MONDAY 14 JUNE 2021 COMPLETEMUSICUPDATE.COM
TODAY'S TOP STORY: The artist and management community have both welcomed a move by Sony Music to start paying through royalties to artists with record contracts that pre-date 2000 even if said artists are yet to 'recoup' on their original deal... [READ MORE]

TOP STORIES Artist and management community welcome Sony Music's decision to pay royalties to artists on unrecouped pre-2000 record deals
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LEGAL NMPA hits back at Roblox response to copyright lawsuit
"Profanity-laced" Kanye West deposition "not productive"

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DEALS Primary Wave announces new investor and distribution deal
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LIVE BUSINESS With lifting of COVID restrictions set to be delayed, live sector calls for more data and financial support
TEG acquires London venues XOYO and Camden Assembly

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MEDIA Shaun Keaveny to leave 6 Music
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AND FINALLY... Kim Jong-un warns North Koreans about the "vicious cancer" of K-pop
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MEASURE PR - PUBLICIST (LONDON)
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VENICE - STREAMING LEAD (LONDON)
Venice - a music distribution platform offering artists a new approach to development, empowerment and releasing their music - is looking for a Streaming Lead to join its team in London.

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Collective Licensing In Ten Steps
A ten step guide to the collective licensing system
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Artist and management community welcome Sony Music's decision to pay royalties to artists on unrecouped pre-2000 record deals
The artist and management community have both welcomed a move by Sony Music to start paying through royalties to artists with record contracts that pre-date 2000 even if said artists are yet to 'recoup' on their original deal. The big announcement from the major comes amidst increased debate about the intricacies of record deals, partly sparked by the big conversation around the economics of streaming that has taken place during the COVID pandemic, and in no small part because of the #brokenrecord and #fixstreaming campaigns.

In a memo to artists and managers on Friday, Sony Music stated: "As part of our continuing focus on developing new financial opportunities for creators, we will no longer apply existing unrecouped balances to artist and participant earnings generated on or after 1 Jan 2021 for eligible artists and participants globally who signed to SME prior to the year 2000 and have not received an advance from the year 2000 forward. Through this programme, we are not modifying existing contracts, but choosing to pay through on existing unrecouped balances to increase the ability of those who qualify to receive more money from uses of their music".

Under a conventional record deal, a label invests in the recording, release, distribution and marketing of new music, in return for taking ownership of any sound recording copyrights created in the process. The label then exploits those rights for profit, committing to share any income with the main artists who made the recordings. Quite what share the artist gets varies greatly from deal to deal, though under conventional record contracts the artist would receive a minority share of the most lucrative revenue streams, which today includes streaming.

Another key element of a record deal is recoupment. A label is usually allowed to recoup any upfront cash advance it pays the artist when signing a deal - and also often some of its other upfront costs - out of any monies made by exploiting the recording rights, before making any new payments to the artist. Under a classic 'royalty deal' those upfront costs are specifically recouped out of the artist's minority share, meaning the label often actually goes into profit on a deal (from its majority share) before the artist has recouped and starts to receive new payments.

In the big old debate about the economics of streaming - and how streaming income is shared out between the different stakeholders in the music community - a key talking point has been how monies allocated by the streaming services to the recording rights are split between label and artist. While every deal is different - and artists who work with distributors instead of labels are likely getting a majority of that money - on a classic record deal the artist will usually receive a minority share of no more than 25%. Many artists argue that that's not fair.

Heritage artists have generally been most vocal on this point to date, though often argue that they are speaking out on behalf of new artists rather than musicians of their own generation. Although, arguably, it's the heritage artists who have been most screwed over by the system during the rise of streaming.

While new artists certainly face big challenges in building a business around their music, when it comes to choosing a business partner to work with on their recordings there are now many more choices available. And while major labels still drive a hard bargain, modern record deals tend to pay slightly higher royalties, and artists might be able to negotiate in terms whereby they get ownership of the recording rights after a period of time.

