Music4 5 goes practical - final

Music 4.5 Goes Practical16th September 2010

Adam Street Private Members Club

Event partners

Music 4.5 is organised by

Scott Cohen, The OrchardLocal growth first or global reach immediately?

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TM ®

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Monetize AudiencesNot Content

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Level of Spend

High

Low

Low High

Digital Music Engagement

ADCSP 11% / £ 23%

Generation Free

P 9% / £ 1%

Traditional Physical 23% / £ 4%

PhysicalFanatics P 11% / £ 11%

Budget Conscious

P 8% / £1%

MOsP 11% /£26%

Going DigitalP 15% / £ 31%

Digital Dabblers

P12% / £2%

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Number 1 Singles

Olly Murs - UK

Amoroso Alessandra - Italy

Script - Ireland

Yolanda Be Cool – GermanyTaio Cruz - Spain

Collectif Metisse - France

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TM ®

Patrik Larsson, Headlock ManagementMusic and music technology service as export

commodity?

Gregor Pryor, Reed SmithPractical issues to consider: licensing, different

jurisdictions, glocal routes to market

Music 4.5 Goes Practical

Practical issues to consider

Gregor PryorReed Smith LLP

16 September 2010

About Reed Smith LLP

Top 15 law firm in the world, over 1,800 lawyers

Dedicated Media and Technology practice consisting of over 80 lawyers globally

Ranked Tier 1 in Chambers 2010 and Legal 500 for Media and Entertainment and acknowledged expertise in Digital Music

Featured ‘Wired 100’ most influential people in digital media

Disproportionate number of lawyers who were previously in-house counsel

Practical issues to consider

Why we are qualified to talk about this

Advise digital music services that represent well over 90% of the market

Involved in a large number of key cases concerning digital music, including Tribunals, CISAC and copyright reform initiatives

Rated top-tier by directories based on industry expertise

“Unrivalled experience in the [digital music] market” – Legal 500

Orientation

1. Setting the scene

2. Establishing licensing parameters

3. How to obtain licences

4. Practical approach to licensing

5. Helpdesk

Setting the SceneGLOBAL Entire music industry worth £3.9bn in 2009, up 5%

on 2008. Recorded music industry, including physical and

digital sales, was £1.36bn in 2009, same as in 2008.

Live music revenues – including direct ticket sales, secondary ticketing and 'on the night' spend – have increased by 9.4% to £1.5bn, but have slowed from 2008's outstanding growth of 13%.

Business-to-consumer revenues – including live concerts and recorded music sales, grew 4.8% to £2.9bn – 75% of the total industry.

Setting the Scene

UK

PRS for Music collected £511m in 2009, up 4.1%.

Business-to-business revenues including businesses using music, direct licensing of music services and sponsorship totalled £967m, up 4.4% on 2008.

Recorded music revenues in the UK are larger than the US per head, $26.52 per head in Britain compared to $15.08 in the US.

“Flat is the new up” – Will Page, PRS Economist.

Setting the Scene

Napster - True or false?

The company was majority-owned by Shawn Fanning’s uncle Napster attracted 16.4 million users in less than 12 months and had

40 million users at the time of the injunction after 18 months Majors were set to invest in the business but could not agree terms At the height of the legal controversy, Shawn Fanning introduced

Britney Spears at the MTV VMA’s while wearing a Metallica t-shirt The head of ‘new media’ at Universal Music wore a Napster t-shirt to

staff meetings Chuck D submitted a declaration in support of Napster in the

infringement proceedings Bertelsmann lost $45m trying to buy the company


The company was majority-owned by Shawn Fanning’s uncle TRUE Napster attracted 16.4 million users in less than 12 months and had

40 million users at the time of the injunction after 18 months Majors were set to invest in the business but could not agree terms At the height of the legal controversy, Shawn Fanning introduced






40 million users at the time of the injunction after 18 months FALSE Majors were set to invest in the business but could not agree terms At the height of the legal controversy, Shawn Fanning introduced






