Elton John invests in music tech company Audoo
Elton John and his manager David Furnish have invested in a music technology company that is bidding to “revolutionise” public performance royalties.
The duo have joined the likes of ABBA’s Bjorn Ulvaeus, MPL Ventures, Tileyard and Edinv in backing London-based Adoo, which has secured $5 million (€4.76m) in its latest funding round, taking its total raised to $22m.
The investment round follows key hires at Audoo, including music publishing veteran Nigel Elderton as chair and Melanie Johnson as chief commercial officer.
“Working as a musician can be seen as all glitz and glamour but for the vast majority of artists, especially new and emerging acts, this isn’t the case,” says Elton. “It’s often brutally unfair and this sadly extends into being paid correctly. Right now, artists are not being paid accurately for their plays because the data simply doesn’t exist.
“People have given up on their dreams and we’ve lost talent and future stars because of this disparity. That’s why we’ve invested in Audoo and their world-class technology and data, to help create a more transparent system for everyone, and ultimately to keep the music alive.”
“Being able to draw on the support of artists in our mission to revolutionise the royalty space has been key to Audoo’s success”
Formed in 2018, Audoo’s board includes experts from APRA AMCOS, BMG, Bowers and Wilkins, PRS for Music and Sony Music Publishing. According to the firm, its technology “powers the commitment to improving accuracy, transparency and reporting in quasi-real-time without burden for licensees, PROs and CMOs”.
“Being able to draw on the support of artists in our mission to revolutionise the royalty space has been key to Audoo’s success,” says Audoo founder and CEO Ryan Edwards. “We are proud to welcome more icons to aid the next stage of our journey.
“With Elton and David’s strategic investment, we continue to champion and deliver a fairer and more transparent music industry for creatives to benefit for generations to come. We look forward to welcoming more international partners, licensees and creators to join us on this industry-changing journey.”
Audoo works to provide solutions to the challenges faced in public performance royalty data collection and payment distribution with its Audoo Audio Meter and insights platform that is rolling out across the UK, Europe, Australasia and Africa through industry-first partnerships.
The company says the installation of Audio Meters in businesses worldwide – including cafés, bars, hair salons, restaurants, gyms and retail locations – “sees its small, discreet plug-in solution cut through foreground noise, identify the music, match the song data, and report this usage back to PRO and CMO partners – ultimately improving fair and accurate payments to rights holders with a greater level of accuracy”.
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APRA pushes back royalty payment change
Australian collection society APRA is to delay the implementation of its new royalty rate.
The proposed change to the distribution practice was announced in May, whereby songs performed by a support act at major concerts in Australia and New Zealand will be allocated a fixed 20% of APRA royalties from the concert, compared to the headliner’s 80%.
The plans were originally due to be brought into play in November, but have now been pushed back to next June as they had not taken into account “negotiations on guaranteed fees for support acts that were underway prior to the announcement”.
Currently, the split is roughly 66/33 in favour of the headliner, although that can shift in certain situations such as when there are multiple support acts. While the move will bring the territory into alignment with other countries and collecting societies, one artist manager told The Music Network that the changes would mean a “massive difference” in the performance royalties generated by Aussie support acts.
An amendment was approved for a new start date for the changes to the distribution practice for major concerts to be effective for all setlists provided after 1 June 2024
TMN understands that one of the sticking points was Australian pop star’s Tones and I’s upcoming support slot for Pink, produced by Live Nation. Since the activation date for the new split has now been deferred, APRA will apply equal weighting to the tour.
“Following the announcement, discussions continued with members and managers to further understand the implications of the proposed changes,” says an APRA statement. “We’ve taken this feedback on board and acknowledge the proposed November 2023 rollout did not take into consideration negotiations on guaranteed fees for support acts that were underway prior to the announcement.
“At the August APRA board meeting, an amendment was approved for a new start date for the changes to the distribution practice for major concerts to be effective for all setlists provided after 1 June 2024.”
The proposed changes do not apply to music festivals licensed by APRA.
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BMI reacts after live groups appeal rate increase
Live Nation, AEG and the North American Concert Promoters Association (NACPA) have filed to appeal against BMI’s court triumph over performance royalty rates paid by the live industry.
