In today's CMU Daily: The MLC is suing Pandora over how the streaming service pays royalties on its free tier; and it's a day ending with a 'y' so that means there's another installment in 2024's hottest music business soap opera starring Hipgnosis

One Liners: Warner Chappell signs deal with Jon Shave; Midnight Mango brings two new agents on board; PPL ELAM funding; Kylie Minogue to get BRITs Global Icon gong; new music from Sister Bliss, Mike Lindsay and Nick Mulvey

Also today: Big news for London's Printworks venue as developers reveal plans to make "permanent cultural venue" - and Live Nation's Ticketmaster arbitration lawsuit is back in court to be decided by the Ninth Circuit judges

Plus: Listen to Rose Rose in today's Approved, and the latest edition of the Setlist podcast

Today's top story: MLC sues Pandora over unpaid royalties

Pandora Free users are “able to listen to particular sound recordings on-demand whenever they choose”, which means the US streaming service must pay mechanical royalties for all usage on its free-tier, says collecting society the MLC in a new lawsuit filed with the courts in Nashville.

The MLC accuses Pandora of underpaying royalties, with its CEO Kris Ahrend adding, “Our team repeatedly sought to resolve this issue directly with Pandora, but Pandora has refused to correct their reporting or royalty payments”.

The dispute between the US mechanical rights society and Sirius XM-owned Pandora centres on how ‘personalised radio’ services are defined, and whether they exploit the mechanical rights in songs, as well as the performing rights.

Traditionally radio broadcasters only needed a licence covering the performing rights because DJs would play music from records or CDs, which would then be transmitted over the airwaves. Crucially no copying took place, which is when a mechanical rights licence is required.

In some cases, online and even personalised radio services also only require a performing rights licence, although the rules differ from country to country. In the US, the mechanical rights compulsory licence, which the MLC administrates, provides the relevant rules. It distinguishes between interactive and non-interactive online services, and says interactive services exploit the mechanical rights.

With personalised radio - which is the core of Pandora’s product - it’s typically understood that if a user gets a curated stream of music, but can’t pick specific tracks or albums on-demand, then this falls under the non-interactive bracket and a mechanical rights licence is not required

Under Pandora’s Premium subscription plans - which do pay out to the MLC - users can skip and replay songs on-demand, without any limits. On Pandora Free, the ad-supported service, users get “a limited number of skips per day” but “may be given the option to unlock more skips by engaging with an advertisement”. Those listeners will also be “prompted to watch a video ad” when they want to replay a track. Marketing blurb also makes a point of this saying that users can “search and play what you want”.

That functionality, says the MLC, means Pandora Free is also an interactive service, and therefore mechanical royalties are due. "Users of Pandora Free can select and receive streams of particular sound recordings on-demand at any time", its lawsuit states. "Even if a Pandora Free user decides to listen to music in a 'lean back' mode such as a playlist or custom-made webcast, they remain able to listen to particular sound recordings on-demand whenever they choose".

Pandora acknowledges that when a free-tier subscriber uses the extra skip or replay functionality, that is interactive. But the rest of the time, it reckons, the service is non-interactive. Therefore, when reporting its revenues to the MLC - so that society can calculate what royalties are due - it doesn’t report all its free-tier revenues.

The MLC lawsuit explains that Pandora has “excluded revenue derived from non-interactive services on the Pandora Free configuration” because it believes those elements are “beyond the scope” of the compulsory licence. Even though, the MLC adds, Pandora has admitted that it increased the on-demand functionality of its free service in order to compete with the likes of Spotify, which offer more interactivity. And Spotify pays mechanical royalties on its entire free tier.

When the MLC sent a letter to Pandora insisting its exclusions of revenue were not allowed, the streaming service responded by disputing the society's interpretation of US copyright law and the compulsory licence, and also stated that it’s not the job of the MLC to decide whether a service is required to pay mechanical royalties or not.

Commenting on the lawsuit, Ahrend concludes, “We have brought this action to ensure that our members receive all the mechanical royalties they are due in connection with the use of their songs by Pandora on the Pandora Free service".

