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Esmúsica: ‘collective voice’ of Spanish music biz is born

Organisations from the live, recorded and publishing sectors in Spain have joined forces to create Esmúsica, a federation acting as a “collective voice” for the Spanish music industry.

The umbrella body was formed yesterday (Wednesday 30 October) at industry conference BIME Pro, which is taking place until 1 November in Bilbao, north Spain. The organisation takes a similar model to that of umbrella groups in Britain (UK Music) and Canada (Music Canada).

Industry figures signed the agreement to launch the federation, with representatives from Acces (national association for live music venues); Aedem (Association of independent music publishers); AIE (Society for performing artists and publishers); APM (Association for music promoters); Arte (Association of stage technicians); Opem (Organisation of professional music publishers); Promusicae (Spanish music producers); SGAE (General society of authors and publishers); and Ufi (Union for independent phonographers).

Iñaki Gaztelumendi, founder and president of Spain Live Music and the person responsible for the new body’s strategic plan, told Spanish news agency Efe that Esmúsica will “put the demands of this sector – which is of such economic, cultural and social importance – on the public agenda, so we can improve as a collective entity.”

“Esmúsica will put the demands of this important sector on the public agenda”

Esmúsica aims to work closely with the state to aid the sustainable development of the Spanish music sector, focusing on areas of talent, creativity, intellectual property, entrepreneurship, training, innovation and internationalisation.

The association also wants to create national standards for all areas of the music industry in the country.

In addition, Esmúsica will produce a best practice guide relating to hiring in the sector and collaborate in the formation of an Academy of Spanish Music.

In terms of financing, the umbrella organisation plans to create a state fund dedicated to the development of the music industry.

The new body will also form the Observatory of Spanish Music, an analytical body looking at the current state of the Spanish music industry and working on ways to advance in the future.

Spain is the focus of the latest IQ market report, available to read online in the most recent edition of IQ Magazine here.

 


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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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CISAC readies sanctions against SGAE

Cisac – the association representing the world’s copyright collection societies – has announced plans to impose sanctions against SGAE, amid continued alleged rule-breaking by its rogue member from Spain.

At a meeting of its board of directors yesterday (4 December), Cisac (the International Confederation of Societies of Authors and Composers) resolved to initiate its sanctions process against SGAE, which could result in the Spanish society’s expulsion.

“Cisac’s board of directors, at its meeting of 4 December 2018, discussed the serious situation at SGAE and the society’s breaches of Cisac rules,” reads a statement from the association. “In view of SGAE’s failure to remedy these breaches, the board decided to launch a sanctions procedure under Cisac’s statutes.

“This procedure could result in various sanctions and measures, including the expulsion of SGAE from Cisac.”

SGAE (Sociedad General de Autores y Editores) has been embroiled in controversy since June 2017, when police raided its offices in search of documentation relating to an alleged scam dubbed ‘the wheel’ (‘la rueda’), in which SGAE members and TV execs allegedly conspired to create “low-quality music” – often reworked versions of songs in the public domain – then broadcast on late-night TV, generating performance royalties collected by SGAE.

SGAE maintains it is “totally willing to comply” with Cisac’s recommendations

Royalties from music licensed under la rueda account for around 70% of monies collected by SGAE from television, despite reaching only around 1% of the TV audience, according to Spanish paper El País.

In July, four of the five big music publishers – Warner/Chappell, Sony/ATV, Universal Music Publishing and BMG – along with the smaller, US-based Peermusic, wrote to the society requesting to pull their international catalogues, which include the likes of Bruce Springsteen, the Rolling Stones, Radiohead, Lady Gaga, Beyoncé and Enrique Iglesias, collectively comprising almost 60% of broadcast collections in Spain, from SGAE.

In a 65-page report published in May, Cisac found “serious concerns” relating to “distorted and inequitable distribution of royalties” at SGAE, and ordered the society to overhaul the way it does business.

While SGAE maintains it is “totally willing to comply” with Cisac’s recommendations – including the appointment of a new director-general (Gerardo Rodríguez, hired last month) and the creation of an external monitoring body, the association says SGAE has failed to fix its shortcomings. A final ruling is scheduled for Cisac’s annual general meeting in May 2019.

 


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Major publishers to pull catalogues from embattled SGAE

Four of the big five international music publishers have taken the first steps towards severing their ties with SGAE, as the fall-out from the alleged ‘wheel’ scam continues to plague the controversial Spanish collection society.

Warner/Chappell, Sony/ATV, Universal Music Publishing and BMG, along with US-based indie Peermusic, have each written to SGAE requesting to pull their international catalogues, which include the likes of Bruce Springsteen, the Rolling Stones, Radiohead, Lady Gaga, Beyoncé and Enrique Iglesias, collectively comprising almost 60% of broadcast collections in Spain – according to leading daily El País.

