8Sided Blog

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Spotify’s Podcast Ambitions Are Clear

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Recode:

Not only has Spotify acquired Gimlet Media, a podcast producer and network, for around $230 million but it has also bought Anchor, a startup that makes it easier for people to record and distribute their own podcasts.

The company says it isn’t done — it says it has other podcast acquisitions in mind, and that it expects to spend up to $500 million on deals this year.

Engadget:

Spotify is taking the Netflix model, in short. As the company grows, it’s inevitable that established record labels will start charging higher licensing fees. Podcasts, however, is something that Spotify can buy and own as exclusive content. If it green-lights the right shows, it could pull users away from third-party podcast apps and then slowly persuade them to take out a premium subscription. Anchor, too, gives Spotify the potential to rapidly build a YouTube-style distribution network.

The Gimlet Media deal is a glimpse of where Spotify is headed, but, coupled with the Anchor acquisition, we’re seeing the platform’s transformation into a different kind of company. As Spotify co-founder and CEO Daniel Ek says in a press release, “These acquisitions will meaningfully accelerate our path to becoming the world’s leading audio platform …” Thus, it’s no longer a music platform.

🔗→ Spotify has bought two podcast startups and it wants to buy more
🔗→ Spotify finally made a profit and spent big on its podcast future

Make Way for the Virtual Dance Floor

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On our blog about “music’s place in the 21st century” we rarely get to write about anything as futuristic (in a ‘shape of things to come’ way) as this, via Music Business Weekly:

Yesterday (February 2), DJ star Marshmello played an exclusive in-game concert in Fornite at 2pm ET. Fortnite players could watch the virtual show for free, so long as they made sure their avatar was available at the concert’s location (Pleasant Park).

The numbers are now coming in on the event’s audience, and they’re mighty impressive: according to reliable sources, over 10 million concurrent users witnessed Marshmello’s virtual concert. These people’s in-game avatars were all able to hit the virtual dancefloor in front of Marshmello’s own avatar and show off their moves.

Mark Mulligan in Music Industry Blog:

For my son and his friends this was every bit a shared live experience, each of them talking to each other via Xbox Live and dancing with each other on screen. In-game live experiences like this are nothing new, but it may just be that we are beginning to get to a tipping point in shared gaming experiences for Gen Z that will shape their entertainment expectations for years to come.

and Darren Hemmings in the Motive Unknown newsletter:

I tweeted over the weekend that this brought to mind when US rock bands of a certain age talk about the influence KISS had on them. Often it wasn’t about the music so much as the spectacle of it all, and how much that impacted them as a child or teen. I think there’s parallels here; these are the kind of great experiences that really get fans hooked in, and strikes me as a colossal win for Marshmello as an artist.

At a point where I often grumble that innovation is drying up in music, this proved to be a fine example of how great things can come together to make a massively successful event for all involved.

Marshmello’s DJ set is also now exclusively available on Apple Music, no doubt a high-profile pay-off of the streamer’s association with Dubset.

Video games took some of the blame when music industry profits declined in the late-90s/early-00s. We reasoned that kids who once spent their allowance on music were instead using it on games. There was probably some truth in that, setting up tension between the game and music industries. But we’re now starting to see cooperation in marketing games and music that’s going leaps beyond background songs and Guitar Hero. And as journalist Cherie Hu talks about on a recent episode of the Music Tectonics podcast, the integration of music and non-music media and interactive entertainment may be the big music business story of 2019.

Regardless, we’ve come a long way since this:

🔗→ Marshmello just played a live set to 10m people in video game Fortnite
🔗→ Marshmello Just Live Streamed on Fortnite…So Just What is a Concert?
🔗→ Marshmello’s Fortnite concert shows it should be done

Spotify Strenghtens Podcast Hopes with Gimlet Media

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The Hollywood Reporter:

Spotify is in talks to acquire Gimlet Media, multiple sources tell The Hollywood Reporter, as it sets its sights on becoming a bigger player in the podcasting space.