The US collection society claimed victory in the long-running court battle back in March after New York District Court Judge Louis Stanton ruled a new rate of 0.5% would replace the previously tiered rate of between 0.15% and 0.3%, which had been in place since 1998.
The ruling said the new 0.5% rate also applies retrospectively to shows that took place from 1 July 2018.
However, it was revealed this week that the live groups have filed a notice to appeal the decision, which could mean they intend to move forward with the appeal, but could also be a procedural move to keep the option to appeal open. The move was drew criticism from BMI.
“Given Live Nation, AEG and NACPA’s bizarre position throughout trial that concertgoers attend concerts for the experience of the staging, videos and light shows, as opposed to the actual songs and music being performed, their appeal was not a surprise to BMI,” says BMI president and CEO Mike O’Neill.
“For decades, the live concert industry has fought to keep rates suppressed. And even now, when they are making more money than ever, in more ways than ever, they are determined to deny songwriters and composers the fair value of their work, despite the fact that without their contributions, a concert wouldn’t even be possible. BMI will continue to fight on behalf of our affiliates, the creators of the music that is the very backbone of the live concert industry, to prevent that outcome.”
At the outset of the case in 2018, BMI said its total income from the US concert business was $20 million annually
It claims the court’s decision “ended decades of below-market rates”, arguing the revised rate reflected “the importance of music in the live concert experience”.
“The decision also expanded the definition of the total revenue base to which the new rate is applied, taking into account the way modern promoters monetise concerts,” it adds. “This includes tickets sold directly onto the secondary market, servicing fees received by the promoters and revenues from box suites and VIP packages.”
BMI (Broadcast Music Inc) represents the public performance rights in over 20.6 million musical works created and owned by more than 1.3m songwriters, composers, and music publishers.
At the outset of the case in 2018, BMI said its total income from the US concert business was $20 million annually, or less than 0.19% of the industry’s revenue. This number is less than 2% of the $1.118bn it paid to songwriters in 2018 (BMI paid $1.5bn in 2022).
The live groups have not commented on the appeal. However, responding to the March 2023 ruling at the time, Live Nation said in a statement, “We advocated on behalf of artists to keep their costs down, and managed to hold the increase to less than 1/3 of BMI’s proposed increase. This will cost the performers we work with approximately $15 million a year spread out over thousands of artists, and cost increases for Live Nation directly are not material.”
An spokesperson for AEG said back in May: “AEG Presents and NACPA were defending performing artists, who bear the costs of BMI fees, in this litigation. The result is that BMI was awarded significantly less than it sought, which is an important benefit for performing artists. AEG Presents will always support all of the artists who make their living on our stages.”
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PRS for Music hails live music rebound
UK-based rights management organisation PRS for Music has hailed the rebound in live music after revealing record collections for 2022.
The society, which represents the rights of over 165,000 writers, composers, and music publishers globally, collected £964 million in 2022, a year-on-year increase of 22.9% (£179.4m), and an 18.9% increase on the previous high of £810m achieved in 2019.
Live music was responsible for generating £62.7m of royalties, an increase of 683% (£54.7m) on the pandemic-hit 2021 and 16.1% up on 2019. More than 128,000 live events were reported to PRS across the year in the UK, including major tours from the likes of Dua Lipa, Ed Sheeran, Little Mix, N-Dubz, The Cure and the Rolling Stones.
“In 2021, PRS for Music set out its vision to pay out over £1 billion in royalties within the next five years,” says PRS CEO Andrea Czapary Martin. “Last year we accelerated progress towards, and beyond, this milestone. Through our ambitious licensing strategy and utilising our joint ventures we have maximised the value of members works at every opportunity, while our investment in new technologies and services means we can pay out royalties more quickly and accurately, delivering the best possible service to members at a market leading low cost-to-income ratio.”
“LIVE continues to champion our sector, and recognises that not all parts of the live music value chain have experienced the same rebound”
PRS also launched its Back to Live Music Venue Prize competition in 2022, which saw six independent music venues across England, Northern Ireland, Scotland and Wales awarded a total of £60,000 of financial support to improve live music experiences for performers and for the local communities they serve.
“Today’s PRS for Music announcement reflects the UK’s love of live music from our talented artists and writers,” says a statement from LIVE, the trade body of the UK live music business. “LIVE continues to champion our sector, and recognises that not all parts of the live music value chain have experienced the same rebound.
