CMU Daily 05.03.21: Jay-Z sells "significant majority" of Tidal to Jack Dorsey's Square, EU officials could send Apple statement of objections based on Spotify complaint, as UK regulator launches investigation into tech giant's App Store rules

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Jay-Z sells "significant majority" of Tidal to Jack Dorsey's Square
Jay-Z has sold a "significant majority" of his Tidal streaming service to Twitter CEO Jack Dorsey's Square company. Exactly how much of the streaming firm that accounts for isn't clear, but it's set Square back $297 million. Not bad, considering Jay-Z paid $56 million for the whole thing six years ago. And, you know, it's Tidal.

"I said from the beginning that Tidal was about more than just streaming music, and six years later it has remained a platform that supports artists at every point in their careers", reckons Jay-Z. "Artists deserve better tools to assist them in their creative journey. Jack is one of the greatest minds of our times, and our many discussions about Tidal's endless possibilities have made me even more inspired about its future".

Predominantly a financial services company, Square is best known for its mobile payments platform. As part of the new deal, Square will offer financial tools to artists on Tidal to help them collect royalties. Should they want such a thing.

When Jay-Z acquired what had previously been known as WiMP back in 2015, he brought on board a load of celebrity musician friends to join him as stakeholders in the company too - including Madonna, Chris Martin, Kanye West, Nicki Minaj and his wife Beyonce. This allowed him to push a narrative that Tidal was going to be the most artist-friendly streaming service to have ever existed anywhere.

Under this new deal, Dorsey said yesterday, those artists will collectively become "the second largest group of shareholders" in the streaming service. Back in 2017, tel co Sprint also acquired a 33% slice of the Tidal business, though - ahead of the Square deal - earlier this week Jay-Z bought back that stake for an undisclosed sum. The bulk of those returned shares will now go to Square.

"Why would a music streaming company and a financial services company join forces?" Dorsey wrote on Twitter, posing himself the obvious question.

"It comes down to a simple idea: finding new ways for artists to support their work", he went on. "New ideas are found at the intersections, and we believe there's a compelling one between music and the economy. Making the economy work for artists is similar to what Square has done for sellers".

"To all of Tidal's current listeners and fans: thank you for your loyalty and commitment to artists and their work", he added. "Tidal will continue to be the best home for music, musicians, and culture. Our commitment to you is to constantly listen, learn, and work to make a service you love".

Of course, somewhat ironically, Dorsey's other company has found itself climbing up the music industry's big tech gripe list in the last year, frequently getting a good old name check whenever record labels or music publishers moan about digital platforms hiding behind the copyright safe harbour to avoid paying for all the music that their users upload.

Indeed, when the boss of the Recording Industry Association Of America, Mitch Glazier, included a customary big tech moan in a blog post about his organisation's most recent stats pack, he honed in on Twitter in the spot where YouTube would have taken the heat a few years back. "Ongoing holdout services - like ... Twitter - show just how hard some platforms will resist paying for the music that powers their own success", he wrote.

Quite a few music industry reps noted that fact yesterday when Dorsey tweeted about how much he wants to find "new ways for artists to support their work". Had he even considered the old way of just paying when your platform streams those artists' music, they wondered.

Maybe Jay-Z could have a word. After all, he'll be seeing quite a bit of Dorsey now this deal has been done. Because, see, under said deal, Jay-Z will join Square's board, where he will "help lead our entire company, including Seller and the Cash App, as soon as the deal closes".

Commenting on that, Jay-Z himself says that he and Dorsey "share visions" and therefore he is "excited to join the Square board". His partnership with Dorsey, he adds, "will be a game-changer for many", which is why "I look forward to all this new chapter has to offer!"

Of course, as well as all the game-changing and looking forward and new chapters, Jay-Z might have been at least slightly motivated by the money generated by this sale. This is his second deal to sell off a significant stake in one of his businesses in recent weeks. Last month, he sold 50% of his champagne company Armand de Brignac to LVMH Moët Hennessy Louis Vuitton.

In an interview last month, he admitted that the Armand de Brinac deal was done as his main entertainment company took a hit due to the pandemic. "I think Roc Nation will be fine", he said. "Like all entertainment companies, it will eventually recover. You just have to be smart and prudent at a time like this".

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EU officials could sent Apple statement of objections based on Spotify complaint, as UK regulator launches investigation into tech giant's App Store rules
The European Commission could set out a list of objections in relation to Apple's allegedly anti-competitive conduct in the next few weeks, sources have told Reuters and Bloomberg. Meanwhile, the UK competition regulator yesterday announced it was now launching an investigation into the ins and outs of the tech giant's App Store.