SGAE (Sociedad General de Autores y Editores) has been embroiled in controversy since June 2017, when police raided its offices in search of documentation relating to an alleged scam dubbed ‘the wheel’ (‘la rueda’), in which SGAE members and TV execs allegedly conspired to create “low-quality music” – often reworked versions of songs in the public domain – that was then broadcast on late-night TV, generating performance royalties collected by SGAE.

Royalties from music licensed under la rueda account for around 70% of monies collected by SGAE from television, despite reaching only around 1% of the TV audience, says the paper. “Our repertoire, however, receives about 1%,” says Santiago Menéndez Pidal of Warner/Chappell Spain and Portugal. “It’s a joke.”

Publishers’ association ICMP warned last month that, despite having being reprimanded by the international publishing community and a World Intellectual Property Organisation (WIPO) arbitration panel, SGAE continues to operate a version of the alleged scam.

“We need the people who have brought corruption to this house gone”

When the purported scheme first came to light, SGAE said it had introduced measures to address the ‘wheel’. However, ICMP suggested the society never intended to eliminate the scheme completely, and a Spanish court has since rejected the WIPO panel’s decision (which would have restricted the percentage of ‘wheel’ music on TV to 20%) entirely.

An ICMP source said, pending a wholesale “revision of the society’s governing structure”, publishers may be forced to seek “alternative licensing options in order to protect their repertoire in Spain.”

In identical letters sent to SGAE last Friday, the five publishers accuse the organisation of “mistreating” their international/‘Anglo-Saxon’ repertoire, and lay out their intention to take their catalogues elsewhere.

According to El País’s sources, the most likely destination for those rights would be a “well-known Italian entity”, with public performance and live/popular music royalties set to follow as part of a period of “decolonisation” of all rights currently administered by SGAE, starting in January 2019.

“For us to stay [with SGAE], we need the people who have brought corruption to this house gone,” says Rafael Aguilar, Peermusic’s regional president. “Fire the president, José Miguel Fernández Sastrón, and ensure that real musicians are represented in the [SGAE] governing body – not the wheel.”

SGAE did not respond to a request for comment.

 


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Artists urge sweeping changes at “fraudulent” SGAE

More than 150 Spanish musicians have signed an open letter calling for government action against SGAE, as controversy continues to rage over alleged corruption at the beleaguered collection society.

In a manifesto titled En defensa de nuestros derechos (In defence of our rights), the signatories – who comprise dozens of major local artists, including Alejandro Sanz, Pablo Alborán, Antonio Orozco, Dani Martín, Malú, Juanes, Bebe, Fito and Los Ilegales – urge the ministry of culture to prevent SGAE being used as a “fraudulent instrument” (“instrumento fraudulento”) against songwriters, with many also calling for the society to be shut down and re-founded under new management.

SGAE (Sociedad General de Autores y Editores) was brought into disrepute in June when police raided its offices in search of documentation relating to an alleged scam dubbed ‘the wheel’ (la rueda), in which SGAE members and TV execs allegedly conspired to create “low-quality music” – often reworked versions of songs in the public domain – which was then broadcast on late-night TV, generating performance royalties collected by SGAE.

18 arrested in raid on Spanish PRO SGAE

“We request authorities and the ministry of culture to act against the bad practices, taking into account their obligation to regulate the SGAE,” reads the letter, seen by El País.

Among the signatories’ demands for a ‘new’ SGAE are the “equitable and proportional allocation of rights” in line with to the contributions of each songwriter/author; an “urgent reform”, in the wake of la rueda, of the distribution of royalties from television; a reform in authors’ representation at the society, including extending the right to vote to a greater number of members; and a code of conduct to promote transparency and best practice.

Some artists and associations have also reportedly approached law firm MA Abogados for legal advice as to the return of monies “allegedly defrauded” by SGAE.

 


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18 arrested in raid on Spanish PRO SGAE

Police yesterday made 18 arrests as part of a new investigation into alleged corruption at SGAE, the troubled Spanish performance rights organisation (PRO).

Agents of the Specialised and Violent Crime Unit (UDEV) raided SGAE’s offices in search of documentation relating to a scam dubbed ‘the wheel’ (la rueda), which saw SGAE members and TV execs allegedly conspire to create “low-quality music” – often reworked versions of songs in the public domain – which is then broadcast on late-night TV, generating performance royalties collected by SGAE.

El País reports that a small group of SGAE members have been turning la rueda for a number of years, with them listed as the composers of the songs and the TV stations as publishers, so the royalties are split between two ways. The newspaper says the scam has netted those involved several millions euros over a number of years.

SGAE members and TV execs allegedly conspired to create “low-quality music” broadcast on late-night TV, generating royalties collected by the PRO

Television channels believed to be involved in the scandal are TVE, Telemadrid, Euskal Irrati Telebista, Castilla-La Mancha Televisión, Radiotelevisión Canaria and Televisión de Aragón.

