More Than Enough Excitment for Music Publishers

As the world steps out of the darkness that was 2020, this year has already been an exciting one for music publishers. The artificial shutdown of live music caused a value boost in copyrights, leading to some major catalog sales, including Bob Dylan, Neil Young, Paul Simon, and Steve Nicks. Then we have the beginning of the Music Licensing Collective on January 1st according to the Music Modernization Act. The MLC has successfully delivered three rounds of royalty payments to writers so far, taking the first steps in healing some wounds between writers and digital service providers.

With even more good news, National Music Publishers Association CEO and President David Israelite announced that 2020 saw a 9.6% increase in revenues totaling $4.077 billion. This is fantastic news for songwriters and publishers. The pandemic hit everyone in different ways and the lack of live music was definitely the #1 impact on the music industry. But even though all hope seemed lost, the RIAA reported that overall revenue grew by 13.4% amidst the pandemic mostly due to streaming, allowing artists and labels to claim a small victory for all their struggle and hardships.

Now writers and publishers can say the same. Performance collections grew 7.9% and synchronization revenue enjoyed 13% growth. And while the streaming debate wages on, rights-holders cannot be too upset at the 19.5% growth of mechanical license revenue driven by streaming, which should only get better with the MLC on the scene. Even though most of these growth increases are less than the percentage increases between 2018 and 2019, it is still something to celebrate considering the circumstances of 2020.

But David Israelite did not only talk about revenue and growth. The other role of the NMPA is to protect the legal rights of creators from infringement and piracy. Intellectual property is so easily stolen and used illegaly, providing no financial compensation to the creators. Nowadays we have content ID on various DSPs that help publishers and organizations like the NMPA fight back and prosecute those that blantaly ignore copyright law and abuse the work of others.

The Stubbornness of Roblox

The NMPA announced a $200 million lawsuit against Roblox with plaintiffs including Universal, Big Machine Records, Concord Music Group, Downtown Music Publishing, Kobalt Music Group and Hipgnosis Songs Fund. These publishers represent artists from Ed Sheeran to Ariana Grande to the Rolling Stones.

Put simply, Roblox allows its 42.1 million users to add music players into the games they make on the platform. The issue is that the music played on these boomboxes is not licensed, like music from Imagine Dragons and Deadmau5. This, of course, is copyright infringement and communicates that piracy is okay to half of all children under age 16 in the United States.

[Roblox has] made hundreds of millions of dollars by requiring users to pay every time they upload music onto the platform – taking advantage of young people’s lack of understanding about copyright – and then they take virtually no action to prevent repeat infringement or alert users to the risks they are taking.

David Israelite, CEO and President of NMPA

Roblox and other gaming platforms are protential royalty streams with which the music industry would be happy to connect. Music publishers would jump through hoops for the chance to get their music before 42 million users, but it has to be licensed correctly. Roblox has to pay to use other peoples’ music on their platform like everybody else.

“Behind the scenes, they are making millions at songwriters’ and artists’ expense. With the complaint we are filing immediately, we are sending a clear message both to Roblox, and to the video gaming industry at large, that you cannot build a company on the backs of music creators, refuse to pay them, profit off of users by activity and money and get away with it.”

David Israelite, CEO and President of NMPA

Billboard recently shared Roblox’s response. Unfortunately for Roblox, they are not backing down. Claiming that they are surprised and disappointed by the lawsuit, Roblox said they expediently address DMCA takedown notices, do not tolerate copyright infringement, and partner with popular artists for music events (not sure what that has to do with this). Israelite compares Roblox to other tech companies that merely hide behind the DMCA as a way to avoid paying for music.

Kriss Thakrar at MEDiA discusses how Roblox is unique in how its users approach music, and that the music industry’s response must also be unique. “Roblox’s users have the potential to be valuable to the music industry. They are clearly eager to embrace music and fandom in a variety of exciting ways. However, doing this with unlicensed music is simply not an option.”

The Disappointment of Twitch

But Roblox was not the only platform on Israelite’s mind during his State of the Industry address. Twitch has been flooded with DMCA takedown notices for background music playing in VODs. The Amazon-owned platform received a batch of 1,000 takedown notices that prompted an email to its users about the situation.

This is our first such contact from the music publishing industry (there can be several owners for a single piece of music) and we are disappointed that they decided to send takedowns when we were willing and ready to speak to them about solutions.

Twitch, Email sent to users

There’s that word again: disappointed. It seems rather condescending for a DSP or game company to tell the music industry that we don’t understand music copyright. Of course we are going to use content ID technology to find unlicensed uses of music on your platform and then tell you to get rid of the infringing content according to the DMCA.

Twich’s response to this news was far better than that of Roblox. Twitch removed thousands of videos and addressed the takedown notices as it is legally required to do if it wants to maintain DMCA immunity. The Soundtrack by Twitch tool does offer licensed music to users, but only for livestreams and not VODs.

Music Publishers Have Their Hands Full

Publishers are buying these massive catalogs and publishing revenues actually increased last year. Rights-holders are going to be eager to find new ways of exploiting these precious copyrights on new platforms, services, and devices. But it is not going to happen unless platforms and technology companies understand that you have to pay for music. There is rampant opportunity here for DSPs and gaming companies to work together with the music industry to both generate revenue for writers and add value to digital products. Hopefully the NMPA has sent a clear message to potential partners: We have valuable assets and we mean business.

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