|TUESDAY 25 JUNE 2019||COMPLETEMUSICUPDATE.COM|
|TODAY'S TOP STORY: Apple has claimed that it receives a commission on just 680,000 of Spotify's 100 million premium subscriptions, and that commission is 15%, not 30%. These figures are in the tech giant's formal response to Spotify's competition complaint in Europe, in which it disputes the streaming firm's claims that its app store policies contravene competition law... [READ MORE]|
Apple says Spotify has exaggerated the impact of its app store fees
Spotify went big when it filed its competition complaint with the European Commission in March, launching a whole website to accompany it. A long time coming, Spotify's complaint listed various gripes about the way Apple controls access to customers who stream music via an iPhone or iPad, though the biggest moan was about the so called Apple tax.
This is the 30% fee that Apple charges on some purchases made through apps that are operating on its iOS platform. Digital service subscriptions are one of the purchase types where Apple takes a cut, although its commission drops to 15% after twelve months.
For streaming music services, the Apple tax is a problem, because their own profit margin - ie the revenue that they don't have to hand over to the music industry - is about 30%. Unable, therefore, to swallow Apple's commission, they have to pass that charge on to the consumer. Which makes it look, to iOS users at least, like all the other streaming services are 30% more expensive than Apple Music.
Now, streaming services operating iOS apps are not obliged to allow users to pay their subscriptions via their phone. So Spotify can send people to its own website, sign up new subscribers there, cut Apple out of the transaction entirely, but still provide its service to the user via Apple devices.
And that's exactly what Spotify did. Hence why Apple is not now taking 30% of any Spotify subscriptions, because everyone who signed up via the iOS app did so more than a year ago. Meanwhile only 680,000 Spotify subscribers are still paying their subs via the Apple system, which is where it gets to charge its 15% fee.
A key theme of Apple's response to the EC - actually filed at the end of May - is that Spotify is greatly exaggerating the impact of its app store commission. Both in terms of the what commission is charged (by talking about 30%, even though that no longer applies to any Spotify consumers), and by implying it affects a much bigger slice of its user-base.
Of course, when griping about Apple's app store policies, Spotify didn't just moan about the existence of the Apple tax, but also about other rules around the way you can communicate to customers via your iOS app. Yes, Spotify can - as it did - stop taking payments via its app to avoid paying Apple its cut. But it can't clearly instruct iPhone-owning users about how they should go about signing up for a premium account elsewhere on the net.
Given that for Spotify the freemium level is in many ways a loss-leader to sign up premium subscribers - and given that Spotify's free service is most limited on mobile devices, limitations designed to make premium more attractive - ideally you want to make it as easy as possible for freebie users to go premium on their phone.
However, once you cut Apple out as a transaction partner, you can't directly link iOS freebie users through to other payment platforms. So you're reliant on those users having the inclination to open a browser, go to spotify.com and go through the payment process on that site.
Therefore, Spotify would likely counter to Apple's submission, yes the Apple tax may now apply to a small minority of its users, but by avoiding paying its rival a 15-30% fee on more subscriptions, it had to make it much harder for freebie users to become paying users on their mobiles. Which could have a negative impact on overall premium sign-ups.
In addition to Apple's line that Spotify has been exaggerating the impact of its app store fees and policies, it also continues to claim that its rival is just trying to get a free ride. Spotify, the argument goes, wants to continue utilising an operating system and app framework that Apple paid to build without contributing to the costs of running that platform.
In a blog post responding to Spotify's original EC complaint in March, Apple wrote: "Spotify wouldn't be the business they are today without the App Store ecosystem. But now they're leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that's wrong".
Kanye West attempts to ensure his EMI dispute stays in California
West is trying to get out of his ongoing contractual commitments to EMI. He sued first in January in the Californian courts. His choice of court was important, because key to his case is a rule under Californian state law that says that no one can be forced into a service contract that lasts longer than seven years. West started working with EMI in 2003.
It's long been debated in the US music industry as to whether that so called seven year rule in California applies to record and publishing contracts, which traditionally oblige artists and songwriters to deliver a certain number of records or songs, and are therefore linked to output rather than time. Labels and publishers usually argue that their contracts are rights contracts not service contracts, so the seven year limitation does not apply.
However, before getting too deep into that debate, EMI's main argument when it counter-sued in March is that its deal with West falls under the laws of New York state, where the seven year rule does not apply. In its legal filing, EMI went to great lengths to state how West had been well advised when signing his contract with the music publisher in 2003, and that lawyers would have made him aware that any future disputes must be heard in New York.
That hasn't stopped West trying to force his legal battle with EMI back to California. His latest legal filing argues that the New York case should be dismissed and the music publisher should have to refile its action in the state where the dispute began. By going legal on the other side of the country, West added, EMI was simply trying to "escape" the strict employment laws of California.
Throughout the dispute, West has made bold statements about his EMI deal, which he argues amounts to "servitude". Last week's legal filing had similarly bold language.
