CMU Daily 25.01.18: Enrique Iglesias reckons misclassified streams cost him millions in royalties, Mark E Smith dies

Enrique Iglesias reckons misclassified streams cost him millions in royalties
Good news for avid collectors of sales v licence lawsuits. Sony Music may have settled its royalties battle with a bunch of American Idols, but now Enrique Iglesias has sued Universal Music over the way the mega-major classifies his streams for royalty purposes. Iglesias reckons that classification is in breach of his record contract and has cost him millions.

As much previously reported, as the recorded music business has shifted over to digital, there has been much debate over how record companies share download and streaming income with heritage artists whose record contacts don't specifically reference such revenues.

Record contracts usually provide artists with a percentage share of any money their recordings generate. However, the percentage paid to the artist often varies according to how the money is generated. A traditional distinction was between sales income (eg selling CDs) and licence income (eg sync deals). A common royalty on the former was 15%, while on the latter 50%, so these distinctions make quite a big difference for the artist.

Labels in the main have treated downloads as sales income, even though the deals done between the record companies and the download stores are licensing deals. That led to a flurry of lawsuits, mainly in the US, of which the FBT Productions case against Universal in relation to Eminem's recordings was the highest profile. Despite all that litigation, most artists saw their download royalties increase by only a few percent, a long way off the 50% rate that was commonly assigned to 'licence' income.

What about streams though? How should streaming income be treated when it comes to paying royalties on old record contracts? Most of the big cases on sales v licence to date focused on downloads not streaming. That made the legal battle between 19 Recordings – representing various finalists from 'American Idol' – and Sony Music interesting, as it included the argument that a higher licence royalty should be paid on streams. But earlier this month it emerged that that lawsuit has been pretty much settled out of court.

This brings us to the lawsuit filed by Iglesias in Miami yesterday. The case is very much focused on streaming monies and how streams are defined by a label when such income is not specifically mentioned in a record contract. Neither of Iglesias's two deals with Universal Music specifically mentions streaming income. No, not even his second deal that was signed in 2010. Which seems like quite an oversight for such a recent contract.

Cases of this kind are all about contractual interpretation, and therefore centre on the specific wording of Iglesias's two record contracts with Universal. While much of the lengthy lawsuit that was filed yesterday is dedicated to running through all of the music star's multifarious successes, a little time is dedicated to specific contract terms.

In particular, a catch all 'any other income' clause in the original 1999 contract. According to the lawsuit, that clause said that monies generated by "any type of use not specifically covered" elsewhere in the contract would result in a royalty payment to Iglesias of 50%. And that, the lawsuit notes, is substantially higher that the standard 'album royalty rate' contained elsewhere in the deal.

Given that streams aren't specifically mentioned in either the original 1999 contract or the subsequent second contract in 2010 (downloads are, but not streams), Iglesias's lawyers reckon that he should have been getting the 50% "any type of use not specifically covered" royalty on all the streaming monies generated by his records. But he has not.

Iglesias, therefore, has been significantly underpaid because of – says the lawsuit – "Universal's improper crediting of streams at the incorrect album royalty rate, which is less than a fraction of the 50% streaming royalty". I'm not sure anything can be less than a fraction. That's just another smaller fraction surely? But we get the point.

Actually, interestingly, in a footnote, the lawsuit states that Universal's Interscope label - which released Iglesias's English language albums under the first part of his deal with the major - did initially pay the higher 50% rate on streams. The other Universal subsidiaries which released his Spanish language albums and later records presumably did not.

Says the legal filing: "Up until approximately 2016, Interscope properly recognised and credited Iglesias' streaming royalties at 50%. However, upon receiving a directive from Universal, Interscope – without consulting or otherwise notifying Iglesias – began crediting streams at the incorrect, lower record royalty rate".

Given the managers and lawyers of many heritage artists reckon the sales v licence question was never properly addressed, despite all the lawsuits on download royalties Stateside, this new case will be interesting to watch. Although it also includes a dispute over Iglesias's audit rights, it is very much focused on how streaming income is defined in old (and, as it turns out, not so old) contracts that don't talk about streams.

Though, usually when it's mega-star artists who sue, a confidential out of court settlement follows, so that no precedent is set that may apply to other artist deals with similarly written clauses. Nevertheless, this dispute will be one to watch. Certainly Iglesias's legal rep James Sammataro reckons the dispute could inform other heritage artists with grievances over their share of streaming income.

