Digital Media Digest

May 2019

With the accelerating pace of technological change, the League posts a monthly digest of relevant news and information regarding changes, trends, and developments that may affect the digital media activities that orchestras use to achieve their institutional missions. For each monthly digest, the League's digital media consultants, Michael Bronson and Joe Kluger, draw from a variety of websites and publications to provide excerpts or summaries of articles. (These do not necessarily represent the views of the League.)  

As a service of the League, members with questions about the information in this digest or about other digital media topics – e.g., planning, strategy, and production – may contact Michael Bronson at This email address is being protected from spambots. You need JavaScript enabled to view it. or Joe Kluger at This email address is being protected from spambots. You need JavaScript enabled to view it. .


Major digital music and streaming services Amazon, Google, Pandora and Spotify filed separate appeals of a U.S. Copyright Royalty Board ruling that increases mechanical royalty rates paid out to songwriters by 44%. Apple, which bills itself as a friend of musicians and songwriters, is conspicuously absent from the list of appellants. (Source: Apple Insider)
Media companies whose business models have been upended by the internet have long complained about Google and other online platforms profiting from their content without compensating them adequately. The media industry got some help recently, with the European Parliament’s adoption of a copyright law that requires technology platforms to sign licensing agreements with musicians, authors and news publishers in order to post their work online. The new law is meant to force tech firms to aggressively remove unlicensed copyrighted material from their websites proactively, rather than waiting for complaints to come in before acting. (Source: New York Times)
The global recorded music market grew by 9.7% in 2018 — its fourth consecutive year of growth — to $19.1 billion, according the latest annual report from the International Federation of the Phonographic Industry (IFPI). Streaming revenue grew by 34.0% and accounted for almost half (47%) of global revenue, powered by a 32.9% increase in paid subscription streaming, according to the report. There were 255 million users of paid streaming services at the end of 2018, with paid streaming accounting for 37% of total recorded music revenue. Growth in streaming more than offset a 10.1% decline in physical revenue and a 21.2% decline in download revenue. Streaming in North America was up by 14%, though that was down from 2017’s 17.1%. (Source: Variety)
 
In 2017, SoundExchange CEO Michael Huppe collected compensation of nearly $1.4 million, a 27% year-over-year increase of roughly $300,000. That ‘non-profit’ payout drew serious criticism, though a ‘black box’ unmatched holding balance of nearly $300 million also raised eyebrows. So, what are the figures for 2018? Despite repeated attempts dating back to January of this year, SoundExchange has refused to disclose critical financial information from 2018. (Source: Digital Music News
Spotify announced that it has filed an antitrust complaint against Apple with the European Union, alleging that the iPhone maker is harming consumer choice and stifling innovation via the rules it enforces on the App Store. As Spotify’s CEO Daniel Ek outlined in a blog post, the company is particularly annoyed about the 30 percent cut Apple takes from subscriptions made via the App Store. This “tax,” suggests Ek, seems designed to harm streaming services that compete with Apple’s own. Ek says that if Spotify pays this cut it has to “artificially inflate” its prices “well above the price of Apple Music.” But if it doesn’t pay, Apple applies “a series of technical and experience-limiting restrictions” that make Spotify an inferior experience. (Source: The Verge)
 
Following Spotify and other big streaming companies’ controversial decision to appeal a ruling from the Copyright Royalty Board that would require higher payouts to songwriters, several artists — the majority of whom are some of the biggest songwriters in the industry — have signed a joint letter expressing their disgust. “We’re hurt and disappointed,” begins the letter, which is addressed to Spotify CEO Daniel Ek. Their reason for calling out Spotify alone, while Google, Amazon, and Pandora were also listed on the appeal, is because the artists say it was “the only provider that made us feel we were working to build a modern music industry together.” (Source: Vulture)
 
Last October, Spotify made a surprising move into the digital distribution business. Apple Music soon followed close behind. Earlier this year, the company narrowed its ‘Preferred Distributors’ list to just 3 – CD Baby, Distrokid, and The Orchard. Spotify had also unveiled its distributor list under two tiers – Preferred and Recommend. Now, the streaming music giant has once again updated its distributor list.  On the Spotify for Artists page, Distrokid and CD Baby remain the company’s preferred artist distributors. Sony’s The Orchard continues to stand alone as the company’s only preferred label distributor. Under ‘Recommended Label Distributors,’ which includes FUGA and Believe, Spotify has quietly added Absolute Label Services. (Source: Digital Music News)
Swedish streaming music giant Spotify published its financial report for the first fiscal quarter of 2019.  The service has become the first streaming music platform to reach 100 million subscribers.  This figure grew 32% year-over-year.  In addition, the service now has 217 million total monthly active users (MAUs), up 5% over the previous quarter.  The company reported 123 million users on its ad-supported service.  Breaking down the company’s financials, Premium revenue reached $1.5 billion, up 34% year-over-year and 5% over Q4 2018.  Ad-supported revenue took a major hit, growing 24% year-over-year to $140.6 million, but plummeting 28% over the last quarter. The company’s net loss for Q1 2019 totaled $158.6 million.  Spotify’s net income last quarter totaled $507.5 million. (Source: Digital Music News)
 