Meanwhile, heritage artists - whose catalogue has become more lucrative simply because streaming removes both logistical and transactional barriers when it comes to monetising old recordings - are stuck on 20th century record deals that usually pay lower royalties and provide no provision for the rights to revert to the artist.

In many cases there is also a lack of transparency over how old deals are being interpreted and whether additional deductions that made more sense in the physical era are still being applied to artist royalties. And, of course, many artists have never recouped on their original deals, so any streaming royalties are just being set against old debts.

All of this has fuelled the argument that so called performer equitable remuneration should be applied to streams, like it is when recorded music is broadcast or played in public.

Where ER applies, artists have a statutory right to payment when their recordings are utilised, and that payment comes via the collective licensing system. If applied to streams, it would mean artists getting at least a minimum cut of any streaming income directly through a collecting society, oblivious of whatever royalty rate their label is paying, and even if they never recouped on their record deal.

Organisers of the #brokenrecord and #fixsteaming campaigns in the UK have called for a rewrite of copyright law - so that ER would apply to the so called making available element of the copyright and therefore to streams. So far more than 220 artists - including may big name heritage acts - have signed a letter calling for such a change.

Most labels - major and indie - oppose ER being applied to streams, and some in the artist and management community have also expressed concern about the potential unintended consequences of such an approach. Once the costs of administrating ER on streams is taken into account - alongside the inefficiencies with the collective licensing system, certainly on a global basis - newer artists who have negotiated more favourable deals with labels or distributors might actually be worse off.

Some argue that, because it's really heritage artists who are losing out under the current system, a better approach would be for labels to address issues with old record deals in terms of royalties and recoupment. During the parliamentary inquiry into the economics of streaming, it was noted that the Beggars Group applies a modern streaming royalty rate of 25% to every recording in its catalogue, oblivious of what any old record contract says about royalties. And it also writes off unrecouped balances after fifteen years.

Beggars boss Martin Mills has previously called on the majors to follow his company's lead on royalty rates and recoupment, something Beggars Group General Counsel Rupert Skellett highlighted when giving evidence to the Parliamentary inquiry.

Sony, of course, hasn't gone that far, only shifting on unrecouped balances, and technically speaking choosing to pay royalties on unrecouped accounts rather than actually writing off those unrecouped balances entirely. Nevertheless, it's a significant move that will put pressure on both Warner Music and Universal Music to follow suit. It also potentially weakens the argument that there is a need to apply ER to streams (from a heritage artist perspective, for session musicians ER is the only way they would get a cut of the digital pie).

Sony's announcement was welcomed by the UK's Music Managers Forum and Featured Artist Coalition, both of which have been campaigning for the years for the labels, and especially the majors, to address inequities in old record contracts. Indeed, both groups called for the writing off of unrecouped balances after a set time in their joint submission to the parliamentary review, endorsing the approach taken by the Beggars Group, and also recent moves at BMG to address unfair contact terms relating to older recordings in the catalogues it has acquired over the years.

MMF boss Annabella Coldrick said on Friday: "This is a very important, timely and welcome initiative from Sony Music. The MMF have been calling for a more progressive approach to tackling outdated contractual terms for some time, including a write-off of historic unrecouped balances. It is imperative that artists signed in an analogue era can also benefit from the boom in online streaming. We hope forward-thinking moves by companies like Sony, BMG and Beggars will help accelerate the pace of reform across the entire industry. The momentum for change really feels like it's picking up pace".

Meanwhile the FAC board stated: "We applaud Sony Music Entertainment's announcement and look forward to the rest of the recorded music industry following suit. We have long campaigned for unrecouped balances on advances to be written off after a fixed time period. It is therefore welcome that Sony has taken steps to do this today. We welcome this move towards a more artist-friendly model, and expect that Sony will apply this adjustment on a rolling basis".

"Tackling the problem of outdated and heinous contractural terms, such as decades old balances and regressive royalty rates, is at the forefront of the FAC's agenda. These old-era contractural terms are completely unfit for the modern age, and we passionately believe that challenging these contracts holds the key to a fairer future for artists".

