New issue of Music & Copyright

The latest issue of Music & Copyright is now available for subscribers to download. Here are some of the highlights.

Russia’s royalty collection system heading for a big shake-up
Russia’s music royalty collecting segment has been in turmoil over the last few weeks as Sergei Fedotov, head of state-approved authors’ rights collecting society the Russian Authors’ Society (RAO), was arrested and a group of rights holders left the organization to set up a new collecting society, the Russian Authors’ Union (ROAS). Police opened an investigation into RAO a year ago, alleging that RUB500m ($7.7m) had been funneled out of the organization in a series of dubious real estate deals. However, no action was taken until late June of this year, when Fedotov was unexpectedly arrested on suspicion of fraud. In the weeks following his arrest, another collecting society, RSP, which collects a 1% tax on imports of electronic devices that can be used for copying content and until recently was closely associated with RAO, announced that it is cutting ties with the embattled organization. At around the same time, the creation of ROAS was announced, a collecting society claiming to avoid repeating RAO’s mistakes.

Subscriptions take the digital lead in Japan; physical formats remain dominant
The Japanese music trade association, The Recording Industry Association of Japan (RIAJ), has reported midyear production figures for physical music formats and trade earnings from the sale of digital music in the country. Combined revenue from physical audio and music video production was down year-on-year, while total record company earnings from digital sales and services were boosted by growth in subscriptions. Taking physical and digital together, total recorded music revenue suffered a small dip, in contrast to the slight rise in the first six months of last year. Physical formats still account for more than three-quarters of total recorded music trade income in Japan, and the positive gains in subscription income in the six-month period were unable to offset lower physical format revenue. Digital sales have gained momentum in the last few years, and rising subscription sales mean that Japan is now more in line with most Western markets. However, the country has a long way to go before it reaches the digital tipping point.

BMI begins its legal challenge to the DoJ’s insistence on full-work licensing
US performing rights organization (PRO) BMI has started the ball rolling on its legal challenge to the US Department of Justice’s (DoJ’s) interpretation of the consent decrees and how both ASCAP and BMI license performance rights. In 2014, the DoJ began a review to examine the operation and effectiveness of the consent decrees. This was following a request by ASCAP and BMI to consider new ways of licensing, and most notably, that they be permitted to allow music publishers to partially withdraw certain digital licensing rights. However, while the DoJ declined to allow a partial withdrawal, its decision to insist on full-work licensing has drawn considerable fire. Following the publication of the DoJ’s statement on the closing of its consent decree review, ASCAP and BMI said that they would pursue a joint campaign to challenge the DoJ. ASCAP is to push for legislative reform; however, it is BMI that has fired the first shots with its initiation of a legal challenge.

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