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Live royalties growth surpasses radio/TV in 2018

Music collections grew almost 2% in 2018, generating €8.5 billion, with the growth of live/background music royalties surpassing that of frontrunner TV/radio.

The most recent figures released by Cisac, the association that represents global copyright collection societies, show the traditional revenue streams of TV, radio, live and background music – that played in restaurants, bars and clubs – “continue to be the backbone of royalties collections”, despite the “mass migration to digital channels” in recent years.

In Cisac’s Global Collections Report 2019, which documents overall royalties collected in the areas of music, audiovisual, visual arts, drama and literature, the association’s director general, Gadi Oron, puts “comparatively modest” growth down to the “devaluing effect of the exceptionally strong euro”.

Revenue from live and background music combined has grown 0.8% from 2017 to €2.6bn, while TV and radio has seen a decline of 3.1%, generating €3.3bn.

In conjunction with TV/radio’s decline, live/background royalty collections surpass that of broadcast in Italy and Chile. Live and background royalties reach €322 million in Italy (-0.9% year-on-year) and CLP10,960m, or €13.43m, in Chile (+8.4% YOY).

“The large traditional revenue streams continue to be the backbone of royalties collections”

Europe remains the largest region for collections, generating over 50% of global music revenues. According to the report, the live music sector “continues to grow healthily across Europe, with strong demand for concerts and festivals.” Live/background collections lead the way in Europe, rising 1.4% in 2018 to €1.7bn, and by 11% over the past five years.

Live collections are also up in Asia-Pacific by 3.1% to €306m and 2.2% in Canada/USA to €345m. Elsewhere, royalties are down -0.9% in Africa (17m) and 9.5% to €194m in Latin America and the Caribbean, where live music still remains the leading source of collections.

Digital is where Cisac president Jean-Michael Jarre sees the “future”, with increasing subscription revenues driving growth of 185% over the past five years.

“More than ever, societies are working in a landscape of fragmenting income sources,” writes Oron. “This calls for more versatility: protecting the large traditional collections streams of live, background and broadcast, while striking new deals to monetise creators’ works on YouTube, Facebook and other digital platforms. The role of authors’ societies in generating monetary value for millions of creators has never been more vital.”

 


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SGAE postpones upcoming reform vote

Spanish collection society SGAE (Sociedad General de Autores y Editores) has postponed its general assembly – due to take place in October – to January 2020, when a number of current members will have departed from the society.

Members of the controversial SGAE, which was expelled from international authors’ rights association Cisac in May, were due to vote on statute reforms at the assembly on 15 October.

The society has failed to obtain a member majority on changes to statutes on three separate occasions. The reforms are necessary in order for the society to comply with European Union intellectual property law and with demands made by Cisac and Spanish Minister of Culture, José Guirao.

The decision to postpone the vote comes after members including Julio Iglesias, José Luis Perales, Iván Ferreiro, Ramón Arcusa (Dúo Dinámico) and Jorge Ilegal asked to terminate their membership to the society. By moving the vote to January, the departing members will no longer be able to participate.

“SGAE is postponing its assembly to 2020 to guarantee legal certainty following the request from the Ministry of Culture,” reads a post on the society’s Facebook page.

“SGAE is postponing its assembly to 2020 to guarantee legal certainty following the request from the Ministry of Culture”

The Ministry of Culture had demanded that SGAE “respect” members that wanted to leave, after various members, including Southern Music Española SL, Peermusic and Lugar Music, complained that the society had attempted to limit their right to vote after they announced their intention to leave.

However, according to the society, the Ministry of Culture had also demanded it implement article 27 of it current statutes, “under which asking to leave SGAE constitutes the loss of the right to vote in the general assembly.”

According to the SGAE, the Ministry of Culture has created a “legal paradox”. By moving the assembly to 2020, reads the society’s statement, any doubts relating to legal rights, are dissipated.

SGAE is no stranger to controversy. The society recently received a €2.95 million fine for anti-competitive practices by the Spanish competition regulator and has been linked to a scandal known as ‘the wheel’ (la rueda).

