Just as things were looking a little quiet on the “Universal Music falling out with people” front, the major has filed an explosive lawsuit against Believe and the battle is on.
The French distributor and label services business has, according to Universal, “been able to achieve dramatic growth and profitability in recent years by operating as a hub for the distribution of infringing copies of the world’s most popular copyrighted recordings”.
The bombastic $500 million lawsuit accuses Believe and TuneCore, the DIY distribution platform it acquired in 2015, of facilitating rampant copyright infringement by enabling others to illegally upload recordings owned by Universal to streaming services and social media platforms, and then claim royalties when those versions of the tracks are streamed.
That includes remixed, sped up and slowed down versions of Universal recordings, which the major claims often employ deliberate typos in artist names in a bid to avoid detection.
The criticism of Believe in the lawsuit, which has been filed by ABKCO and Concord as well as Universal, is brutal. “From its inception, Believe recognised that it lacked the resources, creative talent and business acumen necessary to sign and develop top-level artists and create catalogue that could compete fairly” with the more traditional record industry, the legal filing states.
As a result, it goes on, Believe made “the affirmative business decision to enter into distribution contracts with anyone willing to sign one of its basic form agreements”. As a result, the distributor’s client list is “overrun with fraudulent ‘artists’ and pirate record labels who rely on Believe and its distribution network to seed infringing copies of popular sound recordings throughout the digital music ecosystem”.
Believe has two sides to its distribution business - distribution and artist and label services via the main Believe brand, and DIY distribution via TuneCore.
Through TuneCore it offers basic digital distribution to anyone who wants it, charging fees and passing 100% of any royalties onto the user. It's obviously through TuneCore that Believe enters into contracts with “anyone willing to sign one of its basic form agreements”.
It’s no secret that some execs at the majors don't like the fact that an increasing portion of the music industry’s streaming royalty pool flows to an increasing number of independent artists and labels through distributors like TuneCore.
Indeed, Universal in particular pressured Spotify and Deezer to change their royalty models to freeze out artists with small numbers of listeners and streams, meaning those artists now earn nothing and more of the royalty pool can flow to the majors and their superstar signings
Another criticism made about DIY distributors more closely connects with this lawsuit, centred on allegations that individuals and companies use these platforms as a way to carry out streaming fraud, including uploading tracks released by famous artists signed to the majors, hoping that their versions get streamed inadvertently by people searching for the legitimate version.
The popularity of sped up and slowed down tracks, especially on social media platforms, has expanded the opportunity for this particular type of streaming fraud.
It would be easy to infer from Universal's lawsuit that Believe has deliberately gone out of its way to bring in business from streaming fraudsters and copyright infringers. That’s not the case. And Believe, which is a founder member of the Music Fights Fraud Alliance, would argue that - while any DIY distributor is open to abuse by copyright infringing fraudsters - it has put systems in place to try to stop the scammers.
However, Universal argues, those systems are woeful. “While Believe is fully aware that its business model is fuelled by rampant piracy”, the major claims, “it has eschewed basic measures to prevent copyright violations and turned a blind eye to the fact that its music catalogue was rife with copyright infringing sound recordings”.
As proof of that claim, Universal says that tracks that are obviously trying to circumvent the system with typos in artist names - including tracks credited to Kendrik Laamar, Arriana Gramde, Jutin Biber and Llady Gaga - have got through Believe’s filters.
It also accuses Believe of abusing YouTube’s Content ID system, which identifies recordings included in videos uploaded to the YouTube platform. Universal alleges that Believe allows infringing tracks to enter the Content ID database, meaning that scammers can sometimes claim royalties when third parties put major label tracks into their videos.
But not only that, once the major has identified the fraud and addressed that matter within the YouTube ecosystem, Believe, it’s alleged, continues to distribute “the exact same track to other digital music service providers and to seek royalties for use of that track from those providers”.
Universal, ABKCO and Concord say that the true scale of the infringements facilitated by Believe will be revealed through the discovery phase of this legal battle, but it is already talking about damages in excess of $500 million.