returns after a 10 year or whatever term your fund is structured at? Music royalties are the place. In addition to that Goldman Sach, and all of the entertainment industry trades have been predicting that the music industry is going to double in value by 2030. So people hear that, and they hear about this investment that you can evaluate.
(Last May, investment bank and research firm Goldman Sachs released a study that estimates the global industry — comprising live music, recorded music, and publishing — will reach $57.5 billion in 2020, about 29% down from an original forecast. In 2019, that figure was $75 billion. Still, Goldman Sachs was optimistic about a quick recovery following the COVID-19 pandemic, predicting that the live sector, in particular, will make a healthy comeback in 2021. Goldman estimates that global industry revenue will reach $140 billion by 2030, driven by live shows and music streaming.)
How will Go to Eleven Entertainment attain a significant slice of the music publishing pie against such heavy competition?
If you look, you can see the trend where everybody thinks that just getting bigger, and signing as much as they can, is their strategy. That is not our strategy. Our strategy is to find the best music that we can possibly find, and to then find as many different licensing sources that we can to try to make those writers money. I believe in quality over quantity, as far as publishing.
You are also president of Monica Corton Consulting.
Well, the consulting was sort of a way for me until I figured out what I was going to do when I left Next Decade Entertainment in 2018.
Are you less active now with MRC?
Yeah, as I said I’m raising a fund during a pandemic and sourcing songwriter purchases so the minute that we close the fund we can buy all of these catalogs. There’s not a lot of time to consult between all of that.
So most everything you do is through Go To Eleven Entertainment?
Yeah, out of the fund.
How many people are working with you?
There are three people working directly with me now. I have two partners who will join us next year when we raise the next fund. Right now, we are raising our first fund. The second fund is much bigger.
Have you signed any songwriters as yet?
We are in the process of doing that. As soon as we close our fund we will start. We have been doing all of the valuations for everybody. So as soon as we close our fund we can start finding our writers.
Your strategy is to work solely with female songwriters? What’s the reasoning behind that strategy?
We are run by women on the music side, and we are focusing on women. We feel that they are a hugely undervalued part of the business, and one (demographic) that we see growth in is working with women. Women have been totally undercapitalized throughout the history of the music business, and they often are discriminated against. God forbid that a writer should have a kid, and not be able to tour. That killed a lot of careers for women (songwriters and artists) and it doesn’t have to. Now we have this streaming economy, streaming performances. For a panel I just did, I found data that more people are streaming music than podcasts which is an incredible thing because it really has only kicked in since the COVID-19 pandemic happened.
In addition to acquiring music royalty income streams, buyers are also interested in wider rights, such as merchandise, name and likeness rights, as well as the writer’s share, neighboring rights, and producer royalties.
It’s (publishing is) an asset that you can value by looking at past royalty statements, and accurately predicting where you are going to level out and, hopefully as in our case, expanding that licensing significantly. Our growth will not only be based in North America but around the world, especially in all of these new emerging markets like in Africa and Southeast Asia. So now we have all of the markets that we are embedded in, like all of Western Europe, Australia, and now these new markets. So it is easy to understand why it is an exciting time to be buying catalogs, and expanding the growth. Also, you can have your writers writing with people in a faraway place which we could never do before because of digital, So the technology is fueling all kinds of opportunities.
Do you have international representation or sub-licensing in place yet?
That is also something we are now trying to set up.
Well, working three decades in music publishing, you almost certainly know where to go.
Yes, I know all the players. And, whoever I don’t know, I will find out pretty quickly.
After years of being overlooked, Africa is now deemed a significant music market. There has been a growing internationalization of African artists with Maleek Berry, Davido, Black Coffee, Yemi Alade, DJ Maphorisa, Aya Nakamura, Fally Ipupa, Moonchild Sanelly, and others.
At the same, Universal Music Group, Warner Music Group, RCA, and several music publishers have jumped into a market that is expected to have nearly half a billion people using mobile internet by 2025.
In 2018, UMG acquired a majority stake in Kenya’s leading label, and AI Records. Warner Music Group has a partnership deal with the Nigerian label, Chocolate City Entertainment. In May, Downtown Music Holdings acquired South Africa-based Sheer Music Publishing. It’s not hard to find Western firms doing business in Africa anymore.
Everybody is. Yes, Downtown just bought Sheer Music, and labels have set up offices over there. You have to think of Africa not as one continent. You have to think of it as different nations that are all expanding in music. Nigeria is a big market. There’s Kenya. We are sourcing a singer/songwriter from Kenya who is phenomenal. I think that there is a tremendous opportunity there. But there is also a complicated situation because the governments there control much of the industry. For example, in Kenya the government controls the broadcasters (regulated by the Media Council of Kenya), and it also controls the performing rights organization (Music Copyright Society of Kenya). So they (the Kenyan government) collects a lot of money, but it doesn’t seem to get fully distributed to songwriters.
As technology continues to improve, there will be further opportunities for music publishers and labels in the emerging markets like Africa, India, China, South Korea, and Brazil. A lot of focus has been on India of late.
Also the Middle East. I think the Middle East is going to be an interesting area also help develop for all of the same reasons. People are investing in local territories because they see music as an opportunity financially.
Many Middle Eastern countries have a combination of Shari’a law, and other civil code systems that do not specifically protect intellectual property rights.
With many of those emerging markets, there are similar concerns. That’s why I particularly find Africa so interesting because it is the beginning of them setting up their (rights) system. While they have laws that protect copyright, the systems that they have to protect creators are really quite interesting. Hopefully, the more that we integrate our writers with their writers, we can show them more the good things than the bad things about our system.
China now pays for the use of Western music now doesn’t it?
