Latest / The Price of Music / Apollo's $700m Sony investment, Universal's share price dip

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Apollo's $700m Sony investment, Universal's share price dip · The Price of Music

• 0:07
  Hello and welcome to The Price of Music, the show that looks at
• 0:10
  the money behind the music industry, with me, Steve Lemack
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  and Music Allies head of Insight Stuart Dredge.
• 0:15
  First, a very quick correction. When I said last week that our
• 0:19
  daughter had discovered Conan Grey on Avatar World, she was at
• 0:23
  pains to point out to me on hearing last week's show that it
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  was in fact on Toker Life, which apparently is an entirely
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  different virtual world. So we can only apologise to any
• 0:34
  of our musician followers who have spent the past week trying
• 0:37
  to find a way of creating a new revenue stream in the wrong
• 0:41
  reality. I mean, how many of these
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  virtual worlds aren't actually? Don't answer that, Stuart.
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  We'll be here all day. We've got, we've got other
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  matters to address. How have you been anyway since
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  last week? Are you?
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  Are you well? I'm good, I'm good, I'm very I'm
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  just over overheated now with that that traditional British
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  thing of now that's too much summer having two weeks ago I've
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  been saying when summer arriving now I'm like, can we please?
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  Honestly, don't knock it. Did you get a chance to cast
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  your eye over the Mercury Music Prize nominations, which came
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  out last Thursday? Did you have any list do?
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  You know, one of the most exciting things that's being
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  interesting is I get the press release, so I get to go and tell
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  people who's nominated, right? Yeah.
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  Yeah, and what did they say in the press release, apart from
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  telling everyone what an amazing award it is?
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  Because what? I don't know.
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  I don't know what you make, what your take on the Mercury is at
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  at this point. I mean, I've been a few times
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  and I always like it because you get to see these, see them all
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  before, which is one of these we could talk about because that's
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  not going to happen this year. But just seeing all these things
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  in juxtaposition, I remember one year seeing I can't, but I think
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  it was Sons of Chemit. One year I saw them and it was
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  like, you know, everyone, it was like they came on and everyone's
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  like, oh, it's a jazz album. Let's have a good old chat at
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  our tables. And by the end they got a
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  standing ovation because they were so good.
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  And that was so that was really when you see something comes on
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  and everyone's like, right, jazz album, this is, you know, and
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  that year was great. And then and then next year jazz
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  and won. So so yeah, I know it's it's
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  also as I get older, some of these albums I haven't heard of
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  and it's a good we yearly reminder of like take a listen
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  to these because someone has decided that they're
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  artistically worthy. So it's quite a good nudge.
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  How about you though? What do you?
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  Think, I mean, as anyone who knows me will tell you, I have
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  long been a bit of a Mercury skeptic and and not, not
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  necessarily due to the records that are chosen for the
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  shortlist. And I do and I do see the
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  inferred, you know, purpose of it, which is you say is to
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  highlight records, some of which might have gone under the radar
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  of music fans. And it has helped some over the
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  years. And, and at least it's a chance
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  to get some more music on the telly as well, because there
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  isn't much music left on TV. But the, the reason I find it
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  uncomfortable is down to, well, it's probably two things
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  actually. I mean, one, it does, I'm afraid
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  to say from from my point of view, it does it, it has an
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  achingly high opinion of itself, does the Mercury Prize.
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  And then there's the money involved, which I mean, it's
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  changed a little over the years now when it's much less
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  expensive than it used to be, but you still, you have to, to
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  enter, you have, it's £200 plus VAT just to enter.
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  So they're getting what, 200 times, I don't know, around 250
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  entries, which actually I thought was quite low.
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  I thought more people, more people would enter than that.
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  But I when I was involved in a label and obviously this has
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  changed, but when I was involved with Deceptive Records and
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  Elastic as album was nominated, after the nomination, after
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  you've paid to enter, then they'd ask you for all sorts of
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  things, including you had to give them quite a hefty
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  contribution towards their marketing costs.
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  I think you also had to give them a track royalty free for a
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  compilation CD. And then you've got to buy your
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  own tickets to the event as well.
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  So you could be, you could be down by about a grand back then
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  just for buying a table. But things have changed, haven't
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  they? As I say, you still have to pay
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  to enter, but now recording because I looked this up, but
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  according to the official Mercury website, there are no
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  additional fees or requests made for any other contributions or
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  payments. And you won't have to buy
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  tickets for a ceremony this year because there is no ceremony.
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  Which came as a surprise, didn't it?
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  Did it not? Yeah, well, it's it's so they're
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  going to have BBC Music is the part that they're going to
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  provide exclusive TV and radio coverage online social media
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  report. And then this year other
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  extensive promotional activity replaced the usual live
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  performance event, but they're going to announce that close to
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  time. So no one really knows what's
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  going to happen other than it's not a great big free dinner for
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  the industry while listening to music.
