🔵 Unpicking Universal's $500M lawsuit against Believe

Does it have a case, and is the wider rhetoric from Universal warranted?

Hi there -

News broke this week that Universal Music is suing Believe for $500 million, alleging “industrial-scale copyright infringement”.

Quite the claim. So what’s going on?

In short, Universal believes it has sufficient evidence to prove that Believe has profited from the distribution of tracks that wilfully infringe copyright. An example would be sped-up versions of tracks by Taylor Swift, among others, which might then be credited to “Taylor Swit” or something equally typo-tastic.

(I should point out that Universal is not the only company on the claim either; both ABKCO and Concord Music - disclosure: an MU client - are also listed.)

Do Universal and co have a case? Well, I think we should credit the companies involved with being sensible enough to collate what it believes is sufficient evidence to make the claim, so at this point, I would think it quite likely that the accusers may have substantial evidence to present.

The target here is really Tunecore, the DIY distribution platform that Believe acquired back in 2015. As a DIY platform (meaning anyone can upload music to it for distribution to most DSPs and platforms like TikTok etc) one could well imagine copyright-infringing material slipping past, not least because of the sheer volume of music being carried on that platform. With 100,000 tracks landing on DSPs every day, I think we can all understand how tracks can sneak through at first. That being said, if the tracks then start to earn serious money, well, one would expect them to stick out a little more.

Tunecore and Believe, for what its worth, strongly refute these claims.

Let’s be clear though: this all still has to play out in the courts, so we should leave it to the judges to decide if Believe/Tunecore has infringed here, and what the penalty might be if so.

For me, there are more interesting elements to this lawsuit. Let’s break them down…

1. The language being used

First is the language and tone Universal is using when issuing statements around this. Let’s look at the first one:

“Believe is a company built on industrial-scale copyright infringement. Their illegal practices are not limited to cheating artists on major labels but artists on independent labels as well—including artists on the independent labels within the trade bodies of which Believe is itself a member.”

This, to me, might be the first overreach. As I understand it, Believe is not a member of Merlin, nor Impala, and I’ve a feeling it isn’t a member of AIM and similar entities either. [Correction 8/11/24: Believe is an AIM member - thanks to those who corrected me!] Consequently, Universal’s words here feel rather like an attempt to sow discord among the indie label space - one which, I think, might well fall flat. It is essentially trying to scream “look indies, they screwed you too!”. It is possible that is the case, but I would think Universal will need to back that up with substance rather than words at some point. In the midst of that, the trade bodies point feels like a curious path to go down, rather than simply referencing “other independent labels” or some such.

Now let’s move onto the second remark:

“It’s no wonder that Believe has been outspoken against the streaming reform principles for which so many major and independent labels have been advocating. Why? Because such reforms would undermine and expose their system of building scale and market presence by distributing music for which they have no rights and illegally collecting royalties to enrich themselves and their coconspirators”

This, to me, is where Universal really oversteps the mark in its tone. Conflating the copyright infringements with Believe’s opposition to the artist-centric model - one that many music businesses felt was a “reverse Robin Hood” type of setup and not a positive move - feels rather like an attempt to both single out the company whilst also planting something of a false concept that in fact, the artist-centric model Universal demanded was loved and welcomed by all. It absolutely was not.

Of course, details are still to emerge here, so it might be possible that Universal can prove a link between the infringements it alleges and why the artist-centric model might be antithetical to that, but I remain sceptical.

Let’s remember some key facts about the artist-centric model that Universal ushered in first via Deezer, and then through other DSPs. First, the company never consulted with any other music businesses when pushing for this model. It strong-armed a system into place without allowing any other stakeholders (majors or indie) a voice in that negotiation.

Equally, in doing so, Universal slammed the door on any other method of remuneration - such as the user-centric model that was proving itself effective over on SoundCloud at the time - again, without allowing a wider conversation about this all to take place beforehand.

Ergo, to now talk in terms of it as a system that “many” music businesses have been advocating belies a simpler truth: the artist-centric model Universal proposed was generally viewed as slightly better than the current model, but also flawed and ignoring of other, possibly superior, models. There is now no chance to explore those - and the fiscal benefits they might have delivered - because of Universal’s single-minded approach to pushing its own agenda through without consulting others. This op-ed piece from Martin Mills of Beggars Group, Darius Van Arman of Secretly Distribution, Stephan Bourdoiseau of Wagram Stories, and Emmanuel de Buretel of Because Music speaks to the issues in more detail.

So yes, “many” music businesses might have eventually admitted the new system was better, but they were not left with much choice.

