Digital Media Digest

March 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. .


A Music Startup Is Paying Artists For Their Future Royalties 
Amuse, a Swedish music startup that bills itself as a reimagined record label, has introduced a new royalties payment system. Called “Fast Forward,” the program uses machine learning coupled with Amuse’s “vast access to music consumption intelligence” to crunch the numbers on precisely how much an artist or group stands to make in the next six months of their career — and then pays them for those future profits. According to the company, the system can automatically analyze more than 27 billion pieces of data, such as streams of an artist’s latest album, to figure out an individual’s future royalties. Artists who use Fast Forward will be able to view and withdraw those future royalties from the Amuse app directly. (Source: Rolling Stone)

Beck: 'Tarantula' with Gustavo Dudamel and The LA Philharmonic
James Corden and "Roma" director Alfonso Cuarón welcomed Beck and musicians from the Los Angeles Philharmonic, led by Gustavo Dudamel, for a special performance on “The Late Late Show with James Corden” of "Tarantula," a song inspired by the Oscar-nominated "Roma." (Source: CBS)

Class Action Lawsuits Filed in New York Against Sony and Universal
Five musicians brought proposed class actions against Sony Music Entertainment and Universal Music Group in the US District Court for the Southern District of New York. The legal action is based on the refusal of those two labels to ‘permit recording artists to terminate grants of copyright interests 35 years after the initial release’ of the artists’ albums. Section 203 of the Copyright Act, enacted in 1976 and commonly known as the 35-year law, represents ‘a major legal issue in the music industry’, according to the press release announcing the action. The plaintiffs claim that Sony and Universal have violated the law and refused to allow recording artists, who have sent Notices of Termination to those companies, to take back ownership and control of their US copyrights.(Source: Music Business Worldwide)
 
Orchestras Don’t Get Record Deals Anymore The Grammys Show a Silver Lining
Washington Post Classical Music Critic Anne Midgette says that, while “The Grammy Awards for classical music are irrelevant….calling the awards irrelevant strikes me as imprecise.”  “These days, the classical Grammys are much more closely linked to live orchestral performance than they’ve been for quite some time. That’s because most orchestral recordings these days are made during performances, and are issued, in many cases, on orchestras’ own in-house labels. Recording, increasingly, is part of an orchestra’s mandate. And since, as we’ve seen, recordings tend to feature different repertoire than standard subscription programs, this trend of recording concerts for release is contributing, slowly but surely, to a perceptible broadening of the orchestral repertoire.” (Source: Washington Post)

Comcast, DSO Make Deal to Broadcast Live Concerts
Comcast cable watchers in Michigan can now tune in for live Detroit Symphony Orchestra performances. In a content-for-air time trade, Philadelphia-based Comcast Corp. is broadcasting some DSO classical series concerts on its Michigan channel. Comcast will show eight concerts from the 2018-19 season. It brings the DSO's existing "Live from Orchestra Hall" online series to more than 1 million Comcast cable customers in Michigan. (Source: Crains Detroit)
 
Spotify Soars to 96 Million Paying Subscribers — And Posts a Quarterly Profit
Spotify has released its financial results for the fourth fiscal quarter of 2018. For the first time in the company’s history, operating income, net income, and free cash flow were all positive. Premium subscribers reached 96 million, up 36% year-over-year. The company attributed the ‘better-than-expected’ gain from its Google Home promotion and annual holiday campaign. In addition, monthly active users (MAUs) grew to 209 million, up 27% over the previous year quarter. (Source: Digital Music News)
 
Spotify Will Now Suspend and Terminate Accounts That Use Ad Blockers
Thinking about using an ad blocker to stream music for free on Spotify? Well, think again. According to a new report, Spotify has silently added new rules against ad blockers in its latest Terms of Service update.  The rules state “circumventing or blocking advertisements in the… Service, or creating or distributing tools designed to block advertisements in the… Service” will lead to an immediate suspension or termination of your account. (Source: Digital Music News)

Netflix and the Economics of Bundling
By receiving 14 Oscar nominations, and winning 4 of the, Netflix solidified its position as an insider in the theatrical movie business. Well, in every way but one: Netflix still doesn’t “release” its movies in theaters.  Instead of using an exclusive theatrical release, Netflix movies are almost always available to stream the same day they are released in theaters. This raises an important question. How can Netflix be so successful while rejecting the most important part of the business: the theatrical release? The answer is that Netflix is pursuing a fundamentally different business model from everyone else in the industry.  Netflix is not in the business of selling individual movies to many different customers. Instead, it’s in the business of selling many different movies to individual customers—in bundles. Bundled subscriptions allow Netflix to practice a different kind of price discrimination from the movie studios. The company doesn’t have to figure out how much a consumer values any individual movie on the service. The bundle does that for them—very profitably. (Source: Harvard Business Review)
 