(Laughter). I think it is the beginning of it (royalty payments) there too. It’s not all that solid. I don’t know any publisher that has a solid working relationship in China in that they are getting regular royalties, but we are all trying.
Music streaming has awakened a giant in China. Tencent Holdings has a joint venture with Spotify; it owns 10 % of Universal Music Group; and is owner of UMG’s Greater China operations. Tencent Music controls more than 70% of China’s music-streaming market with its roughly 700 million monthly active users, and it owns WeChat, China’s top mobile messaging app with 1.15 billion monthly active users, and its largest video game business.
The Chinese technology giant also owns data centers in the U.S., Canada, Singapore, India, and Germany, and it’s rapidly expanding that ecosystem with new digital services like cloud gaming platforms, and could expand, Netflix-style, into producing its own content, or live streaming concerts.
Tencent Holdings is now planning to increase its stake in Universal Music Group by a further 10% before its option expires in Jan. 15, 2021.
Tencent is loaded with cash, and wields considerable power now, and could put considerable pressure on Western music stakeholders seeking to operate in China and elsewhere. As well, Tencent with its joint label with Universal Music Group, TME, is intent on discovering, developing and promoting Chinese artists domestically, and to the world.
But all of these activities by Tencent are also going to help us protect our music there. Hopefully, we will be able to finally collect for the music that they have been playing all this time that they have not been paying us for.
In the Spring, you wrote two comprehensive papers about monetized music platforms, targeted at artists and singer/songwriters grappling with business solutions in a virtual world against the backdrop of the live music sector taking among the heaviest beatings from the COVID-19 pandemic, including no touring, no festivals, and a staggering loss of income.
I was speaking out on these platforms so I could tell other creators, songwriters, and artists that I knew where they could go.
Three years ago, live streaming was primarily the realm of online gamers and influencers, but the global disruption of the COVID-19 pandemic has elevated live streaming. This has led to artists broadcasting whatever they can on Instagram, Twitter, YouTube, Facebook, and Twitch.
So many artists are trying to build up audiences by just throwing up random streams. Few platforms offer a clear business model, and artists remain mostly in the dark about the opportunities available for monetized live streaming. They are most likely performing to gain exposure, and for free, or shrilling for donations
What fans will eventually pay is still not clear, but artists need to be paid. Perhaps there should be sliding scales of pricing, based on the stature of the artist, the size of the audience, the prominence of the event etc. Is it downloadable, can you access the performance from multiple platforms and other factors.
I wrote the article specifically because I was really frustrated. I was seeing all of these amazing live performances, mostly on Facebook, and I knew that none of those people were getting paid. Maybe, they would get donations because they could put out a donation link to their website, but there’s no guarantee.
And that’s awkward. It’s like passing the hat.
But when you need to do that you do that. It is awkward but if you need money you will do that. That is why I started to research what other real monetized music platforms were out there that are succeeding in paying songwriters and artist appropriately. Twitch kept coming up. People kept saying Twitch this and Twitch that
In 2018. Drake and Travis Scott broke Twitch’s viewing records by streaming Epic Games’ smash hit Battle Royale Fortnite alongside gamer Ninja.
With live shows axed, Twitch has pushed its music affiliations to further attract artists seeking to reach their fan base through music and gaming activities.
Today, Twitch relies heavily on music. Logic signed an exclusive deal with Twitch, and Linkin Park’s Mike Shinoda recently issued an album on Twitch this summer.
Still, there are concerns that Twitch pays only the live audio, it doesn’t pay on recorded transmissions.
I have my own issues with Twitch. Three years ago, when I first learned what Twitch was and that they didn’t have PRO (performance rights organization) licenses at the time, I had a somewhat heated discussion in front of the entire Copyright Society (at the Mid Winter meeting of the Copyright Society of the USA in Napa, California in Feb. 2017) with an attorney about how did they have the right to be using our music on a platform that was hosted by Amazon? I came back from the conference and I called ASCAP, and BMI and asked, “What is going on? How could you not have licensed Twitch?” People were like, “Well, you know…..” They then explained that they were trying to license Twitch, but that Twitch was hiding behind the DMCA (The Digital Millennium Copyright Act).
A lot of the mainstream social platforms have launched emphasizing music, but it’s not their day job. For example, Instagram’s day job is images; YouTube’s is user-generated content; Twitter’s is communication; Twitch’s is gaming, which is definitely live. That is their DNA. Music really was an afterthought.
Yes, but all of the video games have had music in them and, in addition, you could be playing a game, and playing some album behind you. So even if the game wasn’t embedded with that music, you could be playing music in your own realm live in which you were playing the game. There was lots of music use, but they just were not licensing it. To me, that’s a performance license, at the bare minimum, that is what they needed.
A decade ago, commercial infringement was rampant on a mass scale. I recall doing a Google search for Lou Reed that revealed unlicensed and infringing internet use buy such large corporations as American Express, AT&T, Chevrolet, Chili’s, Lysol, Pottery Barn, Vons, Domino’s Pizza, and Netflix. Light years ago, but widespread infringement still continues.
That’s how everything works now. It is light years.
I recently spoke with Gordy Haab who has been writing music for “Star Wars” video games for the better part of a decade, and he told me people strip his music out of “Star Wars” video games or album releases, and they put it up on YouTube. Despite each one of those tracks, on average, having three or four million streams, he earns no royalty income because his music is on YouTube illegally. Walt Disney Studios retains the master and publishing rights of all “Star Wars” properties, and they didn’t put it on YouTube. Users of the games stripped it and put it up. The infringements are so massive that it’s like playing whack a mole trying to take them all down.