EC officials are investigating various competition law complaints against Apple, though the one that could result in a statement of objections being sent to the company's bosses in the next month relates to Spotify's grievances.

Spotify, of course, went public with its long-running Apple beef in 2019, launching a website and filing a formal complaint with the European Commission, both of which argued that its rival exploits its market dominance to force unfair rules on app makers.

There were various specific moans in that complaint, but the big one related to the so called Apple Tax, ie the 15-30% Spotify is forced to pay to Apple if it sells subscriptions via its iOS app.

Given Spotify already hands over 70% of its income to the music industry, it is forced to pass any transaction fees onto the subscriber, which would mean - within the iOS ecosystem - Spotify would look more expensive than Apple Music.

The other option is to just not allow free users to upgrade to premium via the Spotify app. But more Apple rules stop Spotify from telling those free users where else online they can buy a premium package, making it harder to upsell freemium to premium.

Most of Spotify's gripes are shared by 'Fortnite' maker Epic Games, of course, which has gone even more public with its Apple beef. Though it's Spotify's complaint that could result in specific demands being imminently made by the EC.

Citing various sources, Reuters reports: "The European Commission could send the statement of objections setting out suspected violations of the bloc's antitrust rules to Apple before the summer ... [an] EU 'charge sheet' usually indicates whether a fine is merited and what companies have to do to halt anti-competitive practices".

In addition to the EU's investigations, the UK's Competition And Markets Authority yesterday confirmed it was launching "an investigation into Apple following complaints that its terms and conditions for app developers are unfair and anti-competitive".

The regulator added: "[This] investigation will consider whether Apple has a dominant position in connection with the distribution of apps on Apple devices in the UK – and, if so, whether Apple imposes unfair or anti-competitive terms on developers using the App Store, ultimately resulting in users having less choice or paying higher prices for apps and add-ons".

Commenting on the Apple investigation, CMA boss Andrea Coscelli said: "Millions of us use apps every day to check the weather, play a game or order a takeaway. So, complaints that Apple is using its market position to set terms which are unfair or may restrict competition and choice – potentially causing customers to lose out when buying and using apps – warrant careful scrutiny".

"Our ongoing examination into digital markets has already uncovered some worrying trends", he went on. "We know that businesses, as well as consumers, may suffer real harm if anti-competitive practices by big tech go unchecked. That's why we're pressing on with setting up the new Digital Markets Unit and launching new investigations wherever we have grounds to do so".

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Lenny Williams has another go at making his Warner Music royalty dispute a class action
1970s soul singer Lenny Williams is having another go at getting his royalty dispute with Warner Music approved as a class action that could also benefit other artists signed to the major.

Williams, who fronted R&B group Tower Of Power, sued Warner in 2018 over a common royalty gripe among artists, which is what happens to streaming income as it passes through a major's international subsidiaries.

He claims that Warner allows its different divisions around the world to deduct fees from his streaming income before passing the money to the label he's directly signed to in the US.

His percentage royalty share is then calculated based on what the US label receives, but - he argues - the maths should be done on the at-source income, ie what the streaming service paid into whatever Warner subsidiary took payment.

Williams sought to make his lawsuit a class action so that a positive outcome could benefit any artists signed to Warner. However, the major argued that there were some specifics about Williams' record contract that meant it wasn't representative of the majority of the deals it signs with artists, making this dispute inappropriate for a class action.

In Williams' original lawsuit he identified three groups of artists who should be part of the class. The first group would have more modern contracts with Warner that mention streaming. The second group would have pre-digital contracts that don't mention streaming, but which do talk about 'licensing income' (which, artists would argue, should apply to streams). And the third group are artists with record contracts that don't mention streams or licensing.

However, Williams himself falls into the latter group, which - Warner argued in court - makes his claim more complicated. The judge overseeing the case concurred, noting that, unlike most other artists in his proposed class, he would need to prove three things to win his action.

So, not only that his royalty should be calculated based on at-source income, but also what his streaming royalty rate should be. And that he is even due a share of digital income to start with, given his record contract only talks about royalties in relation to physical copies.

Williams was back in court this week - this time at the Ninth Circuit appeals court - to argue that the judge got in wrong when he declined to make his lawsuit a class action. And that, his lawyers argued, was mainly because of the small sample of contracts Warner Music chose to share with the court.

According to Law360, attorney Bobby Pouya said that while there could be something like 40,000 artist contracts relevant to this case, Warner was only obliged to share a hundred, and it got to pick which contracts it shared. Therefore, Pouya argued, Warner was able to skew things to make it look like his client's record contract was unusual.