The move by the music streaming giant signals just how seriously it is taking its push into other forms of audio entertainment. Spotify and Gimlet representatives declined to comment. […]

By acquiring Gimlet, Spotify would tap into a podcasting production powerhouse that has churned out such hits as Heavyweight, scripted series Homecoming and Reply All.

This is an interesting development and adds extra context to our earlier post regarding how Spotify can rebrand as an audio platform rather than solely a music platform. Gimlet is a smart company. I am sure they would not agree to this arrangement without assurance that Spotify will prioritize and enhance the podcast experience on the service.

The report notes that Gimlet owns its intellectual property (thus, the content of its hosted shows) which the company can leverage into film and television adaptations, among other possibilities. That adds an extra dimension to Spotify’s plans. One of those shows is StartUp, which, at times, documents the inner workings of Gimlet in real time. I’d love the network to add new Gimlet-related episodes that follow the progress of this Spotify deal.

By the way, I’m a fan of the Gimlet show Reply All. If you haven’t heard it yet, this episode about an Indian telephone scammer is fantastic.

🔗→ Spotify in Talks to Acquire Podcast Startup Gimlet Media

Trouble for the Two-Second Sample

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There’s a misconception that sampling has a time limit, that one can legally sample anything (a drum hit, a vocal yelp, a guitar riff) as long as it’s short. I’ve heard various guidelines set for this assumption with the two-second mark as the most common. It’s not true. If a judge or jury can identify a sound — any sound — as originating from a copyrighted source, you’re probably in trouble.

Granted, the US courts have not been consistent in how they rule on this, and it’s fair to say there’s no set precedent here. But, in the EU, this may no longer be the case thanks to repeatedly snubbed Rock-and-Roll-Hall-of-Famers Kraftwerk and the synthesized sound of banging metal.

via Billboard:

The case involves a two-second sample from “Metall auf Metall,” which the producers Moses Pelham and Martin Haas used as a continuous background loop in the 1997 song “Nur Mir.” Although the sample consists of just two seconds of the original song, it’s recognizable and important in “Nur Mir,” which is performed by the singer Sabrina Setlur. […]

… Advocate General Maciej Szpunar advised the European Court of Justice, which is deciding a copyright case that involves Kraftwerk’s “Metall of Metall,” that even limited sampling of a recording can constitute copyright infringement. Advocate General opinions are not binding, but they’re watched closely, since they often predict the way the high court of Europe will decide cases.

The case is interesting as it involves only the recording (master) side of the music and not the composition (written song). The idea is that one can take a ‘sample’ of a written song in isolation — such as a couple of notes or a few words — and it would be too general to constitute infringement. The failure of the recent “haters gonna hate” lawsuit illustrates this. But a recording is specific, easily traced to its rights-holder. Complete Music Update once again provides the most helpful explainer:

Basically, when you sample a two second clip of a track, you are sampling both the recording and the song contained within it. But it might be hard to argue that the two second snippet of the song can be protected by copyright in isolation. However, at the same time you could argue that the two second snippet of the recording is.

The ‘Metal On Metal’ case centres on the recording rights. In essence, in the 2012 court hearing, when one argument on the Kraftwerk side was that Pelham could have recreated the sounds he sampled, they were basically saying that there was no song copyright to infringe here, but that the separate recording copyright had been infringed by the uncleared sample.

In his ruling, the Advocate General wrote, “A phonogram is not an intellectual creation consisting of a composition of elements such as words, sounds, colours etc. A phonogram is a fixation of sounds which is protected, not by virtue of the arrangement of those sounds, but rather on account of the fixation itself.” Feel free to substitute ‘phonogram’ with ‘recording’ as you read that.