I couldn’t help but read Universal’s actions in its comments around the Believe lawsuit as one in which the company clearly feels confident about its case - so confident, in fact, that it will now use that case as a means to further its wider agenda, which at this point appears to be continuing to undermine the indie music space by attempting to create division.

2. The flawed logic around copyright in DIY distribution

Another point we must look at within this lawsuit, however, is the means by which DIY distributors are regulated. In its coverage of the story (linked below) MBW references the fact that both DistroKid and Tunecore carry clauses in their contracts which exonerate them from any claims in the event an artist is found to be breaching copyright.

Evidently, from Universal and co’s lawsuit, this view is not a defence deemed acceptable, and one can understand why.

Ultimately this bears similarity to the move in the US to sunset Section 230, a clause that provides immunity to tech companies from legal consequences related to user-generated content. Whilst this week’s Trump win might well see that buried, there was - prior to Elon Musk’s involvement - a bipartisan move to remove that clause and ensure the likes of X or Meta could be sued for hosting offensive content.

The same logic feels applicable here, in that the “we can’t be responsible for what is uploaded” argument looks unlikely to hold water. If that is the case, it will be fascinating to see how that changes the landscape where DIY distribution is concerned.

I suspect some might argue that placing more control over what exactly is uploaded to DSPs - via platforms like Tunecore and DistroKid - may not be a bad thing. This was, after all, the main focal point of Universal’s ire as it pushed it artist-centric model onto the likes of Deezer.

Certainly then, there is much to monitor with this lawsuit. It will doubtless play out very publicly too, not least because Universal look to be taking full advantage to further spread division whilst cementing its own dominance even further.

I shall be watching with interest.

Have a great evening,

D.

PS - we are hiring (again!). Full details at the bottom. 👇🏻

🎶 listening to “Live At The Witch Trials” by The Fall. Perhaps it is the early nights drawing in, but of late I’ve had a real urge to take a deeper dive into The Fall’s work. The dour tone of Mark E Smith fits these crappy “dark by 4.30pm nights”, heheh. This is as good a starting place as any, taking the form of a formidable 3CD set courtesy of Cherry Red (disclosure: an MU client) who are certainly delivering some stellar box sets and reissues in recent years. I still maintain their Hawkwind “Space Ritual” 10CD (+ one Blu Ray) box set is one of the finest reissues I’ve ever heard too.

📺 watching “Beardyman 🇬🇧 | GRAND BEATBOX BATTLE 2023: WORLD LEAGUE | Showcase” on YouTube. This is a masterful performance from the beatboxing madman, which sees him speaking Japanese to the crowd whilst fusing his vocal antics through all manner of FX that delivers anything from stomping club bangers to quite ethereal ambience. Honestly, it’s brilliant - just watch it.

🤖 playing with Keyboard Maestro, a key macro tool for Mac OS. Where this really shines is in creating your own shortcut launchers for specific apps, which in turn allows me to create a ridiculously extensive set of quick launchers for Bitwig, that can, for example, load a drum synth into a new track, then set it to output all channels separately, all in less than 2 seconds. Ludicrously useful. Even on a simpler level I now have it so that typing “dhmeet” in Slack just posts a Google Meet link in the channel and hits return for me. Love it!

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Stories worth reading from the Music Industry:

UMG sues Believe and TuneCore for $500 million, alleging ‘industrial-scale copyright infringement’

“It’s no wonder that Believe has been outspoken against the streaming reform principles for which so many major and independent labels have been advocating. Why? Because such reforms would undermine and expose their system of building scale and market presence by distributing music for which they have no rights and illegally collecting royalties to enrich themselves and their coconspirators,” the UMG spokesperson said.

👆🏻Hot take: see editorial above

Believe and TuneCore say they ‘strongly refute’ copyright infringement claims in UMG’s $500m lawsuit and ‘will fight them’

Believe’s full statement reads: “Believe and TuneCore do not comment on pending litigation. As companies that work with artists and labels around the world, we take the respect of copyright very seriously. “We strongly refute these claims, and the statements made by Universal Music Group and will fight them. We have developed robust tools and processes to tackle this industrywide challenge, working collaboratively with partners and peers and will continue to do so.

👆🏻Hot take: see editorial above

Indie-gestion: With Universal Ravenously Hungry, is the Independent Label Sector Facing an Existential Crisis?

How this unfolds remains uncertain. Maybe TikTok will struggle to get the critical mass of independents it needs to sign direct deals in order to recalibrate the licensing landscape more in favour of Big Tech than Small Label. Or maybe this will prove to be the fissure that leads to a breaking apart of the indie “community”, where self-interest trumps collective benefits.

