CMU Daily 01.08.17: Spotify tops 60 million premium users, RIAA says Spinrilla has no safe harbour

Spotify passes 60 million users as stock market listing looms
Spotify now has more than 60 million paying users, while sources reckon that the streaming music firm will list on the New York Stock Exchange in quarter four providing Warner Music signs on the dotted line with a new multi-year licensing deal.

Spotify last updated its official premium subscriber count in March when it passed the 50 million benchmark. It quietly updated that figure to 60 million on its website yesterday, amid further chatter about the firm's plans to become a publicly listed enterprise.

As previously reported, the Spotify company is planning a so called 'direct listing' on the New York Stock Exchange, an unusual move, but one that is arguably less risky in the PR stakes. It means that existing shares in the company will start to be traded on the stock exchange, but no new shares will be issued.

Ahead of that, the streaming music company has been busy getting new multi-year licensing deals in place with all the key content owners, with Universal Music, Sony Music and indie label-repping Merlin already on board.

Which means that the Warner deal is the last major contract still to be signed. The mini-major is expected to agree to similar terms to its competitors – a cut in revenue share in return for more data, marketing and control over content – though the specifics of the arrangement are still being finalised.

Although the public listing should mean less PR challenges than a more conventional initial public offering, once listed on the stock exchange Spotify and its business model will be under the constant scrutiny of Wall Street.

Long-term success in subscription streaming requires a combination of mass scale and keeping expenditure under control. Spotify bosses will be hoping that cutting its revenue share commitments to the labels in the new deals combined with this year's impressive premium user growth figures will keep the City boys happy in the near term at least.

Quite how many paying users Spotify needs to be a viable business long-term is still an unknown quantity, further complicated by discounting that reduces the value of the average subscriber, and growth in emerging markets where the value of a premium subscription is somewhat lower. Still, current growth rates remain impressive, so there is probably room for just a little bit of optimism. At least until dinner time.

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RIAA argues that Spinrilla doesn't have safe harbour protection
The US record industry is trying to bulldoze Spinrilla's safe harbour. Can you bulldoze a harbour? That's the question, isn't it? The bulldozer would get wet I suppose. Is that a deal breaker? I tried Googling "can you bulldoze a harbour?" because, you know, Google is meant to answer everything. No answer my friend. Bring back Ask Jeeves I say.

Anyway, Spinrilla is the hop hop mixtape sharing app that was sued for copyright infringement by the record companies back in February. The mixtape set-up quickly hit back the following month arguing that [a] it employed the Audible Magic rights management technology on its platform that the record industry had requested it use; [b] the labels now suing it had in the past lobbied for their music to be promoted on the service; and [c] safe harbour, safe harbour, safe harbour, safe harbour.

The safe harbour, of course, is the much talked about (in music circles) bit of law that says that internet companies can't be held liable if their users use their servers or networks to infringe copyright, providing said internet companies have a system in place via which rights owners can remove infringing content. Spinrilla argues it is compliant with the safe harbour that is set out in America's Digital Millennium Copyright Act.

But not so, says the Recording Industry Association Of America in a new filing with the court. The record industry trade group reckons it's found at least two technicalities which mean that Spinrilla does not qualify for safe harbour protection. So bring on the bulldozers.

"Defendants have not registered a designated DMCA agent with the Copyright Office and have not adopted, communicated, or reasonably implemented a policy that prevents repeat infringement", says the RIAA in its new filing. And both of those things are necessary to employ the safe harbour. "Either of these undisputed facts alone renders defendants ineligible for the protections of the DMCA", the labels group adds.

Honing in on the repeat infringer issue, something that was at the heart of the last big safe harbour case in the US when BMG successfully sued internet service provider Cox Communications, the RIAA's court filing goes on: "[One user] uploaded a new mixtape each week for over 80 consecutive weeks, each containing sound recordings that the RIAA identified to Spinrilla as infringing, including recordings by such well-known major label artists as Bruno Mars, The Weeknd, Missy Elliott, Common and Ludacris".

Did Spinrilla do anything about that user and their repeat infringing. No, it did not, the RIAA reckons. Meaning the defendant doesn't have safe harbour protection, despite that being the core of their defence. It is now to be seen whether the court concurs.

