TODAY'S TOP STORY: Spotify has responded to the barrage of criticism that has followed its decision to appeal the ruling made by the US Copyright Royalty Board regarding the royalty rates streaming services should pay to songwriters and music publishers. It insists that it is fine with the top-level revenue share rate increase, but says that the devil is in the detail and there are big problems with the CRB's detail. Though it doesn't go into much detail about the detail... [READ MORE]
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TOP STORIES Spotify defends its appeal of the new US songwriter royalty rate
LEGAL Shuffling/Hustlin lyric theft case settled out of court
LIVE BUSINESS Coda and A Greener Festival launch initiative for better backstage environmental sustainability
MANAGEMENT & FUNDING Ditto Music launches artist management division
RELEASES Holly Herndon collaborates with AI on new album, Proto
Pan announces soundtrack offshoot, previews Tujiko Noriko film score
ONE LINERS JYP Entertainment, BTS, Arcade Fire, more
AND FINALLY... Ed Sheeran neighbours claim pond is a pool
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Spotify defends its appeal of the new US songwriter royalty rate
Spotify has responded to the barrage of criticism that has followed its decision to appeal the ruling made by the US Copyright Royalty Board regarding the royalty rates streaming services should pay to songwriters and music publishers. It insists that it is fine with the top-level revenue share rate increase, but says that the devil is in the detail and there are big problems with the CRB's detail. Though it doesn't go into much detail about the detail.

A compulsory licence covers the mechanical copying of songs in the US, of course, which means that the CRB sets the rates anybody mechanically copying songs must pay. That includes digital music services, which both copy and communicate music when they deliver streams of tunes to their subscribers. In recent years the CRB has been reviewing those rates, ultimately concluding that the streaming firms should increase the share of revenues allocated to songs from 10.5% to 15.1%.

At its heart music streaming is a revenue share business, with monies generated by the services being shared between the services themselves and the owners of the separate recording and song copyrights they exploit. Every deal is different, but on average recording rights have traditionally been allocated 50-60% of streaming revenues, song rights 10-15%, and the services themselves somewhere between 25-35%. Spotify says it needs at least 30%.

There has been much debate over the last decade as to whether that split of the money is fair, what has often been dubbed the 'digital pie debate'. In the Digital Dollar roundtables organised by the UK's Music Managers Forum and CMU Insights in 2016 - involving artists, songwriters, labels, publishers and managers - most people agreed that the services taking 30% seemed more or less fair (though partly because advances and minimum guarantees also committed to by the services meant that rarely got to actually keep their 30%).

However, it was generally felt that the split between the recording and song rights - at that point 58% for recordings and 12% for songs was common - was probably not fair. In recent years though, in countries where publishers negotiate deals directly with the streaming services, we've seen those companies push their revenue share up closer to the 15% level. Meanwhile, the services have pressured the labels to take a concurrent cut in their share.

In many ways therefore, what the CRB has decided for the compulsory licence in the US pretty much mirrors what has been happening in the open market in countries where judges don't get involved in rate setting. So why did Spotify and its rivals like Amazon, Pandora and Google take the costly (in terms of legal fees) and risky (in terms of reputation damage) step of appealing the CRB's decision as soon as it was finalised last month?

"We are supportive of US effective rates rising to 15% between now and 2022", Spotify insisted in a blog post on its Spotify For Artists website yesterday. But, it then added, only if the licence available to services paying that 15% revenue share rate provides said services with "the right scope of publishing rights".

As noted above, when music is streamed, songs and recordings are actually both copied and communicated (or 'made available'). On the songs side of the music business the licensing of copying (mechanical rights) and communicating (performing rights) has traditionally be handled separately. Which is why, in the US, Spotify must get licences from the performing right collecting societies (ASCAP, BMI et al) while also paying publishers mechanical royalties under the compulsory licence.

However, the compulsory licence recognises this, meaning that the 15.1% rate is (more or less) the figure to be paid across both the mechanical rights and the performing rights, some of which goes via the publisher, some via the societies.

So that's not the problem. However, says Spotify, there are other complications. What about when it streams video? What about when it makes lyrics available? Spotify goes on: "The CRB rate structure is complex and there were significant flaws in how it was set".

"A key area of focus in our appeal", it says, "will be the fact that the CRB's decision makes it very difficult for music services to offer 'bundles' of music and non-music offerings. This will hurt consumers who will lose access to them. These bundles are key to attracting first-time music subscribers so we can keep growing the revenue pie for everyone".

Increased royalty commitments to songwriters and music publishers elsewhere in the world have often been matched by decreases in the revenue share paid to artists and labels. However, Spotify also argues that it's simplistic to assume that any new obligation on the songs side of music licensing will be always compensated on the recordings side.