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  Yeah, You wonder what? I mean, it's got to be down to
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  budget, isn't it? I think the, I mean, there's two
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  reasons why you would cancel the live event.
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  One is that you couldn't guarantee the commitment of all
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  the artists to turn up and play live or you can't afford it or
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  they can't afford it, depending on who's been asked to to put
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  the money up for getting the, you know, getting the band
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  together and transporting them there and, you know, bringing
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  along their sound crew and whatever else they which.
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  Year. Was it last year?
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  When did the this going to sound terrible?
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  When did the Queen die? Was it two years ago?
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  Or yeah. It's all gone so fast.
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  Yeah. But that was the day they had
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  everyone there and they had to literally give it to having the
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  bread rolls and had to send everyone home, I think.
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  Yes. And maybe they decided then the
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  downside of a live ceremony is you can because I was it the PJ
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  Harvey one when they had to call off because that was 911.
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  So they've had a couple of times and they've had to abandon the
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  ceremony on the day of. You know, maybe they've decided
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  that online is better. Yeah.
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  I just, I just, I just wonder if there's no focus for it though,
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  what's whether that will affect the impact that the award has
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  and particularly because we don't know, I don't think
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  they've even said how or where they're going to announce the
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  winner. They'll be announced in
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  September, but we don't know. The TikTok dance routine.
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  That's that's my, that's my but so if you're if you're a
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  sceptic, is, is there any point in me asking you who's who do
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  you think should win? Who do you think's going to win?
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  Or would you do you kind of avoid all that kind of speculate
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  because that's part of the fun of it.
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  I think for me has always been like, and actually it's not me,
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  it's do you know Paul from record of the day?
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  He goes round. He used to go out at a ceremony
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  with a piece of paper and say, right, who's going to win and
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  who would you like to win? Or you just get everyone to fill
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  it in and see who was right. And it was those that dual thing
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  of who you'd like, who you think will win.
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  Yeah, I don't know. I mean, I looked up the odds.
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  Charlie XCX is currently favorite.
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  What was interesting was two of the guitar records in the list
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  of betting odds that I had a look at earlier on the English
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  Teacher album. Well, Last Inner Party I think
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  was second favorite. English teachers album, This
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  Could Be Texas was third favorite.
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  And I like that English teacher album a lot.
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  You slightly worried that once you've had your mercury moment,
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  will you ever have it again? So it's quite, I mean, they're
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  both, you know, they're both debut albums, aren't they?
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  And where do they where would they go next?
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  But there's, I mean, there are some interesting records on that
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  list. I think as a as a as an
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  outsider, I, I might have a pound on that C Mac records,
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  because the the CMAT album is, is a good, it's not really my,
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  my kind of thing, but it's a big hit at 24 railway cuttings.
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  I can tell you with the rest of the family.
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  And that's how I've heard it a lot.
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  And I think, you know, CMAT is a really interesting character as
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  well, but it's over the years I've found it's very hard trying
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  to second guess the judges so apart.
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  From this apart from. One year where I predicted
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  Speech to Belle would win and then forgot to have a bet on it.
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  It's one of those things, isn't it, where sometimes the the
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  obviously the clear favorite win doesn't win.
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  And it's like, well, everyone reacted against the hype.
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  And then every so often they give it to the clear favorite.
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  I think just to keep everyone guessing.
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  But you know, the thing it noted me to listen to was Barry Can't
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  swim this year, one of the other nominees, because about six
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  people have told me in recent months, you would love Barry
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  Can't Swim specifically you. We know what you like and you
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  would love them. And I just hadn't got around to
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  listen to. I listened to it last night and
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  I do like it so that those people were right, but it took
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  the Mercury nomination to remind me so.
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  I mean that is, that is, that is the thing.
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  I mean, I do think, as I say, despite everything else, I think
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  the idea of the prize is good to have a prize which isn't
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  entirely based around sales and whoever wins gets the statutory
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  prize of £25,000, which I guess in these this day and age, not
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  to be sniffed at. I might have a quit on them
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  night archives. I think that's my long job bet.
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  Is it because I love? I love that album.
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  It's like just the the, the nostalgic for old school drum
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  and bass in me loves it, but it also feels somehow brand new.
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  So yeah, that's my kind of, that's my kind of sentimental.
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  I'd like this to win. Yeah.
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  Well, congratulations anyway to to all the nominees.
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  So the winner will be announced at some point in September,
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  right news hang on tight everyone.
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  We're going in with Spotify and Universal Music Group and their
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  financial revelations and some interesting knock on effects.
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  Where where would you like to start?
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  Would you like to start with with Spotify, which was a story
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  which broke while we were recording last week's news
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  episode, But anything else to come out of the Spotify figures?
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  Yeah. So we should start with the big
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  company first, which is one of the things we're going to talk
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  about. But yeah, so Spotify posted its
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  its financial results last week. The big news there was it was
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  profitable, which is counter what people think.