It is very difficult. That is why the DMCA doesn’t work. You have big companies that are trying to do that, or they did try to do that in the beginning. The industry tried to stop it, and they couldn’t.
You moderated a panel last week at the Cutting Edge Music Business Conference on “Monetized Music Platforms: You Can Make Money Performing During COVID-19.”
My panelists included Steve Marks from Road Nation, Mat Devine from Cameo, Stephen White from StageIt, and AJ Smith, a DIY artist who talked about using those platforms, as well as others to succeed from an artist perspective.
As Twitch moves deeper into live streaming music performances, artists need to understand that they must create a strong fan base on the platform that watches regularly, not just their one-off performances. Artists can provide subscribed channels as well as also run ads on their channel, link fans to music and merchandise stores, and allow fans to donate directly.
Subscriptions revenue is split 50/50 between the artist and Twitch after taxes, payment processing, bank, and currency conversion fees, etc. Twitch affiliates earn a share of revenue generated from video ads played on channels.
However, artists looking to generate revenue on Twitch face roadblocks and some of Twitch’s monetization features such as subscriptions are only available to Twitch affiliates and partners. To achieve affiliate or partner status with Twitch, would-be streamers are required to meet certain milestones such as a minimum number of followers, and a minimum number of hours streamed per month.
My understanding, when I wrote the article, is that it is only live streaming performances, meaning they are not recorded.
(If a live stream is recorded or saved, or made available on demand, a mechanical rights license is necessary.)
As an artist, you can make money three ways on Twitch. You participate 50/50 in any subscription that is secured on your channel. You participate in bits digital content (i.e. animated emoticons) that can only be purchased from Twitch. You’ll earn 80% of one U.S. cent per bit used, and the remaining 20% is shared with the extension developer. If people use a lot of them, you make some money. And the third way is with donations.
Twitch is a much better platform than any other video platform that I have seen in that you can totally do your own thing, and do it in a creative way. You can also add advertising to your Twitch station, and there are different levels to what that advertising value is based on depending on which advertiser you picked, and how big your channel gets. So the idea for Twitch is that they just want you to create audiences.
All of the platforms want artists to create audiences. They are all about fan engagement.
Yes, but they are just a little different. Now Stageit is like a private concert platform. In that instance, you are reaching out to your fans. It’s a little more controlled. Twitch seems like the Wild West and I still haven’t found a whole lot of artists that are doing it the way I think that Twitch is intending music people to use their channel. And now that they are in broo-ha-ha with all of the labels and publishers I think that it is a weird time for music on Twitch. In fact, I asked Twitch to be on my panel because I featured them so much in my article and they declined to be involved.
(Twitch has been lambasted by music trade organizations, including the RIAA, for its licensing practices for Twitch Soundtrack, a music-streaming service within the platform that offers users a way to avoid copyright takedowns when using music.
Twitch Soundtrack is designed so that music played will only be audible during the actual live stream. It separates audio into its own channel so that music does not appear in archived versions of streams that are available to watch on-demand, afterward — or in any clips fans make of their favorite streamers
Twitch Soundtrack, by separating audio and video, avoids paying for sync licenses which generate significant revenue for labels, publishers, and artists. In effect, there’s no synchronization licensing involved because it is just a live one-off performance.
Twitch Soundtrack includes more than a million songs by independent artists that users can employ in their live streams, legally, and free of charge, with all rights cleared. Partners include SoundCloud, CD Baby, EMPIRE, Create Music Group, UnitedMasters, DistroKid, Westwood Recordings, Dim Mak, Nuclear Blast, Chillhop Music, and the artist mxmtoon, among others.)
Cameo is an awesome platform because it does something completely different. Once a cameo is booked, the artist has 7 days to fulfill the request. They can earn credits referring friends. They can produce promo videos that can be used on their website or on Facebook, Instagram, LinkedIn, TikTok, and Twitter. Cameo customers can register to get more in-depth service or they can just buy a cameo without registering.
Yes, the cool thing about Cameo is that you can do it as much or as little as you want. You can set your price for a cameo. So you can have a sale and sell your cameo for $25 you could get up to $100 or more. The higher level Cameos are $300 a Cameo.
There’s a 75/25 revenue split.
Yeah but that’s pretty good. You can make a lot of money and now the audience is so big on Cameo because they have so many different celebrities and entertainers that do it. Comedians, actors, politicians, and musicians. It’s like a cavalcade of people.
Among Cameo’s leading earners are Snoop Dogg, Ice T, Lance Bass, Flavor Flav, RiFF RAFF, James Kennedy, Tommy Lee, Ne-Yo, Debbie Gibson, Nick Hexum, Drake Bell, Corey Feldman, and Mandy Moore.
Mat Devine (the Head of Music Partnerships at Cameo) was in the (alternative rock) band Kill Hannah. As a musician, he totally understands the music industry. I think he has a really interesting platform that does a lot of good. It’s cool that, at the end of the day, the creator gets the majority of the money.
I quite like Steve Marks’ RoadNation platform which helps to identify cities for band to tour, enabling fans to choose locations. RoadNation then helps artists generate revenues in advance of a tour by selling merchandise, meet and greets, and video messaging with different price points. All of which contributes to a tour’s income stream and generates direct connections with fans.
RoadNation is very cool. When I found out that Steve Marks was the head of RoadNation, I got all excited because Steve was the person at the RIAA (General Counsel for the Recording Industry Association of America) who presented at a publishers’ meeting, that I thought actually cared about business solutions that help artists and songwriters and publishers. He’s like that at RoadNation.