It writes: "The CRB judges set the new publishing rates by assuming that record labels would react by reducing their licensing rates, but their assumption is incorrect. However, we are willing to support an increase in songwriter royalties provided the licence encompasses the right scope of publishing rights".

None of this will placate those organisations representing music publishers and songwriters, which have been scathing about all the streaming services which have decided to appeal the CRB ruling, and of Spotify in particular. They will likely point out that the CRB didn't just come up with its new rates over lunch one day. There were long drawn out hearings and numerous submissions by all sides as part of the rate review process.

The boss of the National Music Publishers Association, David Israelite, was as scathing about Spotify's blog post as its decision to appeal. He said on Twitter yesterday that it had been a "big mistake to try to deceive songwriters and artists with this blog post", before promising to "breakdown this propaganda blog line by line and expose the truth".

The CRB appeal will be a major PR headache for Spotify and the other streaming services which are likewise appealing the new rates. Not least because the songwriting and music publishing community in America is more organised now than ever, ironically because writers and publishers came together to work in collaboration with the streaming sector to sort out the process of paying mechanical royalties via the Music Modernization Act.

The fact that Apple isn't participating in the appeal also means that music industry campaigners can use the line "use Apple Music if you care about songwriters", which is handy. It's debatable how many music fans would actually switch streaming services as a result of that kind of campaign, but it certainly creates challenges for Spotify, which has been desperately trying to build bridges with the songwriting community in recent years.

The whole thing also illustrates the issue with compulsory licences, which are usually supported by music users and hated by music makers. But they can be problematic for the former group too, in that they don't offer the flexibility of bespoke short-term deals between services and rights owners, and any tricky negotiations have to occur in public.

Those on the music industry side might also point out that, while this compulsory licence may be causing Spotify problems in the US, the company is concurrently trying to force some compulsory licensing on the streaming sector in India after it couldn't agree terms with Warner Music.

So that's all a big fat mess isn't it? You can read Spotify's blog post defending its position here. We await the NMPA's angry response with interest.

If you want to fully understand the complexities around digital licensing and how streaming royalties are calculated and paid, the 'Digital Dollar' book from MMF and CMU is a damn fine place to start, even if we say so ourselves!


Shuffling/Hustlin lyric theft case settled out of court
So, when LMFAO put the lyric "everyday I'm shuffling" into their song 'Party Rock Anthem', did they infringe the copyright of Rick Ross song 'Hustlin', with its line "everyday I'm hustlin"? Yes? No? Yes? No? Well, we'll never know. The Shuffling/Hustlin copyright case has been settled out of court.

Ross reckoned that the similar lyrics did constitute copyright infringement and went legal to prove as much. However, the litigation got caught up in all sorts of technicalities, with Ross himself ultimately being removed from the case on the basis he no longer controlled the 'Hustlin' copyright.

His co-writers on that track, Andrew Harr and Jermaine Jackson, proceeded with the litigation. Following recent manoeuvrings, two courts cases were due to take place this year.

The first case would have been to confirm if Harr and Jackson were still in control of their share of the 'Hustlin' copyright. The second would then have tackled the key question, whether a similar three-word lyric can constitute copyright infringement. It was thought the latter could require 40 testimonies, ten expert witnesses and hundreds of submissions to court.

But none of that will now happen. According to Law 360, a deal was done last week after a mammoth nine hour settlement conference in front of a magistrate in Miami. Details of the deal are not known, but it seems almost certain we'll now not get any court time on the Shuffling/Hustlin copyright question.

Which is no fun for us, but possibly the better outcome for both parties.


Coda and A Greener Festival launch initiative for better backstage environmental sustainability
Booking agency Coda last week announced a partnership with A Greener Festival on a new initiative called Green Artist Rider. The aim is to help promoters provide more environmentally sustainable backstage hospitality to those artists who request it.

Coda artists will be able to opt in to the scheme, with AGF then offering promoters and venues assistance to reduce single-use plastics, source sustainable food, reduce emissions and eliminate waste backstage.

"AGF have regularly seen promoter's 'green' actions stop at the dressing room door", says the organisation's co-founder Claire O'Neill. "We believe this isn't always the will of the artist nor the failure of the promoter, but simply a lack of communication. The work with Coda on the Green Artist Rider serves as a bridge between artists, promoters and venues, and one part of the puzzle, helping to change old practices into better new ways".

Launched by Coda's Alex Hardee at the Green Events & Innovations Conference during ILMC last week, it is hoped that the initiative will spark further debate and action on green issues in the live music industry.