Amazon has entered into discussions to launch a free, ad-supported music service, sources familiar with the plan tell Billboard — intensifying its competitive threat to global streaming leader Spotify. The world’s biggest e-retailer would market the free music service through its voice-activated Echo speakers, sources say, and would offer a limited catalog. To obtain licenses for the free music, Amazon has offered to initially pay some record labels per stream, regardless of how much advertising Amazon sells. (Source: Billboard)
 
Once again, PBS president and CEO Paula Kerger has to justify the 50-year-old institution of public media. Last month, the Trump administration proposed for the third year in a row the elimination of the Corportation for Public Broadcasting, the “quasi-governmental” organization that distributes federal money to more than 300 PBS stations across the country. Kerger explained on the latest podcast episode of Recode Decode why eliminating federal funding for PBS would not hurt all stations equally. Some in urban centers like New York and Washington, DC, might be able to get by with the money they get from other sources, including corporate underwriters and individual donations. But the threat is a more “existential” threat for stations in rural areas that “are not going to make it ... unless there is some federal support.” (Source: Vox)
 
The U.S. Department of Justice is seriously considering the removal of 1941-dated performance royalty consent decrees. That’s music — and money — to the ears of mega-PROs [performance rights organizations] ASCAP and BMI, who have spent most of their lives under the restrictive decrees. But the decrees, which were imposed in 1941 to prevent anti-competitive gouging and unfair business practices, are deeply ingrained in the businesses of both PROs and the publishers and songwriters they represent. Which means removing them might be seriously complicated. (Source: Digital Music News)

US radio stations, restaurants, Spotify, tech giants speak out on PRO consent decrees: ‘They are more critical than ever’
ASCAP and BMI say they’re stodgy, antiquated laws. But a consortium of radio stations, restaurants, hotels, and major tech giants like Spotify and Google/Alphabet are defending the Department of Justice’s long-running Consent Decrees as necessary safeguards. (Source: Digital Music News)
In a change to its ContentID claims process, YouTube wants everyone to rely on its all-encompassing ContentID, an automated system that can reference millions of songs, films, TV shows, audiobooks, and more to find matching content. ContentID trawls YouTube looking for instances in which a copyrighted work might have been used and notifies the original owner. The copyright owner then has a few choices, including removing a video or simply monetizing it. The new change will prevent content owners from filing a manual claim if ContentID has already discovered a claim on the same video. Manual flagging is not available to everyone on YouTube. It is typically reserved for multi-channel networks (MCNs) and other large entities. In a post informing these networks of the policies, YouTube says the change addresses dispute queue times. (Source: Digital Music News)
 
In a David vs. Goliath battle, the U.S. Copyright Office received two bids to run the MLC, the Mechanical Licensing Collective, which is mandated by the recently-passed Music Modernization Act to collect digital mechanical license royalties. The first group, which simply titles itself the ‘MLC,’ is led by the National Music Publishers’ Association (NMPA), which represents major publishers like Sony/ATV, Warner/Chappell, and Universal Music Publishing Group and a number of larger indie publishers. It also has heavy endorsement from non-publishing groups, including the RIAA. The American Mechanical Licensing Collective, or AMLC, is backed by a consortium of indie publishers, music technologists, and decidedly non-major publishers. (Source: Digital Music News)
 
In a landmark vote, the European Parliament has approved the Copyright Directive.  This includes two controversial measures – Article 11 (the ‘link tax’) and Article 13 (‘upload filters’). The Copyright Directive now grants rightsholders an improved negotiation position with online platforms that use their works.  In addition, authors and performers will benefit from new provisions included in the bill. These include better remuneration and contracts. The Copyright Directive will also establish lighter rules for small startups.  Article 13 (now 17 in the final text) requires for-profit internet companies, most notably YouTube and Facebook, to license content directly from copyright holders. Should they fail to do so, they must immediately take infringing works down, ensuring said works are not re-uploaded. (Source: Digital Music News)
You, too, can compose like Bach. Or rather, artificial intelligence can compose like Bach. Or at least, that’s the premise of a recent Google Doodle, which promised to take any two-bar melody you type in and turn it into a Bach, or Bachlike, chorale in four parts, played by charming little music-box figures of bewigged 18th-century musicians. It may only add to the doodle’s charm that what it actually proves is the opposite of what it sets out to do. Nobody can compose like Bach. Especially not a machine. You already knew that. But you can have a lot of fun along the way to finding it out. (Source: Washington Post)