The RoadNation model is supposed to be a re-envisioning of touring, but clearly in a physical world. Right as they were about to launch the platform in a really big way, the pandemic happened, and they pivoted. They pivoted in a really interesting way. They partner a lot with Twitch to do their tours, but the idea is about teaching musicians how to accurately budget. How can you prepare to sell your tickets, and sell other services before? So you know when you are going out on tour that you are going to make money. How many times have you heard new or younger artists plan a tour, and they show up at a venue, and there are only five people there? That used to happen a lot, and that won’t happen on RoadNation because they plan out the full tour, and engage fans to help sell tickets. And then they maximize that by partnering you with other bands so you are helping each other sell the tickets.
RoadNation’s direct artist-to-fan strategy is intended to minimize touring risks.
Steve is a great executive. I’m sure that RoadNation is going to do really well, both in the virtual world and in the physical world once we are in the physical world again.
RoadNation gives bands 85% of the proceeds raised.
Which is awesome. What is most interesting about their model is all of the other things that an artist gets to sell. They sell experiences around their tour. So that can mean the band doing a meet and greet or doing a more significant one-on-one meet and greets with a fan; teaching them their instrument. There’s a lot of different creative things that you can come up, especially if you are multi-talented.
BMG recently announced it will be rolling back at least some aspects of its use of the controlled composition clause in their record deals.
As you know, when the 1976 revision of the Copyright Act came into effect, the mechanical royalty rate began to increase on the effective date of Jan. 1st, 1978 after it had been frozen at 2¢ since 1909. Afterward, the mechanical rates increased very gradually but was frozen in 2006.
Yes, since 2006.
The controlled composition clause on mechanicals—how much the recording company has to pay for each controlled composition– known as a 3/4 rate—has been dropped in most territories, but not in the U.S. or in Canada. But in Canada, the Canadian Musical Reproduction Rights Agency has long negotiated away certain parts of the typical controlled composition clause as far as sales in Canada are concerned.
The rapturous response BMG got is understandable. However, effectively, the mechanical rate is now worth 30% less due to inflation. So is BMG doing songwriters and music publishers that much of a favor?
Well, they are doing more than anybody else is. And BMG just set the example.
And other labels won’t have much of a choice but to follow.
That’s the idea. That’s what happened with (BMG’s lawsuit against) Cox Communications, and that is what is happening now with the mechanical rate.
In the U.S., for recording deals after 1995, the controlled composition clause doesn’t apply to digital. So it became less relevant as the music business moved more toward digital. So is this quite the gift horse that it is being proclaimed?
The thing is that it is a bit too much too late. It’s physical product, and nobody is selling physical product anymore. It looks very magnanimous but if you really look at what the percentages are for physical product being sold now it’s a pittance. All of the money is in streams, and streaming money sucks.
Two decades ago, with physical sales at an all-time high, the impact would have been staggering.
Yeah, it would have been really good if they did this even 10 or 15 years ago. Then it would have really made an impact.
A label wants to protect their downside so they use the compulsory clause so they say they will only pay mechanicals on 10 songs. If an artist has more songs on an album, and some of them were written or co-written by other songwriters who don’t agree to take the three-quarter royalty on physical, the artist has to pony up the difference from their album royalty due to the 10 song cap.
That’s right, they go into the negative. If they have a long song and a bunch of uncontrolled writers there is no way that you are making money. You are getting debited from your record royalties.
To its credit, BMG did sue Cox Communications for failing to maintain a repeat infringer policy that, in effect, voided Cox’s safe harbor protection from liability for their customer’s infringement under the DMCA, reaching a settlement of $1 billion in 2018. This set in motion the other majors clamoring to get onboard, and winning against Cox, and launching a flurry of lawsuits against other net firms, including Grande, Charter, and RCN.
Platforms take safe harbor to mean “what they don’t know is on their platform, they’re not liable for”; whereas the labels argue that certain ISPs should not enjoy safe harbor protection from liability for their customer’s infringement on the basis that they had deliberately poor systems for dealing with repeat infringers, and that platforms should be required to make an upfront effort to avoid copyright violation.
What BMG did with Cox Communications was an incredible, courageous, and amazing thing for the industry because they set a precedent that needed to be set. And then everybody else followed them.
We didn’t have a win against any digital service to that magnitude, ever. So this all began. It can’t stay like this. It can’t be. Not just for Cox, in particular, but it can’t be that people get to launch their digital and then three years down the line we sue them and then they comply. That’s got to stop.
BMG’s action of suing Cox Communications set a precedent that reverberated internationally.
Which is important. It is really important.
Last year, the European Union adopted tough new copyright laws set to take effect by next June. The final wording of EU’s overhauled copyright rules included the controversial Article 17 which would requireinternet services with at least 5 million average monthly users to “demonstrate that they have made best efforts” to prevent the upload of content flagged as copyright-protected by rights holders. When there are no licensing agreements between an internet platform and right holders, platforms will need to make best efforts to obtain authorization.
There was opposition right up to the end over Article 17 from groups representing the likes of Google, Facebook, Twitter, and other organizations that sought to ensure that the EU Copyright Directive wouldn’t put too many new obligations onto their members. That pressure continues over the two year ratification period.
Submissions by both the Computer & Communications Industry Association, and the Internet Association, for example, as part of the United States Trade Representative (USTR) have been particularly critical of the European Copyright Directive.
More recently, a wide-ranging group of rights holder organizations has expressed concerns with the European Commission direction. A letter focused on how Article 17 of the 2019 copyright directive, which addresses the value gap, is being interpreted in the Commission’s consultation. The cultural industry signatories argue that the consultation seeks to rewrite the rules and goes against the EU legislators’ original intention; the result of a carefully crafted compromise reached by the co-legislators, the European Parliament, and Member States.