The Association Of Independent Music also welcomed Sony's announcement, stating on Twitter: "We welcome this positive move from Sony Music, writing off unrecouped balances for heritage artists, a practice which is widespread in the independent sector. We hope this news will encourage others to follow, towards making fair digital dealing a global standard".

Sony says that artists who qualify for what it calls the Legacy Unrecouped Balance Program will be notified in the weeks ahead. The devil will be in the detail, of course, regarding how many artists benefit and quite how the new royalty payments work.

Although Sony's memo on Friday said eligible artists will also be able to utilise existing royalty payment tools available in the US and UK - and due to be rolled out elsewhere - whereby they can fast-track payments or get advances on projected earnings.

The memo concluded: "We're driven by our mission to provide artists with the best levels of service. The programme we are announcing today is part of that continuing work and further builds on our initiatives and investments in modernised contracts, flexible deal options, advanced data and analytics insights for creators and more".

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NMPA hits back at Roblox response to copyright lawsuit
The US music publishers fundamentally misunderstand how online gaming platform Roblox operates. Or at least so reckons online gaming platform Roblox, which also insists it fulfils all its commitments under US copyright law in terms of dealing with copyright complaints, while adding that opportunities abound within its super duper "metaverse", if only the fucking music publishers would get themselves into the 21st century and stop filing fucking lawsuits.

I mean I'm paraphrasing slightly. But only slightly. The publishers, meanwhile, reckon fucking Roblox should just fucking get itself some fucking licences. Yeah, I'm paraphrasing still. But only slightly.

The US National Music Publishers Association announced during its General Meeting last week that a consortium of its members had filed a $200 million lawsuit against Roblox. The gaming platform, NMPA boss David Israelite declared, has "made hundreds of millions of dollars by requiring users to pay every time they upload music onto the platform – taking advantage of young people's lack of understanding about copyright – and then they take virtually no action to prevent repeat infringement or alert users to the risks they are taking".

The day after the NMPA meeting, Roblox issued a statement saying it was "surprised and disappointed" about the litigation which "represents a fundamental misunderstanding of how the Roblox platform operates". The gaming platform added that it would defend itself "vigorously as we work to achieve a fair resolution”.

When it comes to managing and removing copyright protected material uploaded to its platform without licence, Roblox insisted it complies with all its obligations under the US Digital Millennium Copyright Act. "As a platform powered by a community of creators, we are passionate about protecting intellectual property rights – from independent artists and songwriters, to music labels and publishers – and require all Roblox community members to abide by our community rules", it said.

"We do not tolerate copyright infringement", it added, "which is why we use industry-leading, advanced filtering technology to detect and prohibit unauthorised recordings”. The company also "expeditiously" responds to takedown requests issued under the aforementioned DMCA, it insisted.

"We are committed to continuing to partner with the music industry to unlock new, creative, and commercial opportunities for artists and songwriters through virtual merchandise, exclusive virtual concerts, launch parties, and more", it then concluded.

Some in the music industry have, of course, been looking at platforms like Roblox as useful new marketing channels in the short-term and possible revenue generators in the long term. And Warner Music has been looking into such things with sufficient interest that it invested in the Roblox company ahead of its stock market listing earlier this year.

However, marketing value will only ever get you so far when it comes placating the music industry, with labels much more likely to be attracted by such promises than the publishers.

Certainly Israelite wasn't very impressed by Roblox's response. He told Variety: "Having some deals with some labels and publishers to host music events is in no way legally adequate when you operate a massive platform to which music in integral".

"Simply announcing community rules and trying to hide behind the DMCA are not sufficient when there are hundreds of thousands of songs being utilised every day without compensating copyright holders", he added. "Roblox suggesting that we fundamentally misunderstand how they use music is like a bank robber caught in the act telling the bank it fundamentally misunderstands money".

Oh that's good line there Dave, well done. It remains to be seen if this legal battle goes all the way or if - more likely - Roblox does ultimately enter into some sort of licensing deals with the music publishers, so that they too can start talking up all the exciting opportunities for music creators within the good old metaverse.

