CMU Digest

CMU Digest 18.10.21: Sony Music, Copyright Royalty Board, Black Lives In Music, Hipgnosis, Lyric Capital, Coldplay

By | Published on Monday 18 October 2021

Sony Music

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

The pressure continued to build on Sony Music after a TV exposé into the toxic corporate culture at its Australian division. The investigation by Australian TV programme ‘Four Corners’ built upon reports in The Guardian earlier in the year which in turn led to the axing of the long-time boss of Sony Music Australia, Denis Handlin. In the wake of the TV investigation, record industry trade group ARIA and Queensland music organisation QMusic both revoked honorary awards they had previously handed to the former Sony chief. Although Handlin himself is not directly accused of sexual harassment, it’s alleged he led a toxic workplace where bullying was common, and which allowed sexual harassment and discrimination to occur. Sony Music HQ in New York continues to insist it only became aware of the issues recently, even though complaints about Handlin’s management style went back decades, and actually led to a formal investigation in the 1990s. [READ MORE]

Music publishers and digital platforms both submitted proposals to the US Copyright Royalty Board for what the streaming rate for song rights in America should be from 2023-2027. Unlike in most countries, streaming services can rely on a compulsory licence on the songs side in the US, with rates set by the CRB every five years. The publishers want to push up the share of streaming revenue that is paid to song rights – which is currently in the 10-15% bracket in most countries – to 20%. That would put the US statutory rate someway ahead of what has been negotiated on the open market elsewhere in the world. Previously the US statutory rate was lower than in many other countries at 10.5%, though during the last review for 2018-2022 the CRB said the rate should increase each year until it got to 15.1%. However, that decision is still subject to appeal, even though the period it covers is fast coming to an end. Which means the CRB will now be concurrently considering the 2018-2022 and 2023-2027 rates. [READ MORE]

Campaign group Black Lives In Music published a new report highlighting systemic racism in the UK music industry. Among its key findings, the report stated that 86% of black music creators and 88% of black music professionals believe that they face barriers to their progression in the industry due to the colour of their skin. And 63% of music makers and 73% of professionals surveyed said that they had experienced direct or indirect racism in the industry. The campaign’s CEO Charisse Beaumont said: “You cannot change what you cannot measure. Nearly 2000 people responded to our survey on ‘the lived experience of black music creators and industry professionals in the UK music industry’. That is 2000 people hoping for genuine change. This report is the first of its kind and holds a mirror up to the UK music industry showing what it actually looks like”. [READ MORE]

Two major new deals involving investment funds were announced that will result in more mega-bucks acquisitions of music rights. Hipgnosis confirmed a much rumoured alliance with Blackstone that will make a billion dollars available for the purchase and management of music catalogues. Meanwhile Northleaf Capital Partners announced a new partnership with Lyric Capital Group – owner of Spirit Music Group – which sees Northleaf and other investors set aside £500 million for music rights acquisitions. Both Hipgnosis and Lyric are capitalising on increased interest in music rights within investment circles, which is partly a result of the streaming boom sending the music rights business back into growth, and partly based on the argument that – as an asset type – music rights are pretty dependable, especially if you are looking for steady long-term returns. [READ MORE]

Coldplay outlined everything they are going to do to make their 2022 world tour as eco-friendly as possible. The band had previously said they wouldn’t tour again until they could make sure doing so was “environmentally positive”. On their next tour, shows will be powered by renewable energy, including solar installations at each venue, waste cooking oil and a kinetic stadium floor that will generate energy from fans dancing. Fans will also be encouraged to travel to the venue in an environmentally sustainable way, with an app recommending the most eco-friendly travel options, plus a tree will be planted for every ticket sold and free drinking water will be available in an effort to eliminate plastic bottle waste. Academics from Imperial College London will then scrutinise how effective all these measures are and share their findings with the wider live music industry. [READ MORE]

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