 


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SGAE suffers third statute reform failure

Spanish collection society, Sociedad General de Autores y Editores (SGAE), is facing increased pressure from the government and international author’s rights association Cisac, after failing to make reforms to its statutes.

The beleaguered collection society lacked member votes to implement reform at its General Assembly in Madrid on Monday (24 June). 62.8% of members voted in favour of the changes proposed by SGAE president Pilar Jurado, 4% short of the two-thirds majority required.

Of the 18,000 eligible members, only 1,356 participated in the vote.

Changes to the society’s statutes are necessary in order to comply with current European Union intellectual property law. In the run up to the vote, Jurado stressed that the society was facing its “last opportunity” and that failure to comply with the changes would be “terrible for creators”.

In failing to reform the collection society has also failed to meet the demands of Spanish Minister of Culture José Guirao and the International Confederation of Authors’ Societies

In failing to reform – for the third time – the collection society has also failed to meet the demands of Spanish Minister of Culture José Guirao and the International Confederation of Authors’ Societies (Cisac).

Last week, the National Assembly rejected Guirao’s call for governmental intervention in light of SGAE’s upcoming General Assembly. Following the decision, Guirao stated that failure to pass the reforms would leave “no other option other than to strip SGAE of its authority.”

In May, Cisac temporarily expelled SGAE as a member, due to the society’s failure to convince the body of its commitment to reform. The sanction, which “can be lifted or adjusted at any time” provided positive change is made, remains in place.

Earlier this month, the society received two fines from the Spanish competition regulator, one of €3.1m in relation to “abusive” 10% concert tariffs, and the other of €2.95 for anti-competitive conduct.

SGAE has been embroiled in controversy surrounding a scandal known as ‘the wheel’ (la rueda) since 2017.

 


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SGAE fined €2.95m for anti-competitive practices

The Spanish competition regulator has fined national collection society SGAE €2.95 million for anti-competitive conduct, just days after the society’s expulsion from international authors’ rights association Cisac.

The national commission of markets and competition (Comisión nacional de los mercados y la competencia – CNMC) imposed the fine following the conclusion of a two-year investigation into actions undertaken by SGAE, known as the Sociedad General de Autores y Editores in Spanish.

The fine is the second that SGAE has received in the space of a few weeks. On 7 May, the Supreme Court approved of a €3.1m fine against the collection society, in a move lauded by Spanish promoters’ association the Asociación de Promotores Musicales (APM). The sanction was first proposed by the CNMC in 2014, in relation to SGAE’s “abusive” 10% concert tariffs.

The recent investigation into SGAE conduct finds evidence of “single and continued infringement” of free competition and European Union law.

The CNMC states that SGAE imposes contractual conditions to limit the freedom of its members. The society prevents members from attributing the management of only a part of their intellectual property rights by grouping rights into designated categories which cannot be managed separately. Members are also unable to revoke or partially withdraw the management of rights.

Through this practice, reports the watchdog, the society “has created obstacles to the free management of rights and the development of management entities other than the SGAE, making competition difficult.”

“[SGAE] has created obstacles to the free management of rights and the development of management entities other than the SGAE, making competition difficult.”

The watchdog also reports that the society has abused it position in relation to public broadcast rights, by bundling musical and audiovisual rights together and providing no itemised price breakdown for clients.

The joint sale, or bundling, occurs in the hospitality and catering sectors. As a result of the bundling, users wishing to offer musical content are obliged to acquire the audiovisual rights at the same time. CNMC states this impedes alternative offers from other management entities, given that SGAE is the only operator offering public reproduction and broadcast rights for musical content.

The investigation also finds that the lack of itemised price breakdown prevents users from determining the actual costs incurred by their use and therefore from comparing SGAE charges to offers from possible competitors.

Complaints from audiovisual authors’ rights group Dama (Derechos de Autor de Medios Audiovisuales, Entidad de Gestión) and collection society Unison sparked the investigation.

“At Unison we celebrate the decision of the Spanish regulator, which helps to guarantee free competition in the market of music rights management,” says Unison chief executive Jordi Puy.

The companies involved have two months to appeal the resolution through the national court.

