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‘PROs have no idea what’s played’: Vnue pushes into rights

Vnue, a New York-based tech start-up that aims to “revolutionise the live music business” by recording shows and releasing experiential content to fans, is to acquire Soundstr, a music rights company that pays rightsholders based on the actual usage of their works.

“For years, the performance rights organisations have utilised blanket licensing agreements to charge businesses, such as the 62,000-plus bars and taverns in the US, large fees for music they are likely never going to play, due mainly [to the fact] the PROs have no idea what music is actually being played,” says Vnue CEO Zach Bair.

“Because of this, many rightsholders don’t see a dime from performances of their work in blanket licensed businesses. Our technology aims to solve this issue and make it fair for everyone.”

The acquisition of Soundstr will, says Vnue, speed up the development of its own music-identification technology, MiC (Music Indentification Center). With MiC, instead of paying blanket fees to license music, bars would only pay for music they actually use, eliminating costly lawsuits from collection societies that target unlicensed venues.

“The current performing rights system discourages venues from having music”

“The vision for Soundstr is to create transparency on real-world music use, ensure accurate songwriter payments when their works are used and simultaneously help licensees pay fees in accordance with their music use,” says company founder Eron Bucciarelli-Tieger. “Vnue is the natural home for Soundstr as the company seeks to carry on with that vision. I look forward to the day when general performance royalties show up on my performing rights statements.”

“The current performing rights system discourages venues from having music, and does not fairly compensate the musicians even if the venues do pay into the PRO system,” adds Bair.

“With the joining of the MiC system and Soundstr technology, we will better align the fees the venues pay with the music that’s actually played there – and by making this fee fair and transparent, increase the number of licensed venues and ultimately increase royalty payments to the actual rightsholders for the songs.”

 


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Global live royalties up 8.5% YoY in 2015

Global royalty payments for public performance rights grew 9.1% to €6.8 billion last year, accounting for 78.8% of all collections, Cisac’s 2016 annual report has revealed.

As in 2014, TV and radio made up the biggest chunk of those collections, with over half (53.7%) of all performing rights-royalties generated from traditional broadcast, although live had another strong year, growing 8.5% to maintain its position as the second-largest source in revenue in music.

The biggest growth for live and ‘background’ music (such at that played in nightclubs, bars restaurants) was in Africa (33.2% on a fixed-currency basis) and Latin America (20.2%).

Total royalty collections for all sectors in 2015 totalled more than €8.6bn, up 8.9% from 2014.

The biggest growth for live music was in Africa and Latin America

“Cisac members’ collections in 2015 experienced unprecedented growth of close to 9% year-on-year and, for the first time, broke the €8bn mark,” comments Cisac director-general Gadi Oron (pictured). “This is testament to the continued development of the global collective management network and the increased efforts of our members on improving their operations, adjusting their licensing solutions and responding to market demands.

“The strong growth experienced in all regions of the world in which Cisac members are active is particularly encouraging. It reflects the grassroots work undertaken in many countries by Cisac and its members to promote favourable laws, support societies’ operations and further improve their services to affiliated creators and publishers.”

Cisac (International Confederation of Societies of Authors and Composers) represents 239 collection societies and performing rights organisations in 123 countries.

 


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Sabam reveals details of 2017 tariff increases

Belgian performing rights organisation (PRO) Sabam has revealed full details of its much-criticised increases in festival and concert tariffs, scheduled for 1 January 2017.

The news Sabam (Société d’Auteurs Belge/Belgische Auteurs Maatschappij) was to increase rates was greeted with dismay by Belgian festival promoters when announced in August, with Rock Werchter/TW Clasic promoter Herman Schueremans saying the PRO would “kill the goose that lays the golden egg”.

In addition to increasing tariffs across the board, Sabam will as of 1 January include sponsorship and subsidies in festivals’ revenues, “when these revenues are clearly related to the event”.

The new tariffs are as follows (the numbers being total revenue in euros and the “2016” and “2017” columns showing the increase in fees):

Festivals

Sabam 2017 tariffs, festivals

Concerts

Sabam 2017 tariffs, concerts
Despite the Belgian industry’s misgivings, Sabam insists the new rates should have a “very limited” impact on individual events.

 


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Ascap sues 10 unlicensed venues

American performance-rights organisation (PRO) Ascap is taking legal action against ten music venues, clubs and restaurants for non-payment of licence fees.