(The letter from the rights holder organizations read: “We are very concerned that, in its Consultation Paper, the Commission is going against its original objective of providing a high level of protection for rights holders and creators and to create a level playing field in the online Digital Single Market. It interprets essential aspects of Article 17 of the Directive in a manner that is incompatible with the wording and the objective of the Article, thus jeopardizing the balance of interests achieved by the EU legislature in Article 17.
By interpreting Article 17 in a manner that is contrary to the intent of the EU legislature, and the EU copyright acquis (the regulatory framework for copyright and neighboring rights), the proposed guidance amounts to an attempt to rewrite the Directive and amend EU copyright law without due legislative process.”)
The European Directive is a good thing. It is our strongest argument to get changes to the DMCA. And that’s a good thing because we haven’t had any leverage or opportunity to change the DMCA whatsoever. So we should be thanking Europe for being strong enough to get that law passed, and hopefully, it will be implemented in most of the EU nations.
Interestingly, with the trade deals struck earlier in Europe this year, the Americans have tried to take on the safe harbor principle. Tech lobby groups, representing the likes of Google, Facebook, and Twitter, would much prefer it if the American government puts pressure on governments in Europe to ensure that new copyright laws don’t put too many new obligations onto their members.
Yeah, it’s complicated. Nobody has the answers. It is kind of like little ole us against everybody else. Everybody else has tons of money, influence, and power to lobby in Washington.
Though the regulations are still facing a slew of challenges, global digital companies are looking to come into compliance to get ahead of the curve, and possibly gain an edge over competitors.
TikTok signed a deal with indie digital rights managers Merlin, and renewed its existing licensing agreement with Believe, owner of TuneCore, to distribute over a third of all music releases, by volume, across the world.
Another deal was its global licensing agreement, with the U.S.-based National Music Publishers’ Association which permits TikTok to use the repertoire of NMPA members who opt-in to the deal, while those same NMPA members receive a share of advertising revenue from the platform.
In August, Santa Monica-based Snap struck a deal with several big music companies for rights to their music, and L.A.-based entertainment platform Triller signed a deal with digital music firm 7digital for back-end support on its licensing management.
Let’s understand that music has become a core component of social media. Mechanical licenses and mechanical royalty payments by record companies are less prone to inaccuracies than those made by streaming services because labels need keep artists and songwriters in line. Holding back or reducing mechanical payments to them wins few friends. The same cannot be said of Spotify and other streaming services which seem to care little about artists, and even less about songwriters.
Spotify, for instance, doesn’t have to pay artists or songwriters in a timely manner. They can easily hold back payments without retribution.
Yeah, that is absolutely true. That is the problem. They pay a lot of lip service saying that they care about artists, but they have never shown it. Actions speak louder than words. That is what my mother taught me.
American music publishers and songwriters are currently locked in a legal battle with Spotify, Amazon, Google and Pandora (but, notably, not Apple) over how much they will get paid in the United States. The battle is because these streaming services appealed a Copyright Royalty Board (CRB) decision from 2018 to raise mechanical streaming royalties for 5 years from 2018 onwards in the U.S.
In August, the streaming platforms gained a victory in the Copyright Royalty Board’s (CRB) decision which had received approval from the Register of Copyrights Karyn Temple last year. The U.S. Court of Appeals remanded for procedural issues, or further explanation, the CRB decision. The appellate decision, which is still under seal, appears to be on the technical issues, such as the procedure used to work out the songwriter royalty rates, and not the actual rates themselves.
Spotify has since signaled that, despite objecting to the royalty hike in its appeal and in other actions, that it primarily has issues with some of the technicalities in the revised compulsory license, and also with the process the CRB went through in reaching its conclusions.
Well, it’s likely that they are going to get the reduction that they want because the rates were remanded to the CRB. Unfortunately, in these circumstances, rarely do you see something remanded that doesn’t backfire for the creator.
The Trump administrations looks upon the entertainment community as being non-Trumpers. So it’s been, “No favors for you guys.”
Well, what have they done for anybody? The (Sen. Orrin G. Hatch) Music Modernization Act technically passed (in 2018) under the Trump administration, but it had nothing to do with Trump. It had been in the works for a long, long time other than and everything to do with the music industry coming together to say, “We need to collectively try to resolve these issues, and try to get as much as we can into one act.” That was a herculean event, and clearly good but the implementation we are still waiting to see what actually happens.
(The Sen. Orrin G. Hatch Music Modernization Act, signed into law on October 11, 2018, rewrote Section 115 of the U.S. Copyright Act to create a single licensing entity that will oversee the administration of mechanical reproduction rights for all digital uses of music, such as interactive streaming offered by Apple, Spotify, Amazon, Pandora, Google and others. It also repealed Section 114(i) and, consistent with most federal litigation, utilizes random assignment of judges to decide ASCAP and BMI rate-setting cases.)
It’s about money. Music is like the #3 or #4 biggest economy, and one of the biggest exports of the United States. Movies and music are the things the people look to first. Music is an integral part of movies It is the most positive thing that we put out in the universe. And there’s a lot of money people are making from it From all aspects of the creative industries. That has an effect on everybody.
Do you have anything good to say about Spotify?
No, no, no.
As you recall because you were somewhat involved, Cracker and Camper Van Beethoven frontman David Lowery sued Spotify in 2015 for copyright infringement related to unpaid mechanical royalties. That case, combined in 2016 with a similar action by songwriter Melissa Ferrick, ultimately resulted in a $43.4 million class-action settlement against the company to compensate music publishers and songwriters whose compositions were infringed upon without mechanical royalties compensation.