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  Its users grew, but it missed its IT missed its predicted
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  target for users. So it thought it was going to
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  have it thought it was going to have about 631 million users and
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  it only had 626 million, which may sound like we're splitting
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  hairs, but you know, when you make a prediction, analysts go
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  quite serious about that. So that was that.
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  And that that went OK. And Spotify's share price has
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  been OK. And then a couple of days later,
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  Universal Music Group announced its financials.
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  And the interesting thing here was like when you read them,
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  they sound good. Like it says UMG biggest major
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  label. Its revenues were up 8.7% year
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  on year. Publishing was up 10.1%,
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  recording was up 5.8%. Made more money from
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  subscription streaming services, like lots of good stuff.
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  And then its share price tanked by sort of 20% in the day
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  afterwards. Why is why is that?
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  Sorry to interrupt, because I read it in the same way as you.
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  I looked at the figures and everything looked like it had
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  gone up. So I was thinking, well, the,
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  you know, the, the champagne will be out in the boardroom
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  this afternoon. And then as you say, and then
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  the shares. Then the shares went belly up.
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  Yeah. So what it is about is basically
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  Universal said it's, it's revenues from subscriptions and
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  streaming were up 4.1% year on year, I think it was.
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  And the analysts, the analysts who work for the big investment
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  banks, they've been expecting about 10% growth there.
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  So essentially subscription streaming is growing.
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  Well, streaming revenues are growing slower than analysts
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  expected, even though they're still growing.
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  There's actually like at Barclays, analysts wrote this
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  note saying investors bought UMG mostly for low double digit
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  growth in paid streaming. So you know, 10% growth year on
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  year. And if paid streaming growth
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  stays lower, we see UMG multiples falling, people
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  selling their shares. So what it's the story is
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  streaming and particularly paid streaming isn't growing as fast
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  as people think. And this, a lot of this goes
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  back to this report last year from Goldman Sachs and on the
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  big investment banks. And they predicted that global
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  paid streaming revenues would grow 12.9% this year.
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  So there was this big report, it said streaming is going to go
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  gangbusters. And that was the report that the
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  music industry gets circulated widely and it's what music
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  companies pass to investors saying, look, look how much
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  we're going to grow Goldman Sachs and it's going to be
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  12.9%. So when you come out and give
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  results saying growth is actually half that, that's when
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  the share price. So it's kind of a, it's a
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  inflated expectations. And so the question is kind of
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  were those too high to start with or is something happened
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  disappointing, Which kind of brings me onto another bit of
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  Universal, where in their financial core, they made this
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  comment, which was quite interesting.
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  They were like a slowdown in subscriber growth at certain
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  platforms. This is a quote from their kind
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  of Chief Financial Officer. While Spotify, YouTube and many
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  regional and local platforms will continue to exhibit healthy
• 12:42
  growth in subscribers, other large partners who have been
• 12:45
  less successful in driving global adoption have seen a
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  slowdown. So essentially Universal called
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  out, well, Spotify is doing well, YouTube's doing well,
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  regional streaming sales doing well, but other large partners,
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  which kind of is Apple and Amazon really, if you think
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  about it. So there's something happening
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  here, which is that everything is growing, but there's
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  disappointing not the growth that was being expected by the
• 13:08
  industry, but also by the analysts who recommend whether
• 13:11
  investors should buy and sell shares.
• 13:12
  And so hence, but the other thing we should talk about is
• 13:17
  this happened a little bit before, but yes, Spotify has now
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  overtaken Universal Music Group in its market capitalisation.
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  So the value of the company. So at the time of talking and
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  you know, something happened overnight, you know, anything
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  could happen and they could completely reverse.
• 13:30
  But Spotify is worth about $65 million and Universal Music is
• 13:34
  worth about $42 million because it's gone down and Spotify has
• 13:37
  been growing slowly. So it doesn't really matter.
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  Like it doesn't really matter that Universal is bigger or
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  small. And Spotify, in a sense, they're
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  both still huge companies. Universal is still the biggest
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  record label. But it is kind of an interesting
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  where is the economic power and how is that changing?
• 13:54
  And what are the What is Universal going to do about?
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  That yeah, that's, that's what I was going to say.
• 13:58
  It's the dynamic because when you get to negotiations over who
• 14:04
  is the biggest, I mean they both need each other, but as you say,
• 14:09
  where is the power where and who's who's got the best hand to
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  play when they're sitting around the table.
• 14:16
  I guess the other thing I suppose we should mention is
• 14:19
  that both of these companies while recording figures which
• 14:23
  appeared, you know, both of them have gone up, but they but they
• 14:27
  have both of them let staff go. Haven't they recently over?
• 14:33
  The past. Few months.
