Kobalt-owned global digital collecting society AMRA has announced its latest deal: with independent music rights management company ole.
The partnership will see AMRA licensing the performing and mechanical rights for certain ole catalogues to digital music services.
The deal isn’t quite “global” – it doesn’t include North America and some individual countries – but it’s wide-ranging nonetheless, with AMRA having digital licensing agreements in place with more than 20 digital music services so far.
“ole is one of the most innovative music companies out there with a very strong client roster that will now be able to benefit from AMRA’s new centralised collections model,” said AMRA CEO Tomas Ericsson in a statement. “ole is a technology-driven company that matches our values on transparency, accuracy and speed of accounting.”
For its part, ole’s SVP of finance and administration Chris Giansante hailed the deal: “Working alongside Tomas and his team, we’re confident that ole’s global collections will increase, benefitting our stakeholders in 2017 and beyond.”
The deal comes at a busy time for ole. The Toronto-based company announced in September 2016 that it had spent $520m on acquisitions, while securing a new $500m credit facility to continue its buyout blitz.
That month, ole acquired UK rights-management firm Compact Media, while in January this year it acquired the catalogue of US publisher Red Vinyl Music, and expanded its worldwide administrative deal with artist/producer Timbaland.
The partnership is also the latest step in AMRA’s journey since Kobalt acquired the American Music Rights Association and relaunched it in 2015 as “the first global, direct, digital mechanical and performing rights society”.
CEO Ericsson talked to Music Ally ahead of the announcement of the ole deal to explain more about the partnership, as well as how AMRA is building its business.
“ole are very much aligned with our philosophy around technology-based transparency. A value-driven, no-politics type of approach,” he said. “They believe in the model, they believe in this global approach, and they’re really nice people to work with, which is important.”
One of the key part of AMRA’s pitch to companies like ole is its claim to be able to account 8-12 months faster by collecting directly from global services like Apple Music and Spotify.
“That’s how the effects are. If everyone went after global deals in the digital space, then theoretically everyone could be 8-10 months quicker than before, but in reality that’s not the case,” said Ericsson.
“It depends on your ability to ingest, process and match, and get the royalties out quickly to your clients. You can save a lot of time and gain efficiency from a direct relationship, but you have to have the technology behind it.”
When AMRA relaunched in 2015, its initial focus was on securing big licences in Europe, but since then its horizons have been expanding, with conversations about how it can expand into Japan and Latin America, among other territories.
“We have been having many conversations in Japan with JASRAC. Even in places that are big markets, there are certain limitations within those PROs as to whether they can carve out repertoire and make sure entities such as ours can enter the markets,” he said.
“We are including Japan in all of our licences, but also working with JASRAC to make sure there is no unnecessary disruption. That is also the case for many of the smaller south east Asian territories, and in Latin America. We are working with the local societies to make sure they understand what we’re doing.”
AMRA has been working fast in a field – music collections – which is often criticised for its sluggish processes. In a little under two years, it has put in place a global structure – “except for the few territories we legally can’t enter, like Argentina and South Korea” – and signed 20 global digital licensing deals with DSPs.
“When you take away all the bureaucracy and politics involved, you can get efficient,” said Ericsson. “I’ve been in that world [of traditional societies] myself, and there are a lot of really good companies out there, but they’re also restrained by history and a lot of politics, which is a shame.”
Ericsson is clearly happy to leave the PRO bashing to Kobalt boss Willard Ahdritz, who relishes attacking collecting societies for a lack of transparency and efficiency. But the two men talk about the positive side of AMRA’s business in the same way – and about its partners in the streaming world’s impact on the careers of performers and songwriters.
“Most of these bigger streaming services have 30m titles or more. But we have the ability to ingest those catalogues, to ingest the entire data and to process every line, no matter how small. That is key to the growth,” said Ericsson.
“If there is technology there, we can drive transparency. If we ingest all that data, we’re going to find the money, and see more value being created. We know that these services pay. They pay a lot of money. Maybe before it didn’t get to the rights owners fast enough.”
Ericsson is also optimistic about the dynamics of the streaming market, pointing to the launch of Apple Music – and its lack of cannibalisation of rival Spotify’s growth – as an encouraging sign that the market can keep expanding.
“It is proof of the streaming market’s strength, but it is not yet mainstream,” he said. “We think it is going to take us 10 years, or maybe seven years, before that market really starts to mature.”
Does Ericsson think that AMRA has had an impact on what the traditional collecting societies are doing? Ericsson thinks that it has played its part, alongside others.
“We can see that SOCAN have done some really extraordinary acquisitions and moves,” he said. “In Europe, PRS and GEMA and SACEM are all looking to do interesting things which I think will be expanded beyond Europe eventually. I would be surprised if they didn’t. And there are new, pretty good back-office structures too.”
Those nuts and bolts of royalty collections are, obviously, a key part of AMRA’s offering too – and Ericsson is determined not to rest on its laurels in 2017 as other societies continue to improve.
“We are focusing a lot of our attention right now in the operational part of our business. It’s a lot of data to be handled across all of these territories, and the technology is working fine now, but we are spending a bunch of our attention in further improving that,” he said.
“If we can find better ways, and fine-tune our ways to deliver this data, make it more transparent and achieve better value, then that’s worth our while. We are making sure that we remain focused on delivering to our clients.”