He told reporters: "Despite [his] record-breaking success, Universal has wrongly insisted that artists like Enrique be paid for streams in the same manner as they are paid for physical records despite the fact that none of the attendant costs - production, distribution, inventory, losses - actually exist in the digital world. This is not what Enrique's contract, or the contracts of many other artists, call for".

"Artists, producers and songwriters should benefit from the reduced costs of streaming, not have their musical works spin unwarranted profits", Sammataro continued. "Universal has long ignored, and is now attempting to distort, the clear terms of its artist agreements so that it alone reaps the savings from digital streams. After lengthy efforts to have Universal honour its contractual obligations, Enrique's team regrettably concluded that he had no choice but to file this lawsuit".

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Music Modernization Act introduced into US Senate
The Music Modernization Act was introduced into the Senate in US Congress yesterday, having been introduced into the House Of Representatives late last year.

These are the legislative proposals aiming to sort out America's much documented mechanical rights mess, which has resulted in songwriters going unpaid when their songs are played on the streaming platforms, and a plethora of lawsuits against the streaming services over those unpaid monies.

Under the MMA, a new collecting society would be established that would be empowered to provide streaming services with a blanket licence covering the so called mechanical rights in any songs not otherwise covered by a digital company's direct deals with music publishers.

It would also overhaul the way rates are set whenever song rights are licensed through a collecting society in the US, in a way that should see songwriters and publishers earn more. That would include the licensing of performing rights as well as mechanical rights.

The act was initially proposed in the House Of Representatives by Republican Doug Collins and Democrat Hakeem Jeffries. Its key backers in the Senate this week were Republicans Orrin Hatch and Lamar Alexander, and Democrat Sheldon Whitehouse, with a bunch of others also co-sponsoring the bill.

In addition to cross-party support in Congress, the proposals are also backed by an assortment of organisations in the music and digital communities. Though there are critics too, with concerns raised by some songwriters, in particular over how the new mechanical rights collecting society will be governed.

Nevertheless, plenty of trade groups were ready to reaffirm their support for the MMA as it was formally introduced into the Senate. Here are some quotes for you all to enjoy.

David Israelite, CEO of the National Music Publishers Association: "The MMA is the best hope for songwriters to achieve fair royalties and payments in the digital age. We are grateful to Senators Hatch, Alexander, Whitehouse, Corker, Durbin, Coons, Isakson and Jones for their attention to the struggles of music creators and for introducing the MMA, which we hope continues to gain momentum in the Senate".

Mike O'Neill, CEO of performing rights organisation BMI: "The Music Modernization Act is an important step forward in protecting the rights of the American songwriter ... while we believe there is still more to do to protect the value of the performance right, we are encouraged by the inclusion of two important provisions that go a long way towards ensuring that songwriters and composers receive fair compensation for their creative work ... While we know this bill is not yet final, it represents an unprecedented cross-industry effort to introduce comprehensive music reform, and we look forward to working with all of the interested parties to further support this much needed legislation".

Elizabeth Matthews, CEO of performing rights organisation ASCAP: "The Music Modernization Act addresses some of the most critical issues facing America's songwriters today, including rate court reforms and changes to the outdated music licensing system that better reflect the evolution of how people listen to music. While there is more work to be done to ensure that songwriters earn fair compensation, this legislation, like the similar bill recently introduced in the House, represents important progress in an ongoing effort on industry-wide reforms that protect the rights of music creators. We thank Senators Hatch, Whitehouse, Alexander, Durbin, Corker, Coons, Isakson and Jones for their support and we urge all parties to seize the momentum to pass these bills without delay".

Steve Bogard, President of Nashville Songwriters Association International: "Songwriters will finally get a market-based mechanical rate standard, which should result in more equitable royalties from interactive streaming companies. Until now, we have been tied to outdated rate standards Congress first adopted for player piano rolls back in 1909. In addition, American songwriters will, for the first time, by law, receive at least half of all unclaimed digital mechanical royalties. I want to extend my deepest thanks to all of our introducing Senate sponsors. The Music Modernization Act represents the most significant copyright reform in a generation".

Michelle Lewis, Executive Director of Songwriters Of North America: "[SONA] is THRILLED that the Senate is introducing the Music Modernization Act, which significantly moves the ball forward on legislative reform for songwriters. For too long, songwriters have been severely handicapped in the marketplace, with absurdly low payments for the use of our songs or no payments at all. The Music Modernization Act will help rectify this going forward. SONA is very thankful to Senator Hatch, Senator Alexander, and the other co-sponsors of this legislation for their commitment to improving the lives of songwriters".

