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Insights Blog: Five key developments in music rights this year

By | Published on Wednesday 7 December 2016


Originally published to accompany the CMU Insights masterclass on key developments in music rights that took place in March 2017. 

It’s been another busy year in the world of music rights. There has been lots lobbying and litigation. Plenty of campaigns within the music industry and reviews within political circles. And a handful of innovators experimenting with new approaches.

The aim has often been to clarify and simplify the way music rights are exploited and licensed, or to throw more transparency into the mix, or to assist the owners and beneficiaries of song and recording rights as the recorded music market increasingly shifts to streams.

We’ll review it all at the CMU Insights masterclass ‘The Key Developments In Music Rights’ next March. In the meantime, here are the top five developments you should be aware of…

1. Safe harbours and the ‘value gap’ have been a big talking point in the music community again this year. The safe harbours protect internet companies from liability for copyright infringement if their customers use their services to distribute content without licence.

It’s the safe harbours that allow companies like YouTube to operate opt-out rather than opt-in streaming services; something that undoubtedly strengthens such platforms’ negotiating hand when they are sorting out licensing deals with the labels and publishers.

The music industry would like safe harbour rules revised so that services like YouTube are no longer protected. In the US, the Copyright Office announced a review of safe harbours resulting in a much more vocal campaign on this issue from artists, songwriters, labels and publishers.

The Copyright Office has now launched a second stage to that review. Though with the boss of that agency recently removed and no one certain what position Donald Trump’s government will take on all this, it remains to be seen if anything tangible happens on the safe harbour front in America in 2017. Probably not.

2. The European Commission published a new draft copyright directive. This also included a review of the aforementioned safe harbours, and some revision of how the safe harbours apply to YouTube-type services is much more likely to happen within the EU. Though quite what that will mean in practical terms is not yet clear.

Meanwhile the draft directive also includes measures that could allow artists and songwriters to demand more transparency in terms of what happens to streaming income as it flows from a digital service through labels, publishers and collecting societies to performers and creators.

From an artist perspective, the lack of transparency across the entire streaming value chain is arguably the single biggest issue, so it will be interesting to see what the final version of the new directive says about all that.

3. Duran Duran tested the reach of the American reversion right. Under US copyright law, songwriters who assign their songs to music publishers have a statutory right to reclaim those rights after 35 years. The result of copyright law passed in 1978, the reversion right has only recently properly come into effect, and the specifics of how it works are still being tested.

What about UK songwriters who assigned the rights in their songs to publishers for ‘life of copyright’ 35 years ago? Can they automatically reclaim control of their rights within the US, or does it depend on the specific wording of their original publishing agreements?

When Duran Duran tried to reclaim the US rights in their early songs their publisher – a Sony/ATV subsidiary – went to the High Court in London and successfully argued that the band’s publishing contract meant there was no American reversion right.

It remains to be seen if the band appeal, and what impact the ruling has on other UK songwriters who wrote hits in the 1980s.

4. The review of the consent decrees that regulate US collecting societies BMI and ASCAP backfired. Music publishers hoped that the review would reduce the regulation. Instead it kept all the current rules in place, and then declared that under those rules BMI and ASCAP must operate a so called 100% licensing system, something they really don’t want to do.

That matter is now in court. Even if BMI and ASCAP successfully overturn the 100% licensing decision, there remains the fact that the draconian regulation of collective licensing Stateside – coupled with the compulsory licence that exists for the mechanical rights in songs – are creating all sorts of uniquely American issues for songwriters.

Meanwhile, one attempt to circumvent some of those problems – ie artist manager Irving Azoff setting up a mini collecting society that sits outside the consent decrees – will now be tested in court after the US radio industry sued. This is basically an attempt to force some regulation onto that organisation too.

5. Back in the UK, more attention has been given to a recent move by some artists to start licensing the live performance of their songs directly, rather than via the collective licensing system, as is the norm.

Under this alternative approach, as artists go on tour they temporarily pull the live performance element of their song copyrights out of collecting society PRS, and then negotiate a royalty for the public performance of their songs directly with the tour promoter.

It generally means the artist gets paid quicker, they don’t have to pay a commission to their society, and there is more transparency, especially when the tour goes global and multiple societies would be involved under the collective licensing method.

Though it also poses challenges for the collecting societies, which may still need to be involved for support acts and cover versions. All in all, opinion remains divided on the pros and cons of this approach.

For more details on the CMU Insights seminars and masterclasses click here. For more information on our in-house training services click here.

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