The fine comes at a time of turbulence for the Spanish society. Cisac expelled SGAE as a member on Thursday 30 May for failing to implement reform. SGAE has been embroiled in controversy surrounding a scandal known as ‘the wheel’ (la rueda) since 2017.

 


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Cisac expels controversial Spanish member

The International Confederation of Societies of Authors and Composers (Cisac) has voted to expel Spanish society SGAE for a one-year period, following the society’s failure to convince the body of its “commitment to reform”.

The decision to expel SGAE, known as the Sociedad General de Autores y Editores, was made at Cisac’s annual assembly in Tokyo. The expulsion follows Cisac’s resolution to undertake a sanctions process against SGAE in December, “in view of the society’s breaches of Cisac rules”.

The expulsion is set to last for one year but “can be adjusted or lifted at any time”, provided that the Cisac board of directors concludes that SGAE has made sufficient progress towards implementing its requirements. Cisac recommended a series of changes to its rogue Spanish member following an in-depth investigation which concluded in May last year.

“Today’s vote to proceed with the sanction of a one-year expulsion follows an in-depth analysis of recent reforms set in motion by SGAE’s new President, Ms Pilar Jurado,” reads a Cisac statement.

“Further important technical work and changes are needed and expected by CISAC to ensure SGAE’s compliance with the Confederation’s professional rules”

“While a number of welcome changes have been proposed, they have not yet been approved by the SGAE General Assembly. Further important technical work and changes are needed and expected by CISAC to ensure SGAE’s compliance with the Confederation’s professional rules for member societies.”

SGAE appointed Spanish soprano singer Pilar Jurado as president in February following a vote of no confidence against former chief José Ángel Hevia, who held the position for just three months.

Jurado states that “Cisac is giving SGAE the opportunity to decide its own future”, and called on members to support her proposed reforms in the General Assembly in order for the society “to leave this situation behind us”.

Earlier this week, minister of culture José Guirao demanded SGAE produce a detailed outline of the steps it would take to comply with regulations. Failure to do so would result in intervention from the court.

SGAE has been at the centre of a scandal known as the wheel, or ‘la rueda’, for a number of years. The scam, which saw SGAE members and TV execs create “low-quality music” to broadcast on late-night TV, allegedly brought in several millions in performance royalties over the years.

 


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“It can be a lonely profession”: Stim opens office to creators

Swedish collection society Stim will in June open Stim Music Room, a 200sqm workspace for its members at its headquarters in Stockholm.

An entire floor of the Stim office has been remodelled to create the co-working area, which will be open to all 90,000 Stim-affiliated songwriters and composers.

A total of 35 people can work side by side at Stim Music Room during office hours, while two new studios, designed by Ingvar Öhman, and a live space will enable members to hone their craft free of charge.

“The idea for the project came through dialogue with our songwriters. It can be a lonely profession, especially in the beginning of a career”

“We are incredibly proud to launch Stim Music Room,” says Lina Heyman, head of rightsholder relations at Stim (Svenska Tonsättares Internationella Musikbyrå, Swedish Performing Rights Society). “The idea for the project came through dialogue with our songwriters. It can be a lonely profession, especially in the beginning of a career. By opening up our office we want to support not only the creative process, but also by offering a natural meeting place to our members.

“It’ll be a great addition to our core offer: making sure music creators get paid for their hard work.”

 


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EU songwriters unite against Greek govt-ran PRO

The European Composer and Songwriter Alliance (ECSA) has appealed to the European Commission to take action against the Greek government’s takeover of the national rights collection system.

ECSA submitted its complaint to the European Commission’s competition directorate general stating that creator colleagues in Greece are “being prevented from accessing performance income from their music”. The complaint is supported by the International Council of Creators of Music (CIAM).

In May 2018, Greek performance rights organisation, the Hellenic Society for the Protection of Intellectual Property (AEPI), had its license revoked following a scandal involving unpaid royalties of €42 million and financial mismanagement by board members.

Rival, independent collection rights society Autodia attempted to fill the position in the wake of AEPI’s demise. However, the government took over the management of music rights, creating a new division of the Hellenic Copyright Organisation (HCO).