• 14:35
  Yeah, and, and major labels of Let stuff go, Spotify have it's,
• 14:38
  it's one of those things where in what theoretically is a boom
• 14:42
  time for the industry because everything is going up, people
• 14:45
  are being laid off and everyone is looking ahead and going
• 14:46
  right. Maybe we're not going to grow as
• 14:48
  fast as we thought. I mean, the other thing that
• 14:50
  that that happened was Spotify did their investor call after we
• 14:53
  recorded last week. And this might play into this
• 14:56
  actually, because Daniel let the CEO was talking and he was
• 14:59
  talking about plans for a more expensive tier of Spotify.
• 15:02
  Oh really? Yeah, He was saying the plan
• 15:07
  here was to offer a much better version of Spotify, something
• 15:10
  that could be something like $5 above the current premium tier.
• 15:12
  So if you pay for a subscription for like 11, I think it's 1199
• 15:15
  now, like £5 more. And he could a deluxe version of
• 15:20
  Spotify with all the benefits, but a lot more control, higher
• 15:23
  quality across the board to higher quality audio, better
• 15:26
  quality sound and some of the things he's not really talk
• 15:28
  about just yet. But there have been rumours of
• 15:31
  cleverer playlist stuff, tools that allow you people to kind of
• 15:35
  speed up and mash up and edit songs and maybe super fan stuff.
• 15:39
  If you're a super fan of an artist, some some stuff for you
• 15:41
  that's exclusive. So that's interesting because if
• 15:45
  Spotify has a tier that costs £5 more a month, and if there are a
• 15:49
  lot of people like you said that want that, then that would drive
• 15:53
  more money in turn more payouts to Universal Music Group and so
• 15:56
  on. And so that might help Universal
• 15:58
  Music Group share price go back up because it would give me more
• 16:01
  money from Spotify. So kind of all these things are
• 16:03
  interconnected. Like this idea of how do we get
• 16:07
  more money from paid streaming is going to be a really, really
• 16:12
  hot topic this year, I think. And Universe has been quite open
• 16:15
  about the fact he's got plenty of ideas of how streaming
• 16:17
  services can make money and pay more money.
• 16:19
  So I think it's going to be, it's going to be, it's going to
• 16:21
  be amping up the pressure, especially on the ones that it
• 16:23
  said were disappointing. But even from Spotify's side,
• 16:26
  they're saying, yeah, we think there's people who want to pay
• 16:28
  more. And so we're figuring out what
• 16:30
  we can give them and that if that works, would be good.
• 16:34
  But he's not quite any. That that's a that's a difficult
• 16:37
  car journey, isn't it for Daniel Eck in the front seat when UMG
• 16:41
  are offering advice the back seat drivers of how streaming
• 16:46
  should improve itself. That's that's an interesting.
• 16:49
  That's always been the push and pull, I think, like the music.
• 16:51
  And just like we know how this should work.
• 16:53
  And there have been times in Spotify history where it said, I
• 16:55
  think we know how this should work.
• 16:56
  Like there was a famous one near the quite near the beginning
• 16:58
  when labels said your free service is too good, it's going
• 17:02
  to people aren't going to pay. And Spotify said the reason
• 17:05
  people will pay is by us having a good free service.
• 17:08
  And so there was a time when the labels were kind of forcing
• 17:10
  Spotify to restrict its free tier and kind of, you know, you
• 17:14
  need to clamp down this and pay and eventually actually in that
• 17:17
  case, But if I was proved right in a way, because it said no,
• 17:20
  the less restrictions there are, the more they fall in love with
• 17:22
  it. The more they fall in love with
• 17:23
  it, the more they're likely to pay.
• 17:25
  But I think we may not just Spotify, I think with all
• 17:29
  strings, we may about to see a period of maybe haggling.
• 17:32
  And like you say, it's it's major level saying we think
• 17:34
  we've got some ideas on what you need to do.
• 17:36
  We need to put the price up. We want you to do super fan
• 17:38
  stuff, higher quality, and the streaming service will decide
• 17:42
  whether they think that's right, how they implement it.
• 17:44
  So yeah, it's going to be, but it's, they're all in service of
• 17:47
  a good thing, which is people pay more for music.
• 17:49
  And I think, I think we probably both agree that paying for music
• 17:52
  is worth doing and paying a bit more than we do for streaming is
• 17:55
  good. So yeah, depends, depends what
• 17:57
  you want from your streaming service doesn't it?
• 18:00
  Because if if I was to pay, if I was asked to pay £5 more, I'd.
• 18:05
  There are bits of some of those suggestions like, you know,
• 18:09
  being able to edit and mash up, which I'm not really going to
• 18:12
  use a lot. A better quality that would, you
• 18:15
  know, that would be great. Although I'd be hoping that you
• 18:18
  would be improving your quality anyway without forcing me to pay
• 18:22
  an extra £5 for it. Just so to me, our
• 18:26
  relationship's very fragile. I think our patience is very
• 18:30
  fragile. The superfan stuff is all I'm
• 18:32
  quite interested in. Like one thing that's been tried
• 18:35
  before but didn't quite take off then was what if you paid it
• 18:38
  more and some of that money went straight to the artist who you
• 18:41
  like most. So in your case, I'm trying to
• 18:44
  think of a good example really. I always say Fat Dog, but think
• 18:48
  of it, who's who's a new band you love?
