When it comes to its tactics for bringing those responsible for some of the music heard across the radio dial, there’s perhaps no rights organization more brash than the Irving Azoff-founded Global Music Rights (GMR).
GMR has been a thorn in the side of the Radio industry for years, with ongoing litigation with the Radio Music Licensing Committee (RMLC) a top story in 2019 and 2020.
Now, the powerful artists and publishers’ rights organization that’s tangled with the RMLC for five years is taking a page straight out of the Mafia film Goodfellas by handing Radio a “pay up, or else” approach to its new licensing agreements set to commence April 1.
As first reported by Streamline Publishing’s Radio Ink, GMR — which represents a wide swath of writers and publishers ranging from Billy Joel and Bob Seger to current pop stars Ava Max and Drake — has issued communication to radio stations that air music in its library that their current licensing agreements expire on March 31.
The new deal is straight out of Mission: Impossible, if not reminiscent of the Goodfellas character Henry Hill’s description of how his mafiosos go about collecting payments from those who owe money. On April 1, a nine-month interim licensing agreement would start. But, a 20% royalty increase comes with the signing of a new deal.
The timing couldn’t be worse for the Radio industry, which has seen sequential improvements in its quarterly earnings since the depths of the COVID-19 pandemic some 11 months ago. Still, most publicly traded radio broadcasting companies have carefully balanced cash on hand and their debt leverage by moving forward with a reduction in force. At iHeartMedia, the industry’s largest audio media company, job losses came after an infamous January 2021 employee reduction effort — one that was never reported by iHeartMedia-owned trade publication Inside Radio.
The hardball tactics GMR is taking came without any input or negotiation from the RMLC, Radio Ink reports.
And, GMR’s unilateral royalty rise comes as its court battle with RMLC has been delayed due to the pandemic, creating a legal back log. The discovery process in the groups’ case is not set to conclude until the end of 2021.
A PRE-COVID GUNSLINGER
On February 17, 2020, one month before the novel coronavirus sent most of the U.S. into a pandemic-fueled lockdown, GMR and RMLC engaged in a war of words over who was in the wrong with respect to the litigation and where the court was heading.
In GMR’s view, Judge Terry Hatter Jr. of the Central District of California “dealt a significant defeat” to the alliance of radio broadcasting companies known as the RMLC, “denying its attempts” to dismiss the lawsuit.
However, what GMR’s public relations veteran Larry Solters didn’t mention is that, should RMLC be able to prove the facts it is alleging, then GMR is the entity that is “an illegal cartel,” RMLC said at the time.
Meanwhile, the fight between GMR and the RMLC won the support of the Trump-era Justice Department. In late December 2019, DOJ urged a federal court to reject attempts by the Nashville-based RMLC “to misconstrue the laws that prohibit its illegal, price-fixing, cartel behavior.”
That statement came after GMR in October 2019 sued Entravision Communications for non-payment of royalties for music played — according to GMR — on English-language Rocker KFRQ-FM in Harlingen, Tex.; Classic Rocker KOFX-FM in El Paso; Hot AC KVLY-FM “107.9 MIX FM” in McAllen-Brownsville; and Los Angeles stations KDLD-FM “Súper Estrella Clásica” and simulcast KLYY-FM/KSSE-FM “José” from January 2017.
The GMR letter to Radio became known on the same day SoundCloud introduced what it is calling “fan-powered royalties — a fairer and more transparent way for artists to earn money on SoundCloud.”
It is designed to assist independent artists whose livelihoods were greatly crippled by COVID-19, with a lack of live performances eating into earnings in a major way.
“With fan-powered royalties, money made from listeners goes directly to the artists they listen to,” SoundCloud explained. “This equitable payout model is what independent artists across the industry have been asking for, and as an artist-first platform, we’re excited to be the first music company to roll it out.”
The fan-powered royalties go into effect April 1 for “Pro Unlimited” subscribers in the Premier monetization program and Repost by SoundCloud artists, including those in Repost Select.
How does it work? “The more fans listen on SoundCloud, and listen to your music, the more you get paid,” it explains.
Under the old model, money from dedicated fans went into a giant pool paid out to artists based on their share of total streams — a model, SoundCloud says, “mostly benefits mega stars.”