ATG // Senior Regional Programmer - Music & Comedy (London)

Union Chapel // Visitor Engagement Coordinator (London)

AEG Presents // Project Manager (London)

Live Music Booker // The Halls (Wolverhampton)

Music Declares Emergency // Directors' Assistant (London)

The Royal Albert Hall // Programming Manager, Hire (London)

The Royal Albert Hall // Engagement Executive (London)

SJM Concerts // PR Coordinator (Manchester)

ICE // Netsuite (ERP), Functionality/System Tester (London)

AEG Presents // Marketing Manager (London)

AEG Presents // Touring Manager (London)

Horizon is CMU's new weekly newsletter - published each Friday - that brings you a hand-picked selection of early-stage career opportunities from across the music industry.

Whether you're looking for your first job in music or you're ready to take a step up, Horizon is here to help you find your dream job faster.

👉 Click through to see the current selection.

ONE LINERS

Kylie Minogue, Sister Bliss, Warner Chappell + more

DEALS

Warner Chappell has signed a worldwide publishing deal with songwriter and producer Jon Shave, who has written songs with and for the likes of Iggy Azalea, Charli XCX, Rita Ora, Britney Spears, Clean Bandit, Ellie Goulding and Zayn. Says Paul Smith, VP A&R & Global Creative at the Warner music publisher, “Jon is an amazing songwriter, who can work across many genres and knows what it takes to make a hit. He’s experienced amazing success in his career so far and we hope to help him reach new heights by partnering him with the world’s biggest acts. We’re excited to get to work!”

APPOINTMENTS

Booking agency Midnight Mango has announced that two new agents have joined its team: Joe Frampton, who focuses on guitar-based genres, and Yazid Sadi, who works with artists from the Middle East and North Africa.

MUSIC EDUCATION

UK collecting society PPL has announced it will provide funding to East London Arts & Music - or ELAM - the specialist school for those pursuing a career in the creative industries. The new funding will be "directed towards key programmes designed to ensure young people from under-represented communities have equal access to ELAM’s specialist education, such as the industry engagement programme, pastoral and mental health support, student recruitment and outreach, peripatetic music tuition and travel bursaries".

AWARDS

Kylie Minogue will be presented with the BRITs Global Icon award at this year's big BRITs bash on 2 Mar, where she will also perform. And if you think Minogue might be THRILLED about the award, think bigger people. "I am beyond THRILLED to be honoured with the Global Icon Award and to be joining a roll call of such incredible artists", says she. "The UK has always been a home from home so the BRITs have a very special place in my heart. I have some amazing memories from the awards over the years and I can't wait to be back on the BRITs stage".

RELEASES

Sister Bliss from Faithless has released her latest solo single, ‘Do It Right’.

Tunng's Mike Lindsay will release his debut solo album 'Supershapes Volume 1' on Moshi Moshi Records on 14 Jun. Here is first single 'Lie Down' which includes guest vocals from Anna B Savage, who features heavily across the album.

Nick Mulvey has released new single 'Freedom Now' described as "a cross-cultural musical collaboration transcending borders, and performed together with Iranian superstar Golshifteh Farahni and Grammy Award-winning Pakistani artist Arooj Aftab".

Approved: Rose Rose

Rose Rose, the French-British duo consisting of self-taught multi-instrumentalists Samuel and Pierre, expertly craft music reminiscent of the French electronic scene of the early 2000s. Having embarked on a decade-long musical journey together, they fuse elements of disco, French touch and electronic beats into a contemporary alt-pop package.

Building on the success of their debut EP 'Eye To Eye', Rose Rose are now immersed in the creation of a new album, while also teasing an extended version of 'Eye To Eye' for the first half of 2024, including alternative versions, remixes and exclusive new tracks.

Among the remixes is the newly released ‘Charlotte (Night Version)’. Rose Rose have transformed 'Charlotte' from their signature blend of disco and pop into a pulsating dance track.

🎧 Listen to Charlotte by Rose Rose

Hipgnosis Songs Fund is looking for a new company to value its catalogues

The Hipgnosis Songs Fund - or SONG - is on the lookout for someone new to help it work out the value of its music catalogues. This follows the not-so-surprising news that Citrin Cooperman - the firm that’s been doing that work so far - has quit.

According to the Times, Citrin Cooperman - and its music rights specialist Barry Massarsky, a former economist at US collecting society ASCAP - had "long valued Hipgnosis’s portfolio", but gave notice on 20 Dec that it "would not be providing future valuation services to Hipgnosis Songs Fund Limited”.