When the lawsuit first happened with David Lowery, I reached out to David because I could see… David could have gone, and just made a case just for himself and done some settlement and won. But that wasn’t what David wanted to do. He wanted to change what was going on. I met with his law firm that was fighting the case because it was my contention that, maybe, what could really happen, that could change something significantly, would be that if we could use some of the proceeds of the lawsuit to create the first accurate, independently published database. David and his law firm liked that idea, and then the judge switched the lawyers who were in charge of the joint case. They combined the David Lowery case with the Melissa Ferrick case and put Melissa Ferrick’s lawyers in charge of everything. They wanted nothing to do with me or the idea of using the proceeds to do this. To do an independent database that would create accuracies in the market in regards to data.
Then simultaneously while that was happening, David Israelite (president of the National Music Publishers Association) jumped in and made a settlement on behalf of the publishers of the NMPA. The publishers of the NMPA were not the ones that were not being paid. They were all getting paid. In effect, he undermined what we were doing in the lawsuit for millions of independent artists because some of the money that should have been part of the lawsuit was used to pay off the NMPA in their Spotify settlement. Basically, the majors got a huge amount of money. Their music had been paid. They were the first ones to get licenses with all of the digital services to begin with. It is the independents that have more trouble getting paid, and certainly all of the do-it-yourself (DIY) artists they weren’t being paid because they don’t understand how to register their songs properly.
After the NMPA negotiated its $30 million settlement, Spotify offered up their unclaimed works files to the settlement group. Every publisher that participated in the NMPA Spotify Settlement was given the chance to claim those works. However, only 15-20% of the unclaimed works were eventually claimed. However, this means that 80-85% of those works still need to be matched to their rightful owners.
I do remember that part of the NMPA settlement was that Spotify provided all of the unmatched to all of the publishers of the NMPA. They could make claims on that and I distinctly remember David presenting in front of an AIMP (Assn. of Independent Music Publishers) event that when all of the publishers looked at that unmatched list, only 10-15% of them made claims, and the rest of it was still unidentified.
To reduce the unallocated black box account it might require copyright owners to pay for third party services to assist the Mechanical Licensing Collective (MLC) in further cleaning up the data.
That supposedly is what the MLC was going to do for all of us. They were supposed to have budgeted for all of the administration services they need to successfully pay all the publishers, and songwriters in a transparent system. Isn’t that the whole reason we have this new entity in the MLC? That said, I do think Music Reports is going to get involved in sorting out some of the black box money. Whether a publisher will have to hire them to assist in getting all their black box money or whether the MLC will utilize their data and hire them to help pay out the black box money, I’m not sure. I am very concerned about there being a real effort on the part of the MLC to locate the correct owners of all the black box money. I do not want a large share to be distributed to the largest publishers by market share. There is only a three-year window for them to figure out the black box royalties and get the MLC fully functioning at the same time. That is not going to be an easy task to complete.
While the MLC could make the raw data from the DSPs available to qualified, 3rd party data processors, hired by such copyright owners, so that they may verify the completeness and accuracy of such records (and potentially claim ownership of musical works associated with the sound recordings listed in such records) there needs to be an approved list of such qualified 3rd party data processors available on the MLC website. Many creators are confounded by the registration process or do not know who these companies are, and could be taken in by unqualified people.
Publishers are not required to provide data to the MLC. Smaller independent publishers or self-published songwriters may not know that they have to submit their data to the MLC in order to get paid from the digital services. Many do not understand that they will not get paid without submitting data and that their royalties will go into an unallocated black box account that gets liquidated by publishers based on market share.
Music Reports is going to be doing some interesting work in trying to help publishers that are concerned about their claims with the MLC. To verify data, and to make sure that they are getting paid what they are supposed to be paid.
You had nearly 28 years in different positions at Next Decade Entertainment before you left.
I know. That’s a long time.
Did you reach a point in your life where you wanted to establish something of your own?
I really enjoyed my time at Next Decade. It was an amazing place for me because I like variety in my day. I was chief cook and bottle washer there. I did the licensing. I sourced clients. I signed clients. I found new ways to exploit their music. I oversaw the royalties. I did every aspect of music publishing.
You did music supervision for films and television too.
We did do music supervision for film and television.
I am so very impressed that you were the Assistant Music Supervisor for “Grumpier Old Men” (1995), co-starring Walter Matthau, Jack Lemmon, and Ann-Margret. How cool is that?
It so funny because I was recently watching it on television, and it was so nice to see it just as a viewer and to look at what we did. I’m so proud of all that stuff.
You were the music supervisor for “The Odd Couple II” (1998), co-starring Walter Matthau and Jack Lemmon. You also served as the music supervisor for the Broadway production of “One Flew Over the Cuckoo’s Nest” (2001), starring Gary Sinise. My wife and daughter got to see the Steppenwolf Theatre Company’s London West End production of “One Flew Over the Cuckoo’s Nest,” directed by Terry Kinney, with Gary Sinise, Amy Morton, Tim Sampson, Eric Johner, and Ross Lehman.
It was so good. But we had a lot of trouble with the licensing of “One Flew Over the Cuckoo’s Nest” because originally there were 6 Jimi Hendrix songs in that show, which fit perfectly, but they hadn’t been licensed. So we went to license them for New York, but the Hendrix estate was in a bad place then and they said no. I had Gary write an impassioned letter to why he wanted the Hendrix music in, and why it was so important, and the ways it was being used. But the answer was still no. We had to change the songs. We ended up changing them to blues songs, and that wound up working.
You also did the music supervision for the off-Broadway production “Freak” (1998) starring John Leguizamo.
We did “Bunny Bunny,” “One Flew Over the Cuckoo’s Nest” and “Freak” because the producer (general manager) for all was Robert Cole. We had a relationship with him through Alan Zwiebel.