The venues – the Adrenaline Sports Bar & Grill in Las Vegas; Carmine’s La Trattoria in Palm Beach Gardens, Florida; Dorado Western Club in Houston, Texas; The Concert Pub, also in Houston; Conrad’s Seafood Restaurant in Nottingham, Maryland; Havana Club in Atlanta; Mezzo Ultra Lounge in Providence, Rhode Island; Show Palace in Oceanside, California; Pony in Memphis, Tennessee; and Spike’s Bar & Billiards in Rosemead, California – are alleged by Ascap (the American Society of Composers, Authors and Publishers) to have engaged in the “unauthorised public performance of its members’ copyrighted musical works”.

“By filing these actions, Ascap is standing up for songwriters”

“Hundreds of thousands of well-run businesses across the nation recognise the importance of paying music creators to use their music, and understand that it is both the lawful and right thing to do,” says Ascap’s executive vice-president of licensing, Vincent Candilora.

“However, each of the establishments sued […] has decided to use music without compensating songwriters. By filing these actions, Ascap is standing up for songwriters whose creative work brings great value to all businesses that publicly perform their music.”

 


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The new rights reality for festivals

Without songwriters, the live music industry does not exist. Fans paying to see the songs they love being performed by their favourite musicians provides the income that everyone reading this article has built their livelihoods on. So it’s only right and proper that songwriters are also able to earn a living from the exploitation of their work and talents.

The established remuneration mechanism for songwriters (and their publishers) involves signing public performance rights to the relevant performing rights organisation (PRO). The PROs then license the rights to users (in this case festivals) and these licence fees are used to pay royalties to songwriters and publishers. The various PROs have reciprocal rights agreements (RRAs) with each other, so that international performances can also be licensed and songwriters paid – a simple and logical process in operation for over 100 years.

However, over time, PROs have become monopolistic; large opaque organisations lacking meaningful oversight, seemingly riddled with a self-serving and protectionist culture, having become hypersensitive to criticism, heavy-handed in approach and dismissive of requests for transparency or progressiveness. Many feel that they have lost sight of the very reason they exist: ie. to serve the best interests of their writers and publishers. Progressively a deep unhappiness with the established PRO system has developed amongst both PRO members and rights users.

With regards to licensing live public performance for festivals, it’s a legal requirement for events to license all the rights they ‘use’. If a festival doesn’t have a licence for all of these rights, they will be breaking the local copyright law.

Feedback regarding rights deals festivals have done with their PROs indicates that they have agreed to pay the PRO a certain amount of money – perhaps based on a percentage of ticket income – irrespective of the number of rights that the PRO can license. So when this number of rights reduces, as a result of reassignment and direct licensing for instance, the PRO seems to be trying to force the festival to pay the total amount of money, irrespective of how many rights they can actually license. As shockingly stated by one PRO: “Under the terms of [our] tariff, it only requires the performance of one [PRO]-controlled work at a festival for the tariff to apply.”

Many feel performing rights organisations have lost sight of the very reason they exist: to serve the best interests of their writers and publishers

The present formula being used for direct licensing rights to festivals is to take the tariff rate and apply that over the artist fee. This is to reflect that the bigger the artist, the greater the value of the live public performance rights they deliver. Some may argue that the public is not buying tickets for individual artists or that all artists in a festival situation are equal. But we all know that is not reality. That if a festival had no recognised headliners, and only ‘featured’ artists who would normally only appear as openers on the smallest stage, attendance would substantially decrease, as would the value of the live rights. To reflect the value of live rights in a festival situation, using the measure of the fee paid to the performer is a straightforward, easily calculated and transparent system.

There have been some suggestions made as to how festivals can adjust to the new direct licensing reality. However, it must be remembered, the performers might not be the writers of some of the works they perform, and therefore can’t agree terms on their behalf. Equally, publishers are stakeholders, and the performing artist won’t be able to agree licence terms on their behalf either.

The solution is for an inclusive and transparent forum, involving all the stakeholders, to discuss and create a new standard practice for licensing live public performance rights to festivals. The simplest, most straightforward and transparent solution would be for the deals between festivals and PROs to be renegotiated, so that the festival pays no more than their present tariff rate, and is also enabled to deduct the amounts they have paid for direct licensing from the fee they pay to the PRO. This would ensure that:

1. Festivals do not have to budget an increased proportion of their income for live public performance rights licence fees
2. Direct licensing happens in an understandable, straightforward and relaxed way
3. The PROs continue to license the majority of the works performed, fulfilling their requirement to collectively license

As direct licensing becomes an ever more standard part of our industry, it would seem advisable for festivals negotiating deals with their PROs in the future that the likelihood of direct licensing applications be taken into account.

 


Adam Elfin is co-founder PACE Rights Management, which administers direct licensing on behalf of artists. Its clients include Deftones, Fink and Mark Knopfler.