Billboard again:

Some of the questions referred to the European Court of Justice involve details of European law, including whether the German concept of free use is compatible with EU law. But others get to the center of the debate around copyright and free expression. Generally, most countries’ courts have held that quotation doesn’t infringe copyright when a new work refers to the original one – in a book review, or even in a parody of a song. But what about when the new work has nothing to do with the original? Such questions have increased urgency in the digital age, and this is one of several important cases on the topic.

I wonder if this will create more consistency in how the courts rule on ‘short sample’ cases in the US. And I also wonder if New Order ever had to pony up for their own short Kraftwerk sample in “Blue Monday.”

“Blurred Lines” Precedent Won’t Bring Clarity

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It’s finally over, but this probably won’t be the last post about it. Via Forbes:

The five-year copyright battle surrounding the popular single “Blurred Lines” finally ended this week with a judgment of nearly $5 million against artists Robin Thicke and Pharrell Williams. Marvin Gaye’s family had accused the duo of infringing Gaye’s 1977 song “Got to Give It Up.” California Judge John A. Kronstadt’s final ruling, which entitles the Gaye family to half of all royalties to the song moving forward, effectively puts an end to the highly publicized lawsuit. […]

Thicke and Pharrell … failed to petition the U.S. Supreme Court for a writ of certiorari by the applicable deadline. As a result, the judgment has been entered against them, and the case is now effectively closed.

The controversial “Blurred Lines” copyright infringement case is officially precedent. If there’s any silver lining for Thicke & co., it’s that the Marvin Gaye estate only gets 50% of future royalties. I’m surprised they didn’t get 100% (which is not out-of-bounds in infringement rulings).

In the end, the most interesting court case related to this ruling won’t be the “Blurred Lines” affair but what ends up being the first similar high-profile copyright lawsuit to follow. Who will it be? Led Zeppelin vs. Greta Van Fleet? The Fall vs. Pavement? The Bob Marley estate vs. every contemporary reggae artist?

I kid. But the test will be how far someone wants to take this precedent. In an age when there’s a lawsuit over the lyric “haters gonna hate,” you can bet the limits of the ruling will get tested sooner than later. I’m not even sure how a jury could reach a sensible conclusion, as similarity in style is arguably subjective. I have a mental image of a bunch of stoners sitting around a turntable, and one says, “man, this sounds just like The Piper at the Gates of Dawn,” and everyone agrees.

There’s a fine explainer in The Vulture with copyright expert Jeff Peretz:

… the issue at stake in this case is the “how,” not the “what” — in other words, how the song is presented. Pharrell admittedly set out to create a “party” song in the style of “GTGIU” knowing full well it was within the legal boundaries to do so. He, in essence, walked right up to the legal line but made sure not to cross it. What the original decision did was move the line. By letting it stand in appeal, Judge Milan D. Smith Jr., who wrote the majority opinion, has literally changed the rules. But if the difference between “what” and “how” were properly explained to the jury the first time around, this never would have gotten this far.

Law professor Edward Lee argues in Billboard that the “Blurred Lines” sonic homage to Marvin Gaye could have fallen under ‘fair use:’

I’m not sure which account best explains what happened. But the jury believed Pharrell and Thicke copied from “Got to Give It Up,” and hence the verdict. What would have happened if Pharrell and Thicke invoked fair use and told the jury that they borrowed a small part of the ’70s groove from Gaye’s song, but gave it new meaning, a different character and new expression in a modern pop, dance song fitting today’s tastes? Surely, no one would mistake “Blurred Lines” for a song from the ’70s — it has a much different character. Of course, the jury might have rejected that defense as well, but fair use fits better with Thicke’s original explanation in GQ that the duo intended to borrow the groove of “Got to Give It Up” in creating their new song. Moreover, having the jury or court balance the factors of fair use provides a more nuanced and realistic assessment of the competing interests at stake than the simple test of infringement does.

He adds: “The music world needs a clear decision applying fair use to a non-parody musical work. Without it, copyright lawsuits will only increase.” It’s no surprise that I agree. The democratization of distribution, in turn making almost every artist work available to the public, is leading to an overflow and breakdown of copyright litigation. No artist creates in a vacuum, and if we want to continue to creatively ‘Steal LIke An Artist,’ then something’s got to give.

