Every Sunday CMU sends a summary of five key music business stories from the past week. | This week: Dodgy distributor 3tone's finance partner Carlton James is implicated in bigger scandal - and that one is being investigated by the Serious Fraud Office; TikTok/UMG bust-up rumbles on, with strong words from Grainge during earnings call; lawsuit pending after Kanye's "shameless" rip-off of Donna Summer hit; jury in Supertramp royalties dispute says 41 years long enough; Apple and Spotify continue to call each other names as EU mega-fine looms.
ICYMI: UMG boss Lucian Grainge "should have known" about drink spiking say lawsuit; new report outlines "scathing history" of sexual abuse cover-ups in music industry; Sony settles a big termination rights case - which could have had (major) major label consequences; IMPALA criticises new Apple Spatial rules; MU says UK minister Kemi Badenoch has breached Human Rights Act by blocking Kneecap export funding; WMG boss Rob Kyncl boasts of crack tech team to boost superfan opportunity.
And Finally... Six years ago, Microsoft tried to convince Apple to ditch Google and make Bing the default search engine for the Safari browser. Those talks failed - and now it turns out it was all because Bing didn’t know enough about Annie Lennox... | Plus: We've made another 30 discounted places available on our first CMU Masterclass The Music Business In 2024 with an incredible 80% discount off the current price of £79. Click here and enter the code 62QGQ2L to pay just £15.80 inc VAT. The previous 50 codes are nearly sold out, and this batch is only valid for one week - so move fast if you want this offer! | | |
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💸 The company that funded dodgy distributor 3tone is involved in another rip-off scandal - which is now being investigated by the UK's Serious Fraud Office | |
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This week CMU exclusively revealed that a company associated with the 'investment fund' Carlton James - which invested as much as £3.5 million in 3tone - was embroiled in a much bigger scandal. That scandal - the collapse of pre-paid funeral provider Safe Hands - saw more than 46,000 people, many of them elderly and vulnerable, lose millions of pounds. The Safe Hands collapse is currently being investigated by the UK's Serious Fraud Office.
Back in October we revealed that 3tone had run out of money, leaving artists, labels, supplier and staff out of pocket to the tune of tens of thousands of pounds. More recently we heard that 3tone has been suggesting it should be allowed to "trade its way out" of its predicament, hinting - yet again - that a "new finance agreement" is just days away.
Where that "new finance agreement" might come from is unclear. 3tone's previous finance came via the murky group of UK and offshore companies that operates under the Carlton James name. One of those Carlton James-associated companies is the "Navigator Fund" - formerly known as the "Carlton James Mollitium Offshore Fund Manager Platform SPC". The Navigator Fund was named by Safe Hands liquidators as being the recipient of tens of millions of pounds of policy-holders money - money which, in all likelihood, is now gone.
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🤳 Universal Music and TikTok were unable to sort out their differences before the deadline for taking down Universal Music Publishing songs passed | |
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TikTok removed recordings released by Universal at the end of January after failing to agree a new licensing deal with the major. But it also has to remove songs that are published and licensed by Universal Music Publishing. That's a trickier task that also impacts artists and labels with no formal connections with Universal, if they have released versions of songs in which the major has a stake. The deadline for removing the songs was 29 Feb.
As more artists and labels were impacted by the TikTok/UMG bust up - and with some Universal-signed artists not too happy about the situation - the major put out another statement to its songwriters insisting that "every indication is that TikTok simply do not value your music". On an investor call, Universal boss Lucian Grainge declared that “there must not be free rides for massive global platforms”. The major said it anticipated the removal of its music from TikTok would increase usage on other short form video platforms which, it argues, pay a fair rate.
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| | 😳 The Donna Summer estate has filed papers to sue Kanye West over a “shameless” uncleared sample | |
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In a new lawsuit, the estate says that West's representatives approached them for permission to sample Summer's hit 'I Feel Love' on a track that features on his recent collaborative album with Ty Dolla $ign. The estate owns a third of the publishing in 'I Feel Love'. It declined permission for the sample because it didn't want Summer to be associated with the controversial rapper.
Universal Music, which owns the recording, also declined to license the sample. So instead West created a new recording utilising the distinctive melody of 'I Feel Love'. However, the estate insists, that interpolation still needed to be licensed. Despite being refused such a licence, the rapper and his collaborators "shamelessly used instantly recognisable portions of Summer’s hit song".
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| | 📆 A California court ruled that a 1970s agreement regarding how Supertramp royalties were shared could be cancelled because 41 years was long enough | |
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In 1977 the members of rock group Supertramp agreed that songwriter members Roger Hodgson and Rick Davies would share their song royalties with the rest of the band, John Helliwell, Robert Siebenberg and Douglas Thomson. The other band members continued to receive their cut of those royalties until 2018, when payments stopped. They then sued and reached a settlement with Davies, but the dispute with Hodgson went to court.
Legal reps for the non-songwriting members of the band said "the 1977 sharing arrangement was meant to last forever" and so the three musicians should receive a share of the song royalties in perpetuity. Songwriter Hodgson argued that the agreement didn't specify how long royalties should continue to be paid for and so he had the right to stop the payments. The presiding judge said that because there was nothing in the agreement to say how long the contract should run for it could be ended after a 'reasonable time'. The jury was asked to decide if they thought 41 years was 'reasonable' - which they did.
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| | 🤭 Apple and Spotify continue to call each other names over their dispute about in-app payments with an EU mega-fine due to be formally announced |
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| Apple is facing a €500 million fine in the EU over its so-called 'Apple Tax'. These are the rules that force many app developers to pay Apple a commission when they take in-app payments, and which prohibit the sign-posting of alternative payment options outside the app. Following a complaint from Spotify, EU investigators have concluded the rules are anti-competitive, and sources said this week the mega-fine will be formally announced on 5 Mar.
In a statement pre-empting confirmation of the fine Apple said "Spotify pays Apple nothing for the services that have helped them build, update and share their app with Apple users in 160 countries". Apple went on to say that Spotify's complaint to the EU "was about trying to get limitless access to all of Apple’s tools without paying anything for the value Apple provides". In response, Spotify said it simply wanted a "level playing field" and to stop Apple "favouring their own music service at every turn while placing roadblocks and imposing unfair restrictions on ours".
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