Canadian Music Rights Company Acquires Royalty Collection Startup
July 20 2016 - 10:40PM
Dow Jones News
Audiam, a company that collects missing streaming royalties for
songwriters such as Bob Dylan, James Taylor and Metallica, has been
acquired by a Canadian performing rights group.
The Society of Composers, Authors and Music Publishers of
Canada, whose clients include star acts from R&B's the Weeknd
to rock band Nickelback, bought Audiam as part of its effort to
more efficiently identify its clients' compositions when they are
played on digital services such as Spotify AB, Apple Inc.'s Apple
Music, Pandora Media Inc. and Alphabet Inc.'s YouTube—and to pay
them for all such instances.
While a few decades ago performing-rights groups were
responsible for collecting royalties on a few hundred thousand
performances a year, there are now hundreds of billions of live and
streamed performances to cash in on in the digital era, said
SOCAN's chief executive, Eric Baptiste. Audiam's technology and
growing database of copyright-ownership information will help SOCAN
keep track of it all, he said.
Both companies declined to disclose the terms of the deal, but
Audiam's founder, Jeff Price, said that Audiam's
investors—including singer Jimmy Buffett and Marc Geiger, the head
of the music department at the William Morris Endeavor talent
agency—will get a return on their investment.
Mr. Price co-founded Audiam in 2013 after he and other
executives were pushed out of TuneCore, a company Mr. Price
co-founded to help artists and labels distribute music to
digital-music stores. The aim of Audiam was to help songwriters and
publishers collect so-called mechanical royalties from
music-streaming services—the same type of royalties songwriters get
from sales of CDs and vinyl records. (Performing rights groups such
as SOCAN, Broadcast Music Inc. and the American Society of
Composers, Authors and Publishers collect separate payments, known
as performance royalties, from streaming services as well as radio
stations and live venues; the purchase of Audiam represents SOCAN's
foray into mechanical royalty collection.)
After combing through the catalogs of some of his clients and
identifying all the recordings ever made of their songs, Mr. Price
said he discovered that most streaming services were paying
mechanical royalties to his clients on only a fraction of those
recordings containing their works—even some that the songwriters
such as Bob Dylan had performed themselves.
Others have noticed a similar trend. Nearly eight months ago
Spotify—the largest subscription streaming service with at least
100 million total users—was hit with two songwriter-led lawsuits
filed in U.S. District Court in Los Angeles seeking class-action
status over alleged copyright infringement, which have since been
combined into one suit.
In March, Spotify struck a deal with the National Music
Publishers Association that makes it easier for publishers to claim
royalties they are owed, if they agreed not to join the suit or
make new copyright-infringement claims against the service. Spotify
has millions of dollars on reserve for "unmatched works" of which
it doesn't know the owners, because of missing data in its system,
but has said it wants to pay and is building a better system to do
so.
Mr. Price said the fact that Spotify is missing ownership data
indicates that the works weren't properly licensed in the first
place. Spotify declined to comment.
He said would continue to serve as chief executive of Audiam
while servicing his existing clients as usual. With a new "parent
organization whose sole purpose in life is to ensure people are
getting paid," he said, "I'll have more leverage to compel
[streaming services] to do the right thing."
Write to Hannah Karp at hannah.karp@wsj.com
(END) Dow Jones Newswires
July 20, 2016 22:25 ET (02:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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