“We will continue to work with government and other stakeholders to ensure that the whole live music ecosystem can grow sustainably and uphold the UK’s reputation as a leader in the music industry. Our own report Valuing Live Music will build on this work to explore the dynamics underneath the headlines and highlight the difficulties and successes of the sector.”
Elsewhere, PRS says the European market grew 7.5% (£10.4m) in 2022 to £148.3m, predominantly due to the recovery in live touring – particularly those using PRS’s Major Live Concert Service including Coldplay, Iron Maiden and Sting.
Artists donate royalties to Earth
Brian Eno’s climate change charity EarthPercent has launched a scheme where artists can make the environment the beneficiary of their royalties.
The Earth as Your Co-Writer scheme enables artists to list the Earth as a songwriter and legal beneficiary of royalties, with the money going directly to environmental organisations.
EarthPercent is inviting acts to donate 1% of one new composition – or more should they wish – with funds raised going to the charity’s grant-giving fund.
More than 23 artists including Aurora, Anna Calvi, Jacob Collier, Dave and Stormzy producer Fraser T Smith, Mount Kimbie and Eno himself have signed up for the cause.
Some, including Big Thief, have pledged to donate 1% of touring revenue to the charity to help offset their own environmental impact.
Big Thief have pledged to donate 1% of touring revenue to the charity to help offset their own environmental impact
“The Earth as Your Co-writer is a beautiful idea in which we harness the poetic construct of The Earth as a co-writer of music and direct some of the income from our compositions towards tackling the climate emergency,” says Eno who came up with the concept, and has listed the Earth as a songwriter on new track A Thought.
“EarthPercent provides an easy way for the music industry to make a difference by asking artists to commit a small percentage of their songwriting revenue. All musicians are inspired by the precious planet we live on, so it’s fitting that we are now able to name The Earth as our co-writer.”
The initiative has been created over an 18-month period by a cross-industry advisory group working with EarthPercent.
One of the advisors, Grammy Award-winning record producer Kevin Bacon, reached an agreement with Unison, an accredited rights management entity, who will be collecting the income for the Earth.
During the pilot phase, the charity will be working with the UK Music Publishing Association on how to build the scheme so it can be rolled out on a bigger scale in the future.
How royalties can rebalance a fairer music funding model
The ongoing Covid-19 pandemic has hit the pause button on the ‘live’ global music scene, with many in the industry now turning to new alternative funding streams in keeping their music ambitions and hopes alive. Although musicians and their teams have suffered heavy losses, government-initiated relief funds for artists around the globe has eased the financial burden on the music industry. In the US, for example, close to $20 million has already been raised for struggling artists. Spotify has also collaborated with several organisations to support the global music community, contributing a collective $10 million in donations, as part of the Spotify Covid-19 Music Relief project.
The need for these relief efforts is indicative of the overwhelming dependence artists have on touring and live shows. Yet, there is hope for the music industry with digital music revenues projected to reach one billion US dollars in the UK alone by the end of 2020, while US streaming music revenues grew 12% to $4.8 billion in the first half of 2020. This begs the question: why have artists been slow to reap the benefits of the new digitalisation of music? Despite streaming services proving an important utility to artists, perhaps it is time for musicians to take back more control of their music rights and revenues.
Herein music royalties provide the solution. By opening up music royalties to investors, the music industry can offer up a new sustainable funding revenue model to the benefit of artists, publishers, and record labels alike. For investors and music fans it offers a gateway to a constantly evolving market that is largely immune to geo-political and macro events.
With streaming services under close scrutiny lately, prospective changes to copyright law and royalty negotiations are looming. While the industry may correct itself to remunerate artists more equitably, no one can predict how long this will take. Instead, the funding vacuum ought to be filled by fans, through redirecting the flow of revenue back to artists by investing in their music royalties. With the promise of diversification and returns for investors and much needed liquidity for artists, this could be the next catalyst that lights up a more equitable and sustainable funding model for the music world.
Vanity investments for the new era
Avid music fans will already be well acquainted with vanity investments, where making money isn’t the only primary motive. So in the same way an artist may absorb the full expense of publishing and promoting a particular project, a musical zealot will spend their time and energy supporting their favourite artist purely for the enjoyment in the music and their association with the artist. Record labels have built an important part of their business model on this premise, with the most obvious expenditure for fans being live performances, estimated to constitute approximately 28% of the average musician’s income.
