CMU Daily 18.08.17: YouTube's Lyor Cohen tells industry to shut up and wait (basically), BMI logs response to 100% licensing appeal

YouTube's Lyor Cohen tells the music industry to shut up and wait (basically)
It's nearly a year since YouTube announced it was hiring American record industry veteran Lyor Cohen as its Peacemaker In Chief, the music industry's safe harbour campaign having ramped up somewhat Stateside earlier in 2016.

Yesterday, eight months after actually taking up that tricky post, Cohen took to the official YouTube blog to ponder a little about the music industry's relationship with the Google video site. He basically told his former colleagues within in the music business to shut the fuck up and just wait for the good times to roll on in.

As much previously reported, YouTube, as the market-leading opt-out streaming service, has become enemy number one for the music community in recent years. Partly because of the impact the industry fears the Google-owned service is having on the market-leading opt-in streaming services like Spotify and Apple Music.

YouTube is an opt-out streaming service because anyone can upload content to its server, and copyright owners who do not want their music on the platform must then request its removal via YouTube's Content ID system. Whereas a label's music only appears on a Spotify or Apple Music-type service if they choose to opt-in.

The music industry argues that because of the way YouTube sources its content, that greatly increases the Google company's negotiating hand in licensing deals, meaning YouTube enjoys much more preferential rates that the opt-in streaming services it competes with.

That is only possible because of the aforementioned copyright safe harbour, which says that YouTube can only be held liable for the unlicensed content users upload to its servers once it is made aware of its existence. To that end, the music industry has been busy trying to have the safe harbour rule revised, so that YouTube no longer gets protection, and its negotiating hand will become more akin to that of Spotify and Apple Music.

Cohen deals with the safe harbour issue directly in his new blog post, but not until the end. First he offers some other theories as to why YouTube's relationship with the music industry is so fraught, and then tries to convince the YouTube-haters amongst his former colleagues at the record labels that things are actually much rosier for the music industry within YouTubes-ville than they probably think.

He starts off by talking up YouTube's moves in the subscription space, correctly identifying that the music industry is currently much more enamoured with paid-for streaming than freebie streaming.

He concedes that YouTube came to market with its Red subscription service relatively late in the day, and is still very much rolling it out around the world. But great progress is being made, he reckons, and from a music perspective momentum in that domain will only increase as YouTube Music and Google Play Music are more closely aligned.

"Subscription revenue is still in its infancy", Cohen writes of the wider subscriptions market, "yet it's already reaping billions for the music industry. It's not just some business model on a whiteboard; it's a real and rapidly growing source of cash for labels and artists today".

But while the music industry can look forward to lots of lovely YouTube subscription money in the future, Cohen continues, they shouldn't forget that the company's core revenue stream – ad sales – still has lots of potential.

"Some think ads are the death of the music industry", Cohen muses. "Ads are not death. Death is death. Irrelevance is death. Fans not being exposed to new music is death".

Hmm, maybe. "My time at YouTube has me convinced that advertising is another powerful source of growth for the industry", he goes on. "YouTube's ads hustle has already brought over a billion dollars in twelve months to the industry and it's growing rapidly. Combined with YouTube's growing subscription service, they've now got two engines taking the industry to a more lucrative place than it's ever been before".

And then, of course, there's the promo value of YouTube. Never forget the promo value of YouTube. I can't believe you forgot the promo value of YouTube!

Even the YouTube-haters in the music industry concede that the Google site is a crucial marketing channel, especially for new talent. So much so, even if the labels got their way on safe harbour, the Google company could still drive a hard bargain when negotiating licensing deals, based on the assumption labels ultimately can't afford to boycott YouTube for marketing reasons. Though the labels might argue (or at least hope) that Facebook's video push strengthens their hands in that domain.

But, Cohen says, he is going to make YouTube an even better marketing platform for all those budding new artists out there. "YouTube is already a great force for breaking new artists", he writes, "in fact, the majority of music watch time on YouTube is coming from its recommendations, rather than people searching for what they want to listen to. But YouTube needs to find new ways to promote and break artists and their albums so they have a chance to shine on the platform and connect with their fans. This is one of my biggest priorities and you'll see more coming soon".

So to conclude, if only the music industry would be a little more patient, great things are incoming. More subscription money! More advertising money! More free marketing tools! But not if the fucking labels fucking fuck it all up with all their fucking safe harbour nonsense. I'm paraphrasing a bit there. But it's what he meant.

