The Music Modernization Act is not the law of the land yet, but it’s pretty damn close, as the House of Representatives today (Sept. 25) unanimously approved passage of the U.S. Senate’s version of the bill, which had itself been approved by that chamber last week. Now, the MMA is off to the White House where it will await the signature of President Donald Trump before becoming the law of the land.
Source: Music Modernization Act On the Brink of Becoming Law, Awaits Only President’s Signature
The long road to copyright revision is nearing its end as the U.S. Senate passed the Music Modernization Act by unanimous consent Tuesday (Sept. 18). The move mimics the House’s unilateral support, previously passing the bill by a vote of 415-0 back in April. Now the Senate version of the bill will go back to the House where it needs approval due to all the changes made to the bill in order to get it passed in the Senate.
Source: Music Modernization Act Passes in Senate With Unanimous Support
Christie’s will auction off an artificial intelligence (AI) artwork for the first time this October, hard on the heels of a pioneering all-AI art exhibition held at New Delhi gallery Nature Morte. While the market is eager to move the work, the field raises questions about ownership, obsolescence, and the art world jobs that algorithms can’t do.
Source: Who Gets Paid When Art Created by Artificial Intelligence Sells
Controversial reforms to copyright law have been approved by the European Parliament, leading to potentially huge changes to how platforms like YouTube handle user-uploaded content and fan-made music videos. Members of the European Parliament (MEPs) voted in favor of the Copyright Directive by a clear majority of 438 votes for, 226 against and 39 abstentions. An earlier version of the proposal was rejected in July, following fierce lobbying from both the tech and music communities.
Source: European Union Passes Controversial Copyright Reforms: ‘A Historic…
With the 3rd annual RightsTech Summit approaching, RightsTech co-founder Paul Sweeting was interviewed by the Copyright Clearance Center‘s Christopher Kenneally for CCC’s Beyond the Book podcast.
Sweeting and Kenneally discuss the growing investor appetite for rightstech companies, the emergence of securitized rights and royalties as a financial asset class, data and transparency, and plans for the RightsTech Summit.
“What’s happened in the last two decades at an accelerating pace has been a transformation of the primary mode of consumption from one based on ownership to one based on access,” Sweeting noted. “What that’s done to the media businesses and rights-owning businesses is it’s fundamentally changed how they make money. They no longer sell or they no longer predominantly sell copies of things. They have recurring revenue streams resulting from licensed access. That recurring revenue stream model has meant recurring payout obligations to those media companies.”
Where you have recurring revenue streams, Sweeting explained, “you have a measure of predictability of the returns on rights, because you can measure the recurring revenues and make projections with a reasonable degree of confidence as to what those revenue streams will be five years out, 10 years out. So where you have a measure of predictability in returns, essentially rights are becoming something like a financial asset class in their own right, because investors are always looking for predictability of returns.”
The full podcast is embedded below, but is also available on CCC’s website, and on Apple Podcasts, Google Play and Stitcher Radio.
The full transcript is available here.
Is it still shocking in 2018 to see someone drop more than $50,000 on a digital playing card? Well, that’s what happened when Gods Unchained, a blockchain-based digital card game, wrapped an auction on its rarest card to date: the Hyperion Mythic card. It sold for 146.279 ETH, which was worth about $54,000 at the time. If that doesn’t shock you, how about the fact that a digital trading card of Elon Musk is currently on auction for about the same price?
Source: The weird, wild and expensive world of blockchain art
On Monday, the 9th Circuit Court of Appeals wiped out an eye-opening 2016 summary judgment ruling by a trial court that raised the prospect that music owners could enjoy perpetual copyright because remastered versions were independently copyrightable. In today’s decision, the appeals court concludes that the judge shouldn’t have ruled so quickly for CBS and casts doubt on whether remastered sound recordings exhibit enough originality to be copyrightable.
Source: Appeals Court Revives Lawsuit Against CBS Over Pre-1972 Recordings
One of our goals in launching the RightsTech Project was to help draw attention to the growing amount of, as well as the growing need for, investment in the business-to-business layer of the media value chain.
That’s the layer that connects the creative end of the pipeline with the consumer or market-facing end of the chain. It’s the layer where intangible rights are supposed to get translated into tangible forms of commerce so that market demand can be met and authors and rights owners can capture the monetary value of their work, or at least a portion of it.
Hipgnosis Songs Fund CEO Merck Mercuriadis, left, with advistory board member Nile Rodgers
Over the past two decades, both the creative and market-facing ends of the value chain have been utterly transformed, in scale and velocity, by digital technology. But the middle layer, the B2B layer, until recently remained stubbornly analog, opaque and slow. The result was a highly and increasingly inefficient system for translating market transactions into remuneration for creators.
There are many reasons for that inertia. Unlike the creative and market-facing ends of the pipeline, the B2B layers is not governed by ordinary supply and demand but by a complex web of contracts, business arrangements, statute, legal precedence, treaty, and tradition, all of which are difficult and resistant to change.