It is time for musicians to take back more control of their music rights and revenues
Merchandise sales are another avenue for vanity investors. With that said, where merchandise can be invaluable for fostering connections between artists and their fans, they represent a paltry 2% of the average artists’ revenue stream. In today’s funding model, support on social media is the only remaining option, which can actually have a significant impact. An article from Pigeons & Planes featured statistics from Indify, which aggregates listener data, social metrics, and online trends to identify emerging musicians.
Outside of streaming and purchasing physical copies of music, there are currently very little alternatives available for music fans to support artists. While committing to a streaming service is a necessary requirement for most musicians in today’s music industry, the uneven distribution of funds and the deferred payments don’t always allow artists to kickstart new projects or make their own career decisions. The artist is ultimately the supplier of the music, so it is about time we see them have fairer access to funding models. What if you could dedicate your funds directly to the artist of choice, cutting out the intermediaries and with the promise of a return?
Music royalties unleash new funding alternatives
Music rights have several characteristics that enhance their value as an asset class. Should a song find its way into an advertisement, a film soundtrack, or perhaps repurposed by another artist in a sample, this will boost the generated royalties. Copyright ownership continues seventy years after the last living recipient has passed, making for a substantial long-term investment. Posthumous record sales often boost the value of an artists’ catalogue too. For example, the famous artist behind “Bowie Bonds” had his first #1 album featured on the Billboard top 200 chart following his death in 2016.
Previously, music royalties have been very much a private market between the artists, record labels, catalogue owners and publishers. Now, with the advent of streaming and the incremental role of smart devices, platforms such as the Hipgnosis Songs Fund are making strides in opening up royalties to the masses. Vanity investors can now convert their funds into royalties investments, underpinning the success of their favourite artists, with the added appeal of returns. Also on our own platform, Anote Music, music fans of all genres have committed their money to acquire music rights, with some of them receiving approximately 8% in returns on their investment within less than three months following the investment platform’s official launch.
How to fix the flaws in a traditional business model
During the pandemic-induced hiatus, some of the shortcomings of various streaming services were exposed using the #brokenrecord and #fixstreaming twitter campaigns. This is reminiscent of a similar campaign, Sleepify, which saw American funk band, Vulfpeck, receive $20,000 in streaming royalties from an album with nothing on it. Despite Spotify’s recent efforts to support struggling artists, this loophole in Spotify’s royalty calculation model exposed how little control artists have of their own music royalties, not least their future finances.
Enabling fans to redirect their funds towards their favourite artists can offer artists a chance to diversify and manage their revenue streams
On a similar note, while publishers make the world of music go ‘round, artists have on occasion proclaimed their dissatisfaction with the way copyright ownership is managed. Examples include Kanye West’s latest outburst, Prince and his infamous debacle with Warner Bros, and Paul McCartney’s lawsuit against Sony to regain copyright ownership over music by his former band, The Beatles. These intellectual property disputes also reflect unease in the current music industry. A new funding model that is transparent and unties publishers, artists, and record labels is therefore the ticket to correct the perceived imbalances weighted against artists.
Many new projects driven by the likes of blockchain and other modern technologies are already embarking on the mission to unite the music industry (publishers, musicians, online streaming services, music fans and catalogues). Some investment platforms offer music royalties of artists through the auctioning of music catalogues, based on the future expected earnings of the music royalties. By offering up music royalties in this way, artists can access a potentially vast liquidity pool to free up cash, while retaining 100% artistic control over their music rights.
All these new initiatives are a welcomed sight for a traditional industry which has been struggling to find answers to its current flaws. In example, there is an estimated $2.5 billion worth of unpaid music royalties tied up globally, either unclaimed or unpaid. Paperchain is circumventing it by turning streaming data from Spotify, YouTube, and others, into digital assets. Correspondingly, opening up music royalties as a viable alternative serves by democratising funding in the music industry, and allowing artists to retain more control over their creative rights. It is a collective effort of the music business and emerging technologies, that so far is proving a unifying force in the music industry. And if you’re doubtful just ask Massimo Benini, CEO of Irma Records, or prominent Polish musician Tomasz Lubert on how they felt about the process.
