Every Saturday CMU sends a summary of five key music business stories from the past week. | This week: Apple's 10% Spatial Audio bonus skews in favour of major labels; US Copyright Office will investigate AI licensing that could benefit music creators; Hipgnosis slanging match continues with "cherry picking" accusation; latest on music publishers vs Anthropic; if you were going to order a Notorious BIG shower curtain you might be out of luck. | | | The first of CMU's new virtual masterclasses takes place this Tuesday 30 January at 2.30pm / 3.30pm CET / 9.30am East Coast.
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The Music Business In 2024 gives an expert overview of key trends and developments in the music business over the last year, and will bring you fully up to speed on the current challenges and opportunities in the recording, publishing and live sectors.
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🍎 Apple's new royalty boost for Spatial Audio will favour major labels | |
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Apple Music told its label and distribution partners late last year that it would change its payment model to give a 10% 'bonus to tracks that are ‘spatial available’. An update this week confirmed that the new model will start this month.
While the new 'spatial bonus' offers clear benefits to artists and labels that can afford to master their music in Spatial Audio it will likely disadvantage those who cannot. To qualify for the 10% bonus a licensing partner will need to reach a ‘trigger’ where 50% of its streams in a month are from spatial available recordings. Once this happens the uplift will apply going forward.
However, as most independent artists and labels do not have their own direct agreements with Apple Music they are reliant on their distributors meeting that threshold. This means artists and labels may face the prospect of missing out on the bonus even if they provide all their music in Spatial Audio. Even if they do qualify for the bonus it, the way the it is calculated means major labels will likely benefit the most.
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| | 🤖 The US Copyright Office will investigate AI licensing models that could benefit music creators said its top lawyer | |
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Suzy Wilson, the Copyright Office's General Counsel, was speaking about the government body's ongoing consultation on AI. Although most AI companies say training AI falls under 'fair use' and so a licence would not be needed many copyright owners disagree. And so the Copyright Office is considering how AI licensing might work, especially where large amounts of content are being used.
One proposal could be a compulsory licence, which would probably mean the Copyright Royalty Board would set the framework and royalty rates. Wilson admitted that the music industry in particular had expressed concerns about that approach. "We have already heard from the musicians and songwriters who have experience with the licensing model in other contexts," she said, "and they raise a number of questions about whether or not that would be appropriate".
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| | 🍒 Yet another spat in the slanging match between Hipgnosis Songs Fund and its investment adviser Hipgnosis Song Management | |
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The new board of the publicly listed investment fund known as ‘SONG’ said that HSM “cherry picked” particularly high performing songs to be sold to another Hipgnosis entity, Hipgnosis Songs Capital. That sale was subsequently abandoned when shareholders voted against the proposal at the SONG AGM in October.
The increasing tensions between the two companies are causing many - including City analysts - to question why they are conducting such a public airing of dirty laundry.
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| | 📃 More filings from both sides in the music publishers vs Anthropic legal battle of AI training copyright infringement | |
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The music publishers accuse AI firm Anthropic of copyright infringement for training its chatbot Claude with their lyrics without licence. In its new legal filing Anthropic fully set out its fair use defence for the first time. Insisting it doesn’t need licences because AI training constitutes fair use under US copyright law the company said “to train an AI model is a classic fair use”.
Previously Anthropic called for the music publishers' lawsuit to be dismissed on jurisdiction grounds. The legal action has been launched in Tennessee rather than the AI firm's home state of California. However, the publishers said in their new filing, Anthropic has employees and customers in Tennessee, meaning the courts there have jurisdiction.
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| | 🛹 It's (shower) curtains for Notorious BIG skateboard sales as artist's estate settles publicity rights lawsuit |
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| The estate of photographer Chi Modu owns the copyright in a number of photos he took of the late rapper, real name Christopher Wallace, back in 1996. However, the Wallace estate's lawsuit argued that the use of those images on merchandise products also exploit the rapper's publicity rights, and therefore its approval is required.
In 2022, a judge said Wallace's publicity rights likely were being infringed by the products that featured Modu's photos, including the skateboards and shower curtains. The case was due to get to trial next month, but has now been settled. A legal rep for the Wallace estate said, “pictures of Christopher cannot be commercially exploited without a licence from our client".
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