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"Profanity-laced" Kanye West deposition "not productive"
Lawyers for a technology company suing Kanye West accuse the rapper of walking out of a deposition having delivered a "profanity-laced tirade" instead of actually answering any questions.

According to Law360, MyChannel has filed a motion in court requesting that West be forced to take part in an in-person deposition this month, after one recently conducted on Zoom proved fruitless.

The company claims that West refused to answers its attorney's questions during the original deposition, that took place as part of the ongoing legal dispute, instead choosing to "insult and abuse" the lawyer - including repeatedly referring to him as "boy". West also refused to stop using his phone during the conversation, saying that his "mental genius-ness" required him to do so. He also apparently claimed that the attorney was "in a movie of West's creation".

After fifteen minutes, the motion says, West covered his face and then "walked out of the deposition ... and refused to participate any longer".

MyChannel took legal action against West last year, accusing him of ripping off its technology for his Sunday Service events. It claims that it went into business with West in 2018, with a plan to use its integrated video and e-commerce platform to boost the website for the rapper's Yeezy clothing brand. However, it says, after the company invested $10 million in the project and moved its headquarters to accommodate West, the musician broke off all communication, only to later rip-off MyChannel's tech for Sunday Service.

Following the halted deposition, the new motion also calls for the judge overseeing the case to apply $62,725 in sanctions, saying that West's legal reps "didn't flinch or raise a peep in watching their client conduct himself in bad faith".

West's attorney responded, saying that the new motion was "rife with misrepresentations and is nothing short of a blatant and transparent attempt to gain leverage in a case that plaintiff knows has no merit". They add that they had already agreed that the virtual deposition was "not productive" and they were trying to schedule an in-person interview to take place by the end of June. They also claim that MyChannel's attorneys had even agreed to this, before filing the new motion without warning.

The virtual deposition took place earlier this month after the judge rejected an application for an in-person meeting, citing COVID-19 concerns. MyChannel's lawyers say that West used this decision to "game the system, and violate every known rule of decency and good faith under the federal rules while thumbing his nose at the authority of this court".

It remains to be seen if West is any better behaved at an in-person deposition, assuming one can be arranged. The judge has not yet ruled on MyChannel's motion.

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Primary Wave announces new investor and distribution deal
Primary Wave Music last week announced new investment from Oaktree Capital and a new worldwide distribution deal with Universal's Virgin Music label services business.

The latter deal with Virgin Music will see the Universal division providing physical and digital distribution services to the recorded music side of the Primary Wave group, which will include releases from Sun Records, which it acquired earlier this year, and The Gaither Group of labels, with which Primary Wave has a strategic partnership.

Gaither Music will also maintain its long-standing relationship with the Capitol Christian Music Group which, like Virgin Music itself, sits within Universal's Capitol Music Group in the US.

Confirming the deal from the Virgin side, the division's President and GM - Jacqueline Saturn and Matt Sawin respectively - said in a joint statement: "We are so excited to begin this relationship with Primary Wave Music and The Gaither Group as their new distribution partner. Both companies are so forward thinking and always looking to create new opportunities to build awareness and audiences for their artists and music. Their approach perfectly aligns with ours, and we look forward to many years of success together".

The Oaktree cash-injection is worth $375 million and gives the investment firm a minority interest in the music group. Confirming that deal, Primary Wave boss Larry Mestel said: "The Primary Wave team is honoured to have such a respected financial institution and the talented team supporting our efforts. Bruce Karsh and I have had a working relationship for over fifteen years and he has the unusual combination of business savvy and creative sensibility towards music. This is an exciting new chapter for the entire company as we continue to grow and evolve our business".

The there mentioned Karsh at Oaktree added: "I've long admired the business model and success that Larry has built for Primary Wave and saw this partnership as a unique opportunity to diversify our investment portfolio in a growing and uncorrelated asset class. As a true music lover myself, I'm dedicated to the company’s growth and future success".

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With lifting of COVID restrictions set to be delayed, live sector calls for more data and financial support
UK Prime Minister 'Boris' Johnson is expected to announce later today that the lifting of current COVID restrictions in England will be pushed back by four weeks. Under the original plan, full capacity shows would have been able to return next week, but that now won't happen until mid-July because of concerns about the new delta variant of the coronavirus.