Time to welcome music royalties as an innovative solution
Until the playing field has been levelled, the funding model of the music industry will continue to cause a divide between right holders, and online streaming services. An equitable, balanced and fair funding model is long overdue for the industry. An impetus is emerging from this pandemic that will prompt fairer treatment of music artists, in terms of copyright ownership and the problematic funding model. Music royalties as a way of investment for fans just might be the answer to addressing these problems.
The availability of smartphone technology, the ever growing passion for music and the low entry barrier means almost anybody can invest in music royalties. Enabling fans to redirect their funds towards their favourite artists can offer artists a chance to diversify and manage their revenue streams, rather than relying solely on a publisher or record labels. Equally, this could address issues of intellectual property, considering that new revenue streams could produce material detached from a specific publisher. In this way, investing in music royalties could foster a fundamental change to the current funding model of the music industry. It is time the music industry once again became united – with music royalties being the answer.
Marzio Schena is co-founder and CEO of ANote Music, the European marketplace for investing in music royalties.
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.
PRS for Music relaunches Major Live Concert Service
UK performance rights organisation (PRO) PRS for Music has announced the launch of its upgraded Major Live Concert Service under the new brand MLCS™ by PRS.
MLCS™ by PRS is an online tool that shows local tariffs across global territories. The aim of the service is to aid arena and stadium-level PRS members performing overseas to negotiate “full and fair royalty settlements”.
The tool offers a pre-tour royalty calculation service, details of headliner and support splits in each country – allowing for accurate forecasts of royalty streams throughout the tour – and provides a post-tour royalty reconciliation feature.
Upgrades to the service include fixed payment terms and further reduced administration fees, as well as a range of new technological solutions and streamlines processes.
Special administrative rates have been implemented for the MLCS™ programme, including local rates of 8.5% in some key territories. PRS for Music now charges an administration fee of £125 per set-list per event for members using the service.
“We acknowledge representing the world’s top talent comes with expectations, and we need to be in a position to offer a service that meets those requirements”
The PRO also states it is working on eradicating “promoter kickbacks” in some territories, and that it provides “full transparency to artists on all aspects of the royalty collection and distribution process” as part of the service.
“We acknowledge representing the world’s top talent comes with expectations, and we need to be in a position to offer a service that meets those requirements to be given the privilege of continuing to collect their concert royalties,” states Sami Valkonen, director of international, PRS for Music.
“We’ve taken on board feedback from several of our key member representatives and are committed to making MLCS™ a proposition that further solidifies PRS as the go-to provider of major concert tour copyright management.”
In 2018, £21 million was collected across 60 countries on behalf of nearly 200 PRS for Music members via the service. The tool was used for Ed Sheeran’s record-breaking ÷ tour and world tours by Bruno Mars, Rogers Waters, U2 and the Rolling Stones.
Music Modernization Act passed by US Senate
Campaigners are today celebrating the unanimous passing of the Music Modernization Act (MMA) by the US Senate. The bill, which now awaits reconsideration by the House and a signature from the president, aims to initiate a complete overhaul of the way music is monetised in the US.
Recognising the “momentous day”, National Music Publishers Association (NMPA) president and CEO David Israelite says: “The Senate vote marks a true step forward towards fairness for the people at the heart of music who have long been undervalued due to outdated laws.”
Included in the 185-page bill is the CLASSICS Act (Compensating Legacy Artists for their Songs, Service and Important Contributions to Society Act). Under current laws, only artist recordings made after 1972 have a federal right to be remunerated when played on digital radio. The CLASSICS Act would see SoundExchange establish royalty payments for music made pre-1972.
“[Today] creators of music moved one step closer to getting paid more fairly and industry forces that fought to maintain an unfair and harmful status quo were rebuffed”
Also included in the MMA is the Allocation for Music Producers Act, which will recognise music producers and engineers by writing them into US copyright law. Studio professionals will be provided with a “consistent, permanent” process for collecting digital royalties for their “contributions to the creation of music.”
Commenting on the passing of the Music Modernization Act, Michael Huppe, president and CEO of SoundExchange, the sole organisation designated to collect and distribute royalties by the US Congress, says: “[Today] creators of music moved one step closer to getting paid more fairly and industry forces that fought to maintain an unfair and harmful status quo were rebuffed.
“Now, SoundExchange’s 170,000-member community has just one word for the House of Representatives: Encore.”