Elsewhere at the GEI event, A Greener Festival presented the first batch of its all new awards, with the winners as follows:

International Greener Festival Award: DGTL Amsterdam
Greener Transport Award: DGTL Amsterdam
Circular Festival Award (for reduced waste and resourcefulness): Wood Festival
Water & Sanitation Award: Paradise City Festival
Greener Catering Award: Roskilde Festival
Greener Power Award: Green Gathering
Pied Piper Award (for greener communication): Wonderfruit Festival
Greener Creative Award: Boom Festival
Community Action Award: Rainbow Serpent Festival
Greener Innovations Award: Smart Power Fuel Reduction at We Love Green


Ditto Music launches artist management division
DIY distribution firm Ditto Music has launched a new artist management company, proclaiming itself to be the first distributor ever to do so. Run by Matt Dodds - formerly of Jem Music - Ditto Management launches with a roster featuring Big Zuu, DJ Nathan Dawe, Bobii Lewis and Nathan Brooks.

"While our competitors are investing in A&R bots and algorithms we are putting our resources into people and building a new, fairer music industry where artists are partners, not employees", boasts Ditto Music CEO Lee Parsons. "Matt is one of the best managers we have worked with and these four artists in particular are amazingly talented and driven. I count myself very lucky that this calibre of talent has entrusted Ditto with the next phases of their careers".

Dodds adds: "Ditto Management is a really exciting new venture and I'm honoured to be heading up the department. I believe having a management company which also offers the option of distribution is an exciting opportunity for any developing artist. The current roster are all acts that have the potential to do great things and I'm looking forward to building a team who share my same ambitions".

Artists who sign to Ditto for management will be given the option - but not obligation - to use Ditto's label and distribution services. Although it might be awkward if they don't.


Approved: Sazzie
Sazzie - aka Sarah McIntosh - first gained recognition as The Good Natured, before label politics left that particular project in eternal limbo. Back to working solo, her latest guise sees her yet again crafting tight to the point pop songs, with a wry - perhaps even a little cynical - sense of humour.

Having released her debut single, 'Do You Work Out?', featuring Mix Master Mike, last year, Sazzie is back with her second offering, 'WTF (Pop Culture)'. With a strong 80s influence, the song tackles social media, celebrity romances and bust-ups, #MeToo and a touch of politics. It also features plenty of the two things you can never have enough of in pop - lists and swearing.

It's a welcome return from someone whose return is always welcome. Listen to 'WTF (Pop Culture)' here.

Stay up to date with all of the artists featured in the CMU Approved column by subscribing to our Spotify playlist.

Holly Herndon collaborates with AI on new album, Proto
Holly Herndon has announced details about her new album 'Proto'. The record will, as hinted at last year, see her collaborate with artificial intelligence on creating new music, as well as various humans too.

"There's a pervasive narrative of technology as dehumanising", says Herndon. "We stand in contrast to that. It's not like we want to run away; we're very much running towards it, but on our terms. Choosing to work with an ensemble of humans is part of our protocol. I don't want to live in a world in which humans are automated off stage. I want an AI to be raised to appreciate and interact with that beauty".

'Proto' is out on 10 May, and you can watch the video for new single, 'Eternal', here.


Pan announces soundtrack offshoot, previews Tujiko Noriko film score
Berlin-based experimental label Pan has announced an offshoot, called Entopia, through which it will put out soundtracks. The first release will be the score for Japanese film 'Kuro' by Tujiko Noriko.

"When we first decided to 'split' the film into what might be described as two parallel layers - the narrated story and the visual story - we found that it opened up an 'in-between' space, a space where what is heard and seen continually wrestle with one another", says co-director Joji Koyama of the film.

"We envisaged that the true setting of the film would emerge from this friction, as something imagined and projected by the audience" he goes on. "After a few screenings we were struck by how some audience members would refer to scenes or events in the film that, for us, did not take place... We both thought of the music of Kuro as a score to this space in-between".

On how he fit music into all of this, Noriko adds: "I tried to think of the pieces in abstract terms, like moods and atmospheres. In a way, the process was quite similar to how I usually make music, in the sense that I have images in my head. Of course in this case there were actual images and a lot of them very close to me, but I didn't want to get overly conscious about them either - I didn't want to get stuck by trying to be too specific".

The soundtrack album is out on 26 Apr. From it, this is 'Rooftop'.


JYP Entertainment, BTS, Arcade Fire, more

Other notable announcements and developments today...

• Korean music company JYP Entertainment has announced a global deal with Sony Music's The Orchard for digital and physical distribution.

• Independent music publishing company S2 has signed a worldwide administration deal with Universal Music Publishing. "It's really great", says founders Savan Kotecha and Sonny Takhar.

• Cage The Elephant have signed a new worldwide publishing administration deal with BMG. "We are happy", says manager Cliff Burnstein. "We are THRILLED", adds BMG's David Hirshland.