Dubset’s Major Move

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TechCrunch:

Spotify and Apple Music could soon get the legal grey area of music like remixes and DJ sets that today live unofficially on SoundCloud. Sony Music Entertainment today became the first major record label to allow its music to be monetized through unofficial mixes thanks to a deal with rights clearance startup Dubset. That means Sony’s master recordings will be indexed by Dubset, and rights holders will be compensated even if just a tiny one-second snippet of their song is used in a DJ set or remix.

A source tells TechCrunch that Dubset is getting closer to securing deals with the other two major labels Warner and Universal.

If it can lock down all three, remixes and DJ sets featuring almost any music could be legally hosted on the top streaming services instead of being barred or removed for copyright infringement. That might eliminate the differentiation that’s kept struggling SoundCloud afloat. Illegal music uploaded there has sometimes flown under the radar since SoundCloud is protected by Safe Harbor law regarding user generated content. But if it’s legally available on Spotify, Apple Music, and elsewhere, listeners wouldn’t have to go to SoundCloud.


Could we be stepping closer to a mainstream acceptance of remix culture? A future where derivative works are not only allowed but encouraged is a divergent music future, indeed. As previously stated on this blog, if you can clear unauthorized remixes using Dubset, then why not clear samples eventually? We might be entering an era where most music is fair game for creative mutation, and the original artists get paid. How will that work with songs already released, especially the ones that sneakily didn’t clear drum loops or other samples? Should clearance lawyers start looking at new career options?

As far as Apple Music and Spotify go, I really can’t see them opening up their services to user-uploaded content a la SoundCloud. I’m ready to be surprised, but I do think those predictions are off the mark. The Verge gives a clue to where this might be headed for the two big streamers:

DJ mixes have historically proved to be especially difficult for monetized distribution. “The average mix is 62 minutes long and has 22 different songs in it, and those 22 different songs are represented by over 100 different rights holders,” {Dubset CEO Stephen} White tells The Verge. Using Dubset’s technology, a 60-minute mix can be processed in just 15 minutes.

During that 60-minute mix, White says, MixSCAN will fingerprint every three seconds of audio. “We’re using a combination of audio fingerprinting technologies and fairly advanced algorithmic approaches to identify the underlying masters that are being used in a mix or a remix,” he says. Although MixBANK asks DJs themselves to identify the masters, White says this is just to help validate MixSCAN’s results.


Apple’s Beats 1 Radio regularly broadcasts sets by newsworthy artists and celebrities, but the Beats 1 platform still fails to make the news. These DJ events need exposure outside of the ephemeral original broadcast. Wouldn’t it be nice if the sets were recorded and archived, and then available to play on demand via Apple Music? I think that’s what’s happening here. A different sort of license is required to make these DJ sets available on demand, and every song (and, yes, unofficial remix) must be cleared for this type of usage. Theoretically, Dubset’s technology would not only clear the songs in the mix, but it would be able to do so in 15 minutes. A Beats 1 set could be available to stream on Apple Music within thirty minutes of its broadcast. Voilà. And I’d wager Spotify has similar ambitions.


Previously and Previously and Previously

The Upside of Music Piracy

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For a legacy act, taking a nuanced stance on the effects of music piracy is surprising and somewhat brave. But that’s what Def Leppard guitarist Vivian Campbell is doing in a recent interview with Ultimate Classic Rock:

“The way the band works is quite extraordinary. In recent years, we’ve been really fortunate that we’ve seen this new surge in our popularity. For the most part, that’s fueled by younger people coming to the shows,” Campbell said. “We’ve been seeing it for the last 10, 12 or 15 years, you’d notice younger kids in the audience, but especially in the last couple of years, it’s grown exponentially. I really do believe that this is the upside of music piracy.”