40 million users at the time of the injunction after 18 months FALSE Majors were set to invest in the business but could not agree terms

TRUE At the height of the legal controversy, Shawn Fanning introduced








Britney Spears at the MTV VMA’s while wearing a Metallica t-shirt TRUE

The head of ‘new media’ at Universal Music wore a Napster t-shirt to staff meetings

Chuck D submitted a declaration in support of Napster in the infringement proceedings

Bertelsmann lost $45m trying to buy the company






The head of ‘new media’ at Universal Music wore a Napster t-shirt to staff meetings TRUE

Chuck D submitted a declaration in support of Napster in the infringement proceedings








Chuck D submitted a declaration in support of Napster in the infringement proceedings TRUE








Chuck D submitted a declaration in support of Napster in the infringement proceedings TRUE

Bertelsmann lost $45m trying to buy the company FALSE

Setting the Scene

Winners..

Setting the Scene

Not so much winners..

Establishing licensing parameters

Is a licence needed?

What is a licence needed for?

Who gives the licence?

What kind of licence is needed?

Is there a licence that fits my business model? If not, can I create one?


In context of digital music distribution, some relevant factors to decide who needs a licence include:

Who is undertaking what restricted act?

On whose server does the music sit?

How is the music delivered?

Who contracts with customers?


Whether for downloads or streaming, a licence will be needed for these rights:

Reproduction (“mechanical”) Communication to the public (“performing”) Adaptation? Synchronisation?

Separate licences will be needed for both the musical composition and the sound recording (including performers’ rights).

How to obtain licences

Record Label – for certain uses of sound recordings, such as on-demand, downloads and synch rights.

PPL – for certain uses of sound recordings, such as interactive streaming and webcasting.

PRS for Music – for mechanical and performing rights in musical compositions.

Publisher – for adaptation and synch rights in musical compositions.

How to obtain licences Record label licences – subject to individual

negotiation. PPL licences – PPL offers various online and

mobile music licences and these are subject to individual negotiation.

PRS licences – PRS offers various online and mobile music licences and these can be negotiated – see hand out for details.

Publisher licences – subject to individual negotiation.

Artist direct licences – increasingly prevalent.


The traditional model of collective management:

Performing right societies represented the global music repertoire exclusively in their territory

This resulted from their networks of reciprocal representation agreements…

…and in particular it resulted from the membership and territoriality exclusivity clauses


- Any multi-territory online music service provider in Europe had to obtain licences from the collecting society in each country

- No pan-European single licence available from a collecting society

How to obtain licences The desired outcome for music service providers of

obtaining a pan-European licence for the global repertoire from a single collecting society has not been achieved.

Pan-European licences for major publishers’ repertoire can be obtained from some societies.

So now, instead of having to deal with societies in each territory to obtain a licence for the global repertoire, a provider needs to do that for some of the repertoire, but for major publishers’ catalogues some of the societies can grant pan-European licences.

Practical approach to licensing

But first, do you need to?

PPL offers licences for:

Non-interactive radio (streamed online radio)

Customised radio (allows user to stream content and skip, pause, rate and influence the content they receive)

On-demand programme streaming

This leaves some gaps: what about downloads? Or truly on-demand services (like MOG or we7)?


Answer: go straight to the labels.

Approach each major and aggregators (for indies)

Be prepared for what they will ask for in return for a licence: per stream rate, equity, advance, guarantee, MFN

Majors (+ Merlin) are reported to own stock in


Understand the label’s repertoire and latest strategy

Network and approach the right person and identify who makes the decisions

Focus on how you will make money for the rightsholder

Use simple, catchy presentations that outline commercial objectives for the discussions

Be prepared to talk about technological implementation

Be sensitive to label’s objectives


Core terms for licence agreement:

Sufficiently wide grant of rights

Assurances concerning catalogue availability and exclusive content

Competitive royalty rate and terms

Timely and accurate delivery of assets

Comfort concerning rights clearances

Fair termination provisions

Things to do

Seek a licence when one is required

Set a clear timetable and be persistent

Ask questions and more questions

Focus on positive, revenue-generating opportunities for the label

Entertain them

Prepare for robust negotiation and be empathetic to label’s objectives

Seek solutions and make suggestions

Things not to do Seek a licence when one isn’t required Confuse which label owns which repertoire Be aggressive or score points Fail to understand your technology or underestimate

rightsholders’ understanding of it Escalate without notice and consultation Use the words “promotional”, “anti-competitive”,

“royalty-free” or “P2P” Be unprepared, vague or defensive Wear ‘cool’ clothing or try to act ‘cool’

Contact

Gregor Pryor

Partner

Global Digital Media Team

Phone: +44 (0)203 1163536

Email: [email protected]

Twitter: @gregorpryor



Event partners


Panel discussion: which strategies for what service/product/situation

Moderated by: Grant Murgatroyd, Corporate Financier Magazine

Scott Cohen, The OrchardPatrik Larsson, Headlock Management

Helienne Lindvall, singer, songwriter, journalist with The Guardian

Gregor Pryor, Reed Smith

Pitch Presentation:

Joey Baxter, Eventbox

©eventbox/J Baxter 2010STRICTLY CONFIDENTIAL

eventbox let's you search, listen to and watch interactive event listings for all your favourite venues and acts, buy tickets to them, as well as letting you create your own events.



How does eventbox make money?

1. Ticket sales - eventbox takes a 5% commission on the face value of each ticket sale generated through the service

2. Venues, service providers and event sponsors pay an annual subscription to use eventbox’s interactive marketing tools

3. eventbox provides Sponsorship / Advertising which is highly targeted against music type and audience profile


Who are the competitors?There is no competitor offering exactly what eventbox offers:

• MySpace

- Allows you to create interactive event listings and publish them to your social networks.

• Last.fm

- Event listings with venue details and music from event line ups. Sometimes events have links to buy tickets.

• Time Out

- The best known brand for event listings in some of the world’s major cities.

• Songkick

- Event listings for most music gigs and lots of handy tools including being told about events you like when they are listed.

• Spoonfed

- Event listings on a map, making it easy to find events near where you are, where you will be or where you might be.


Team• Joey Baxter, Founder

Proven background in sales. Family of entrepreneurs for generations.

• Jay Fenton, Technology Consultant

Proven track record in founding technology based companies.

• Roland Glover, Non-Exec Director, PR and Marketing Consultant

Founder and Director of entertainment marketing agency Neon that includes Microsoft, Xbox, MTV, Diesel, Talk Talk, Disney as clients.

• Petra Johansson, Non-Exec Director, Event Management Consultant

Founder of Event Management company Twisted Tree. Co-founder of Music 4.5 event examining the development of the music industry in the digital age.

• Simon Brooker, Graphic Design

Director of a graphic design and identity creation practice.

• David Naylor, Advisor

FFW law firm partner. Specialises in working with technology, media, communications and IP focused businesses and investors.


What we want

• £40K seed funding for proof of concept in Brighton:

Legal £3K

Technical Development £20K

Operations £5K

People £5K

RR and Marketing £7K

• A Technical Lead

Pitch Presentation:

Martin Macmillan, Fireplayer

Pitch Presentation:

Ian Pickard, Gigaboxx

for you

for everyone

Gigaboxx, keeping it live

Information in this document is subject to change without notice and does not represent a commitment on the part of the vendor or its representatives.

Live and direct

Gigaboxx is a revolutionary new mobile music download service which allows artists and record companies to quickly and easily build their own mobile music stores. This then enables them to sell direct to their audience (using a suite of marketing tools), by delivering their site URL (web address) direct to the live audience’s mobile phones – at the point when they are most likely to make an impulse purchase.