(Alan Zweibel was one of the original writers of “Saturday Night Live.” He was a co-creator of “It’s Garry Shandling’s Show,” and was a consulting producer on “Curb Your Enthusiasm.” He also collaborated with Billy Crystal on the Tony Award-winning 2013 play “700 Sundays.”)
Alan wrote much of Gilda Radner’s material. After her death in 1989 from ovarian cancer, he wrote a bestselling book about their relationship titled “Bunny Bunny: Gilda Radner – a Sort of Love Story,” which he then adapted into the off-Broadway play, “Bunny Bunny.”
That was the first production we worked on with Robert Cole. There were 10-minute vignettes about their relationship through dialog that was separated by famous songs from the mid to late ‘70s, including by Bob Seger, Bruce Springsteen, the Bee Gees, etc. I had to clear both the publishing and the master rights for really small fees. That was the first theatrical clearance project I ever worked on, and it was a beast. But I successfully cleared every song and master in the script. Part of the proceeds of the play were going to Gilda’s House, and that is what convinced people to say yes. I had to make them understand that this was a project about art, not commerce.
You are the second person this month I’ve interviewed that worked on “Teenage Mutant Ninja Turtles” films. You were involved in the music of “Teenage Mutant Ninja Turtles III” (1993), while Pete Ganbarg, today president of A&R, Atlantic Records, and president, ATCO Records, was a rookie at SBK Records when he A&Red the “Teenage Mutant Ninja Turtles” soundtracks.
That’s how I know Pete. We were both very, very young. Pete was representing the label and the soundtrack, and I was doing all of the clearances for the film. That was fun. We had ZZ Top in “Teenage Mutant Ninja Turtles III.” It was the third film so any sequel… the third one is sort of the bastard child. The music budget wasn’t nearly as big as it had been for the first two. The first two put SBK on the map. The first platinum album SBK had was for “Teenage Mutant Ninja Turtles.” For this film, they wanted ZZ Top’s “Sharp Dressed Man,” and the original quote that I got from Hamstein Music was way more than our entire budget. I kept talking to them and cajoling them. Finally, they realized that the (band members’) kids liked the Teenage Mutant Ninja Turtles, and they wanted to be in a film that their kids appreciated. That is finally what made them reduce the price so we could afford it.
As senior executive VP of creative affairs and licensing at Next Decade you worked with the estates of Milton Gabler (Commodore Records), Jay Gorney (“Brother, Can You Spare a Dime?”, “You’re My Thrill”), Vic Mizzy (“The Addams Family Theme,” and “The Green Acres Theme), and oversaw music by Boston, Bob McGrath, Jan Johnston, Lucy, and Carly Simon, Millie Jackson, Harry Belafonte, Sammy Hagar, Noah Aronson, Eric Lindell, Noah Aronson, Marcy Heisler & Zina Goldrich, and Gaucho/Sandbox Music.
Given the scope of music you handled—everything from Broadway to jazz to evergreen classic to leading rock and R&B, disco and rap compositions—you must have felt like you were earning PhD in American music studies at the company.
I licensed every possible thing that you could imagine including “The Addams Family” Theme. I was there for both Paramount Pictures films. They had the Hanna-Barbera Productions’ cartoon series (1973), The Shavick Entertainment, and Saban Entertainment 1998 series “The New Addams Family,” the MGM animated series (2013), the Broadway musical (2010), and all of the things that surrounded those projects. There were many different huge projects that came from using that theme. The Broadway musical we were involved in from start to finish. I got a wide-eyed view of how a Broadway show gets to be on Broadway. All of the things it takes and then that show had a very successful international tour. We had to license all of the uses in commercials for all of those shows all around the world.
A little known fact is that George Washington used music to celebrate his inauguration, and then he used the same music for his re-election campaign. Today, presidential candidates continue to use music at rallies and in TV and radio advertisements, to attract followers. But the music being used has transitioned from patriotic folk to contemporary pop or rock standards.
However, problems have arisen when candidates want to use a popular song for their campaign. This has caused numerous issues for particularily Republican candidates, including Ronald Reagan, Mitt Romney, Newt Gingrich, George W. Bush, Ted Cruz, and recently Donald Trump.
Under the Copyright Act, if a politician wants to use a musical work at a rally or in a political advertisement, they need to obtain a license.
Just this year alone, the Rolling Stones, Linkin Park, Neil Young, Phil Collins, Panic! At The Disco, and the estate of Tom Petty are among those who have either sent cease and desist letters or claimed the Trump campaign did not have permission to use their songs.
Trump’s handlers seem to have a cavalier attitude toward music copyright either using songs without licenses or arguing that it is fair use.
Which it is not.
Someone in Trump’s camp might want to reassess its use of Village People’s 1978 hit “Y.M.C.A.” written by producer Jacques Morali and frontman Victor Willis. Taken at face value, the song’s lyrics extol the virtues of the Young Men’s Christian Association (YMCA). However, as a gay anthem, the song was implicitly understood as celebrating YMCA’s reputation as a popular cruising, and hookup spot.
He’s particularly bad at listening to the lyrics of the songs he proposes on his campaign rallies.
So usage of music in a political circumstance doesn’t fall under fair use?
No, you need a license. You need permission. Even if it is played at the venue, because it is a political event, there are carve-outs in the ASCAP and BMI licenses when it comes to being a political event.
As well, there are often restriction clauses in individual composer contracts.