• 18:49
  Like if you paid £5 more and you knew that, like I don't know a
• 18:53
  quid if that was going to Fat Dog, a quid was going to idols.
• 18:57
  Like if there was some I pay more, but it gets to the people
• 19:00
  I love directly. Like I'd be fascinated in that,
• 19:03
  but I don't know how that works. I don't know if the bands have
• 19:05
  to do something to get that money, but I'm really interested
• 19:08
  if that's the road they go down of like pay more but have a
• 19:11
  little bit more of your cash going to the stuff that maybe
• 19:14
  you listen to and love. But that's my speculation.
• 19:19
  Also, how do you how do you calculate that?
• 19:21
  Because if you go off the top five of a family account, that
• 19:25
  means that your money will be going directly to Disney Paw
• 19:30
  Patrol. It's going.
• 19:30
  To be suddenly a massively lucrative franchise, yeah.
• 19:36
  Maybe I'm from from that, from the from the universal story.
• 19:40
  I think this is sort of sort of attaches itself quite nicely.
• 19:45
  Is this Apollo Global Management have invested £700 million in
• 19:50
  Sony Music Group. So what's the what's the deal
• 19:53
  here? Yeah, so Apollo, a really big
• 19:56
  investment firm, and they've been involved in music before.
• 19:58
  So they invested in a company called Harbour View Equity
• 20:00
  Partners a few years ago, which buys catalogue.
• 20:03
  And you know, we were talking recently about Hypnosis Songs
• 20:05
  Fund and people trying to buy that.
• 20:06
  And Apollo were backing one of the companies, Concorde, who
• 20:09
  were trying to buy that but didn't succeed.
• 20:11
  So they're big, big money and interested in music.
• 20:14
  And they've, yeah, they've invested well, provided a $700
• 20:17
  million capital solution to Sony Music Group for investments in
• 20:20
  the music industry. And it was like a, a really
• 20:22
  sparing 2 paragraph press release.
• 20:24
  And the second paragraph was a quote basically repeating that
• 20:27
  and not giving any more details. But if you're joining the dots,
• 20:31
  Sony's been in the news a lot preparing reportedly paying a
• 20:34
  billion dollars for Queens Music catalogues recently.
• 20:37
  And there was a story a couple weeks ago from Music Business
• 20:39
  Worldwide saying Apollo is a financial partner for that.
• 20:43
  So if you join those dots, this investment is probably going to
• 20:46
  help Sony Music by Queens Catalogues, which it's done
• 20:50
  before. So in 2021, it paid about $550
• 20:54
  million for Bruce Springsteen's catalogue or catalogues.
• 20:57
  And it had an investment firm called Eldridge was its partner
• 20:59
  there. So this idea of like the major
• 21:01
  label wants to buy, spend a lot of money on the catalogue, but
• 21:05
  it needs some finance for that. So it's that it seems to be that
• 21:08
  kind of deal. So, yeah, so it's going in
• 21:11
  through the back, it's through the back door into ownership of
• 21:14
  catalogue. Yeah.
• 21:16
  And it's. Yeah.
• 21:17
  So in a sense, it's going to go into Brian May's pocket and he
• 21:19
  can fund his badger campaigns, which is not me taking the piss.
• 21:23
  Like that's. I think he's a marvellous man
• 21:25
  doing all that work he does. But yeah.
• 21:26
  So this is about helping Sony buy presumably Queen's
• 21:29
  catalogues. And yeah, and it's kind of this
• 21:33
  Warner Music has done this before.
• 21:34
  Universal Music has worked with like this idea of like the
• 21:37
  biggest companies in the music industry wanted to make really
• 21:39
  big deals. They need big money of the kind
• 21:42
  that even they don't have necessarily swatting about in
• 21:44
  their coffers. So that's where they look
• 21:46
  towards these private equity companies.
• 21:47
  And then they put the money up. And then the idea then is the
• 21:51
  major label can manage that catalogue, can make it more
• 21:54
  valuable, can, you know, find new ways to make money from it.
• 21:57
  So, yeah, good news for Queen, probably good news for Sony.
• 22:00
  And it's I think we're going to see a few more of these deals
• 22:04
  when those the biggest catalogues come available.
• 22:07
  So you know. Next, the fallout from Canada's
• 22:12
  new 5% levy on global streaming services continues.
• 22:18
  Expert Just like we recap this one just in case any of our
• 22:21
  listeners missed this when we first covered it.