Mobile stores, which were designed specifically with the music industry in mind, are quickly produced and managed, via a user-friendly online wizard.

The artist or record companies can then add tracks, videos, gig lists and much more.

This is all achieved without incurring the expense of an application, which might only work on a specific make and model of smart phone.

Gigaboxx believe that in order for bands to effectively reach an audience and sell product, they must cater for the majority of all phone users, rather than targeting a specific group though just applications. So the Gigaboxx system works across all mobile platforms, delivering the best user experience possible.

The system also empowers bands to deliver unique content and control how that content is delivered. Changing content is now in the hands of the record company or artist.

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Benefits

Included in the standard package is a direct-2-audience marketing tool set. This includes QR codes and a SMS reply service. An artist can print both the QR code and short code numbers on all their promotional material, plus post them to all their favourite social network communities and blogs, dragging an audience back into their Gigaboxx mobile site.

Gigaboxx also supplies and sells local Wifi and Bluetooth solutions, which detect a fan’s phone with their Bluetooth or Wifi enabled, and then transmit the site URL.

Fans can make a purchase there and then through an all new one click micro payment system called Payforit, which is compatible with all mobile phones and is supported by all the major phone networks. Downloads are billed direct to a fans mobile phone bill, or deducted from their pay-as-you-go credit.

Gigaboxx is also able to give artists/record companies a valuable insight into their fan base via the data and analytics collected from download sales.

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Benefits

Benefits

You can change content on the fly - it’s immediate. Meaning artists/record labels can now upload different videos and remixes, depending on the historic geographic data build up using the system. For example a re-mixes EP for Manchester or a unique video for Bristol. They can also sell single tracks, albums, images and merchandise – and of course it’s fully sync-able with platforms like Facebook and Twitter.”

Sign up to the service will be free from next week.

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Information in this document is subject to change without notice and does not represent a commitment on the part of the vendor or its representatives.

For more information, go to http://www.gigaboxx.net or contact the following:

Ian Pickard, MD Gigaboxx, Co-founder [email protected]

07774 216650

Hugh Stanley-Clarke, [email protected]

07956 342682

Pitch Presentation:

Kat Jackman, www.unsignedbandreview.com

Introduction• Kat Jackman, Founder, UBR• UBR is a unique web based music industry

service, and media platform• I am looking for investment to develop user

generated content features, ecommerce/subscriptions, and sales staff to sell advertising online.

Problem

• Major label deals diminishing• DIY approach is the way forward for artists• There are over 800,000 bands on Myspace• The majority of these bands are looking for

feedback to know how to improve and ‘industry’ access

Solution

• www.unsignedbandreview.com• Online feedback from top music industry experts• A panel of credible experts• Currently have Warner Bros, Sony, Universal,

NME, Radio One, Kerrang!, Ministry of Sound, and many other big players in the music industry who give feedback to artists

• Other useful information, editorials, tips and links for artists

http://www.unsignedbandreview.com/

Revenue

• Display advertising and sponsorship - online, events and through apps

• Subscriptions• Classified advertising sales• Affiliates• Downloads (phase 2)

History

• We have 5K bands on UBR database• Get over 1 million ad impressions per month• I have already sold advertising to Xbox,

Smirnoff, Levi, Quiksilver, Sony• I have put my time and money into UBR for the

past two years• I recently won the Daily Mail Enterprising

Young Brit awards and received an award from Peter Mandelson for UBR

Investment

• £200K investment • To develop user generated content features

online• To build technology so that the review service

is managed on a CMS and I don’t have to manage it

• To build the phone app. and facebook app.• Sales, marketing and PR

Summary

• Millions of bands worldwide seeking access to the music industry

• We are a unique service where bands can get industry access

• Proven advertising and subscriptions revenue• Need investment to launch new online features

to generate more ad inventory for brands and ecommerce for subscriptions service

THANK YOU!

• [email protected]• 07717213639• Kat Jackman – Founder

mailto:[email protected]



Event partners


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