Copyright Owners Cannot Sue Until After Registration: SCOTUS
The US Supreme Court has ruled that copyright infringement suits cannot be filed until after the US Copyright Office has granted registration of the work at issue. Fourth Estate is a cooperative news organization which licensed its work to news website Wall-Street.com, on the condition that the site would remove Fourth Estate’s content if it cancelled the agreement. However, Wall-Street.com continued to display articles produced by Fourth Estate after cancelling the agreement, prompting the cooperative to sue for copyright infringement. In its ruling rejecting Fourth Estate’s claim, the Supreme Court cited section 411 which states that a copyright infringement suit cannot be filed “until preregistration or registration of the copyright claim has been made.” Marsha Gentner, senior counsel at Dykema in Washington, DC, said that “although the case engendered much commentary while pending … the unanimous decision was garden variety statutory interpretation. The court noted the current long delay for processing a copyright application to registration by the Copyright Office, but said this was a problem for Congress (not the court) to fix, either by way of the budget or legislation.” (Source World IP Review)
 
Soprano Julia Bullock will take the charge of hosting a wide range of opera content on the newly formed ALL ARTS broadcast channel and streaming platform. ALL ARTS is a new arts platform from WNET that offers free streaming to viewers. The channel will launch its opera content with the Théâtres des Bouffes du Nord’s production of “Katia Kabanova.” This is the first of many such presentations, which will feature Bullock as the host, offering her own “personal and professional insights to the operas at the beginning of each episode.” (Source: Opera Wire)
 
Sony Music Brought in Over $2 Billion in Streaming Revenue in 2018
Streaming music continues to boost Sony Music’s bottom line. Sony has released its financials for its third fiscal quarter (FY Q3) of 2018, the three months ended December 31st, 2018. Breaking down its 2018 fiscal year, Sony Music Entertainment (along with its various sub-labels) brought in over $2 billion in streaming music revenue alone. That figure rose 22.3% over the previous year, when the major label brought in $1.7 billion from streaming. (Source: Digital Music News)

NMPA Submits Mechanical Licensing Committee Proposal; Calls for No-Bid Contract
The Music Modernization Act (MMA) calls for the creation of a quasi-governmental body to handle the collection and disbursement of streaming mechanical licenses. But should the process be open to competing proposals and bids? A large coalition of major publishers and industry groups submitted their initial plans to take over the Mechanical Licensing Committee (MLC). Perhaps a bit presumptuously, the group has called themselves the ‘industry-consensus Mechanical Licensing Collective,’ while asserted that a selection process is unnecessary. The move follows an earlier submission from the American Mechanical Licensing Collective, or AMLC, led by heavyweight artists, which submitted paperwork last November to the U.S. Copyright Office for MLC consideration. The AMLC is decidedly the David in this face-off, with Goliath representing the NMPA’s coalition of publishers, trade groups, labels, and tech power-players. (Source: Digital Music News

U.S. Copyright Royalty Board Submits a 44% Songwriter Streaming Royalty Increase
Last year, songwriters and publishers scored a major increase in streaming royalty rates. Now, that 44% rate bump has been officially published by the U.S. Copyright Royalty Board, though streaming services have 30 days to challenge the increase. Ahead of any challenge, major publishers are issuing stern warnings to Spotify, Amazon, and other streaming music services. The obvious next question is whether any of the streaming platforms will appeal the ruling. (Source: Digital Music News)
 
Vimeo’s owners, the media group IAC, recently reported that revenues grew by 54% for the video streaming service. Vimeo revenues rose to $160 million in 2018, largely thanks to the launch of its paid subscription service. Paid subscribers grew 9% on the platform, with 952,000 members at the end of 2018. Despite the growth for both revenues and paid active users, IAC says Vimeo is not profitable yet.(Source: Digital Music News)
 
Qobuz, an Unnecessarily Costly Streaming Music Service, Launches in the US
Qobuz, a self-proclaimed platform for ‘true music connoisseurs,’ chose to roll out its high-fidelity streaming music platform service stateside on Valentine’s Day. Available on all platforms, Qobuz allows for streaming in up to 24-bit/192 kHz true Hi-Res FLAC – about 29x the audio quality of MP3. Like every other streaming service out there, you can also download your favorite tracks offline on all devices, including mobile and desktops. In addition, the French music platform proclaims it provides ‘exclusive, curated, and in-depth editorial content.’ This includes deep metadata, complete digital booklets, interactive articles, reviews, and playlists. Its library spans all genres, including jazz and classical. However, unlike most major streaming music services in the US, Qobuz’s plans remain unnecessarily pricey. For a Sublime+ subscription, which includes full Hi-Res streaming and discounts for Hi-Res purchases from its download store, users will have to fork over $299.99 a year. A Studio subscription, which only includes unlimited Hi-Res streaming, costs $24.99 a month, or $249.99 a year. Its Hi-Fi service – a la TIDAL – featuring 16-bit CD quality streaming costs $19.99 a month, or $199.99 a year. (Source: Digital Music News)

SoundCloud is Now a Full-Blown Distributor to Apple Music, Spotify, Pandora
SoundCloud may now become a one-stop shop for every indie artist, with the introduction of its new distribution platform. The indie streaming service has unveiled SoundCloud Premier distribution, now in open beta. The new platform will distribute artists’ music to all major streaming music services. These include Amazon Music, Apple Music, Instagram, Spotify, Tencent, and YouTube Music, among other services.  Musicians with a Pro or Pro Unlimited account have access to the distribution platform for free, enabling them to automatically receive payouts from these services. To offer direct digital distribution, the indie streaming service has reportedly partnered with FUGA. (Source: Digital Music News)