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Ivors and MU hit out at the Epidemic Sound model to licensing music for video

By | Published on Wednesday 8 July 2020

Epidemic Sound

UK songwriter and musician organisations the Ivors Academy and Musicians’ Union have said that the recently announced alliance between Adobe and production music library Epidemic Sound is part of a “concerning trend to undermine the ability of composers to make a living through royalties”. But Epidemic Sound insists that its business model is being misunderstood.

The comments from Ivors and the MU follow criticism of Epidemic Sound by the European Composer And Songwriter Alliance last year. That criticism came amid the controversy that surrounded US TV network Discovery seeking to change the way it pays for the music it uses in its programmes, so that composers would only receive an upfront fee and no additional royalties when programmes air.

This all relates to complexities around how the music industry manages and organises its rights, and the big split – on the songs side – between the mechanical rights and the performing rights. These complexities even impact production music and therefore many of Epidemic Sound’s competitors.

Basically, in most Anglo-American markets songwriters assign the performing rights in their songs to their collecting societies. Which means if they subsequently work with a broadcaster or production music library on making some music – and if those projects involve an assignment deal so that the broadcaster or library will own the rights in any music that is made – the performing rights in the song cannot be part of of that deal. The performing rights will automatically belong to the writer’s society.

That means that whenever videos containing that music are screened, broadcast or streamed, additional royalties will have to be paid via the collective licensing system. So, with production music, although the library can provide its clients with a licence covering the recording rights and the mechanical rights in the song, that licence won’t cover the performing rights in the song.

Discovery was trying to change its deals with the musicians it works with so that the network would also control the performing rights in any music it commissioned, meaning no additional licence would be required and no additional royalties would need to be paid whenever programmes aired. In theory, American music-makers could do that deal while still being a member of an American society like BMI or ASCAP, because collecting society rules are slightly different in the US.

However, there was push back from the songwriter community at large, and Discovery subsequently announced that it wouldn’t seek to force its ‘performing rights included’ deal on all the music-makers it collaborates with. Although there are still moves within the US television space to try and change the way music deals are done to simplify the licensing process and reduce ongoing royalty payments.

The music-makers that Epidemic Sound works with sit outside the collective licensing system entirely. This means that they can grant the library control of all elements of both the song and recording copyrights, which in turn allows Epidemic Sound to offer its licensees super simple licences.

This approach gained momentum during the YouTuber boom, as a new generation of video-makers sought a simpler way to access music, with a guarantee that any music licence they bought would be truly global and that no other entities could or would suddenly claim rights in a track via YouTube’s Content ID system.

Though, while the YouTubers were first to embrace the model, Epidemic Sound’s client base has grown to include more traditional programme makers. And – responding to comments under YouTube videos containing its music – it has also licensed its catalogue to Spotify for more conventional listening too.

The Ivors and the MU say that Epidemic Sound’s model is part of a wider trend where creators and performers working on music for media projects are increasingly pressured to give up more of their rights than they would like. And that includes pressure to sign “full buyout deals”, so that they are not due any future royalties beyond an upfront fee.

Mat Andasun, a library music composer and member of The Ivors Academy’s Media Committee, said this morning: “Epidemic Sound is a music library that asks its writers to give up their legal entitlement to royalties in exchange for a lump sum payment upfront”.

“This kind of deal always leaves a bad taste in my mouth as a writer”, he goes on, “because although it seems as if Epidemic is offering to take all the risk on your work not selling after you’ve spent time crafting it, what they are actually doing is depriving you both of the opportunity to reap the rewards of your work selling over many years, and the chance of cashing in on any unusual success your work might have. Making music for commerce is a risk-and-reward model, and writers and publishers should share equally in both”.

Ivors recently teamed up with the MU, of course, to campaign for changes in the way the streaming music business works, with both groups criticising a streaming business model which they argue was designed to favour record labels over everyone else. However, they say, that campaign is also targeting “objectionable commissioning practices surrounding fees and rights negotiated for the composition of music for screen”.

Confirming that stance, MU Deputy General Secretary Naomi Pohl noted comments made by Epidemic Sound CEO Oscar Hoglund when announcing his recent deal with Adobe – which will integrate his company’s music into some of the software firm’s editing packages.

“Oscar Hoglund claims that musicians will benefit from being discovered on Adobe through Shazam”, says Pohl. “This exposure narrative forms part of a widespread exploitative model that the music industry has difficulty shaking. Exposure without royalties doesn’t pay the bills. As we come out of the COVID-19 crisis and TV production restarts, we will be working to ensure composers have sustainable careers. Their royalties are sacrosanct as far as we’re concerned”.

Meanwhile, Ivors CEO Graham Davies said of Epidemic Sound’s disruptive approach to production music licensing: “When there is disruption, we should ask – disruption of what, and to what end? Companies seem to believe that they are faced with a great challenge in trying to devise a fair yet profitable model for paying composers for screen. But that model already exists – royalties. Royalties and related rights exist for creators to share in the revenue generated by their works proportionally to the works’ success, be it high or low”.

“Companies such as Epidemic Sound”, he added, “which make buying out rights and eluding the collective rights management system their USP, are undermining the future of musical composition at its very core, pushing back on the safeguards that allow music creation to be a viable career choice”.

But Epidemic Sound insists that the music-makers it works with – none of whom are UK-based – like the company’s model, and the short-term financial security that comes from the upfront fees they get paid.

It also says that, when it comes to the extra revenues created by music in its library – such as if a track goes big on Spotify, possibly via a chill out or relaxation playlist – it shares that extra income with the music-makers on a 50/50 split basis. And while it is true that musicians working with the firm have to opt-out of the collective licensing system, Epidemic Sound argues that that’s because of society rules, not because it is seeking any exclusive relationship with the music-makers on its team.

Responding to the latest criticisms of his model, the aforementioned Hoglund told CMU: “We’ve come to expect this viewpoint from the more traditional part of the industry that we’re disrupting. Our door is always open and we’d happily sit down with any organisation that would like to better understand how we support and remunerate musicians. That way it is an informed debate and they can hear from our music creators first-hand about how our team and our business model supports them both financially and creatively”.

It seems certain that music licensed for user-generated content – whether on YouTube, Facebook, Instagram, TikTok, Triller or wherever – is going to be a key part of the next phase of growth for the digital music market. Meanwhile in TV, as things become increasingly global in the Netflix age, the traditional territorial approach to music licensing is falling part, and the line between YouTube-style content and more traditional TV productions is starting to blur.

All of which means ever more attention will fall on the various issues that exist with the traditional way things have worked in this domain, the various innovations and new models that aim to overcome those issues, and which of those new approaches the music-making community should embrace.