The delay will be a considerable blow to the live music and wider night-time industries, which are both eager to get back to full capacity operations as soon as possible.

Reps from across the live sector continue to argue that the results of the government's own Events Research Programme demonstrate that there is no tangible increased risk of COVID infections at full capacity shows providing some basic logistical measures are put into place. With the prospect of four weeks worth of full capacity shows now being cancelled, live industry reps are demanding that ministers publish the results of the ERP in full.

This weekend Greg Parmley of the live industry trade group LIVE said in a statement: "The government said the Events Research Programme would give us the evidence we needed to open safely. We have spent the last three months participating in, and paying for, full capacity pilot events that gave us this evidence. To protect the future of our industry we are calling for full transparency from the government, for them to release the full report that proves how we can open safely and to work with us to give everyone the summer of music we all want".

Meanwhile, if another four week delay is unavoidable, the live industry says it will need urgent further financial support from the government.

Mark Davyd, CEO of the Music Venue Trust, wrote this weekend: "The issue is not simply about a delay in re-opening or lifting restrictions. It may on the surface look like a short and manageable pause. But there is no provision in place to bridge the resultant funding gap should this occur. Without some certainty on exactly when grassroots music venues can start trading at full capacity again the majority of the sector, already barely surviving on life support, could flat line".

"This is not an exaggeration", he added, "with no funding in place to mitigate any delay in reopening we will see mass evictions and foreclosures by landlords and creditors who ran out of patience a long time ago. The risk of business closures, widespread redundancies and the decimation of our sector is as real now as it was in April 2020".

"Through the incredible work, support and amazing resilience of all those that work in venues, artists, music fans, local councils and central government we have survived everything this pandemic has thrown at us", he continued. "We are still here. When the Prime Minister addresses the nation [later today] it will be the most important 30 minutes in the entire history of our sector. The government has the tools it needs to avert a disaster, whatever decisions it needs to make".

He goes on: "It has allocated an additional £300 million to support the cultural sector; the Prime Minister or the Culture Secretary can swiftly announce that this money will be immediately released to tackle the challenges caused by any delay to reopening. They can ensure confidence with a clear statement that they won't let grassroots music venues go to the wall. Fifteen months ago, Music Venue Trust set out to Save Our Venues and Reopen Every Venue Safely. We need the Prime Minister and the Department For Digital Culture, Media And Sport to do the right thing [today] and give us the certainty the sector needs that that mission can be completed. Don't fail us now".

The music industry now awaits with much anticipation to see the specific details of the latest extension of COVID restrictions, and whether any new financial support will be immediately available to help the live and night-time sectors survive this latest challenge.

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TEG acquires London venues XOYO and Camden Assembly
The UK subsidiary of Australian live firm TEG - that'll be TEG MJR - has bought itself two London music venues, the 800 capacity XOYO in Shoreditch and the 400 capacity Camden Assembly in, well, Camden.

You might still think of the Camden Assembly as being the Barfly. But if you do, you're so out of date. Like, embarrassingly out of date. It rebranded as the Assembly after the Columbo Group bought the venue from the by-then-Live Nation-owned Mama & Co back in 2016.

TEG MJR says that it will "enhance the production infrastructure of XOYO and relaunch the venue with a three date residency with Skream and further weekly residency parties to be announced".

Meanwhile, "Camden Assembly will continue to trade daily with a mix of live shows, club nights and electronic music events upstairs", just as soon as the ongoing COVID restrictions are out of the way, obviously.

Confirming the acquisitions, TEG CEO Geoff Jones said: "These are two of London's most loved venues. We will honour their legacies whilst bringing new and unbeatable live music and event experiences to patrons. This move gives us a presence in the vibrant London music scene".

While Dan Ickowitz-Seidler, COO at TEG MJR, said: "We are excited to be a part of London's diverse night time culture and to soon be delivering great events and hospitality at two of London's leading venues. The location of both venues is incredible and we are committed to respecting their past and investing in their future, with plans to offer fantastic, contemporary experiences".