"Without safe harbour, we'd all be lost at sea", Cohen writes. "I've spent my professional life fighting for artists to get what they deserve. I've worked with the RIAA and the IFPI to fight piracy since back when the main concern was bootlegged tapes. [But] safe harbour has become an obsession - with many complaining it's the cause of all of industry's woes".

Insisting he isn't just parroting his employer's official line (before doing just that), Cohen insists that "safe harbours is a distraction". He argues: "Safe harbour helps open platforms like YouTube, Facebook, Soundcloud and Instagram give a voice to millions of artists around the world, making the industry more competitive and vibrant".

It seems unlikely his blog post will placate any YouTube critics in the music community. But in some ways Cohen is right that safe harbour has become something of a distraction since it arrived at the top of the music industry's lobbying agenda. After all, even if the labels and publishers got the legislative reform they seek, it could take years to confirm what new obligations any rewrite of the law actually placed on YouTube et al, and who knows where the digital music business will be by then.

And in some ways, at least some of the YouTube hate comes from the music industry's dislike for free streaming, which will always be less lucrative. Though freebie streams are surely going to be part of the digital music business long-term and Google has arguably made more strides in this domain than anyone else.

Which isn't to say that YouTube isn't basically exploiting a loophole in copyright law, nor that copyright owners shouldn't be seeking to close that loophole. Though you sense that some now see safe harbour reform as a kind of panacea that will make the digital music business work for everyone. And it won't. Even if the music industry wins.

And, of course, from an artist and songwriter perspective there remains the big fat transparency problem – the fact many artist and songwriters don't really know how their recordings and songs are generating money online because of poor reporting and deal secrecy at the labels, publishers and collecting societies.

Some moves are being made to bring more transparency to the streaming music business, but on some key issues the major music companies and big collecting societies continue to drag their feet. Doing so is anti-artist and anti-songwriter, and ultimately counter-productive for the entire business. And it also provides ammunition to the safe harbour dwelling tech giants, as Cohen neatly demonstrates.

"Critics complain YouTube isn't paying enough money for ad-supported streams compared to Spotify or Pandora", he muses in his blog. "I was one of them! Then I got here and looked at the numbers myself. At over $3 per thousand streams in the US, YouTube is paying out more than other ad supported services. Why doesn't anyone know that?"

"Artists and songwriters need to truly understand what they're making on different platforms", he adds. And that means more transparency is required, but from the labels and publishers as well as the platforms. "We - the labels, publishers and YouTube - must shine a light on artist royalties", he demands, "[and] show them how much they make from ads compared to subscriptions by geography and see how high their revenue is in the US and compared to other services".

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BMI formally responds to Department Of Justice's 100% licensing appeal
US collecting society BMI yesterday filed its formal response to the Department Of Justice's appeal over the whole 100% licensing rigmarole.

Recap! The US Department Of Justice last year declared that – by its reading of the so called consent decrees that regulate American performing rights organisations BMI and ASCAP – the two PROs are obliged to offer licensees so called 100% licences. Which would mean a licensee with a BMI licence could make use of a song even if BMI only controlled 15% of said song. Under the current 'fractional licensing' system the licensee would also need licences from whichever societies or publishers control the other 85%.

BMI, ASCAP and the US songwriting community hit out at that DoJ declaration, which would require a major change in how collective licensing works and performing right royalties flow Stateside. BMI took the matter to the court that oversees its consent decree where judge Louis L Stanton immediately sided with the society. The DoJ is now appealing that ruling.

BMI's response to the DoJ's appeal restates its arguments as to why 100% licensing is not required under its consent decree, as well as running back through why introducing a 100% licensing system now would be major pain in the arse.

BMI boss Mike O'Neill summarised the society's position as the court papers were filed yesterday. He stated: "BMI's appeal argument is extremely simple in that it comes down to the language of our decree. As Judge Stanton clearly stated, there is nothing in the BMI decree that prevents us from engaging in the industry-wide practice of fractional licensing".

"What is not simple, however", he went on, "is the impact the DOJ's interpretation of our decree would have on the marketplace. It would stifle competition, hinder collaboration and unfairly benefit music users at the expense of the American songwriter".

