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CMU Digest
CMU Digest 08.06.20: Warner Music, Black Out Tuesday, Cox Communications, Spotify, Festival Republic
By Chris Cooke | Published on Monday 8 June 2020
The key stories from the last week in the music business…
Warner Music became a publicly listed company again as owner Access Industries sold 77 million shares in the business on the Nasdaq stock exchange in New York. Shares were initially sold at $25 each – valuing the music firm at around $12.8 billion – with the share price initially surging as high as $33. Access netted more than $1.9 billion from the share sale despite keeping more than 80% of the company – it paid $3.3 billion for the entire Warner Music Group back in 2011. [READ MORE]
All three major record companies made significant commitments to fund projects that combat racism and prejudice following the Black Out Tuesday initiative. The wider music community paused its operations for 24 hours in solidarity with the Black Lives Matter movement in the wake of the controversial death of George Floyd. Many used the day to consider how they could help tackle discrimination and enable more diversity within their own companies and beyond. Universal announced an ongoing taskforce and $25 million fund to support such activities, while both Warner Music and Sony Music announced $100 million funds to support projects focused on social justice and fighting racism. [READ MORE]
A court in Florida pretty much held up the record industry’s billion dollar legal win over US internet service provider Cox Communications. Last year a jury ruled that the net firm’s policies for dealing with prolific copyright infringers among its customer base were not sufficient for it to rely on the safe harbour that protects internet companies from liability for their users’ infringement. The judge overseeing the case this week rejected most of Cox’s arguments for setting that ruling aside, although did say that the number of distinct works infringed by Cox customers should be recalculated which could reduce the overall damages bill. [READ MORE]
Spotify pulled Kobalt into its ongoing legal battle with Eminem’s publishing company Eight Mile Style. The streaming service is being sued over previously unpaid mechanical royalties on streams of Eminem’s songs, even though the 2018 Music Modernization Act was meant to stop such lawsuits. In its latest legal filing, Spotify argues that it was in fact licensed to stream the Eminem songs via its administrative relationship and subsequent direct licensing deal with Kobalt, which acts as Eight Mile Style’s rights administrator. Eight Mile Style denies its catalogue was covered by Kobalt’s Spotify deal, while Kobalt said that Spotify was mischaracterising that deal and its relationship with the Eminem company. [READ MORE]
Festival Republic’s Melvin Benn floated a draft proposal for getting full capacity concerts back up and running as quickly as possible in the UK. He argued that reopening the live sector after the COVID-19 shutdown with reduced capacity shows – so that social distancing rules can be enforced – wasn’t commercially viable. His draft proposal would set up a system whereby ticket-buyers would be required to get tested for COVID-19 and then participate in the NHS’s in-development track and trace programme that will alert people if someone they have been in contact with has tested positive for the virus. Admission to the show would then be conditional on the ticket-buyer testing negative for COVID-19 and not being alerted by the NHS of any contact with the disease. Benn is further refining the proposal and also inviting feedback from the live sector. [READ MORE]