Chris Harrison, CEO of the Digital Media Association: "DiMA thanks the senators for their hard work and willingness to join together in a bipartisan fashion to reform an outdated and inefficient music licensing system that serves neither music fans nor creators. We support the Music Modernization Act because it creates a blanket licence, which is critical to a modern licensing system and necessary for a rapidly growing industry. We look forward to continuing to work with the bill's sponsors in both the House and Senate to create a music licensing system that benefits everyone. Streaming services have literally saved the music industry, delivering better experiences at a better value, and growing revenue for creators. We are glad to see Congress is looking to the streaming future and moving away from the music mess of the past".

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AEG Presents opens French office
AEG Presents has opened itself a new office in Paris. Running the new operation will be Arnaud Meersseman, who will report to the AEG division's co-CEOs in London, Steve Homer and Toby Leighton-Pope.

"The live music scene in France is incredibly vibrant and one we very much admire and it's a real privilege to be able to set up our Paris office", say Homer and Leighton-Pope in a joint statement. "In Arnaud we have a highly experienced leader and look forward to achieving great things together".

Meersseman adds: "I've worked with Toby and Steve since they became involved in Rock en Seine and I'm very proud and excited to become part of the AEG Presents team with this new venture".

He then adds, in possibly the longest sentence ever written: "I have always considered AEG to be best in class in developing venues and festivals that both meet the needs of today's consumers and in the development of the Hyde Park festival build something truly befitting of the London Park, I am looking forward to taking this passion for excellence into the French market and I'm confident we can do some excellent work with both international and French artists as the new office gets underway".

Phew. Meersseman has nearly fifteen years of experience in the concert promotion game, most recently serving as Managing Director of the MIALA/Fimalac group.

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YouTube includes 'non-disparagement agreements' in its artist deals, says Bloomberg
YouTube has included 'non-disparagement agreements' in partnership deals it has struck up with various artists, according to sources who have spoken to Bloomberg.

Presumably those artists wouldn't be able to admit to having entered into such 'non-disparagement agreements' as a result of concurrent 'non-disclosure agreements'. All these NDAs. I wonder if there's a 'no-dick-moves agreement' clause in there too? Probably is since all that Logan Paul hoo haa.

The 'non-disparagement agreements' have apparently been included in deals where YouTube agrees to pay for video production and marketing costs on behalf of certain artists. Given all the "fuck YouTube and its fucking fucked up fucking fuck fuck" sentiment that has been coming out of the music community in recent years, the inclusion of the "you'd better not go and diss us" clause in such contracts is probably unsurprising.

Though Bloomberg notes that, while "non-disparagement agreements are common in business ... YouTube's biggest direct competitors in music don't require them" when likewise making a content or promotional investment into a specific artist.

The music industry has been very busy trying to get copyright law rewritten, of course, so to increase the liabilities of platforms like YouTube. Record companies and music publishers reckon that the Google site exploits a loophole in the law created by the copyright safe harbour to secure unfair terms in its deals with the music industry. Plenty of artists and songwriters agree and have backed the industry's safe harbour reform campaign.

At the same time, lots of artists and songwriters, and labels for that matter, concurrently work with YouTube to distribute their content, build a fanbase, and even generate some income. Which can result in a bit of cognitive dissonance. Unless, of course, you're contractually obliged to suppress your "fucking YouTube" tendencies to achieve your video making ambitions and get on a billboard at Google's expense.

Although that does sound a bit like I'm suggesting YouTube's 'non-disparagement agreements' are actually there to help artists deal with their own inner hypocrisies, rather than existing entirely for the benefit of Google's PR machine. Look at me defending YouTube. You'll be thinking I've signed some sort of 'non-disparagement agreement' if I'm not careful. So, just for the avoidance of doubt, fuck YouTube.

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BBC unveils UK's annual Eurovision contender shitshow
The BBC has put forward six possible acts to represent the UK at Eurovision later this year. The British public will be forced to choose from the disappointing bunch during the broadcast of 'Eurovision: You Decide' next month.

The six songs this year all represent different genres and are all performed by artists who remind you a bit of someone better and more famous. I think we can be fairly confident of a bottom five placing in the big contest this year, even ignoring the fact that the rest of Europe already considers us bell-ends.