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Shaun Keaveny to leave 6 Music
Shaun Keaveny has announced that he is leaving BBC Radio 6 Music after nearly fifteen years at the station.

"Things change, places change, people change, and it's time for a change, after fourteen years (it will seem longer to many) I'm leaving 6 Music", says Keaveny in a statement to listeners. "You have been there through births, marriages, deaths, divorces, get togethers, break ups, great sandwiches, bad curries, deceased pets, the lot".

"You have been unceasingly funny, always kind, always there with pendantry or support for even the silliest feature idea", he continues. "I will be back with something soon, and I hope you'll come along for the ride. In the meantime, feel free to buy me a pint in the Open Arms later, and remember, I love you".

Referencing some of the features that have appeared on the DJ's show, Samantha Moy, Head of 6 Music, adds: "Shaun W Keaveny. A broadcaster extraordinaire: MC of Middle Aged Shout Outs, presiding judge of the Small Claims Court and landlord of the Open Arms".

"From night time to breakfast time to lunchtime, Shaun has created a world on 6 Music that is distinctly his own and which has been a joy to share", she goes on. "His listeners, fellow presenters and all of us at 6 Music will miss him. When he leaves us in September, it will be with a huge amount of love and the warmest of wishes for his next wonderful adventure. Thank you Shaun".

Keaveny joined 6 Music in 2007, having previously presented shows on Xfm. He has presented the afternoon show since 2019. His final show on the station will be broadcast in September.

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Setlist: The music publishers' $200 million lawsuit against Roblox
CMU's Andy Malt and Chris Cooke review key events in music and the music business from the last week, including the $200 million lawsuit against Roblox from a consortium of music publishers led by the US National Music Publishers Association, plus Brexit negotiator David Frost’s big no-show at a parliamentary inquiry into how the UK-EU trade deal messed things up so badly for touring musicians and what, if anything, is being done about it.

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Kim Jong-un warns North Koreans about the "vicious cancer" of K-pop
It already saw off Donald Trump, now K-pop is threatening to cause the collapse of North Korea. Or so fears that nation's leader Kim Jong-un, as South Korean pop music gains popularity in the country.

Kim has called South Korean entertainment smuggled into North Korea via China a "vicious cancer", according to the New York Times. It is now, state media warns, influencing the "attire, hairstyles, speeches [and] behaviours" of young North Koreans and, if not stopped, could make the country "crumble like a damp wall".

South Korean music has long made it into North Korea - hidden from authorities - originally on tapes and CDs and now on USB sticks. However, the proliferation of K-pop being smuggled into the country, along with South Korean TV shows, is increasingly causing concern for the government. So much so that, in December last year, it increased prison sentences for the possession of such material from five to fifteen years.

Those who actually smuggle South Korean entertainment into the country face even more severe punishment, including the death penalty. Meanwhile, anyone seen to "speak, write or sing in South Korean style" could end up in a labour camp for up to two years.

More recently, Kim has said that "a serious change" was taking place in the "ideological and mental state" of young Koreans and that he would act "mercilessly" in order to stop it.

"To Kim Jong-un, the cultural invasion from South Korea has gone beyond a tolerable level", explains Jiro Ishimaru, Chief Editor of Japanese website Asia Press International. "If this is left unchecked, he fears that his people might start considering the South an alternative Korea to replace the North".

He might be right. Back in 2019, the Washington Post reported that foreign entertainment was increasingly a factor in convincing North Koreans to flee the country.

In addition to the legal crackdown on the distribution and consumption of South Korean entertainment, there have also been efforts to compete head-on with K-pop, with North Korea launching its own pop acts.

Girl group the Moranbong Band debuted in 2012, with all members personally selected by Kim. Their first performance incorporated Western music and culture, with 'Theme From Rocky' and 'My Way' among the songs on the setlist, while dancers dressed as characters including Mickey Mouse, Winnie The Pooh and Snow White joined them on stage.

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ANDY MALT | Editor
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