What’s happening with the Spotify stock price? Chris Castle argues the main downward driver for SPOT is the market catching up to the inflated Spotify DPO stock price and its subsequent insider-heavy stock sales.
Starting next week, we’re going to start keeping track of the path to implementation for the Mechanical Licensing Collective under the Music Modernization Act! If you see any milestones we left out, please leave a comment. We’re thinking of calling it the “Countdown to Modernity”.
An academic statistical analysis from Finland raises interesting questions about user-centric royalty systems.
Desperate times for YouTube. CEO Susan Wojcicki is currently organizing a Childrens Crusade, against EU MEPs by urging YouTubers (mostly US teens) to “take action” to protect her $772 billion dollar company’s swollen profits. You see the EU just proposed guidelines (article 13) requiring platforms like YouTube to stop hiding behind its users and pay musicians […]
Now I never said that Music Modernization Act was a self-licking ice cream cone. That was someone else.
The Google “license” in the MMA on pre-72 recordings allows a sound recording owner of a pre-72 recording to approve or disapprove a request for a noncommercial use of that recording. However ridiculous this whole thing is, it is the law, so we must deal with it. We will have more to say about the proposed regulation in coming days, but a couple points jump right out–most importantly, the obligation on the user to clear the song in the recording before burdening either the Copyright Office or the sound recording copyright owner with a no-money clearance request.
If you don’t have time for any other news this week, make sure you read Rob Stringer’s interview in Music Business Worldwide, which should be read side by side with Jody Gerson’s recent interview with Anne Marie Steele.
Rob Stringer (CEO of Sony Music Entertainment) is a long-time records man who brings that underappreciated touch to Sony. (And since I agree with a lot of his approach, naturally I think its refreshing.)
Here’s an example. Every now and then, a label runs across an opportunity for one of their artists that turns out to be a windfall, a true windfall. Sometimes those are driven largely by the artist’s own reputation and creative patina like a soundtrack, sometimes the label creates the opportunity. Either way, it’s not budgeted revenue and it’s both nonrecurring and unusually large, so there’s a strong argument for pass through treatment from time to time. “Pass through” meaning the label collects the money but pays the artist’s share of it out regardless of the artist’s recoupment status.
This generally gives the accountants heartburn, even if done sparingly. But in addition to being a good artist relations move, it’s also the right thing to do. I did that with Road Rash 3DO which was the first videogame to use “real” music, i.e., licensed music, and was also the first and last to actually pay a royalty (across all platforms). (Some games do pay a royalty, but not like the one we got.) I also did it with a soundtrack that was one of the last truly huge soundtracks and our artist had a featured slot. Both those instances put 6 figures into the artist’s bank accounts and we made plenty of money, too. Moral of the story: Leave some on the table.
The same can be said of Rob Stringer’s decision to “give back” to Sony artists on the sale of Sony’s shares in Spotify (more or less confirming that there was a tranche of shares issued to Sony as consideration for licensing the catalog):
“We gave back to the artists which was a deliberate strategy because we wanted to say to them, [you’re] the reason we have most of these shares…”
That’s a great attitude. And of course, is exactly right. (Sony also bought some shares, which, of course, should be Sony’s money as it was Sony’s risk.) I’m not so sure that someone didn’t have to…shall we say persuade…others in the company of the correctness of the sharing move, and it is an awful lot of money. But in the end Rob Stringer got the company to do the right thing, and it’s the kind of thing a good records man would do.
He also makes another excellent point that every artist should think seriously about when considering one of these various direct deals on offer:
“I don’t think Spotify wants to be funding the entire artist development process – we have thousands of people, literally, that we can get to face in the same direction on a global basis,” said Stringer.
“Spotify doesn’t claim to have those thousands of people globally [working in artist development], they are a digital distribution platform… sometimes the lines can become blurred and, quite frankly, we’re both learning as we go along.”
When a major is actually working for you and firing on all cylinders, they really do have that ability to get everyone around the world doing the same thing at the same time in multiple time zones and through multiple distribution channels relevant to their particular market. Or as Jody Gerson said, “[i]t takes a village to break an artist.”