Performing for your utter displeasure this year are Asanda, Goldstone, Jaz Ellington, Liam Tamne, Raya and Surie. Don't bother remembering their names, there's no point. If you really want, you can check them all out here, but I already have and I don't think you should have to suffer it too.

'Eurovision: You Decide' will be broadcast live from the Brighton Dome on BBC Two at 7.30pm on 7 Feb. Surely someone reading this must have some sort of influence to make this whole sorry situation better.

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Mark E Smith dies
Frontman of The Fall, Mark E Smith, has died after a lengthy period of illness. He was 60.

In a statement, the band's manager Pam Vander said last night: "It is with deep regret that we announce the passing of Mark E Smith. He passed this morning at home. A more detailed statement will follow in the next few days".

Smith's continuing ill health led to the cancellation of various The Fall shows in the UK, Europe and the US last year. In August, while announcing the cancellation of the American dates, Vander explained: "Mark's current problems are connected to his throat, mouth/dental and respiratory system ... it's high time Mark put his health first and that's what we are gonna do".

Born in 1957 in Salford, Smith formed The Fall aged nineteen in 1976 with three friends: Martin Bramah, Una Baines and Tony Friel. He quickly quit his job in order to focus full time on the band, which he did with keen focus for the next four decades.

Smith's authoritarian approach to band leadership led to many changes in the outfit's line-up over the years, either through people being fired or quitting. A total of 66 different members passed through the group during their 40 year history. By 1979, the other three original members were all gone, leaving Smith to take full charge of the band's future.

A then sixteen year old Marc Riley replaced Tony Friel on bass in 1978. In an interview with Adam Buxton in 2016, he said: "The second best thing that ever happened to me professionally was being asked the join The Fall. The best thing was being kicked out".

His firing came in 1983, after he and Smith fell out during an Australian tour. Smith subsequently wrote a song about him called 'Hey! Marc Riley', which contained the lyrics, "We've always known him as a bit of a dancer. And we all know him as a pillock". Riley responded with his own song, 'Jumper Clown'.

Smith's ability to throw around nasty, often funny, insults - both in his lyrics and in interviews - certainly helped to maintain an interest in him and his work. However, it was the uniqueness of The Fall's music, built around Smith's personality (necessarily, thanks to the high turnover of band members) and his flair for lyrical wit and insight, which maintained their popularity for so many years.

The band released 32 studio albums, most recently last year's 'New Facts Emerge'. There were an equal number of live albums, plus numerous other releases. Smith also found time for two solo albums, and various collaborations, including with Gorillaz and Coldcut.

Last March, the BBC accidentally announced Smith's death prematurely on Twitter, when it was actually his 60th birthday. He later told The Guardian: "Obviously it was the BBC, the idiots. It was stopped in minutes by Fall fans. I was still ill around that time but was starting to feel better and somebody comes in and says, 'by the way, you're dead'".

Smith was married three times. First to former Fall lead guitarist Brix Smith from 1983 to 1989, and then to Fall fanclub employee Saffron Prior from 1991 to 1995. He and Fall keyboard player Elena Poulou married in 2001. She survives him.

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Slits documentary to be screened in UK cinemas
I had flu a few months ago, and while I was stuck in bed feeling sorry for myself, I read Viv Albertine's autobiography, 'Clothes, Clothes, Clothes. Music, Music, Music. Boys, Boys, Boys'. You should read it, it's a great book.

By the end of it, you'll probably be thinking, "that was great, I would really like to experience more things related to The Slits". And, well, if you time it right, you might be able to head straight out to the cinema to watch a new documentary about them.

First screened at last year's London Film Festival, 'Here To Be Heard: The Story Of The Slits' will be shown in cinemas around the UK in March and April this year. It will be released on DVD shortly afterwards.

Watch a trailer for the film here. And here are the dates for all the upcoming screenings:

29 Mar: Croydon, David Lean Cinema
31 Mar: Liverpool, British Music Experience
14 Apr: London, Hackney Picturehouse
15 Apr: London, Brixton Ritzy
16 Apr: Brighton, Duke Of York
17 Apr: Birmingham, MAC
18 Apr: Derby, Quad
19 Apr: Nottingham, Broadway
20 Apr: Sheffield, Showroom
21 Apr: Manchester, Home
22 Apr: Glasgow, GFT

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Elton John announces farewell tour
Elton John has announced that he is retiring from touring. Although not before he's been out on a three year farewell tour.