Even where there has been a will to change, however, the means were often not available, due to a significant under-investment in B2B systems, from both a technological and financial perspective. You can’t simply make old systems run faster; you need new systems, which takes both money and imagination.
More recently, though, that investment has started to come, particularly on the technological side. The gradual construction of a large-scale, cloud-based computing and storage infrastructure has made it economically feasible to develop and deploy the sort of secure, enterprise-scale rights management and payment systems media companies need to cope with the scale and velocity of transactions generated by new modes of content creation and consumption.
The emergence of new technologies such as blockchain and artificial intelligence has also attracted entrepreneurs and developers bent on disrupting — or at least improving upon — legacy systems.
Now, the financial side is starting to catch up. In June, the Hipgnosis Songs Fund successfully raised $260 million through an initial public offering to invest in acquiring song catalogs. The capital raise represents a clear bet not just on the future growth of the subscription streaming business and other new revenue sources for music, but on the capability and capacity to translate those revenue streams into value for rights owners and investors.
This fall is expected to bring an announcement regarding what may be the first rightstech-focused VC fund, led by long-time music industry executive and consultant Göran Andersson and former Armonia Online CEO Virginie Berger. The pair are looking to raise a $50 million war chest, with half to be earmarked for musictech startups and half for non-music focused rightstech ventures.
This week brought the announcement of a deal by City National Bank to acquire artist payment platform Exactuals, which recently expanded from its base in managing film and television residuals payments into managing music rights and payments.
Exactuals has plans to target additional media businesses with its payments platform in the future as well, according to CEO Mike Hurst, who also foresees increased financial investment in the rights and rights-management space.
“I think you’re going to see increased in investment in the sector for a couple of reasons,” Hurst said in an interview with RightsTech. “Number one is scale. The volume of uses has just exploded and there’s a real need for automation” of business systems to keep up. “Ten or 15 years ago, in the TV business, you had maybe 20 cable channels that wanted four or five movies a year from any given studio and that was your residuals business. It was almost all in the U.S. and the number of deals was very manageable. Today, every country has 100 channels looking for content, and you have global players like Netflix who don’t just want to buy four or five movies, they want everything you’ve made for the past 11 years. So you need systems that are agile and scalable in a way they weren’t before.”
A second factor, Hurst said, has been the emergence of rights as an asset class in themselves.
“These rights have become tradeable commodities and there’s just a huge amount of rights changing hands now,” he said. “Moving these assets around is very difficult, because of the scale and because there are a lot of moving parts.”
Hurst also sees several factors likely to attract financial investors to the sector as well.
“The returns [for investors] can be very good, it’s a more interesting business than 10-year treasury notes, and the streaming business is exploding,” he said. “So, even if you think you’re paying a high multiple [for rights] today, in five years it could turn into a really tremendous investment.”
That’s certainly the view of the founders of the Hipgnosis Songs Fund, which last month paid $23 million for a 75 percent stake in the 302-song catalog previously owned by composer Terius Nash.
“When we talk about gold, oil or diamonds, we talk about things that the financial world feels are priceless and investable. My ambition is that in the future they will feel the same way about songs,” Hipgnsos CEO Merck Mercuriadis told RightsTech last week. “Today 90 percent of the artists that are being signed are singing someone else’s song. So the song and the songwriter is clearly the most important component of today’s music industry,”
That growing investor interest in rights-based assets can also translate into demand for rightstech investments as well, according to Hurst.
“In our case, we make money when we make payments. And we make payments when uses happen,” he said. “As the market grows, we will make more payments, which will generate more revenue on a relatively fixed cost base. So from an investment perspective, you’re getting the underlying value of the company plus the value of the growth in the market. So it’s sort of a double dip in terms of ROI.”
Mercuriadis will be featured in a special fireside chat at the RightsTech Summit on Oct. 5, along with Hipgnosis advisory board member and Grammy-winning artist and producer Nile Rodgers.
Click here for information on how to register for the summit.
In the calendar year of 2016, the latest year we can capture across all income sources, the global value of music copyright in worldwide revenue terms was nearly $26bn – representing growth of $1.5bn (+6.1%) on 2015. That’s a much bigger figure than IFPI’s value of recorded-music-only in the same year, at $16bn.
The $1.5bn annual growth is exciting when you consider that, in the prior year, the total annual global copyright revenue figure grew by a significantly smaller amount – $941m.
Source: How the global music copyright business grew by $1.5bn in 2016 (and why that’s amazing news today)
The revised and amended Music Modernization Act that got the okay from the Senate Judiciary Committee June 28 was still garnering accolades from all sides of the music business days after its passing. Yet, the proposed amendments to the bill — some that were added in the Senate and some that are still under consideration by lawmakers — are also raising new questions and concerns, including how to pay for the proposals.
Meanwhile, the clock is ticking: the Senate needs to act on the bill before this Congressional term ends; otherwise lawmakers and music industry lobbyists must start the legislative process again next year after the fall midterm elections bring new officials into Congress.
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Source: As Clock Ticks, New Hurdles Mount Against the Music Modernization Act