• 22:24
  We're becoming the go to podcast for Canadian music industry
• 22:27
  policy initiatives that way. Is that do you think that's
• 22:30
  what's going to get us 100,000? Yeah, that's that's where the
• 22:33
  big bucks are. Any bucks?
• 22:36
  Yeah. Well, look, yeah.
• 22:38
  So to recap, the Canadian government is has got this new
• 22:41
  law. It's going to take a 5% cut of
• 22:43
  the Canadian revenues of global streaming services.
• 22:46
  So that includes Spotify, Apple Music, Amazon Music, but it also
• 22:49
  includes Netflix video streaming services.
• 22:51
  So if you're a big global streaming service doing video or
• 22:53
  music, you will now have to pay 5% of the money you make in
• 22:56
  Canada to a fund which is going to support like, local music and
• 22:59
  artists and culture. So the two things going on here,
• 23:04
  streaming services are very cross about this.
• 23:06
  They say they already support Canadian artists.
• 23:09
  They put them on their playlist. They help them find global
• 23:10
  audiences. So they don't need to be
• 23:12
  suddenly made to pay more money to do that.
• 23:14
  And Spotify, Amazon and Apple are already challenging this new
• 23:17
  levy. They're filing a legal challenge
• 23:19
  against it. But yeah, so the boss of Music
• 23:22
  Canada was like the music industry body in Canada.
• 23:23
  He's been a critic of it before. And he came up with quite a
• 23:26
  punchy blog post this week, which was saying almost half of
• 23:31
  that money, that 5% will be used to prop traditional radio. 40%
• 23:36
  of it goes to funding the radio industry.
• 23:39
  So there's kind of these mixed messages where the Canadian
• 23:41
  government is saying we want global streamers to pay and this
• 23:44
  will help support our local artists and culture.
• 23:46
  And you've got the streaming service saying, no, you're just
• 23:48
  trying to prop radio because we're getting radios listeners
• 23:51
  away. So you're propping up a kind of
• 23:53
  an industry that's in the past and that's, that's the argument.
• 23:58
  So it's weird because I was thinking about this.
• 24:00
  I was trying to think, you know, what's going on.
• 24:02
  And like, Canada's always quite famous.
• 24:04
  It has rules for how much broadcasters and film makers
• 24:08
  support local culture. Like it's always been like we're
• 24:12
  next to the US, we're next to Hollywood.
• 24:14
  So we need to have quite some regulations around making sure
• 24:16
  we support local content. And as an argument, if you're
• 24:20
  going to make radio and TV do that, you should probably make
• 24:22
  streaming services do it as well, like you should.
• 24:24
  It should be the same rules. So in this blog post, the Music
• 24:27
  Canada boss is about called Patrick Rogers.
• 24:29
  He said that streaming services are being asked to pay around 10
• 24:32
  times what radio broadcasters pay.
• 24:33
  So he's saying it's the amount that's unfair and where it's
• 24:37
  going to. So it's turned into this quite
• 24:40
  big rail about, you know, one side, you need to support local
• 24:44
  culture and we'll create a fund on the other side.
• 24:46
  No, we don't. We do it already.
• 24:48
  And you're just popping up radio.
• 24:50
  So it's kind of becoming quite a heated battle and there's going
• 24:52
  to be a legal challenge and yeah, kind of people throwing
• 24:56
  things at each other verbally. I mean, without knowing how
• 25:00
  Canadian radio is doing, it's hard to comment.
• 25:03
  But if you if you overlaid what's happening there in this
• 25:07
  country, it'd be very hard to say, oh, you're just propping up
• 25:10
  radio. And radio is doing really well
• 25:13
  in the UK at the moment. And I'm not quite sure I don't
• 25:18
  follow necessarily this train of thought that says streaming is
• 25:23
  is undermining and ruining radio and you're just propping radio
• 25:27
  up when radio seems to be doing all right.
• 25:30
  I don't know what it's like in Canada.
• 25:32
  This is where I'll defer to you. Like, how is commercial radio
• 25:35
  doing here? Because I feel like we're lucky
• 25:37
  with the BBC in a sense, which is kind of insulated in some
• 25:41
  ways. But how is commercial really
• 25:43
  doing here? Is that is that suffering for
• 25:44
  streaming do you think? No, not at all.
• 25:47
  I mean global, we're having a tremendous time at the moment.
• 25:50
  Commercial radio, I don't think has ever been as successful as
• 25:53
  it is now because it's interesting, isn't it?
• 25:55
  Partly because of the spread now and the new stations that have
• 25:59
  come through. Greatest hits radio is doing
• 26:02
  really well and obviously they've that's in some cases
• 26:05
  that's listeners that have just moved from the BBC to commercial
• 26:09
  radio. In this case, you know, I think
• 26:12
  Ken, I think it's fair to say I don't think anyone's going to
• 26:14
  fire me from the My one show on the BBC for saying that some
• 26:18
  listeners followed Ken Bruce into the commercial sector.