The 'Farewell Yellow Brick Road' tour is set to begin in the US in September this year, eventually reaching the UK in late 2020. The musician will play more than 300 shows in total, before concluding the venture in 2021.

He initially teased the announcement yesterday with the message on his website: "I've finally decided my future lies..." Which sort of sounds like he's identified every lie he plans to tell in the future. He then subsequently announced his farewell tour via a virtual reality livestream on YouTube. We don't know whether that was one of the lies. Though it if was, it would only be a virtual reality lie. So not a real lie. So let's assume it's happening.

"It's time to come off the road so I can fully embrace the next important chapter of my life", he said, before then talking about his next three years on the road. "Performing live fuels me and I'm ecstatic and humbled to continue to play to audiences across the globe. I plan to bring the passion and creativity that has entertained my fans for decades to my final tour. After the tour finishes, I'm very much looking forward to closing off that chapter of my life by saying farewell to life on the road. I need to dedicate more time to raising my children".

The announcement comes as John gets ready to complete his latest Las Vegas residency, 'The Million Dollar Piano'. Having started in September 2011, the final performance of that show will take place at Caesars Palace on 19 May this year.

Exact UK dates for the farewell tour are yet to be announced, but it has been confirmed that tickets for them will go on sale in September this year. So make a note of that. Unless that was another lie.

Watch the tour announcement here.

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Amazon, Lily Allen, Sting & Shaggy, more

Other notable announcements and developments today...

• Amazon Music Unlimited will be arriving in Australia and New Zealand on 1 Feb. "We're THRILLED to bring an entirely new world of music streaming possibilities to listeners in Australia and New Zealand", says Amazon Music's Head Of International Expansion, Sean McMullan.

• Lily Allen has released the video for her new single, 'Trigger Bang', featuring Giggs. Her new album, 'No Shame', will be out this summer. She's also announced three live shows in Manchester, London and Glasgow in March.

• Just like you've always wanted, Sting and Shaggy have teamed up to record an album. Titled '44/876', it'll be out on 20 Apr. First single, 'Don't Make Me Wait', is out now.

• George Ezra has released the video for his new single 'Paradise'. The track is the first to be taken from forthcoming new album, 'Staying At Tamara's'.

• Jhene Aiko has released a video for a remix of her track 'Sativa'. In addition to vocals from Rae Sremmurd's Swae Lee, the new version also has a verse from his bandmate Slim Jxmmi.

• Alice Glass has released new track 'Cease And Desist'. "This song is a call to arms for all survivors", she says. "We need to fight back against those who have victimised us and against the feelings that tell us to give up inside".

• Cabbage have announced that they will release their debut album, 'Nihilistic Glamour Shots', on 30 Mar. They're also about to head out on a UK tour, including a date at the 100 Club in London on 8 Feb.

• The Damned will release their first album for ten years, 'Evil Spirits', on 13 Apr. First single, 'Standing On The Edge Of Tomorrow', is out now.

• Susanna has released her version of Lou Reed's 'Perfect Day', taken from her new covers album, 'Go Dig My Grave', which is out on 9 Feb.

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

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Jack White tells fans to lock phones away at upcoming shows
Jack White has become the latest artist to ban mobile phones from his live shows. He said in a statement that he wants his upcoming US dates to be a "100% human experience".

A statement informs fans that White and promoter Live Nation "think you'll enjoy looking up from your gadgets for a little while and experience music and our shared love of it IN PERSON".

While some artists' phone bans don't stretch much beyond putting up a few signs, ticketholders at White's shows will be required to put their phones in a Yondr phone pouch. This allows fans to keep their phones with them, although they will not be able to access them while watching the performance.

Those unable to go the full distance without tweeting or adding something to their shopping list will be able to get into the locked bags in special areas outside the main auditorium.

Of course, people like to share photos and video of shows they attend. White recognises that, and has arranged for official photos of each show to be posted on his website immediately afterwards. "Repost our photos and videos as much as you want and enjoy a phone-free, 100% human experience", says the statement. I think people actually like to share their own shitty photos, but rules are rules.

Exactly what will happen if someone is found to have snuck a phone into a show without locking it in a bag isn't clear. Last year, A Perfect Circle had fans caught taking photos while the band performed ejected from venues.

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