The government-run division falls within the collection society’s supervisory body itself, meaning that the organisation lacks any proper third-party regulation.

“Every music creator should affiliate with the collective management organisation of their choice”

ECSA complains that, under the current system, music creators are unable to join a collection society of their own choice. The organisation also claims the government’s “unlawful intervention in the marketplace” is preventing funds from reaching composers and songwriters worldwide.

In addition, the songwriter alliance claims the HCO unlawfully used over €2m in state funds to benefit the new division, violating EU state enterprise funding law.

“The current difficulties in Greece affect first and foremost Greek music authors but also all music creators,” says ECSA president, Alfons Karabuda.

“Europe’s music creators are the bedrock of a vital, diverse and important economic and cultural sector. They deserve an efficient management of their works and the protections of the law just as Greek taxpayers deserve to be confident their tax revenues are being applied in a sound, legitimate and transparent manner,” states Karabunda.

CIAM president Eddie Schwartz comments: “As creators we stand with our colleagues to ensure that going forward, creators have a sound and lawful administrative system in Greece on which they can rely for their livelihoods.

“Every music creator should affiliate with the collective management organisation (CMO) of their choice,” adds Schwartz. “No CMO should ever be prevented from responding to the needs of the creators they exist to protect. This is why we are objecting to the situation in Greece.”

 


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Competition Authority fines SIAE for “abuse of dominant position”

The Italian Competition Authority has levied a symbolic fine of €1,000 on performance rights organisation (PRO) SIAE for the abuse of its dominant market position to suppress competition in Italy’s rights sector.

SIAE (the Italian Society of Authors and Publishers, or Società Italiana degli Autori ed Editori) has been given 60 days to “put an end to its [alleged] distortions of competition”, which relate to a dispute with two newer copyright collection societies, Soundreef and Innovaetica.

SIAE had formerly exercised a (legal) monopoly on Italian royalties collections, although a 2017 provision of Italy’s budget law finally paved the way for the liberalisation of the market and allowed for competition, to comply with EU law.

Some 8,000 rightsholders have left SIAE in recent years, mostly for Soundreef. SIAE was alleged to have spent 400,000 to investigate Soundreef – including by hiring Black Cube, a private intelligence agency founded by ex-Mossad agents – following the high-profile defection of Fabio Rovazzi and Fedez in January.

According to AGCM, SIAE has embarked on a “complex exclusionary strategy” designed to uphold its monopoly

In Fedez’s case, his tour promoter, Show Bees, had paid the artist’s royalties to SIAE – as it was legally obliged to do – but was later ordered to also pay Soundreef too (calling to mind the headache faced by other promoters whose acts are collecting their performance royalties directly).

According to the Italian Competition Authority (AGCM), SIAE has since 2012 embarked on a “complex exclusionary strategy” designed to uphold its monopoly, “impairing the right of authors to choose copyright management services provided by [SIAE’s] competitors”.

As a result, the authority today ordered SIAE to “immediately end the proven distortion of competition and to refrain from behaving [as such] in the future”, as well as imposing the €1,000 fine as a “symbolic pecuniary sanction”.

SIAE’s president, lyricist Mogol (pictured), says the society will “read and evaluate the text [of AGCM’s decision] very carefully”. “SIAE is sure to be able to demonstrate that no violation for abuse took place, and that its work was always respectful of the law on copyright and in general, including in the field of competition,” he comments.

 


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Why the new PPL tariff would be catastrophic for UK music

What’s that saying: “nothing can be said to be certain, except death and taxes”.

In the live music and nightclub industry – some of the costs we have to pay to play recorded music or host live music often feel just like a tax – I’m talking PRS and PPL.

These two monopoly businesses rarely (if ever) get a good word said about them from the venues that have to pay these charges. They take our money, but they never support us – and without live music venues or night clubs, how would UK music acts ever develop into international stars?

There is no recognition from these copyright collection agencies that we are a vital part of the music industry in this country – whether we are grassroots venues, nightclubs, bars with DJs or festivals with DJ tents. We are just the magic money tree constantly paying our fees up to these monopolies, despite closures of grassroots venues across the country. The UK lost 45% of all nightclubs between 2005 and 2015, and pubs and bars are still closing at a rate of 18 per week in 2018. Ever seen PPL or PRS raising concerns or offering to help with this decline? No… me neither!

