5 Interesting Talking Points in the Business of Music Licensing in October '21

Editor’s Note: This piece was beautifully put together by Unique Oliver, an entertainment businessman with core competencies in Music Licensing and Publishing (Film, TV, Video Games and New Media) | Music Supervision(African Content). Unique is also Mavin Records’ Music Licensing & Publishing Cordinator.

The month of October was indeed a fascinating one in the game of Mechanical License  ranging on subject matters on proposals from Top DSPs for royalty rates to be implemented for  2023 - 2027 duration to Africa leading DSP inking a deal with South Africa’s Mechanical Rights Organization to enhance the remittance of mechanical royalties accrued from the Streaming Service. Tiktok's addition of new Sound Partners was also quite remarkable which will allow brands to leverage audio on the platform in line with Tiktok initiative to put a large focus on audio for its Marketing Partners Programme.

The Top Five takeout in the business of licensing in the past month for me includes:

1. Tiktok expands its Commercial music Library: With a library of over 150,000 pre-cleared and royalty-free tracks Tiktok has added six new partners. This Sound Partners include KARM, MassiveMusic, The Elements Music, Epidemic Sound, Songtradr and UnitedMasters. This is great considering the impact sound has on Culture, Creativity and entertainment. I find it difficult to recall watching any popular ad without sound hence, Sound and Visuals is a great combination to enhance user experience and build the ecosystem. Well, the phrase “I heard it on Tiktok'' has come to stay and it’s a great time for brands to leverage on the strong connection as Tiktok users will love to see adverts featuring the song they want.  It’s great to see social networking services and new media companies avoid copyright Takedown campaigns by licensing Music for use on the app. It’s important to recall that Roblox and Twitch settled copyright Licensing Disputes with Music Publishers last month.

2. Royalty Rates - Who should have an increase or deduction in the Pie,  Songwriters?: Well, this time around there is no dispute between songwriters and Streaming Service Providers but a proposal on the mechanical royalty rates. The US Copyright Royalty Board received proposals on what the streaming services think should be the new royalty rates for the next five years (2023 - 2027). While the National Music Publishers Association are looking to get 20% of revenue generated by any streaming service as Mechanical Royalties Rate, the Digital Streaming Service Providers are looking at lower royalty rates. While both parties may have a sound argument on this however, it is important to note that there cannot be an exploitation of the master recording without a mechanical license as well as there is no Musical Sound Recording without musical Compositions.

3. Boomplay X CAPASSO - An introduction to the game of Mechanical Licensing for African DSPs: Unlike the 2018 Music Modernization Act, a lot of laws governing music copyright in Africa are silent on issues related to digital royalties and the rates paid to Songwriters. This partnership is a good one considering the role CAPASSO (The Composers, Authors & Publishers Association) play in the administration of Mechanical Rights on behalf of authors, composers and publishers of musical works. The deal increases CAPASSO’s mandate to collect and distribute mechanical royalties on behalf of the right holders across the African continent similar to the mandate given to the Mechanical Licensing Collective structure which has authority to collect mechanical rights money from DSPs. There hasn't been a better time to register with these societies than now.

4. ASCAP Bonus points for Songwriters: Still on Royalty rates but with focus on Performance License often regarded as the cousin of Mechanical License, ASCAP (The American Society of Composers, Authors and Publishers) with members from all over the world recently unveiled its expanded Royalty Premium Payment Plan. This plan ensures that ASCAP composers, songwriters and music publishers are eligible for premium bonus payments for the top streamed shows and movies on OTT(Over the Top) platforms. This is really a great incentive as it protects the economic value music placed on programs hosted on these platforms as right holders can retain future back end performance royalties. What this means In a nutshell is when there is a hit show on OTT streaming services e.g. Squid Game on Netflix, Composers and Songwriters affiliated with ASCAP will be eligible for bonus payments from ASCAP. You can read more about All Media Rights here.

5. PRS X BBC in a good Licensing Relationship: PRS for Music, British music copyright collective, made up of two collection societies: the Mechanical-Copyright Protection Society and the Performing Right Society signs a five year license agreement with BBC. This deal covers music rights usage on BBC’s services which include but are not limited to television, radio, iPlayer, BBC World Service and BBC Studios. This deal is important considering the role media plays in the Music industry. According to PRS, BBC TV programmes featured eight million minutes of music in 2020 and the BBC as a whole generated 100 billion lines of music data with Over 40,000 songwriters and composers from different parts of the world registered with PRS receiving royalties from BBC last year.

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