According to Law360, it stated: "Even if Mr West's publishing contracts with EMI were not unfair (they are), even if their terms valued Mr West's contributions in line with the enormous global success he has achieved (they do not), and even if EMI had not underpaid Mr West what they owe him (they have), he would be entitled to his freedom".
In between the legal filings, both parties have been very busy behind the scenes trying to negotiate a settlement. And it looked like good progress was being made, particularly when they both requested last month that their respective litigation be further paused so that those talks could continue.
Last week EMI said that, although it may as yet seek a summary judgement in its New York case, at the same time settlement negotiations are ongoing and "the parties have continued to make progress".
James Blake joins Pulse
"I'm THRILLED to be working with James, as he is an artist I've admired for many years", says Pulse's Senior Director, Creative Markell Casey. "It's a testament to the brilliant team here at Pulse as he could have gone anywhere else but instead chose to be with us".
The company's president Maria Egan adds: "We are honoured to be able to join forces with such a seminal artist as James Blake. This is such an important signing for Markell and our team in our mission of creatively supporting the best in class in music of all genres".
SGAE members vote against reforms demanded by CISAC and Spanish government
Pressure has been piling on SGAE for some time, of course, in response to allegations of incompetence, bad governance and outright corruption, most recently regarding the distribution of TV royalties.
The global music publishers, who traditionally rely on SGAE to license their rights to large groups of licensees in the Spanish market, became increasingly vocal in their criticism of the organisation in 2017. They subsequently called on the global body for song right collecting societies - CISAC - to take action, while adding that they were now looking into alternative licensing options in Spain.
CISAC then made a number of recommendations for reforms at SGAE to deal with the criticisms, and later stated that if the Spanish society didn't implement those reforms sanctions could follow. It then made good on that threat last month, suspending SGAE's membership of SGAE for a year.
At the time, CISAC chief Gadi Oron said of the expulsion: "This regrettable step is the culmination of a crisis that has harmed Spain's hard-working musicians, songwriters and music publishers for many years. It is a story of unfair distribution practices, discriminatory treatment of rightsholders, conflicts of interest and governance weaknesses".
He added that in the weeks running up to CISAC's annual General Assembly, where the decision to expel SGAE was made, the Spanish society's new President, Pilar Jurado, "took some encouraging steps to start addressing CISAC's requirements. These were highly publicised, but they were, in reality, not enough. Also, there was and continues to be doubt as to whether the SGAE assembly which meets on 24 Jun will support these reforms, as previous attempts to pass reforms were rejected when the decisive moment arrived".
Those doubts were justified. According to El Pais, only 1356 of the 18,000 SGAE members with voting rights took part in the vote on Jurado's proposals to reform the society in line with CISAC's demands. Of those who voted, 62.78% supported the reforms, but under the organisation's constitution a two thirds majority was required.
While the result means a quick readmission into CISAC is now unlikely, in the short term SGAE management will be more bothered about the Spanish government's next move. Like CISAC and the global music publishing community, the country's culture ministry has been demanding reforms at the collecting society. It has been empowered in this regard by the European laws on collective rights management that were passed at an EU level in 2014.
The culture ministry has been pursuing legal action in a bid to force reforms and could go as far as seeking to withdraw SGAE's licence to operate as a collective management organisation in Spain entirely.
A rival society has already been established in the country called Unison, which was behind the recent complaint to Spain's competition regulator that resulted in SGAE being fined 2.95 million euros. The longer the SGAE membership resists reforms, the more likely it is that major writers and publishers will seek alternative options for licensing their works in Spain, and the greater the risk becomes of the 120 year old society disappearing altogether.
More than 250 music companies sign up to PRS Foundation's expanded Keychange gender equality pledge
In total, more than 250 music companies have newly signed up to the pledge. With the expansion, the PRS Foundation has left how newly participating organisations interpret the pledge somewhat open-ended.
For example, it suggests that orchestras might commit to commissioning half of their newly composed works from women - compared to the 13% of commissions by British orchestras that have gone to female composers over the last 25 years. Equally they could apply it to the gender balance among players in the orchestra or among senior staff. Or, hey, all three.
"It's really encouraging that major music organisations and independent companies are demonstrating their commitment to gender equality in music alongside hundreds of festivals worldwide", says PRS Foundation CEO Vanessa Reed. "From world leading concert halls and orchestras to Bella Union - the first indie label to approach us - pledge signatories are creating an industry wide movement. This will increase choice, quality and opportunity for future generations of music lovers, industry professionals, music creators and artists".
Keychange ambassador, conductor Mirga Grazinyte-Tyla, adds: "Being a female conductor I've probably heard the question 'How is it to be a female conductor?' more than any other question during my life so far, so I'm absolutely aware that as a society we still do have the work to be done for the right balance. I am glad and very proud to be a Keychange ambassador [and] with the whole City Of Birmingham Symphony Orchestra, we are proud to sign up to the Keychange pledge".
For further details on the Keychange project, click here.
Prophets Of Rage return with new single Made Of Hate
"As with many songs", says Chuck D, "'Made With Hate' was formed out of a conversation amongst ourselves about the level of passion fuel it takes to create, especially when attacking something of hate".