That’s not a huge surprise given recent - and very public - criticism of Citrin Cooperman’s valuation by the new SONG board.

That criticism came in the form of a statement issued in December last year in which the board announced that they would be delaying publication of the fund’s annual financial statements. A key part of the delay was concerns that the valuation calculated by Citrin Cooperman was “materially higher than the valuation implied by proposed and recent transactions in the sector”.

When the delayed financial results were subsequently published later in December, the board said they were "aware of multiple data points and transactions within the market which are at material discounts to the implied fair value of the company’s assets".

That statement went on to say that "the board recommends that investors use the fair value and the operative NAV with a higher degree of caution and less certainty than might otherwise be attached to it as an accurate reflection of the fair value of the company’s assets".

Although that language seems fairly restrained, had they said “we don’t think these numbers are particularly reliable and you probably shouldn’t either”, it would not have been much more scathing. As a result, the fact Citrin Cooperman has now quit is not much of a surprise.

All of this is - of course - part of the wider falling out between SONG and its investment advisor Hipgnosis Song Management. That dispute is fast becoming a very compelling - and very public - drama.

As SONG investors became increasingly unhappy last year, the fund kicked off a strategic review of its previous operations. Shortly after that, a new board was put in place at an AGM in October which is now following through on the strategic review.

A core part of that review is the relationship between SONG and HSM which has resulted in an escalating war of words between the two entities.

Indeed, at the same time as it raised its concerns about Citrin Cooperman's valuation of the SONG catalogues in December, SONG also dissed HSM. The other Hipgnosis company had, it said, initially declined to respond to its concerns about the valuation and had eventually "provided an opinion which was heavily caveated".

SONG went on to say, "in the absence of further evidence or insight from the investment adviser on which to base a judgement on the valuation of the company’s assets, the board has concerns as to whether the fair value is reasonable".

Translated out of city-speak, that might be something like “we don’t trust the numbers, you shouldn’t either, and even the folk who commissioned them don’t think much of them”.

A spokesperson for SONG has confirmed that it has now “begun a formal process to appoint a new independent valuer for its year-end report and accounts. The new valuer will advise the board on an ongoing basis".

"The board remains focused on the strategic review", the spokesperson added, "under which it is looking at all options to deliver shareholder value".

Setlist Podcast: AI developments cause celebration and concern

In this week's Setlist Podcast: Chris Cooke and Andy Malt discuss new developments on AI in the EU and UK that have given the music industry cause for both celebration and concern, and the commercial radio industry's anger as BBC Radio looks to give music fans more choice.

🎧 Click here to listen - or search for 'Setlist Podcast' wherever you normally listen

Detailed plans submitted for permanent Printworks venue in London

More details have been revealed about the plan to open a permanent venue at the site previously operated as Printworks London, with property developers submitting detailed proposals to Southwark Council.

“We intend to create a permanent cultural venue and put it on the map globally", says Emma Cariaga, who is jointly leading the project for British Land, the property company that is redeveloping the site. “What appeals to us about it is that it’s creating a new piece of city and a new district for London".

Promoters Broadwick Live operated Printworks in an old newspaper printing plant in South East London for six years from 2017.

The venue was always intended to be a temporary venture while long-term plans for the site were agreed. But when it was announced that those long term plans had been finalised and that the venue would close, more than 11,000 people signed a petition calling for the Printworks venue to remain.

Although Southwark Council stressed that the Printworks venue had always been intended as a temporary use of the site, it also revealed that a permanent cultural space was part of British Land's plan and that it would be working with Broadwick Live to develop that space.

Then, following a closing party in May 2023, Broadwick Live said, “we are delighted to announce that Printworks hopes to return in three years and that we will continue to work with our partners at British Land to create the future cultural venue that retains the essence of the iconic Press Halls".

According to the new more detailed proposal, the new venue will occupy about half of the existing building. The rest of the property will be redeveloped into offices and shops. It is hoped planning permission will be granted by the council within a few months.

According to The Guardian, "architects HawkinsBrown have sought to preserve the original industrial look of the Press Halls, which [will] host electronic dance music club nights, concerts, immersive art shows and corporate events". There will also be a smaller performance space for "immersive exhibitions and intimate music events".

