Stuart Dredge of Music Ally reported on the final session of this morning’s MIDEM Publishing Summit, which saw David Renzer of Universal Music Publishing Group interviewed on-stage… Also watch this session in full, only on midem.com!
Moderator Susan Butler kicked things off by looking back to the past, when she interviewed Renzer for Billboard magazine in 2005, about unresolved splits in copyrights (and specifically publishers getting paid for royalties due from internet radio services, ringtones and other services).
A $280 million settlement was reached in September 2008, brokered between the NMPA, RIAA and Harry Fox Agency. Renzer explained that there will be three phases for payment – one covering 2000 to 2006, one covering 2007 and 2008, and a third covering more recent years.
So how will UMPG pay the money that it receives from this deal to other publishers, and to songwriters? Renzer said a market share methodology will be used, based on data provided by the labels on which publishers they’ve been paying for the years covered. “Even I was shocked by the amount of publishing entities that we’re submitting!” he said.
The NMPA has spent about $20 million on the CRB process that led to the deal – so “some money will be taken off the top to establish a legal litigation fund” for the NMPA to use going forward. Renzer says the next step will be to mine UMPG’s own lists of which songs that haven’t been licensed, and songwriters who haven’t been paid – based on SoundScan and other data.
“Then, we’ll probably do a more general distribution based on the titles that were active in that time period,” he said. UMPG will probably hire an independent consultant to ensure it’s doing all this right, said Renzer.
Butler asked about the digital and online services that have come to publishers in recent years and got licences, and paid advances for those. Does UMPG still have money from the services that closed down – what will it do with the lump of money remaining from those?
“We can’t book money till the end of that turn,” he said. “If we get advances from services, we can’t put it on our bottom line,” he said. The money is “just sitting – we cannot take it to our profit in any way. And we wait for statements to come in. Some services are better than others…”
If a service goes out of business, Renzer said that UMPG will take the chunk of money, look at the copyrights active during that time period, and allocate it accordingly. “We pay our writers. Though we like getting advances from digital services – it helps us prioritise who to negotiate with – if you have an advance you’ll get our attention.”
What about the money used to buy rival publisher BMG – does that have an impact on UMPG’s finances? Renzer says that the company has met all its projections on the deal, and that the integration of BMG was completed on time. “We now have a great mix of businesses,” he said.
Renzer said that UMPG doesn’t find itself competing within itself for syncs – for example between its pop catalogue and its production music library, despite the difference in pricing between the two. “Fortunately both sides of the business are functioning.” He said that the production music library side of the business is doing well, and that the other side has held up well, despite challenges provided by the economic downturn and its effect on the advertising industry.
“It’s important in this environment to have that diversity of businesses,” he said. However, he admitted to being concerned at the direction of the industry. “Everything’s changing, that’s really the truth. Our business used to be a lot simpler – mainly mechanicals and performance, try to get some syncs and license your print… The business has really changed – I call it the fragmentation of our business. Everything’s changing.”
Such as? “The record labels are going to move away from a traditional ten-song album,” he said, suggesting that labels may move to putting out eight-song albums but more frequently, or just mini-albums or even singles.
“We have to work harder… that means pushing harder on the sync side. Sync has now expanded into this whole host of things. We have licensed two dozen iPhone apps at least, and there’s real money there.”
He said the decline in mechanicals is happening so rapidly, and there’s now a softness even in performance income – “the traditional revenue streams are all being challenged”. Rezner said UMPG tries to be technology-agnostic – “We want to license all of them, and collect every single penny we can and get our songwriters paid.”
Butler asked if Renzer had any news to break today (i.e. yes). “We’re going to be launching two new ventures,” he said. “One is a channel through Vevo – it’s going to be a songwriters channel. We’ve already started to shoot various videos – it’s gonna be called Behind The Hit Songs. It’s not going to be just Universal writers, we’re going to open it up to the industry.”
Examples include Glen Ballard sitting at his grand piano talking about writing for Michael Jackson and working with Quincy Jones. “You almost feel like you’re in the studio with him and Quincy,” he said. “We’ve shot about half a dozen of these now. We have a rev-share deal with Vevo, and we’re hoping to get a sponsor on board – so it might be Behind The Hit Songs sponsored by American Express.”
And UMPG is also launching a producer management division. “It’s a natural growth for what we’re doing as publishers,” he said. “This might be our version of a 360.”
A question from the audience – should the various rights societies in the US merge? Renzer thought the pressure will come first on the mechanicals side. “You’ve got a really serious situation, and I don’t think it’s limited to the US – it’s across the globe… I frankly don’t really know what that means for the future. There’s tremendous pressure in the short term.”
However, he didn’t see a merger in the short term between ASCAP and BMI.
Renzer was also asked about making the process of licensing more streamlined for online music services. He replied that UMPG is obliged to go back to its songwriters where necessary, but said a portion of its catalogue is pre-approved. “We are very conscious of the turnaround time and how important that is to closing deals. But sometimes, you know, we have to respect artists and approval rights, and there may be other complications sometimes.”