Entry #3: Heavy Hitters

There are only four major Record Labels who hold copyright ownership of most of the music that you have ever listened to. “The largest, US-based Warner Music Group, controlled about 25 percent of the market as of September 2018. Universal Music Group, an American company owned by the French media conglomerate Vivendi, controlled about 24 percent. Sony Music Entertainment, a Japanese company with studios in the United States, controlled about 22 percent. Each of these groups' issues music recordings under a variety of record labels.” (Fosler-Lussier, 2020, p. 185) This gives the record companies an enormous amount of leverage over the Interactive music streaming services and Songwriters. As the labels own the Publishing companies that own the original music composition copyright, it basically allows them to name their price for the exclusive licensure to play the music. If the Interactive does not agree to their terms, the Record Label could pull their entire library from the Interactive leaving them without almost a third of their content. Interactives on the other hand operate in between the two copyrights. While paying for the exclusive musical composition rights to the record labels who own the publishing rights, they are also paying the compulsory mechanical license fees per stream. This is where music streams today are paid in cents or fractions of cents per stream. “Per-stream rates do not really even provide more than a small step towards answering this broader question. And low per-stream rates are not a sufficient basis for arguing that MSS are unfair to musicians.” (Hesmondhalgh, 2020, p. 10) Most Interactives today however are subsidized by another business as they will rarely make any profit. “MSS have so far rarely been profitable but are sustained either by finance capital (e.g. Spotify) and/or subsidy from a powerful parent company, whether tech companies such as Apple, Amazon and Alphabet/Google or telecoms companies such as Sprint (TIDAL) and Orange (Deezer).” (Hesmondhalgh, 2020, p. 3) Considering that interactive streaming is the dominant form of music consumption today, it is strange that it is governed by over 100-year-old copyright law. “Most of the relevant music copyright laws were written before streaming technology was commonly used.” (Orbay, 2021, p. 824) The result of music streaming also created a spectrum of new privacy issues for the end user as well as a flood of legal issues for the Interactive. “Spotify still communicates user data to “advertising partners”; indeed, this data (not the music) is the company’s principal asset. Because the data describes what users like, when they listen, and in the case of phones, where they listen—it reveals their personal habits in a way that advertisers can exploit.” (Fosler-Lussier, 2020, p. 190) Litigation was also prevalent due to the overwhelming quantity of song copyrights to keep track of. “Despite hiring the Harry Fox Agency, considered to be the most experienced mechanical licensing entity in the United States, Spotify found itself facing lawsuits and mounting pressure from songwriters and music publishers, and eventually entered into two highly publicized multi-million-dollar settlements.” (Elton, 2019, pp. 20-21) The pending lawsuits also made it harder for music creators to subsidize their income from music streaming as their copyrights would be tied up in lawsuits delaying payments. In my next and final entry, we will take a closer look at the new relationship between the musicians, record companies, and publishers.

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