Confirming that the venue is a key part of the development, Paul Clark from one of the project's backers, AustralianSuper, says: “Having a big, versatile cultural venue in the area is important. We don’t want to have a monochrome office environment or a dormitory suburb".

Perspectives: Streaming Transparency Code

Last month the UK government published a new Transparency Code for music streaming, in which digital service providers, record labels, music distributors, music publishers and collecting societies commit to communicate more information to artists, songwriters and their managers about how their music is used by streaming platforms and how digital royalties are calculated.

The code was facilitated by the Intellectual Property Office as part of the Economics Of Streaming work that was instigated by government following the Parliamentary inquiry into the digital music sector. Transparency issues were raised by music creators and managers who gave evidence as part of that inquiry and were summarised by MPs on the Culture Select Committee in their final report.

Trade organisations from across the UK industry were involved in negotiating the code, including those representing labels, publishers, distributor and streaming services, and artists, musicians, songwriters, studio producers and managers. CMU asked representatives from three of those organisations - MMF's Annabella Coldrick, ERA's Kim Bayley, and BPI's Sophie Jones - to give their perspectives on the code, where it fits in and what needs to happen next.

Ticketmaster's arbitration dispute now with the Ninth Circuit appeals court

Can Ticketmaster force aggrieved ticket buyers to take their complaints through arbitration, rather than resolving them in the US courts? A dispute that centers on that question has now reached the US Ninth Circuit Appeals Court.

The actual lawsuit that prompted this dispute relates to allegations of anti-competitive conduct made against Live Nation and its Ticketmaster business. However, Ticketmaster's terms and conditions say that customers must take grievances to private arbitration rather than a court of law, and the ticketing firm has successfully enforced the arbitration term in the past to keep disputes out of the public eye.

Arbitration is favoured by many companies as a way to resolve disputes because, in theory, it is more efficient and cost effective than fighting a legal battle in court. However, arbitration hearings are also private, unlike court hearings which are a matter of public record. So for many companies, keeping claims out of the courts and out of the public eye, is another highly desirable benefit of arbitration.

For Ticketmaster and Live Nation - given the media and political interest in the dominance of Live Nation in the US live entertainment market, and the calls from some quarters that the 2010 merger of Live Nation and Ticketmaster should be reversed - there are obvious benefits to keeping disputes out of the public eye. Particularly if they relate to allegations that the company has violated competition or antitrust laws.

That’s not to say that Ticketmaster has only enforced the arbitration clause in those sorts of cases and there have been various lawsuits where the ticketing firm has successfully argued that a dispute should be heard by a private arbitrator rather than a court of law.

However, in this case that argument was unsuccessful. And all because Ticketmaster “unilaterally” amended its terms around arbitration and changed the company that would handle the arbitration process, from Judicial Arbitration And Mediation Services Inc - or JAMS - to New Era.

In last year's district cout ruling, judge George H Wu said that the change in arbitrator resulted in an "unfair surprise" for the ticket-buyers and made forcing arbitration "procedurally unconscionable”.

But, says Live Nation in a filing with the appeals court, "the district court’s refusal to send this case to arbitration is inexplicable given the parties’ clear intent ... nothing about the mere change in arbitration providers here was unfair, unexpected, or otherwise unconscionable".

The plaintiffs in the case have also criticised the approach taken by the new arbitrator. JAMS “successfully resolves business and legal disputes by providing efficient, cost-effective and impartial ways of overcoming barriers at any stage of conflict”, says the company’s website. Meanwhile, New Era boasts that they “eliminate litigation gamesmanship”, offering “fair, efficient, pragmatic, flat fee 100-day arbitrations and mediations”.

The way New Era works, the plaintiffs in the case argued in the lower court, relies on “non-traditional” processes which they described as “Kafkaesque”. The change in arbitrators, therefore, they alleged, was an attempt by Ticketmaster to make it harder for customers to pursue a claim.

"Indeed that was the point", the plaintiffs state in their own submission to the Ninth Circuit, "to bind the antitrust class to New Era’s Rules, hoping to defeat the upcoming mass arbitration. Faced with these facts, the district court properly concluded that Live Nation’s terms were unconscionable under California law".

Live Nation’s appeal was filed with the Ninth Circuit last November, though its filing was only made public last week. The ticket buyer plaintiffs have now filed their response, and we await to see what the Ninth Circuit judges make of the whole thing.