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Blogger adds to the pile of Fyre Festival lawsuits
Another Fyre Festival lawsuit? Yeah, why not I say. A blogger who documented the whole Fyre Festival debacle, as it unfolded on the island in the Bahamas that was meant to host the supposedly luxurious event, has now sued founders Ja Rule and Billy McFarland for fraud, misrepresentation and breach of contract.

Blogger Seth Crossno posted photos from the Fyre Festival shambles, showing how the event's actual site compared to the luxury set-up that had been promised. His coverage of the unfolding clusterfuck generated plenty of clicks and numerous media subsequently got his take on the whole event, which was cancelled just as it was opening for business.

Crossno reportedly spent $13,000 on tickets for the festival via a package that promised a private jet would get him to the island. In the end his flight was downgraded to a more run of the mill Boeing 737, but with the promise that his accommodation would be upgraded and he'd have artist passes for the weekend. Needless to say, the accommodation upgrade wasn't up to much.

According to Amplify, the new lawsuit filed in North Carolina by Crossno and his friend Mark Thompson states: "When [they] arrived to the site, they were shocked to find that, instead of the luxury experience that was advertised, they were greeted with a disastrous and barren area where workers were scrambling to set up the most basic infrastructure. [There was] no security in place and minimal amounts of Fyre Festival workers were available to provide direction or information".

The new lawsuit is seeking $25,000 in damages, accusing Ja Rule, McFarland and the festival's marketing chief Grant Margolin of the fraud, misrep and contract breach. The new litigation, of course, lands on a pile of other lawsuits filed against the Fyre companies and their founders by angry ticket-holders, suppliers and financial backers. McFarland also faces criminal charges for alleged fraud.

Though given McFarland is being repped by a public defender in the criminal case and is self-defending in at least one of the civil lawsuits after being unable to pay his lawyer's fees, it's not clear if there is any money left for all these litigants to claim. Until McFarland et al sell the movie rights to the whole Fyre shit storm. I'd probably pay to see that film.

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Universal to administer Bruce Springstreen's entire songs catalogue
Bruce Springsteen has signed a wide-ranging deal with Universal Music Publishing which will see the major administer his entire songs catalogue on a worldwide basis.

And this is the first time a single publisher has repped Springsteen's entire oeuvre worldwide. I know what you're thinking, but what about that time? But that time didn't exist. You made it up! That time is a non-existent time that only exists in your totally unreliable stop-lying-to-yourself screwed up memory. This is a first right. Say it with me, one and all, "it's the first time a single publisher will represent Springsteen's entire catalogue worldwide". I'm telling you, with news this big, some people better be THRILLED.

"We are THRILLED to be working with Jody Gerson and her team", says Springsteen's manager Jon Landau. "After forty productive years of working with the leading independents, it is now time for us to centralise Bruce's publishing. Universal Music Publishing combines putting the artist first with creating, leading, and managing the incredible changes occurring in the world of publishing. At this point in Bruce's legendary songwriting career, they are an ideal fit".

Adds the there mentioned Jody Gerson, CEO of the Universal music publisher: "During a career spanning more than 40 years, Bruce Springsteen has amassed one of the most iconic catalogues of songs in the history of music. As an artist, his demand for excellence and his requirement for heart and passion in everything that you do is the standard for how we operate every day at Universal Music Publishing. We are THRILLED to put the entire global resources of our company into expanding the popularity of his music and creating exciting new fan experiences".

Double THRILLED. Sweet.

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SESAC radio rates go down after arbitration, though fuels argument against the US rate courts
US collecting society SESAC yesterday confirmed that new royalty rates had been agreed with the American radio industry via an arbitration process. The bad news is that the rates radio stations will pay the performing rights organisation have gone down by around 60%. But the good news is that the society is still getting rates 50% higher than rival PRO ASCAP.

There are four collecting societies representing the performing rights in songs in the US – two big ones, BMI and ASCAP, and two smaller ones, SESAC and Global Music Rights.

The big two are regulated by the pesky consent decrees, agreements with the US Department Of Justice designed to overcome the competition law concerns of collective licensing. SESAC is not governed by consent decree, but did agree to accept independent arbitration on rate setting with the Radio Music License Committee, partly in a bid to stop the radio industry pushing for government regulation in line with ASCAP and BMI.

SESAC having agreed to that independent arbitration in 2015, it was expected that the rates the society could demand from radio would go down. However, the SESAC rate is still significantly higher than that secured by ASCAP last year, which was a voluntary agreement, but one reached under the threat that the RMLC would take the matter to the rate court that is empowered to set rates by the society's consent decree.