• 26:22
  So some some of it's just listeners moving around from
• 26:25
  station to station. But in in general with all the,
• 26:29
  because it's a tremendous fabric of different musical genres that
• 26:32
  are represented by commercial radio, but also having taken
• 26:36
  some of their big name brands like Hearts and Things and
• 26:39
  taking it national, we now have a lot of radio, which it seems
• 26:45
  to be. Yeah, radio is doing fine.
• 26:48
  Commercial radio is certainly is doing all right, I think.
• 26:52
  And we don't really have that culture of quotas for local
• 26:56
  stuff, do we? Or I mean, again, you can tell
• 26:57
  me if I'm wrong here, but we don't have that sort of thing
• 26:59
  where TV companies don't. I suppose Channel 4 has some
• 27:02
  stuff, doesn't it? But that's more about
• 27:03
  independent broadcasting, I think.
• 27:05
  But. Yeah, I don't.
• 27:06
  I think there's there's no patriotic flag waving though.
• 27:09
  That's wherever you go. But it's it is interesting
• 27:14
  because I think we've seen some stuff happening in France like
• 27:16
  this, where they've got a body called the National Central of
• 27:19
  Music and they're, the streaming service are kicking off there
• 27:22
  about being asked to contribute to that.
• 27:23
  And again, the argument there is, well, this will support
• 27:25
  local culture, local music. So there is this thing about
• 27:29
  global big streaming services. Yeah, who does?
• 27:34
  Who decides how they support local culture?
• 27:36
  Should they be allowed to do that themselves?
• 27:38
  Or does someone need to create a fund and oversee it externally
• 27:42
  and they just put money into it? And that's, and the one thing
• 27:45
  that's happened so far is when that's been mooted in Canada and
• 27:49
  France, the streaming service has been very, very, very punchy
• 27:51
  about we don't like this, this is going to make us have to
• 27:54
  invest less in the country where to put our prices up.
• 27:57
  They're quite aggressively fighting this idea.
• 28:00
  And I wonder if one reason for that is that they might, they
• 28:03
  worry it might catch on. And in every country they'll be
• 28:05
  contributing money. And I sort of see both sides
• 28:08
  because I think if you're, if you're working for Spotify
• 28:10
  Canada, you are making playlists and you're putting Canadian
• 28:12
  accent. You know, someone there is
• 28:13
  saying, I want to help Canadian artists get an audience.
• 28:16
  So they are doing stuff. So it's a, it's quite a nuance.
• 28:20
  There's no kind of obvious baddie and goody here, but it is
• 28:23
  turning into quite a big argument.
• 28:24
  And, and I think the reason we're talking about it and the
• 28:26
  reason I write about it is a lot of countries are looking at this
• 28:29
  and saying, do we need something like this?
• 28:31
  Do we need a fund? Do we need some way of making
• 28:33
  sure? That way if you're a big a big
• 28:35
  service, you're you're supporting our local, local art.
• 28:39
  Finally, for this episode, it's Here's our and finally story.
• 28:45
  And finally, 14 teams in the NBA are being sued over their use of
• 28:51
  music in social media posts. This is a recurring story for
• 28:57
  us, isn't it? We were talking about the
• 28:58
  Beastie Boys, was it last week? We were talking about Beastie
• 28:59
  Boys in that restaurant chain, like someone who's a business or
• 29:03
  a brand uses commercial music in their social posts and they get
• 29:05
  sued by the music industry. And so this case, yeah, 14
• 29:10
  basketball teams, which I had to look this up.
• 29:12
  It's it's nearly half the NBA. It's 30 teams in the in the
• 29:15
  league. So that's nearly half the teams.
• 29:17
  And they're being sued by music publishers.
• 29:18
  So Cobalt artist publishing group, Notting Hill Music.
• 29:22
  So it's it's a publishing lawsuit rather than the label
• 29:24
  lawsuit. But yeah, they're accused of
• 29:27
  using music and their videos on like TikTok, Instagram, YouTube,
• 29:30
  Facebook, whatever Twitter is now.
• 29:34
  And it's that the same old thing I've talked about before is if
• 29:38
  you're, if you're a regular person, you can just like search
• 29:40
  for a song in the catalogue and put it in your video.
• 29:43
  If you're business, you can't, you have to go and get a
• 29:45
  licence. And so far these cases tend to
• 29:48
  go the way of the music industry if they go to court because the
• 29:52
  rules are quite clear. Like those those companies,
• 29:54
  Tiktok, Instagram, they have licensing deals, but they don't
• 29:57
  cover commercial use by brands. So I.
• 30:02
  Find this really strange though, that because you are left with
• 30:06
  what are the two reasons why this might have happened?
• 30:09
  One, it's some, well, it's, it's, it's somebody who's not
• 30:14
  aware that you need a license or it's just the terrific arrogance
• 30:20
  of somebody saying, I don't care that you need a license.
