CMU Digest

CMU Digest 02.08.21: Tencent, Women In CTRL, CRB, FLVTO/2conv, Reservoir

By | Published on Sunday 1 August 2021

Tencent Music

The key stories from the last week in the music business…

Tencent was ordered to give up any exclusive rights it has over music catalogues in China within 30 days. That order came from the Chinese competition regulator, which also fined the web giant in relation to its unfair practices in the digital music market. The ruling is part of a wider crackdown by China’s State Administration Of Market Regulation against various tech companies in the country. As well as running three streaming services and a popular karaoke platform, Tencent Music Entertainment has also exclusively represented a number of music catalogues in the Chinese market, including music from all three majors. Which meant that rival streaming services in the Chinese market had to negotiate licensing deals with their biggest competitor. That said, some of those exclusivity deals had already ended, partly as a result of past pressure from SAMR, with Sony and Universal both now having direct deals with Tencent rival NetEase Cloud Music. Now Tencent will have to end all of its exclusivity deals, except its narrower partnerships with individual independent artists. [READ MORE]

The Women In CTRL organisation again put the spotlight on diversity at the top of the UK music industry’s main trade organisations and collecting societies. Although things have improved since 2020, there is still work to be done. The new study concluded that “female representation has increased, but women are still underrepresented” across the twelve organisations analysed, with 42% of board members now women, up from 34% a year ago. Women In CTRL founder Nadia Khan welcomed the improvements, but added: “True diversity goes beyond female representation to minority groups, disability, socio-economic status, sexual orientation and education. Let’s try to fix the system and have real conversations”. [READ MORE]

An assortment of songwriter groups called on the US Copyright Royalty Board to knock back a proposal to keep the mechanical royalty rate for CDs and downloads the same. Mechanical copying is covered by a compulsory licence in the US, which is why the CRB sets the rate. For CDs and downloads, where labels are the main customers of mechanical rights, that rate has remained unchanged since 2006, at 9.1 cents per copy. The National Music Publishers Association and Nashville Songwriters Association International told the CRB they’d agreed with the major labels to keep that rate in place. But a submission from the Songwriters Guild Of America, the Society Of Composers & Lyricists and Music Creators North America – also backed by various other groups – said that proposal is not supported by the songwriter or indie publisher community, and that at minimum the rate should keep up with inflation. They also argued that the NMPA is not a neutral representative of the songs business because it’s biggest three members – the Sony, Universal and Warner publishers – have a vested interest in the status quo, because of their sister label businesses. [READ MORE]

It was confirmed that the Russian operator of stream-ripping services FLVTO and 2conv would no longer participate in his ongoing legal battle with the record companies. The majors sued Tofig Kurbanov in Virginia for the copyright infringement his stream-ripping sites enable. He claims that, because he and his websites are based in Russia, the US courts do not have jurisdiction. The labels’ lawsuit was initially dismissed on those grounds, but was then reinstated on appeal. Most recently the court hearing the case ordered Kurbanov to store and share server logs that show where his websites’ users are based and what audio they are ripping. He argued that doing so would be an unreasonable burden and raise privacy concerns. Rather than comply with the court order, Kurbanov’s lawyers confirmed their client was now planning to just ignore the case. Which almost certainly means he’ll lose. It then remains to be seen what the labels can do with any legal win against the Russian defendant and his company. [READ MORE]

Music firm Reservoir formally listed on the Nasdaq stock exchange via a merger with a special purpose acquisition company. The deal with Roth CH Acquisition II Co was first announced back in April. SPACs are businesses with no active operations that raise money via a stock exchange with a view to buying another company, and through that acquisition the acquired company gets something of a back door stock market listing. Following the completion of the merger with the SPAC, Reservoir said that it was “the first US-based publicly traded independent music company and the first female founded and led publicly traded music company in the US”. [READ MORE]

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