• I Am Pop, the platform that helps artists and companies utilise Facebook Messenger as a marketing tool, has raised 2 million euros of new funding. "We are entering an era of post-social", says founder Tim Heineke. "Private messaging is the new social network".

• 7digital has signed a two-year deal with Music Powered Games, which develops online music games that use song lyrics to power gameplay. Specifically, it will provide a streaming service within MPG's US-only MuzArcade app. Elsewhere, 7digital's Deputy CEO Pete Downton has confirmed he is stepping down from the business.

• Bauer Media is set to launch what it claims is the UK's first national country music radio station next month. Country Hits will launch on 5 Apr. It's a genre I've fallen in love with and it's thrilling [THRILLING?] that it now has a home in Country Hits Radio", says The Saturdays' Una Healy, who will be among the presenting team.

• Q Magazine has done an advertorial deal to produce a load of branded coverage for this year's All Points East festival. "Our insight and understanding of Q's audience of music lovers, paired with our editorial and commercial expertise will place readers at the beating heart of All Points East through a creative campaign spanning print, digital, social and experiential", says Bauer advertising exec Abby Carvosso. So that's a shame.

• BTS have announced that they will release new album, 'Map Of The Soul: Persona', on 12 Apr. Pre-orders start today.

• Labrinth, Sia and Diplo will release their debut album as LSD on 12 Apr.

• Karen O and Danger Mouse have released the title track from their 'Turn The Light' album, which is out this Friday.

• Emma Bunton has released another new song from her upcoming new solo album, 'My Happy Place'. Here's 'Too Many Teardrops'.

• Arcade Fire have released new track 'Baby Mine', taken from the soundtrack of Disney's upcoming live action remake of 'Dumbo'. The song itself is a remake of a track from the 1942 animated original, neither of which really needed updating.

• Caterina Barbieri has announced that she will release new album 'Ecstatic Computation' on 3 May. From it, this is 'Fantas'.

• Pheeyownah is back with new single 'Gold'. The track is taken from her debut album, 'Silver', which is out on 3 May.

• Ishmael Ensemble have announced that they will release their debut album, 'A State Of Flow', on 3 May. They will tour the UK the same month. Here's new single, 'Lapwing'.

• Dido will tour the UK in November and December this year - her first tour for fifteen years - to promote her first album for five. She'll kick off in Birmingham on 28 Nov, finishing up at the Hammersmith Apollo on 8 Dec.

• John Mayer has announced shows in London, Dublin and Manchester in October. Tickets on sale this Friday.

• Check out our weekly Spotify playlist of new music featured in the CMU Daily - updated every Friday.


Ed Sheeran neighbours claim pond is a pool
Ed Sheeran's neighbours are yet again complaining about how he is developing his Suffolk estate. Now some are arguing that a wildlife pond dug last year has been converted into a swimming pool. And while wildlife ponds are good, swimming pools are bad.

The musician's original planning application in 2016 said that the kidney shaped pool would be used to "support nature conservation", giving a home to dragonflies and water beetles, as well as drinking water to mammals wandering about the place. Permission was granted by the council, on the grounds that the pool not be used for swimming.

Since its construction though, the Daily Mail reports, nearby residents have noted that a jetty, steps into the water and a Romany caravan have all appeared in and around the pond, making it look more like a swimming pool with a diving board and changing room.

Neighbours have now raised concerns with the council, one writing: "I believe that the development of the site is more about creating an environment for a 'wild lifestyle' rather than the actual 'wild life'". I'm sure if they weren't so very very angry, they would have spent the small amount of time necessary to make that joke really land.

Sheeran has argued that the steps provide emergency and maintenance access, while the jetty and caravan "form interest". But his opposers nevertheless reckon he's up to no good and potentially harming wildlife in the process.


ANDY MALT | Editor
Andy heads up the team, overseeing the CMU bulletins and website, coordinating features and interviews, reporting on artist and business stories, and contributing to the CMU Approved column.
Email andy@unlimitedmedia.co.uk (except press releases, see below)
CHRIS COOKE | MD & Business Editor
Chris provides music business coverage and analysis. Chris also leads the CMU Insights training and consultancy business and education programme CMU:DIY, and heads up CMU publisher 3CM UnLimited.
Email chris@unlimitedmedia.co.uk (except press releases, see below)
SAM TAYLOR | Commercial Manager & Insights Associate
Sam oversees the commercial side of the CMU media, leading on sales and sponsorship, and advising on CMU Insights training courses and events.
Email sam@unlimitedmedia.co.uk or call 020 7099 9060
CARO MOSES | Co-Publisher
Caro helps oversee the CMU media, while as a Director of 3CM UnLimited she heads up the company's other two titles ThisWeek London and ThreeWeeks Edinburgh, and supports other parts of the business.
Email caro@unlimitedmedia.co.uk
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