• 30:23
  But I mean, sure. And both of those are bad.
• 30:28
  The, the arrogant, we're just going to use your music.
• 30:31
  That's quite bad. But also if surely in this day
• 30:35
  and age, doesn't everyone kind of vaguely know that you can't
• 30:39
  just use somebody's music without asking maybe their
• 30:41
  permission first? Well, they've been, they've been
• 30:44
  lawsuits, they've been settlements.
• 30:46
  You know, it's it's and I and I see why I don't I don't
• 30:49
  understand all the elements of the sports licensing landscape
• 30:52
  in the US. You know, there may be some
• 30:53
  rights that the NBA does have for music, for example, claims
• 30:56
  you could call. So there may be someone doing it
• 30:58
  think thinking they're covered or not.
• 30:59
  But I mean, it must be tempting. Like if you are the social media
• 31:02
  person for say, I don't know, Man City and you have you have a
• 31:05
  video clip of Vernon Harlem lifting a trophy.
• 31:07
  The temptation to slap simply the best by Tina Turner on top
• 31:10
  of it and put it out on TikTok. But you're part of your job
• 31:14
  would be to know that you can't do that unless you've gone and
• 31:16
  licensed simply best. So So yeah, I mean, it's one of
• 31:20
  those things where you look at it and say this will probably be
• 31:23
  settled and but it just keeps happening.
• 31:27
  And at some point, I don't know, at some point either the message
• 31:32
  gets through or at some or maybe what's needed is some easy way
• 31:36
  to licence music. Maybe if people want to use like
• 31:38
  there's obviously a demand here, like brands and misses want to
• 31:41
  use popular songs in their social posts.
• 31:44
  And maybe the Especially with sports, you're probably trying
• 31:47
  to put something out quite quickly, aren't you?
• 31:48
  Like you've got a clip from a game and you want to have a.
• 31:50
  Yeah. And so licensing it the
• 31:52
  traditional way might be too slow and difficult, in which
• 31:54
  case there's an opportunity there for the music industry to
• 31:56
  go. Right.
• 31:57
  Here's we're going to launch this.
• 31:58
  Here's how you do this. Here's how you can put a song in
• 32:01
  your clip. And we get paid and no one gets
• 32:03
  sued. So maybe every time this
• 32:05
  happens, it will make that more likely as well as making it less
• 32:08
  late. We will do this, but.
• 32:09
  Maybe, maybe, just maybe you need, I don't know, Taylor Swift
• 32:14
  half time during the Super Bowl to sing a song about how you
• 32:17
  need a licensed sports teams to use this music.
• 32:21
  There you go. And then, then everyone will
• 32:23
  know. But that's it.
• 32:25
  I mean it's all the web of licenses.
• 32:29
  Like you might have someone perform at 1/2 time game in the
• 32:31
  NBA, but if they're playing, yeah.
• 32:34
  So there's all these. It's all is complicated.
• 32:36
  I know. Like interestingly, TikTok are
• 32:37
  trying to do some stuff with this.
• 32:39
  They've got this thing called the commercial music library,
• 32:41
  which we talked about before, which is like if you're a brand
• 32:43
  busier, you can go to TikTok and say, right, show me all the
• 32:46
  songs that I can use. And TikTok is going to the music
• 32:49
  industry, a lot of independent artists and labels saying, why
• 32:52
  don't you put your music in our commercial library?
• 32:54
  Brands can use it. You get played, discovered, and
• 32:59
  there's a couple of artists, Indji was one of them who
• 33:01
  actually broken through this. Like they got they broke because
• 33:04
  their music was being used by brands on TikTok from this
• 33:06
  commercial. So I think there's like an
• 33:08
  incentive for those companies like TikTok and Instagram and
• 33:10
  YouTube to actually also do this and try and figure out a
• 33:13
  solution. So ideally, but the ideal
• 33:17
  endpoint I think is not that people who don't companies don't
• 33:20
  use songs in their videos. I think the ideal endpoint is
• 33:22
  they can and money is paid and then the artists who made those
• 33:26
  songs get paid too. So I hope that's where it goes.
• 33:29
  I'm always, I'm always an optimist, you know, I hope all
• 33:31
  these very complicated licensing wrangles can suddenly emerge
• 33:35
  into beautiful money flowing joy.
• 33:38
  But you know, there's a few things, a few hoops to jump
• 33:40
  through before we get to that, I think.
• 33:42
  And that's where we leave Stuart Dredges Utopia for this week.
• 33:47
  Thank you very much for listening.
• 33:48
  If you've if you've enjoyed the show, please do subscribe in
• 33:51
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• 34:00
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• 34:03
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• 34:10
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• 34:13
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• 34:16
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• 34:20
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• 34:26
  That's the Price of Music podcast@gmail.com.
• 34:29
  Until next time, take care everybody.
• 34:31
  Cheerio.