SGAE’s offices were raided in 2011 as part of a probe – dubbed Operation Saga – into the alleged misappropriation of funds meant for creators.

Four former employees, including ex-president Teddy Bautista, were last September cleared of all charges, with the National Court of Spain citing “insufficient” evidence for the allegations. (CMU notes, however, that Pedro Farré – a one-time ally of Bautista – has since authored a book, Cazado, “about his time expensing drugs and prostitutes” to SGAE. Make of that what you will.)

IQ has contacted SGAE for comment.

 


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Legal victory for direct licensing in Spain

In what the winning party is calling a landmark victory for advocates of direct licensing, a Spanish court has ruled against SGAE in favour of a venue which had negotiated to pay performance royalties directly to artists.

The ruling – by Judge Pedro Macías, of the commercial court of Badajoz in Extremadura – centres on two shows by veteran Spanish rock group Asfalto and comedian Pablo Carbonell at Badajoz’s 325-cap. Sala Mercantil in 2010.

When SGAE (Sociedad General de Autores y Editores), the Spanish collection society and performance rights organisation (PRO), realised the venue had not paid its fees, it announced its intention to collect – only to be told in an email that “the artists had reached a private agreement between them” and the Mercantil, according to Juantxu Manzan of the venue’s lawyer, OpenLaw.

OpenLaw believes Macías’s ruling – in which he affirmed artists’ “exclusive rights to the exploitation of the work, without any limitations other than those established by law” – has the potential to set a precedent for other composers and performers wishing to follow Asfalto and and Carbonell’s lead.

“The owners of these rights are the authors, so they are the ones who should be able decide what to do with them,” comments OpenLaw’s Andrés Marín. “If a composer and performer negotiate directly with a third party and agree to give away or even collect their copyrights directly, the SGAE has no right to try to collect, or recover, the rights the artist has not claimed.

“This ruling, therefore, opens a door that, until now, was closed to artists represented by SGAE: to be able to decide whether to collect their own royalties.”

“The owners of these rights are the authors, so they are the ones who should be able decide what to do with them”

The growth of direct licensing – in which an increasing number of artists are choosing to bypass their local PROs in favour of collecting performance royalties directly – was one of the live music industry’s biggest stories of 2016. Most affected are festival promoters – the vast majority of which have one-stop, blanket licences – with many facing the prospect of paying multiple licensees: the PRO and the artist directly.

While reports in some Spanish papers, such as El País, appear to suggest SGAE’s dispute was with the artists themselves, Asfalto frontman Julio Castejón tells IQ that isn’t the case. “It is not Asfalto who had a lawsuit against SGAE,” he explains. The information that has circulated is wrong.”

While explaining that he has his “own ideas of how copyright [should be] collected at concerts”, he adds that “in no case did we want to act as copyright collectors to replace SGAE. That information has been manipulated.”

A legal spokeswoman for SGAE clarifies that the PRO’s lawsuit was aimed at the Mercantil, not the performers – and says Macías displayed a “clear misunderstanding” of copyright law by failing to distinguish between the rights of performers, composers and publishers.

“The performers said to the court that they’d received their royalties, and the court understood that to mean the composers had, too,” she tells IQ. “It was a clear misunderstanding of Spanish copyright law, which distinguishes between the rights of composers and artists.” (In both cases, it should be noted, the composers and performers were one and the same.)

“It was a clear misunderstanding of Spanish copyright law, which distinguishes between the rights of composers and artists”

She insists Spanish creators can, if they wish, opt out of SGAE’s collective licensing – but that in the case of the two disputed shows, neither performer had done so. “If any of our members want to withdraw certain rights, there’s a procedure for it,” she explains. “But what we can’t do is have both systems: If they have a blanket licence, they can’t then administer their rights directly as well – it would be chaos for us.”

Matters are complicated by a pending supreme court case over whether SGAE must abolish its 10% box-office tariff on major shows – dubbed “abusive” by promoters’ association APM – with the PRO provisionally adopting a lower 8.5% while it awaits the final decision.

Adam Elfin, of leading direct-licensing agency PACE Rights Management, says it’s important those wishing to collect their performance royalties directly go through the proper channels. “PACE’s position has always been that if you want to directly license, you first need to reassign the rights from your PRO,” he comments. “If rights-owners are directly licensing without first engaging with their PRO, I can see that causing unnecessary confusion for all stakeholders.”

While Castejón says Macías’s ruling is the first time a court has agreed that “the author can collect their own royalties if they want to”, SGAE doubts whether the case – which concerned the non-payment of less than €1,000 – was a “landmark decision”, and says the story has been “exaggerated” by the Spanish press.

Victorious law firm OpenLaw, however, says the decision shows traditional collection societies are ultimately subordinate to the wishes of copyright holders – and demonstrates a “clear victory over the unjustified position of dominance that SGAE exerts over many of Spain’s music venues and artists”.

 


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