Believe Digital For Sale, Pandora's Financial Lifeline, and ASCAP Works With YouTube For Better Songwriter Payments

Jun 16, 2017

Benom Plumb, Assistant Professor of Music Industry Studies at the University of Colorado Denver, reviews the biggest stories of the week affecting music royalties. He is a music industry professional, not an attorney.

Believe Digital Actively Seeks Sale, Major Players Show Interest (Hypebot)
Benom’s Take: More interesting news on the acquisition and investment front. Believe Digital, a France-based company, recently purchased popular DIY distributor, TuneCore, in 2015 and since that time, has conducted some aggressive funding and expansion activity. Multiple private equity firms have financed Believe and it appears some of the major companies have serious interest in buying the global label services and distribution company. With all the recent chatter around Merlin and Sony RED, this sort of deal would make sense for a big player to jump on, as well as investors to cash out.

YouTube, ASCAP to Share Data in First-Ever Voluntary Deal (Billboard)
Benom’s Take: Unfortunately, YouTube royalties are by far the lowest and (almost) inconsequential for songwriters and music publishers. Nevertheless, this is about as close to YouTube and any performing rights organization getting together, holding hands, and singing “Kumbayah.” The word “voluntary” here is key because the licensing and royalties between YouTube and ASCAP have been compulsory and regulated by the government (via the Dept. of Justice “Consent Decree”). This is because the two companies couldn’t come to an agreement on their own, so a government “rate court” steps in to dictate the licensing terms and rates..

Under this new voluntary deal, ASCAP will provide data to YouTube so that YouTube’s Content ID System can better match and identify performance royalties from ASCAP members. That’s a good step and I’m glad they’re taking it. Now, if we could just get the government regulation out of the way and have YouTube pay a fair rate, we’d all be in good shape. But for now, this positive step should mean that more ASCAP writers and publishers will be paid their YouTube royalties.

SiriusXM’s $480M Pandora Investment: Lifeline or Invasion? (Music Business Worldwide)
Benom’s Take: Invasion, definitely invasion. After being rejected a few times to buy Pandora, SiriusXM has taken a new approach by investing $480 million and obtaining decision making power in Pandora’s operations. The fact that SiriusXM has been granted three seats on Pandora’s Board of Directors and that one of these SiriusXM executives could be named Pandora’s Chairman, gives serious reason for pause. In fact, after 18 months, SiriusXM could buy more of Pandora. So it appears to me, since SiriusXM couldn’t buy Pandora out right, the goal of SiriusXM is to now take over Pandora from within, over time. Considering the woes and losses suffered for Pandora, the SiriusXM “takeover from within” could end up being Pandora’s saving white knight.