👆🏻Hot take: another take on Universal’s continued ingestion of indie businesses, this time courtesy of Eamonn Forde.

Monstercat on games: 'Indirect monetisation is often overlooked'

The compilation albums were a great avenue for that. We have official playlists for a lot of our collaborations including Roblox, Rocket League and Fortnite, and we’ve had billions of streams come through these gaming opportunities, which result in indirect monetisation for our artists. So, direct monetisation is one thing, but I think the indirect monetisation is what’s really exciting. It’s just about finding how to have compelling conversions through what you’re activating in, so that you’re able to monetise beyond the activation when it’s over.

👆🏻Hot take: I really like how Monstercat are approaching this. Honestly I just find it refreshing that someone is looking at the games space with a wider view on how the music industry can engage with it beyond simply licensing songs for use as soundtracks.

Chartmetric goes talent-spotting with predictive search tool

The company says it has spent more than 18 months building the tool, which uses data for more than 10m artists to analyse signals that may predict ‘long-term success’. “There is no single metric that can predict success. Each of the signals we identified integrates multiple data points from many services,” said VP of product management Akash Mukerjee. “By handling the heavy analytical work behind the scenes, our distinct signals can be used to identify emerging talent far earlier than was ever possible before.”

👆🏻Hot take: the tech in use here is admirable, but something really doesn’t sit well with me in terms of what this means for A&R. Scouting for things already blowing up on DSPs feels akin to minesweeping the album section in HMV Oxford St back in 1995, trying to find bands that you can sign, rather than getting out among the scenes themselves to really spot talent before it even reaches a studio, much less a release. Maybe I am out of touch, but the state of the frontline music releases market would suggest otherwise.

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Notable news from the world of tech:

Microsoft just learned its lesson about overcharging for AI features

Microsoft recently announced that its Copilot Pro AI features are being baked right into Microsoft 365 (via ZDNet). This will bring Copilot Pro to key apps like Word, Excel, PowerPoint, Outlook, and more. This is good news for users, but it also represents an admission of a failed AI business strategy. Why? Because until now, Microsoft had been charging $20/month for Copilot Pro as a 365 add-on. And apparently, that wasn’t going over very well with users.

👆🏻Hot take: I feel this only reinforces the point made in the article below this one, i.e. that businesses (and people in general) simply aren’t seeing the value in most AI offerings at present.

IT spend in Europe set to rise, and it's not all about AI

The problem is that, despite the hype surrounding it, there are few essential applications that need AI. Lovelock said: "We don't see the must-have app emerging in the next three years that's going to force people to go out and buy these AI-enabled devices," "They're going to be purchased as part of the regular replacement cycle. Generative AI is a technology that is going to be sold, not bought."

👆🏻Hot take: great to see respected industry people confirming what I think was already clear, namely that despite the hype, AI is yet to deliver the real killer provision that we all find absolutely essential.

Amazon Ratchets Up Enshittifying Prime Video After Public Shrugs At Initial Ads

Why, this hasn’t been tried since — checks notes –, well, since cable television did the exact same thing! Never mind that people went to streaming in part because they hated this very thing about cable television. Never mind that this new program comes with absolutely zero benefit to the subscriber. And certainly never-the-fuck-mind that you’re going out of your way to talk about how the customer is the frog you’re gently raising the temperature on the pot of water. Yes, this is obviously brilliant. Now, why is Amazon doing this? Because the frog didn’t complain about the temperature of the water, apparently.

👆🏻Hot take: I do sometimes wonder just what it might take for people to actually say “enough”. I assume the answer here is that alternative services need to pop up offering streams without ads again. That or people are just so entrenched in their Prime relationship with Amazon that constant ads still aren’t enough to make them quit. Depressing, either way.

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Looking for something else to read? Here you go:

everybody wants to be Beyoncé, nobody wants to be Beyoncé

on the business (or lack thereof) of a cultural icon

👆🏻Hot take: this is a great read, asking why Beyonce’s brands never seem to amount to much. It’s a really interesting dissection of fame, brands, and how celebs try to fuse the two - some with huge success (Rihanna/Fenty) and others perhaps less so (Beyonce/SirDavis). Well worth your time.

The Mainstreaming of Loserdom

On staying home v. going out, brat summer, and the ethics of rotting

👆🏻Hot take: this has a really interesting point to ask, around the degree to which younger generations are essentially not going out and living life through a phone, whilst almost LARPing an online identity that suggests something different. If there’s one read I would say is essential in today’s NN, this is it. I’m leaving the best until last!

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As a Paid Social Exec, you will be responsible for working with our Marketing Managers to develop and execute effective campaigns and strategies for our clients, leveraging paid social strategy and creative output.

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