If we fail because of yet another massive increase in our running costs, it won’t just be the venues affected

And just to be clear, we and all other music venues are not arguing that we should not pay PRS or PPL; we do and will continue to support artists, bands and songwriters through paying for use of copyrighted music. This is about the amount that we are being told to pay.

In July, PPL (Phonographic Performance Limited) – which collects and distributes royalties for performers and labels when recorded music is played, as opposed to PRS for Music (the Performing Right Society), which pays songwriters, composers and publishers, including for live performances of their music – announced a review of its specially featured entertainment (SFE) tariff, which covers nightclubs, pubs and bars, cafes, restaurants and hotels.

Among other things, PPL’s proposals would include a revision of its ‘fee-per-person’ measurement, leading to proportionately higher charges for larger events. In its consultation paper, the collection society says that, “in line with PPL’s key principle of fairness, PPL believes that in a revised SFE tariff the ‘fee per person’ for all SFE events should be broadly the same, regardless of the size of the audience. This aim is easier to accomplish with attendance bands of equal size, and therefore PPL’s current thinking is that a revised SFE tariff should use consistent bands of 25 people regardless of the size of the audience.

“The fee would be set at the top of each band.”

This increase would not be economically viable for our businesses

The proposals from PPL are quite outrageous. We have calculated that for just one venue, the new tariff would increase the annual cost from just under £6,000 to nearly £60,000. The justification from PPL for this would be almost laughable if it wasn’t so potentially damaging to businesses.

They have said they have modelled that this is the amount that people would be prepared to pay for having music to dance to. At time when nightclubs have been closing at a scary rate, this clearly doesn’t add up. We know our customers and how much they are prepared to pay, and we know how business costs stack up, and this increase would not be economically viable for our businesses.

One of our trade bodies, UK Hospitality, has produced some strong arguments why these proposals are extremely damaging to an important sector of UK business – and if we fail because of yet another massive increase in our running costs (after many have faced massive business rate increases, payroll costs and, for many of us, hikes in rent) it won’t just be the venues affected.

Where will artists and DJs be playing? I suspect once again in illegal raves – and those rave organisers won’t be paying any taxes, including PRS and PPL, or making sure people are kept safe. I don’t see that as a future any of us wish for.

 


Julie Tippins is head of compliance for UK promoter and venue owner DHP Family, which runs Oslo, Borderline and the Garage in London, Thekla in Bristol and Rock City, Rescue Rooms, Bodega and Stealth in Nottingham.

IPRS goes digital to combat unlicensed events

For the first time, the Indian Performing Right Society (IPRS) is allowing event promoters to pay digitally for the use of its members’ repertoire, in a bid to increase copyright compliance in a country where as many of 90% of live events go ahead without an IPRS licence.

Javed Akhtar, chairman of the performance rights organisation, explains: “IPRS wants to ensure that purchasing of licences by the organiser for any event, big or small and anywhere in the country, can be done at the click of a mouse.

“This step will bring total transparency and [increase] ease of doing business with the society to the benefit of everybody concerned. On the other hand, events organisers should have no excuse any more for not obtaining the licence required under the law.”

According to Rakesh Nigam, IPRS CEO, the society is “committed to going all-digital”, mirroring the ongoing move away from paper money in India, especially since late 2016’s demonetisation crisis.

“Events organisers should [no longer] have an excuse for not obtaining the licence required under the law”

“It requires substantial investment by the society over the medium term,” he continues, “but our top priority is to take out the friction from the licensing process: removing negotiations and cash payments from the system will increase efficiency and transparency, and save time and costs for everyone.”

According to RNM, Rakesh, along with his counterpart at India’s Phonographic Performance Limited (PPL), revealed recently that of the more than 80,000 events organised in India last year, just 10% had a valid licence.

IPRS, headquartered in Mumbai (Bombay), is India’s only government-authorised royalty collection society for music authors, composers and publishers.

 


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