Techdirt has some thoughts:

This is the part of music obtained freely that never gets mentioned: the multiplier effect it has on a bands relevance and longevity. This isn’t to say that such a model works for every band in every instance, but it’s refreshing to see an artist step back and try to get the full picture of what’s really going on here. It would be quite easy for someone like Campbell to see the young faces in his audience and never give a second thought to how those younger fans got to a Def Leppard concert. By taking an intelligent look at that question, however, Campbell has reached a place where he’s found a friend where he might have seen an enemy.


It is extraordinary how attitudes are changing across the board as larger artists begin to find advantage in the new music paradigm. (When it comes to topics like this, I wonder how much influence Bob Lefsetz is having on classic rockers.) The only question I might have: is music piracy still a concern when it comes to younger audiences? Are teenagers and fans in their 20s still downloading files? As statistics show streaming gaining traction at an accelerating rate, one might assume Daniel Ek’s mission to eliminate piracy might be paying off.

Another side of the coin: Def Leppard are active on YouTube and engage on social media, regularly posting new content, which is also rare for a legacy band. Though Campbell’s perspective is refreshing, he may be off-base about the reality of what is mostly driving young fans to his band’s concerts.


Update: Music 3.0 blog also asks Does Music Piracy Still Exist In The Age Of Streaming?

Cranking the Wheel

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“Spotify playlists, and Spotify charts, and Spotify plays, have become the number one tool that labels and artists and managers are using in order to break artists and measure success,” said industry analyst Mark Mulligan, speaking to Wired earlier this year. “If you get things working on Spotify, that’s going to crank the wheel.” Anyone who’s opened Spotify and found themselves clicking on their Daily Mix playlist, or fired up the app’s Discovery Weekly playlist already knows this. The app, and the impact of its playlist placements, are now an almost unspoken reality of the industry’s digital growth.

And so we come to this week’s news, of Spotify playing coy about what determines the song of the summer. In a blogpost published on Wednesday, the streaming service’s US team announced a – you guessed it – playlist of the tracks that they “predict” will soundtrack your BBQs, house parties and whatever other photogenic events you’ll be attending in the sunshine. “To create this year’s Songs of Summer predictions,” they wrote, “Spotify tapped the insights of its genre and trend experts, analysed its streaming data and considered factors such as a song’s performance on the charts, on key Spotify playlists and how it’s performing over time. The team also factored in buzz on social media to create a list of songs perfect for essential summer moments.”

At a glance you’d look at this and think, ‘oh cool, Spotify are predicting the future. That’s fun! They’re fun!’ But when you take a closer look, a couple of issues become clear. First, that you walk right into a chicken-and-egg situation. Do songs chart well because it’s been playlisted dominantly, and thus listened to by lots of people on Spotify? Or does it make that Spotify playlist position because it’s performing well on the charts? We don’t know about those inner workings within Spotify. But it’s bizarre for the company to both aggressively use reams of data to thrust certain songs under our noses, then act as though it doesn’t consequently set the agenda for what casual music listeners grow to like.

Spotify Settles With Songwriters

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Spotify has reached a settlement with a group of songwriters who had sued for copyright infringement, eliminating an potential complication to the public offering that the streaming service is planning later this year.

Under the agreement which will need to be approved by the court, the streaming company will set up a fund worth $43.4 million to compensate songwriters and publishers whose compositions the service used without paying mechanical royalties.

Spotify has to pay record labels to use their recordings and publishers to use the underlying compositions; it pays mechanical royalties directly to publishers and public performance royalties to performing-rights groups like ASCAP, which distribute the money to their member publishers and songwriters. Streaming services don’t need to negotiate with publishers, since they can take advantage of a “statutory license” offered by the federal government.

But they need to find the right publishers to pay — a challenge in cases where recordings have entered Spotify’s system without proper metadata. Spotify has always made a point of holding money aside for publishers it couldn’t identify, but doing so doesn’t make it compliant with copyright law.

