by : Business, Featured Articles, May 2017

Managers of The World – Unite!

Managers of The World – Unite!

Managers across the world are coming together to form communities where they can network and stay informed about current issues. Getting their artists to sign a record label contract is no longer the end game. Tech companies are taking on the distribution of music and business has to be drummed up there. The upshot is that alliances between music managers are becoming more prevalent. Music managers rightly perceive that negotiating collectively with powerful players, both on behalf of their artists and for themselves, is more effective. So a new type of interest group is slowly emerging from their ranks, both at the domestic and global level. These so-called Music Managers Forums, or MMFs, effectively argue their position as a key cog in the music supply chain.

MMFs and the IMFF

Today, there are at least nearly thirty countries with MMFs, and each one is managed as an independent entity. MMFs exist in Australia, Belgium, Luxembourg, Canada, Denmark, Finland, France, Germany, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom, USA, Italy, Spain and Estonia. They exist in Africa and in Latin America. Some MMF’s are more organized than others and are active lobbyists in their own right, like those in the United Kingdom, Canada, and New Zealand. Others, like the Latin American and Scandinavian MMFs tend to meet only to discuss the course of general business affairs. They all belong and associate as members of a larger umbrella organization: the International Music Managers Forum or IMMF.1 The IMMF is the trade association that represents managers around the world, with membership currently well over 1,000. The IMMFs’ base is in Luxembourg, chaired by Volker May, an independent record producer, publisher, and manager.

IMMFs advocacy can take many forms. In a statement released on September 2014, the IMMF shows concern that new deals between the rights’ holding labels and publishers, on the one side, and digital service providers, on the other, are leaving them out. For the IMMF, “artists [are not shown] the deals that are being negotiated between the services and the rights holders who represent [their] music”. The organization demands “an obligation for absolute transparency when rights are assigned in order to prove fair remuneration”, for otherwise there can be no assurance that the resulting revenue will be fully shared with artists.2 Of course, if artists were given a seat at the table, managers would take a cut.

In May 2015 the IMMF addressed the release of the leaked contract between Spotify and Sony Music in 2011. Clause #4 of the well-known leaked document showed an advance of 40 million dollars by Spotify to Sony in payment of the ‘establishment’ of Sony’s catalog – a payment that did not trickle down to Sony artists. Moreover, clause #14 noted that Sony Music would earn free and discounted advertising in exchange for the licensing their music to the service, again without the consent of artists. Sony Music, Warner Music, Universal Music, and EMI, and the independent record label network Merlin, all own a total estimated 20 percent equity share in Spotify, and this produces a serious conflict of interest while leaving the artist out. As the letter concludes, “a lot of the issues in the music industry arise from the failure to fully seize the digital opportunity to restructure business practices, and deal terms to reflect the changed environment.” The reference here is to the lack of access to usage data and ad-revenue, as well as the subscription totals of the DSPs.

The UK’s Example

If managers are left out of the digital loop between the labels and the DSPs, they are learning to cope. The IMMF has delivered training sessions in four different continents to ensure that managers around the world are properly equipped to take on new business opportunities and challenges. The IMMF also holds conferences around the world, taking advantage of important music industry events such as SXSW, Midem, and the World Creators Summit. Wherever emerging artists are showcased, there is case for the IMMF. A bi-annual General Assembly is held at Midem in Cannes, France, and the Reeperbahn Festival in Hamburg, Germany.3

The Music Managers Forum in the United Kingdom stands out in its international reach and the scale of its projects. In a white paper, Dissecting the Digital Dollar, the UK MMF explores anomalies in the industry and summarizes managers’ global viewpoints over 150 written pages.4 In an effort to delve deeper into the subject, this correspondent reached out to Jon Webster, its new President (and CEO from 2007 to 2016). Under Webster’s leadership, the MMF UK has become the largest in the world, and pioneered the creation of the IMMF in Luxembourg.

Funding is essential to run an MMF. Webster’s organization searched for funding from the government, but was denied due to the state’s preference to support artists and not their representatives. Finally, Google ended up providing monetary support to the UK’s MMF. Webster seems pleased with the compromise, for he has since been able to get artist data from Spotify that he would not otherwise have had. In fact, UK artists can observe a global dashboard of their plays and seem better served by the existence of the UK MMF than before.

There is a contradiction here, naturally, for financial support coming from the tech sector would seem to undermine the power of managers to set an independent course that better served their interest. Webster seems to have judged the outcome was still beneficial for his peers, and indeed it is hard to argue that being in the payroll of Google is definitive. Any funding might be better than none early on, and the UK MMF can now tackle other tech giants, such as Apple and Spotify. That it already extracted some benefit from the latter online service may be a sign that the compromise worked.

Labels, moreover, will still be around, so crafting agreements with them goes hand in hand with the right fight on behalf of managers and their artists. Says Webster: “As a manager, you understand that you might be fighting with a label about digital royalties one day and you have to ask for money for the video the next”.

Conclusion

Overall, it seems that talent is being well served by the new work MMFs worldwide. The resilience of managers in the new digital juncture, and their sense that there is strength in numbers, surely benefits artists. Artists are not negotiating collectively and are more vulnerable without the MMFs than with them. Moreover, there is a movement within the management community that is refocusing its effort not on live music, where artists make most of their income, but on recordings. For talent, fighting by organized proxy for a better cut in the trade of master recordings, is a welcome development at a time when streaming revenue is taking over the industry and the promise of recorded music is better than it has been for a long time.

 

By Karin Harvey

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Endnotes:

1. Open letter, Luxembourg May 21, 2015

2. Music Videos and Money, 2014

3. http://immf.com/about-us/networking/

4. https://themmf.net/

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