Business News CMU Digest

CMU Digest 05.02.23: Tidal, TikTok, Music Venue Trust, ticketing fees, AI exceptions

By | Published on Sunday 5 February 2023

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

Universal Music announced an alliance with Tidal to investigate a possible alternative business model for music streaming. It follows the recent memo from Universal boss Lucian Grainge in which he criticised the way streaming income is currently shared out across the catalogue of music available on the streaming platforms. Although he didn’t go into specifics, Grainge seemed to mainly object to mood music and background noise being treated the same as more conventional music when money is being allocated to tracks based on consumption share. In this week’s announcement, Universal and Tidal said they are going to “explore an innovative new economic model for music streaming that might better reward the value provided by artists”. That might include factoring in track length when money is shared out, putting a premium on artist-led user engagement and allowing artists to offer add-on premium experiences within the streaming apps. [READ MORE]

TikTok confirmed it is experimenting with some restrictions in its music library in Australia. Some users in the country won’t be able to access all the music clips usually available within the TikTok app. The social media firm said it was temporarily putting some restrictions in place so it can “analyse how sounds are accessed and added to videos, as well as looking to improve and enhance the wider Sounds Library”. Bloomberg pointed out this could be linked to the ongoing negotiations between TikTok and the music industry about its music licences. The record labels and music publishers are looking to increase their income from TikTok, possibly by shifting the service from a lump sum to revenue share licensing model. But there remains disagreement over just how important music clips are to the TikTok experience. The video sharing app could use its analysis in Australia to support its claim that the music industry is overstating the importance and therefore value of commercially released music on the platform. [READ MORE]

The UK’s Music Venue Trust published an annual report that said venues are “operating on razor thin margins” and often “struggling to survive”. The report included a survey showing that the country’s grassroots venues together employ over 30,000 people, and staged 177,000 events in 2022, with 565,000 individual performances attracting audience visits of almost 22 million. However, that’s a 16.7% decline on 2019 levels, in part because of cutbacks venues have had to instigate to stay in business as costs have surged following the COVID-caused shutdowns. MVT added that while the total income generated by events staged at the surveyed venues was over £500 million, the profit margins of the venues themselves have been hugely squeezed. Calling for more support from both government and the wider music industry, MVT said it was important to “reiterate the precarious financial position that much of the sector still finds themselves in – the current economics no longer stack up”. [READ MORE]

Joe Biden took aim at the fees charged by ticketing platforms. The US President encouraged law-makers in the country’s Congress to consider a Junk Fee Prevention Act, which would regulate sectors that commonly add extra fees to online transactions, including the ticketing sector. Biden’s proposal followed the recent session in Congress looking at ticketing in general and Live Nation’s Ticketmaster in particular. In theory the ticket agent’s fee is charged separately to the face value of any one ticket because – when multiple primary agents sell tickets to the same show – they are encouraged to compete on those transaction fees. But that theory falls down when one ticket agent gets 100% of the tickets for a show. Consumer rights groups have long called for the fees to be bundled into the headline ticket price or at least for ticketing platforms to advertise tickets with the full price after all fees have been included. If Congress runs with Biden’s plans, the platforms might be forced to do just that. [READ MORE]

The UK government confirmed it is not proceeding with a proposed new copyright exception covering data and text mining by AI companies. The music industry had heavily criticised the proposal, which might have allowed companies developing music-making AI to train their technologies by mining data linked to existing music without getting permission or a licence from the owners of the copyrights in that music. IP minister George Freeman said during a debate in the UK Parliament that that proposal was, with hindsight, a bad idea. He added that the government now planned to have “deeper conversations” with creators, platforms, publishers, broadcasters and digital intermediaries on this issue, in order to “ensure that we do not rush precipitately into a knee-jerk move that is wrong”. [READ MORE]

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