Beyond past and future compensation, the settlement agreement outlines a process by which Spotify and the class counsel “will work collaboratively to improve the gathering and collecting of information about composition owners to help ensure those owners are paid their royalties in the future,” according to the plaintiffs’ motion.


Previously, Previously, and Previously.



Update: Complete Music Update does a great job explaining this mess:

In some countries, the music publishing sector has traditionally licensed the performing and mechanical rights separately through different entities, meaning streaming firms need to ensure that – not only do they have deals in place for both recordings and songs – those deals cover both the performing and mechanical rights of any works streamed.

In the US this has proven challenging, because while there are collecting societies that licence performing rights, there is no one-stop society that represents mechanical rights. In other countries where the two elements of the copyright are licensed separately, there is a mechanical rights society that can provide a licence to cover any songs that are not subject to direct deals between the streaming firms and the big music publishers.

On one level this shouldn’t matter because there is a compulsory licence covering mechanicals in the US, which includes a set statutory rate to be paid, so streaming services don’t need to negotiate terms and they know from the outset what the mechanical costs will be. However, the compulsory licence obliges the streaming service to alert each and every rights owner that it intends to exploit their work or – where they can’t identify the owner – it should file paperwork with the US Copyright Office instead.

Few services did this, mainly because of the big music rights data problem, whereby there is no one stop publicly accessible database to tell you who controls which song copyrights, nor which song is contained in which recording. However, by failing to adhere to the formalities of the compulsory licence, whenever a streaming service streams a song in the US which is not covered by one of its direct publisher licences, it is technically committing copyright infringement.


Update 2:

Compare Spotify to Facebook. Facebook has no licenses. None. Zero. Zilch. They know they have no licenses and they don’t seem to be in much of a hurry to solve this problem. For all of Spotify’s problems, Facebook is not Spotify. Facebook is a royalty deadbeat.

What the Spotify cases should tell Facebook is that Facebook should not expect to get a pass for their bad behavior. Facebook should expect to write a very large check for the past and a very large check for the future.

Mechanical Royalty Rates Revisited

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America’s Copyright Royalty Board yesterday got around to thinking about what the country’s mechanical royalty rates should be for the next five years.

Mechanical royalties – paid to songwriters when recordings of their songs are copied and distributed – are covered by a compulsory license Stateside. Which means songwriters and music publishers are obliged to license third parties making and distributing those copies at a statutory rate, so that rate-setting processes like this one are rather important.

Traditionally the main customers of mechanical rights have been record companies, which need a license from the relevant songwriter or music publisher every time they press a CD.

In the US, unlike in Europe, it was the label which paid the mechanical royalties on downloads too, so that iTunes didn’t have to worry about making sure the owner of the song copyright was paid their share of any income.

However with streams, where both the mechanical and performing rights of the copyright are exploited, it is the digital platform that is the licensee and which therefore pays the mechanical royalties directly to the writer or publisher (or not as the case may be, as those songwriter lawsuits against various streaming services have demonstrated).

Discs and downloads also remain a decent part of the recorded music business for now of course, but – after a bit of a stand off – the US record industry reached a deal with the music publishers on mechanical royalty rates last year. Which means that the CRB hearing is very much focused on the rates paid by the streaming services, which are, after all, where all the growth is in recorded music these days.

The tech giants are expected to argue to reduce the amount they pay, while the National Music Publisher’s Association and the Nashville Songwriters Association International will lobby for an increase.

NMPA wants songwriters to be paid each time their song is played, or each time a user purchases a subscription. It also wants to share the profits from the sale of technology and subscriptions that include access to music.

The US government has been setting mechanical royalty rates for over 100 years, beginning in 1909 when Congress determined that the rights would be subject to a compulsory license. This means that anyone can record a songwriter’s work for a fixed rate without permission or approval. Congress used to set this rate, but has since delegated the task to the CRB judges. The current rates were set over ten years ago when digital streaming was just starting to take off.