He told the court: "Typically when we do accept a sample we negotiate that with the defendant. It's not just self-selected and they put something out there. This is not the proper way to conduct discovery in a case like this, where the defendants have most of the information, and the lack of discovery as we've indicated, affected both of the claims' unique defences and undermined the court's ability to conduct a proper analysis".

Needless to say, Warner countered that the lower court got it right. Meanwhile, its lawyers argued, the sample of hundred contracts were very representative of the bigger picture, including deals from different decades and different imprints of Warner Records.

It remains to be seen whether the Ninth Circuit concurs with Warner and the lower court, or sides with Williams.

New series of white papers on Building Trust puts the spotlight on the copyright safe harbour
A new series of white papers on the legal and ethical responsibilities of digital companies has been launched this week by content and platform security firm Friend MTS, in partnership with CMU Insights.

Platform responsibility and online harms have become big talking points in recent years, of course. Debates continue between the copyright industries, the tech sector, free speech advocates and the political community. However, it's clear that the regulation of online platforms is going to increase in the years ahead, and that the corporate reputation of digital companies is going to increasingly depend on well thought out and communicated policies in this domain.

Launching the new series of white papers, Friend MTS says in a blog post: "It's important that platforms, rights-holders and responsibility facilitators are all well informed to ensure and enable productive discussions around these topics. But understanding many of these issues means navigating often complex areas of law and contentious social debates".

"To help inform and educate all the stakeholders", it goes on, "we've teamed up with CMU Insights to present 'Building Trust', a series of white papers exploring the economic and social responsibilities of digital platforms and other online service providers".

The first white paper puts the spotlight on the good old copyright safe harbour. It provides a user-friendly introduction to the principle itself and the various controversies it has caused in recent years, including around takedown systems, repeat infringers, user-upload platforms and fair use. It then looks at actual and proposed reforms of safe harbour rules in the European Union, US and UK.

You can download a free copy of the white paper from the Friend MTS blog here.

And you can find out more about the 'Building Trust' series here.

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AIR Studios launches diversity scholarship with University Of Surrey
AIR Studios has announced it is launching a new scholarship that will allow aspiring record producers or sound engineers from ethnic groups underrepresented in the music industry to study a sound recording degree at the University Of Surrey. The AIR Diversity Scholarship will ultimately be worth £30,000 to successful applicants, who will study the university's long-established Music And Sound Recording (Tonmeister) course.

Launching the scheme, AIR Director Kamila Serkebaeva says: "The excellence of knowledge and technical understanding that the Tonmeister degree provides is unrivalled in the music recording industry. We have nurtured bright new generations of University Of Surrey graduates for decades and have come to understand the deep value of participation in higher education".

"For this reason", she adds, "and following on our recent commitment to a stronger and more inclusive music recording ecosystem, we set up the AIR Diversity Scholarship for the Tonmeister course. We hope that this will be the beginning of a wider reform to increase representation in the music industry and that we'll soon see diverse values, goals, and concerns brought into the dialogue and the quality of our collective work".

Meanwhile, Tony Myatt from the music and media department of the university says: "We are absolutely committed to addressing some of the systemic imbalances which exist in higher education communities and some areas of the UK music industry".

"We want to support and provide the very best educational opportunities to the next generation of recording engineers and music producers, regardless of their backgrounds or financial position, and with a diversity that fully reflects our society", he goes on. "We're delighted to partner with AIR on this UK-first initiative and are excited at the prospect of working with them to support the best young musical and recording talent of the future".

There is more information about the scholarship here.

St Vincent announces new album Daddy's Home
St Vincent has announced details of her sixth album, 'Daddy's Home', with is set for release in May.

"'Daddy's Home' collects stories of being down and out in downtown NYC", she says in a statement. "Last night's heels on the morning train. Glamour that's been up for three days straight".

The album's title, and title track, she reveals in an interview with The Guardian, are inspired by collecting her father from prison at the end of a twelve year sentence in 2019.

This gave way to a series of songs about "flawed people just doing our best to get by". She adds that the album "reflects my particular feeling toward humankind right now".

'Daddy's Home' is out on 14 May. The first single from it is 'Pay Away Your Pain', the video for which you can watch here.

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DEALS

Sony Music Publishing has signed Dayglow - real name Sloan Struble - to a worldwide deal. "I'm so stoked to be working with the Sony Music Publishing family", he says. "As an artist making all of my music on my own, it's awesome to have the full team backing me up. Working with good people is vital for me, and everyone in SMP is so kind, creative and understanding of me and my work". His debut album, 'Harmony House', will be out on 21 May.