Yes, definitely but because it’s a performing right that’s a little grayer. The real seat of power, as far as stopping this, is with the PROs. They do have procedures for that, but songwriters need to engage with them to help them stop music from being performed at political campaigns. I recently wrote an article asking, “What if we look at it as an opportunity?” Like not stopping but trying to license music for politics. There’s tons of money in it. I successfully licensed a commercial in 2016 of Harry Belafonte’s “Turnaround” (1959) for a gun control ad. It was a very powerful ad, and we got paid. Harry was okay with it. I’m not saying you license stuff you don’t believe in, but I do think that, maybe, you do license things that you do believe in; to set an example, and also, maybe, we can also create a new income stream with political advertising.
The Piano Guys faced legal action after playing One Direction’s hit “What Makes You Beautiful” at Trump’s 2016 Inauguration Ball. Texas songwriter and producer Savan Kotecha, who penned the song as a loving homage to his wife, confirmed that the Piano Guys didn’t seek permission. He tweeted after the performance. “I will be looking into taking action.” That’s chilling.
I think that happens a lot now. There are so many composers on songs now that have nothing to do with the band that is singing them.
Wouldn’t a group performing a non-original song fall under a regular license?
No, because it’s a political event. There are different rules for politics.
(Following string of members’ complaints BMI has created an exclusion clause to prevent politicians from using music without permission. ASCAP’s Political Campaign License agreement provides a blanket license to perform any or all of the millions of compositions in the ASCAP repertory. However, ASCAP members may ask ASCAP to exclude specific songs from a particular political campaign’s license. In that event, ASCAP will notify the campaign of the excluded works.)
With producers, co-writers, and A&R executives often contributing to a track written and recorded by a songwriter artist, there’s often pressure on the artist to relinquish a slice of the publishing, and even part of their authorship. It can also get complicated if a producer says, “I contributed to your song.” There’s no exact math to break it down.
Unfortunately, the land grab for a piece of the publishing is alive and well today, and you don’t have to be so big for people to push you into that. A lot of songwriters are getting ripped off by producers who work on tracks at the end of the songwriting process, and insist on taking publishing in addition to their production points. If a songwriter needs the cut, they wind up giving a portion to that producer to keep the deal alive.
There are also managers who insist on retaining partial publishing with their clients.
I think now is just as corrupt in the way of taking publishing from legitimate songwriters as it was in the ‘50s and ‘60s. People just don’t talk about it as much because the industry leadership is so embedded in that process. I remember meeting with Lionsgate a few years ago; where I was pitching music for “Nashville” for a client who was a major ‘70s country writer. I was told to be prepared to give up publishing to Lionsgate if I wanted a song in “Nashville.” This writer had written his hit song in the ‘70s. Why would he give up publishing to get a synch license?
No wonder that so many artist/songwriters or songwriters are so confused about the music industry, so defensive about being self-published, and hesitant about signing even with a legit music publisher.
Yeah, that’s a complicated issue too. There are a lot of examples of where songwriters have been taken advantage of by their publisher. They have been given a big check and then ignored. I believe our company is different in that we really care about our writers and do want to help grow their catalogs.
I’m going to take a stab, and say you are Jewish.
(Laugh) Yes, I am.
Tell me about rabbi Stephanie Kolin last year offering the Muslim congregation of the Islamic Society of Mid-Manhattan in New York City the facilities of Central Synagogue after a fire. The imam, who led prayers, called it, “one of the most blessed moments of my life in New York,” according to the Jewish magazine, The Forward. The feeling was echoed by members of the Jewish community, including by you.
This took place in an environment in which American Muslims and Jews acknowledge that there is anti-Muslim sentiment in the American Jewish community, and many Jews feel there is considerable anti-Semitism in the American Muslim community.
So how did this momentous moment come about?
Right after the shootings in New Zealand that killed 50 Muslims in the Christchurch mosques (during Friday Prayer on March 15, 2019), I was asked by a friend involved in Muslim/Jewish relations in New York if I could put together a group of congregants at Central Synagogue to go and support the mosque that is around the corner on 55th Street. To go to the mosque with positive signs, “Your Jewish Brothers and Sisters Are Here For You.” Just with positive messages, and stand at the mosque when the members were going to services. To show them that we were there for them. That we weren’t going to let them down. We knew that this was a very scary thing for the community. We were so warmly welcomed. People stopped and thanked us. Omar’s (Mediterranean Cuisine), right next to the mosque gave us food. They gave us water. They were so thankful.
We did it again the following week because what happened is that Omar’s had a fire at 4 A.M., and the fire had damaged part of the mosque. So while we were waiting with all of the congregates who were all outside because they weren’t letting people in–the fire department was doing an inspection to see if the building was safe for them to come–he Imam kept coming out saying, “Please be patient. The fire department is here.” He was so touched that we were there on the second week. Not only Central Synagogue, but the Temple Emanuel had come the first week. More came from Central Synagogue and the Temple Emanuel the second week. And rabbi Stephanie Kolin brought other clergy.
Then the fire department determined that congregates couldn’t go in.
Stephanie called Central. and asked, “Can we bring everybody to Central and have them pray in the Pavilion?” which is the basement of Central. They said, “yes,” and so we marched down the street, 600 people, to the Pavilion We prayed with them in our synagogue. It is something that I will never forget.
Larry LeBlanc is widely recognized as one of the leading music industry journalists in the world. Before joining CelebrityAccess in 2008 as senior editor, he was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-80. He was also a co-founder of the late Canadian music trade, The Record.
He has been quoted on music industry issues in hundreds of publications including Time, Forbes, and the London Times. He is a co-author of the book “Music From Far And Wide,” and a Lifetime Member of the Songwriters Hall of Fame.
He is the recipient of the 2013 Walt Grealis Special Achievement Award, recognizing individuals who have made an impact on the Canadian music industry.