In a bold move to pave the way for more widespread licensing of music publishing rights, EMI Music Publishing and Sony BMG Music Entertainment have entered an umbrella agreement that sets working guidelines for clearing rights to new digital music delivery opportunities on phones, PCs, digital cable systems and emerging physical configurations.
The pact, announced Dec. 17, pairs the world’s top publishing house and the second-largest record company globally, promises to drive the clearance of thousands of copyrighted works for new distribution formats.
The deal covers North American rights for master ringtones and ringbacks; DualDisc, the new two-sided music format that combines CD and DVD functionality; digital video distribution, including video-on-demand services and video downloads; multi-session audio discs like copy-protected CDs; and “locked” content for hard drives and storage media that consumers may “unlock” by purchasing the tracks or albums online.
“We didn’t want to hear a clamor that everyone was not able to get what they wanted because one group was holding up licensing rights. I think this puts an end to that and sets us on a road to finding out how good these markets really are,” EMI Music Publishing chairman/CEO Martin Bandier told Billboard.
The deal sets defined rates for master ringtones, ringbacks and DualDisc. Rates for other emerging technologies, most notably video, have been left open for determination at a later time.
Specific financial terms of the agreement were not disclosed.
ROOM TO EXPERIMENT
Sony BMG CEO Andrew Lack says the core aim is to create a framework that allows for short-term experimentation with new business models.
“The idea is, ‘Let’s try to get our hands dirty with all of these things, but let’s not make 10-year deals that can’t project what the marketplace will look like that far out. Let’s just work through the next couple of years,”‘ he says.
The agreement recognizes the sense of urgency labels and publishers are feeling to create working business models and efficient licensing systems that allow them to profit from quick-moving digital distribution opportunities.
In recent months, Lack reached out to Bandier to broker an agreement to facilitate widespread licensing.
EMI administers publishing for top Sony BMG acts that include Usher, Alicia Keys and Los Lonely Boys. The two companies also share a strong connection on catalog artists. Part of the bedrock of EMI’s musical copyrights comes from its earlier acquisition of CBS Songs, the onetime publishing business of CBS Records (now Sony Music Label Group U.S.).
The deal also figures to help Sony BMG and EMI Music Publishing in their own in-house negotiations for digital rights with sister companies.
Sony BMG is still in talks with Sony ATV and BMG Music Publishing about digital rights for mobile and other new formats. Lack says he anticipates that both publishing companies will move quickly toward similar agreements with Sony BMG in the wake of the EMI pact.
EMI Music Publishing remains in talks with EMI Recorded Music regarding the same issues.
Bandier says the Sony BMG deal gives the company a “better sense of what others think is fair and reasonable, so we wouldn’t be criticized for making a deal internally that would seem either heavy-handed or too light-handed.”