Many in the music community argue that the rate courts repeatedly set the royalties paid to BMI and ASCAP members at below true market rates. And SESAC reckons that its new deal with the US radio sector, set by independent arbitrators, proves that argument. Which could help BMI in its ongoing battle with the RMLC over future rates. And Global Music Rights, which is currently fighting RMLC over whether or not to involve independent arbitrators in its licensing negotiations at all.

Says SESAC boss John Josephson: "While we believe that the value of our music substantially exceeds the amount of the award and the nature of the arbitration process made it inevitable that we would see a reduction in our fees for terrestrial radio, the panel's decision is a resounding affirmation of the fact that ASCAP rates in radio do not reflect fair market value".

He went on: "We are pleased to create a benchmark that we hope will benefit all songwriters and publishers. Songwriters are amongst the most heavily-regulated small businesspeople in the United States, and this agreement marks an important step in SESAC's ongoing effort to assure that they receive fair compensation for their works".

And hurrah for that. And hurrah for Adele, the latest artist to shift her performing rights Stateside over to SESAC. Her prize is less radio money but also more radio money. Super.

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Production Music Awards return
Organisers of The Production Music Awards have announced that The Production Music Awards, which are, erm, awards for production music, will return in November alongside Tune Up, a day of sessions for musicians and composers on making music to soundtrack telly shows and movies and such like.

MCPS Production Music is the flagship sponsor of the event, though there are other music industry outfits and organisations sponsoring elements of the show. Go on Spotify, dare you to sponsor the Best Chill Out Award. I don't think there is one, but they could set one up. It would annoy people. It would be funny.

Meanwhile the production music wing of mechanical rights society MCPS is THRILLED to be supporting the 2017 PMAs. Look, here is Simon James, Head Of MCPS Production Music. He says: "Last year's PMAs were a triumph and we're THRILLED to continue our support of this positive event, showcasing the fabulous, high quality music our industry consistently produces".

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Paul McCartney, Jack White, Jay-Z, more

• Paul McCartney has written a song about Donald Trump. "Sometimes the situation in the world is so crazy, that you've got to address it", he told students at LIPA, according to the Liverpool Echo.

• Jack White has been in the studio working on his next solo album. Look, photo evidence!

• Have you checked out the tracks Jay-Z forgot to put on his new album '4:44'. 'MaNyfaCedGod' features James Blake, while 'Blue's Freestyle/We Family' includes his daughter Blue Ivy. There's also a track called 'Adnis'. All three will be on the bonus edition of '4:44'.

• A deluxe remastered version of Underworld's 1999 album 'Beaucoup Fish' will be released on 25 Aug. Four discs there'll be, four!

• Major Lazer have posted a video for their track 'Sua Cara', featuring Anitta and Pabllo Vittar. Fun fact: it was filmed in Morocco. No lie.

• Arcade Fire have announced a third show at London's Wembley Arena on their 2018 UK tour - this one on 13 Apr. Tickets will be on sale from Friday.

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Live Nation sues theoretical sellers of Coldplay knock off merch
Hey, anyone planning on selling unofficial Coldplay merchandise in Boston this weekend, consider yourself sued. Live Nation just sued you. They sued your ass. Check your ass. It's just been sued. That's what the short sharp pain was all about.

Except that Live Nation doesn't actually know who you are. So, actually, your ass is fine. Unless, by an extraordinary coincidence, your name is John Doe and you work for XYZ Company. In which case, as you were, your ass has definitely been sued.

So, yes, Live Nation's merchandise company last week filed legal papers in Boston against anyone who might be planning on selling unofficial merch outside Coldplay's show in the city this Friday. Because, says the live giant, it has the exclusive right to flog Coldplay tat "in the vicinity of the group's concerts on the group's present North American concert tour".

But, not actually knowing who is planning on selling knock off Coldplay beanie hats on Friday, Live Nation filed legal papers against John Does 1-100, Jane Does 1-100 and XYZ Company, with a plan to amend the names accordingly if and when any dodgy Coldplay beanie hat sellers are actually sighted near Boston's Gillette Stadium.

Presumably the live firm hopes that the threat of immediate litigation will keep said illicit beanie hat sellers away from Coldplay's show. Though if you are planning on setting up a stall selling Chris Martin inaction figures, if you could change your name to John or Jane Doe before Friday, that would save on the paper work.

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