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APPOINTMENTS

Elsa Vivero has been promoted to General Manager and EVP, Global Commercial Services at Warner Music's artist and label services division WEA in the US. "Elsa is a fantastic collaborator with our many global partners and a passionate advocate for our labels and artists", says WEA President Maria Weaver. "She - alongside her brilliant team - will be key to continuing to find new and inventive ways to boost our presence globally and grow our artists' fanbases with big, bold campaigns".

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RELEASES

Drake has released new EP, 'Scary Songs 2', featuring three new tracks: 'What's Next', 'Wants And Needs' featuring Lil Baby, and 'Lemon Pepper Freestyle' featuring Rick Ross. Still no sign of that new album though.

Justin Bieber has released his new single 'Hold On'.

Charli XCX, The 1975 and No Rome have released a new single together called 'Spinning'. "I think Rome and The 1975 guys are so talented, it's honestly so cool to have this song with them", says Charli XCX. "I feel like we all speak the same musical language in some way, and that language is stunning, exquisite, tasteful and chic".

Bruno Mars and Anderson .Paak have teamed up for new project Silk Sonic. Here's the first single, 'Leave The Door Open'.

Chance The Rapper has released new track 'The Heart & The Tongue'.

Kings Of Leon have jumped on and turbo-boosted the NFT bandwagon with their new album 'When You See Yourself', out today. Because you can buy NFT versions of it, see. NFTs are non-fungible tokens, an attempt to introduce scarcity and collectibility into digital content. Blockchain and smart contracts help with the scarcity, and mean artists can even earn from any resale of the assets. What fun! Makes me almost nostalgic for that year when bands sold albums on USB sticks.

Stormzy and Kwesi Arthur have put out a remix of Yaw Tog's 'Saw'.

Lil Baby has released new track 'Real As It Gets', featuring EST Gee.

Tyler, The Creator has released new track 'Tell Me How', which originally appeared in a Coca-Cola advert last month.

Ray BLK has released new single 'Games', featuring Giggs.

Una Healy has released new single 'Swear It All Again'. The song, she says, "is all about the mistakes you make when you let your heart win over your mind. It's about those relationships you keep going back to when you know they're wrong. I've certainly been there - sometimes you need to be disappointed and have your heart broken a few times before you accept it's time to move on".

Pussy Riot have released new single 'Sexist', featuring Hofmannita.

A Certain Ratio have announced that they will release new EP 'ACR:EPA' on 7 May. From it, this is 'Wonderland'.

Vampire Weekend co-founder Rostam has released new single '4Runner'. His new album, 'Changephobia', is out on 4 Jun.

Ezra Furman and Du Blonde have released the video for their recent single 'I'm Glad We Broke Up'. New Du Blonde album 'Homecoming' - from which this track is lifted - is out on 2 Apr.

Liza Owen has released new single 'Josie'.

Jodie Harsh has released the video for recent single 'My House'. "I wanted to get the whole British drag queen community together in one video as it's never really been done before", she says of the video. "We were all stuck at home at the peak of the second wave, so I got a lip sync sent over from everyone!"

Check out our weekly Spotify playlist of new music featured in the CMU Daily - updated every Friday.

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BTS named most successful recording artist in the world in 2020
BTS have been announced as the 2020 winners of the Global Recording Artist Of The Year award from worldwide record industry trade group IFPI.

The first South Korean act to ever win the accolade, they are also the first winners who primarily perform in a language other than English. Though before you get too excited about this brave new age where everyone embraces music and culture from every corner of the Earth, the rest of the top ten that accompanies this award is full of North American artists. Yeah, not even a Brit this year!

The IFPI's big prize is handed to the artist who scored the most sales and streams of their music in any given year. BTS have been close before - coming second in 2018 and in seventh place in 2019 - but this is the first time they've taken the trophy. Of course, putting out a lot of music helped.

"BTS are a global phenomenon", says IFPI CEO Frances Moore. "They have had another outstanding year, releasing three albums, and continually finding creative and engaging ways to share their story with the world. They truly show the power that music has to bring joy and happiness to people the world over. We would like to congratulate RM, Jin, Suga, J-hope, Jimin, V and Jung Kook, and we are excited to see what they have in store next".

Putting out three albums in one year clearly helped them get to the top, which may be why Taylor Swift - who only put out a measly two - finds herself in second place, down from number one in 2019.

That said, Drake only put out a compilation of demos in 2020 and he's at number three. And Billie Eilish makes it to number five, despite not putting out any albums at all in 2020. It's almost like there's no clear pattern to be seen here.

Of course, this is all gearing up for the IFPI's big global record industry stats pack that will be published later this month. That will tell us more about how very successful record labels were around the world in 2020, while - like all such statements in the last year - also trying not to sound too happy about that due to the live industry collapsing.

Anyway, here's the full top ten:

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