Assuming you're following this, he goes on: "You must create the energy to hate 'hate'. To have peace you have to despise hatred with a passion for peace and attack it. You can't have hate take over anything, especially history, so you have to fuel yourself to attack in thought, word and deed with equal passion".
So that's all clear: the song was made with hate for hate, which is fine because, although you should never hate, it's OK to hate if you are hating hate. The band will play two headline shows in the UK this August. Catch them at London's Shepherd's Bush Empire on 12 Aug and the Manchester Apollo on 13 Aug.
BMG Production Music has signed a deal to represent the Sounds Of Red Bull catalogue. Owning a production music library being another of the ways in which the sugary drink brand is a bit weird. The BMG tie-up applies worldwide, expect for the US and Red Bull's home country Austria. "Partnering with Red Bull - an iconic brand renowned for creating exciting and engaging media content - is an exceptionally good fit with the overall content strategy of BMG Production Music", says BMGPM's John Clifford. Sure.
Fleur East, Greg Burns and James Barr have been announced as the hosts of a new breakfast show on Hits Radio, Bauer's national pop station on DAB that is also on FM in Manchester. The new breakfast line-up kicks off on 12 Jul. "There will be early starts", says East.
The video for Avicii's collaboration with Chris Martin, 'Heaven', has been released. The track appears on the producer's posthumous album 'Tim'.
Zara Larsson has released new single 'All The Time'.
Friendly Fires have announced that they will release their first album for eight years, titled 'Inflorescent', on 16 Aug. The record was co-produced by Mark Ralph, James Ford and Disclosure. Here's new single 'Silhouettes'.
Frightened Rabbit have released two cover versions of their song 'My Backwards Walk', one by Harkin & Sarah Silverman, and another by Manchester Orchestra. Both tracks are taken from the upcoming covers compilation that will mark the tenth anniversary of their debut album, 'The Midnight Organ Fight'.
Hot Chip have released the video for 'Spell' from their new album 'A Bath Full Of Ecstasy'.
The Good, The Bad And The Queen have released the video for their song '1917'.
Snail Mail has re-issued her debut EP 'Habit', featuring a new recording of her cover of Courtney Love's 'The Second Most Beautiful Girl In The World'. Separately, she's also released a version of her track 'Pristine', in Simlish - the language of characters in 'The Sims' video game series.
Cold War Kids have released new single 'Complainer', taken from their upcoming new album 'New Age Norms'.
Trash Kit has released new single 'Sunset'. The band's new album, 'Horizon', is out next week.
KO has released new track 'Any'.
GIGS & TOURS
The Libertines have announced new UK shows in December. They'll kick off in Bournemouth on 3 Dec and wind up at Brixton Academy in London on 18 Dec. The band have also announced that they will open their new bar and recording studios in Margate on 16 Aug.
The line-ups for this year's Warehouse Project shows in Manchester have been announced. The events, which run from September to November, will this year take place at new Manchester venue The Depot. Performers include Aphex Twin, Nina Kraviz, Skepta, Mura Masa and more. Details here.
Idles have announced that they will head out on a short tour in December. They will take in Glasgow, Manchester and Leeds, before their biggest headline show to date at London's Alexandra Palace on 7 Dec.
Check out our weekly Spotify playlist of new music featured in the CMU Daily - updated every Friday.
Bradley Cooper and Lady Gaga secret Glastonbury set "isn't happening"
Cooper performed in character on the Pyramid stage two years ago, shooting a scene for the film 'A Star Is Born', in which he co-stars with Gaga.
Rumours of a return grew after Edith Bowman appeared on last weekend's 'Sunday Brunch' on Channel 4, saying: "On my podcast ['Soundtracking'] I had Bradley Cooper talking about 'A Star is Born', and when I spoke to him I was like 'I just want to see you guys do a gig, you know play it live' ... He was like, 'Well we have been talking to [Glastonbury's] Nick [Dewey] and Emily Eavis about it, we'd do the Park Stage'".
Cooper actually made this claim on an episode of 'Soundtracking' released in October last year, so that's plenty of time to have it all organised for this weekend, right? Sounds like it's definitely happening. Except it's not. Or so says Eavis.
"Before this one gets out of control", she wrote on Twitter, "the answer is no, that isn't happening. (Although you can watch the amazing 'A Star Is Born' in our Pilton Palais cinema tent at 4.30pm on Friday)"
How far talks about a Cooper/Gaga Glastonbury set actually got isn't clear. Maybe little further than Cooper's imagination. Anyway, I hear the surprise set at the Park Stage this year is Keanu Reeves and Alex Winter performing as Wyld Stallyns. Watch out for that one.
Elsewhere in Glastonbury news, Emily Eavis is on the latest episode of BBC Radio 4's 'Desert Island Discs' in which she discusses how she went from disliking the festival as a child to being in charge. Most media attention has fallen on other comments she made during the programme though, about how some men in the music industry still "refuse to accept" that they have to speak to her about the event, rather than her father Michael.