While the court proceedings in relation to the 100% licensing debate continue to go through the motions, it's also hoped that lawmakers in US Congress could ultimately amend copyright law to give the all-clear to fractional licensing in the collective licensing domain.

Plus, of course, there has been a post-Presidential election change of leadership at the DoJ since last year's proclamation on 100% licensing, so there is always a chance the government agency could be persuaded to change its mind.

O'Neill added: "As always, we hope for the opportunity to sit down with the new leadership of the DOJ to educate it about the negative ripple effect its 100% licensing interpretation would have on the entire music industry".

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Songs signs Hudson Mohawke
US music publisher Songs yesterday announced it had signed a worldwide co-publishing deal with that Hudson Mohawke guy, aka Ross Birchard.

As well as his own output as an artist, the Scottish producer has also worked with a stack of other acts including Kanye West, Drake, A$AP Rocky, Pusha T and John Legend.

Confirming the new deal, the VP of A&R at Songs, Greg Johnson, said: "Hudson is one of the most important hit-making forces on the rise in contemporary music and we are THRILLED to be working with him at Songs".

Noting Birchard is now based in America, Johnson added: "He's also now based here in the US which will put him in the mix for an even wider array of collaborations about which the creative community is already excited".
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Universal Music Publishing signs Tom Misch
Universal Music Publishing in the UK has signed a worldwide deal with artist / songwriter / producer chap Tom Misch. Why? Because Misch "takes the musical ingredients of J Dilla-style beats, irresistible guitar lines and neo-soul to create his own adventure in sound that's intrepid, invigorating and bursting with inventiveness" of course! I can't believe you even had to ask. It was so obvious.

Says the MD of Universal Music Publishing UK, Mike McCormack: "We're hugely excited to be working with Tom – he is an exceptionally talented songwriter and producer. Everything he puts out is refreshing, original and beautifully produced".

Promising "much magic to come", not least from Misch's debut album, McCormack added: "I'd also like to thank Mark Gale and Pete Simmons here at UMPG who have been fans and supporters of Tom from day one and worked tirelessly to convince him and his management that Universal was the right home for his music".

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ABBA's Benny Andersson plays his memoirs on the piano
Benny Andersson off of ABBA is releasing a new album of solo piano music via Universal's classical label Deutsche Grammophon. It features new interpretations of songs from both ABBA and his stage musicals, plus other solo compositions. After much thought and plenty of consideration - I'm sure - he's called the album 'Piano'.

"In the process of recording this album, I have come to realise that the pieces I have chosen to play are an integral part of me", says Andersson of the record, which is out on 28 Sep. "In endeavouring to reach for some core within them, I have found that the more I strip away the clothing, the closer I feel to the music, regardless of whether it was created last year or 40 years ago. In a strange way, I feel like I am playing my memoirs".

The new version of ABBA track 'Thank You For The Music' that appears on the record lands on the streaming platforms today.

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AIM to give Innovator Award to Boy Better Know
The Association Of Independent Music has announced that the boys from Boy Better Know will be handed the Innovator Award at this year's Independent Music Awards. The grime collective and label founded by JME and Skepta has, of course, been integral in the rise of the genre and its crossover into the mainstream.

Announcing the decision to present BBK with an award, Vice's music chief Alex Hoffman, also a judge for the AIM Awards, said: "Like so many young people trying to somehow make a viable career out of music, when the members of BBK came together, the completely independent route was the only one on the table".

He went on: "Then the offers came flooding in but none of them saw a reason to change the set-up. They simply saw what they'd achieved on their own terms up to that point and had the confidence to keep building their empire independently. Their influence on the next generation of UK artists goes so much further than their musical output and goes so much further than grime".

Speaking for AIM, the trade group's Lara Baker added: "Boy Better Know have been tearing up the rulebook for over ten years, influencing culture and building success entirely on their own terms. From the early days of radio stations refusing to play their music and venues shutting down their shows, 2017 has seen them dominate the airwaves and take grime global. Whether headlining Glastonbury's Other Stage, taking over The O2 arena or dropping tracks with Drake, they maintain a fiercely DIY and independent spirit, inspiring countless young artists to do the same".

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Steve Angello, MTV Unplugged, Justin Bieber, more

Other notable announcements and developments today...

