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Content Lockdown Is Hurting Composers and Publishers (Guest Column)

Introduction

The past two decades have been a boon for composers, AV music publishers and production music library owners as content

Co<i></i>ntent Lockdown Is Hurting Composers and Publishers (Guest Column)

The past two decades have been a boon for composers, AV music publishers and production music library owners as content had a certain freedom of movement between various networks and platforms. In a market that saw AV rights-owners benefit from multiple revenue streams, that meant fresh financial opportunities with every new licensing agreement.

However, recent years have seen a phenomenon that threatens to tighten the tap for AV rights-holders down to a trickle: content lockdown. That is: relegating the movement of once free-roaming content to the gated communities of tech and broadcast giants like Amazon Prime, Disney Plus, Peacock, HBO Max, Paramount Plus, et al.

Consequently, rights-owners that had multiple earning streams now have one — and one that pays less. This will have a dramatic effect on the future income of songwriters, composers, and publishers of production music libraries and soundtracks.

Performance Rights Organizations will also feel increased pressure as things continue in this direction. Take Disney’s position as an example. Over the course of its history, Disney has produced and acquired a ton of content, where most of the music is under its control.

As Disney Plus rolls out globally, it could change the equation of payments to PROs and pay only the writer share on broadcasts of its published assets, creating yet another major disruption in the income streams of copyright societies and administrators if other platforms follow. In a nutshell: the same amount of work for PROs for significantly less revenue.

Traditional production music libraries are feeling the squeeze of content lockdown more directly from disruptive newcomers who have ambitions to create all-encompassing eco-systems in-house.

KKR-backed Artlist, a relatively new kid on the PML block, was founded in 2016. Since then, it has opened a stock video service, signed artists and launched the Artlist Original music label, as well as buying the Motion Array catalogue and image software developer Fxhome, thus creating a creative technology platform that can offer one distributive license for all types of usages.

Challenges are growing for traditional PML players. Namely: direct licensing for high-quality music; writer share buyouts; high cost of music supervision for film and TV productions that will air on one streaming platform; and future decrease of income in back catalogues due to content lockdown. Universal Production Music boss Michael J. Sammis articulated the need for a “marketing Renaissance” when he posted an opening for the VP position at his company on linkedIn.

An extreme rebirth (the definition of Renaissance) of recorded music libraries could look like this: Since they hold both sides of their assets and provide the creative community with stems and remix abilities via online platforms, they could register all their works on the blockchain and allow independent video and music creators to use their works in the creation of new video or music content. The business model would be based on income participation (as defined in the smart contract) and an immediate license would be generated. AV writers can find a splice of their music in a new composition and get a slice of the revenue.

On the flip side, Warner Brothers have just launched a PML label in partnership with UPM that would place their assets on third party productions to compensate for the future decrease in their publishing assets due to content lockdown. Warner Music is also taking preemptive actions.

Warner Music has had a hand in film and TV production since 2017, ever since it appointed ex MGM COO Charlie Cohen as the head of Warner Music Entertainment.

In 2021, the company’s enthusiasm in this area is greater than ever. In the WMG Q2 earnings call, Steve Cooper said: “We’re focused on maximizing our artists’ and songwriters’ reach and revenue across all fandom touchpoints.” In the third quarter of this year, WME inked deals to co-produce and develop non-fiction film, scripted projects and TV projects, as well as a “first of its kind” deal with Twitch. It will include original programming curated by leading social-first digital media company IMGN, which WMG acquired last year.

Also, in the third quarter, Warner Music Group closed “milestone,” “career-spanning” deals with Madonna and the David Bowie estate. These are deals that could include developments across the company’s entire ecosystem: Children’s animation by WME around their unique persona; virtual performances and fan engagement using Wave; a virtual avatar using Spirit Bomb; special licensing deals via Lickd…

WMG is connecting the dots and creating a new formula of content migration and development for its artists and songwriters. WMG Plus, if you will. Buying Concord and utilizing its theatrical content across its ecosystem would be a game-changer on all fronts.

The embracing of cryptocurrency by the likes of AMC Entertainment’s Aron Adam is really exciting. This is where the entire relationship between the music business and the AV world could be redefined. If someone like Adam dares to extend the use of cryptocurrency and introduce a Blockchain-based compensation module for independent creators, providing an immediate box office distribution from tickets sold, they would create a new benchmark for the entire industry.

Take it a step further: Teaming up with ByteDance or meta could lead to the creation of an IRL presence for the vibrant movie community of creators, offering live streams of exclusive content and interactions between the meme creators and consumers, creating new income streams

In the middle of all this, there is another disruptive newcomer – Hipgnosis’ Merck Mercuriadis. As things stand, to fully exploit his copyrights, he must work with his competitors — the major music publishers. But, with Hipgnosis Songs Group in the US, and its professional powerhouse team in London, Mercuriadis has the infrastructure to disturb the status quo by promoting and licensing (where possible) the writer share for sync directly, bypassing his competitors.

Take this one step further: utilize the new music company he is forming with Blackstone to empower all writers (regardless if Hipgnosis Songs Fund owns them) via a tech-driven platform that would create a new business model and change the way music is licensed. Forever.

Ran Geffen is the founder of XR connect development agency OMA, and CEO of Amusica Song Management in Israel.

(By/Ran Geffen)
 
 
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