• Kobalt has announced a label services deal with DJ/producer Steve Angello and his label Size Records UK. Kobalt boss Willard Ahdritz says his global team is "very excited" about the new partnership.

• MTV is apparently relaunching its 'Unplugged' franchise, with Shawn Mendes the first act to unplug for the new series.

• Radiohead drummer Philip Selway will release new solo album 'Let Me Go' via Bella Union on 27 Oct. It soundtracks a film of the same name, which is out next month. Here is the title track.

• Justin Bieber and BloodPop have released a new track called 'Friends'.

• Producer Gordon Raphael, who has worked with the likes of The Strokes and Regina Spektor, is releasing a debut album as an artist on 27 Oct. Here is a track from it. The album's called 'Sleep On The Radio, this track is 'Savage'.

• Robert Plant is going on tour in November and December and people who pre-order his new album 'Carry Fire' via Amazon get priority access to tickets. Imagine that!

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Beef Of The Week #368: Wu-Tang Clan fan (aka Potential Juror Number 59) v Martin Shkreli
In a week when some of the very worst Americans have been in the media spotlight, it was reassuring to read the court transcripts from the recent fraud case against Martin Shkreli.

And in particular transcripts of the jury selection process at the start of the proceedings, during which more than 200 potential jurors had to be excused from the trial, on the basis that they didn't feel they could be impartial in the case, on account of the one time pharmaceuticals entrepreneur [a] being a cunt, [b] looking like a cunt, and [c] having once disrespected the Wu-Tang Clan.

This beef actually occurred back in June, but the transcripts were published by Harper magazine this week, and they make for very amusing reading indeed. Shkreli, you may remember, was the slime-ball who became front page news when he raised the price of the drug Daraprim by 5000% in his role as CEO of Turing Pharmaceuticals.

He then stayed in the news by being a general shit-bag and saying shit-baggy things, and subsequently became music news when it emerged he had provided funding to punk and hardcore label Collect Records. It then turned out that he was also the buyer of 'Once Upon A Time In Shaolin', the new record made by the Wu-Tang Clan of which only one single copy was being sold.

Shkreli's association with the Wu-Tang Clan ultimately won him his first appearance in the Beef Of The Week column, when he started beefing with Wu-Tang member Ghostface Killah. That occurred after the latter was asked by TMZ what he thought about the buyer of Wu-Tang's new album.

"That shithead" he responded. "You don't take some AIDS pill you have for like $7 and then make it like $800. You know? You don't do it like that. I don't care if you bought the Wu-Tang whatever, whatever, whatever. I don't even know him, but when I heard what he did with the AIDS like that, that's not right".

It's probably fair to say that, when Shkreli - having been arrested on allegations of fraud in late 2015 - rocked up in court earlier this summer to face eight fraud charges, many of those lined up to sit on the jury were very much in agreement with Ghostface Killah.

Hence why so many potential jurors had to be excused. "I'm aware of the defendant and I hate him", said potential juror number one when asked whether they could be 'fair and impartial' as a member of the jury considering the fraud allegations. "I think he's a greedy little man", the potential juror added.

"Both of my parents are on prescriptions that have gone up over the past few months, so much that they can't afford their drugs", stated potential juror number eighteen. "I have several friends who have HIV or AIDS who, again, can't afford the prescription drugs that they were able to afford". But that's not relevant to the fraud case, potential juror number eighteen was told, so could you not put those feelings to the side? "No, no, no, no".

"He's the most hated man in America", reckoned potential juror number 47. "I just walked in and looked right at him and that's a snake", stated potential juror number 52. "I have total disdain for the man", admitted potential juror number 70. "I believe the defendant is the face of corporate greed in America", confirmed potential juror number 77. "He kind of looks like a dick", observed potential juror number 144.

But what about potential juror number 59? Could potential juror number 59 be 'fair and impartial' if asked to sit on the jury deciding the fate of fuck face Shkreli?

"Your Honour, he is totally guilty and in no way can I let him slide out of anything", the potential juror said. So, not very impartial then. But on what basis do you form this strong opinion? Well, there's "his entire demeanour" for starters. And then there's "what he has done to people". And, of course, as potential juror number 59 was very keen to stress, this is a man who "disrespected the Wu-Tang Clan".

Earlier this month, Shkreli was found guilty of two counts of securities fraud and one count of conspiracy to commit securities fraud. He is still be sentenced.

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