About the latest global music business podcast, Tim InghamFounder of MBW and CEO of Amra joined, Thomas Erikson (As shown in the picture).
Amra is a global digital collections association whose owner happens to be Kobart Music Group.
since cobalt Acquire and restart Amru In 2015, collection associations have become a fast-growing business in their own right: in the 12 months to June 2022 (the last year for which public financial information is available), Amra generated more than US$110 million In terms of income.
Amla’s Today’s clients include Kobalt’s Global Publishing business, as well as other major independent music publishers including Anthem Entertainment and armada music publishing house.
Before joining Amru and cobalt, Thomas Erikson Served as deputy CEO of the Swedish Collection Association STIMhe served as Managing Director of ICE until 2009.
On this podcast, Ingham ask Ericsson On the changing landscape of songwriter royalty collections, future opportunities, and how Amra has invested over US$50 million Upgrade and expand core technologies.
Listen to the full podcast above (29 minutes) or read the abridged and edited version below…
How is Amra different from traditional PRO?
Amru yes In many ways, we are traditional professionals: we represent songwriters like any other professional (such as ASCAP in the US or PRS in the UK), and we represent them from other professionals around the world under so-called reciprocity agreements. Gather information.
However we only [collect via reciprocal agreements] Offline income includes radio, television, broadcasting, live streaming, etc. when it comes to digital Collection, we license and collect entirely at our own discretion. That’s why we are different.
We license all DSPs directly in over 200 regions and we receive data and funds directly from these sources in all these regions without going through [local] PRO or some other intermediary.
What percentage of the global songwriter royalty collection today comes from “digital” (you collect it directly around the world) versus “below the line” (on radio, TV, live, etc.)?
When we started looking at the US, in 2014/2015, we found that about 25% of royalties came from digital sources.
Last year, 65% to 70% of all royalties for the same images were digital, and we believe that number will grow to 80% to 85% in three to five years. It might even happen faster.
That’s why we bet on building [Amra’s] technology. we watched that [trajectory] and place a bet [digital royalty collections growing their share of the ‘pie’].
All over the world, there are incumbent professionals, each with costs associated with management, resources, staff, etc. How will this change as digitization becomes the majority of publishing industry revenue?
This will be one of the biggest challenges [for the industry] Over the next three to five years, PROs will change the way they work in many ways.
There are many professionals who have [started doing] That. For example, PRS, Stim and GEMA created ICE to extract the digital processing part for them [collectively].
“This will be one of the biggest challenges [for the industry] Over the next three to five years, professionals will change the way they work in many ways.
However, whenever you need to collect offline royalties in any territory, you will need resources and processes to handle that territory. I don’t think this will ever completely go away.
But from a songwriter’s perspective, if you become a [local PRO]you don’t [always] Really understand how your funds are collected – whether through reciprocal agreements or direct licensing. It’s a complex structure, but it can be done [more] Effective, that’s why we built Amra.
One of the biggest grievances I hear from music publishers is exactly what you describe: reciprocal agreements meaning people get money from a local pro, who then pays the money to another pro, Then the money slowly flows down the pipe. Maybe the original PRO takes a commission or deduction; maybe the second PRO in the chain does. Lack of visibility – these problems still exist in 2024!
Absolutely they are still going on.
It’s amazing to me that this still happens, especially in digital Collection, where [should be] 100% transparency into what data you can get from the service.
You recently published a report that Amra has invested over $50 million in its royalty technology to date. What improvements has this investment resulted in?
this [product of that investment] are an absolute pillar of our business model, and US$50 million That’s a lot of money!
for us [the main reason] The investment in such effort is: Can we process it faster? Can we be more precise? Can we invest in machine learning and other artificial intelligence technologies? [royalty/song] A match that may not exist [before]?
We’re talking about hundreds of billions of rows of data that must be processed continuously throughout the year. if [via tech] we can actually handle [Amra’s non-matching rate on digital services] After getting down to zero, we saw a significant increase in the value of the customer.
“Our long-tail collection has nearly doubled in value over the past three years.”
Obviously, traditional repertoire like big songs, pop, rock, etc., these matches are always accurate and have been for many years. But when you get deeper into the long tail, you see a big difference, and there’s a general perception that there’s no value there. have A lot of The value is there!
Our long-tail collection has almost doubled in value in the last three years because we can zero in on everything and we find everything.
When Kobalt first acquired Amra, there were many questions about how Amra could remain impartial to third-party customers rather than looking after Kobalt’s own catalog. Ten years on, how do you ensure impartiality?
We quickly realized we needed to keep the two companies strictly separate. We hired Deloitte to run a comprehensive business separation process and basically support our separation from a governance perspective, an employee perspective, a data access perspective—every aspect that could be considered.
One example is that Amra receives complete usage data from all DSPs – all plays, all clicks, whether they are songs we control or not. This information obviously cannot be shared with anyone at Kobalt or any of our other clients, so there are very strict access restrictions or access procedures between companies.
“Kobalt only sees its own data, revenue and numbers. The same goes for our other publisher clients.
Kobalt can only see his own data, earnings and numbers. The same goes for our other publisher clients.
All rights [Amra represents] Licensed under the same structure. We approach everything the same way. There is absolutely no preferential treatment at Kobalt.
There has been a lot of talk about for-profit PROs over the past year, after BMI decided to go this route before being acquired by New Mountain Capital. ASCAP publicly urges BMI to take this measure! Amra is apparently part of a private, for-profit company. What is your overall view on the for-profit vs. non-profit debate?
Even before I came to Amra, when I was deputy CEO of STIM, my view was that it didn’t matter if your business was nonprofit or for-profit, as long as the structure and business model created more value for songwriters.
“Whether your business is nonprofit or for-profit, it doesn’t matter as long as the structure and business model create more value for songwriters.”
I can’t tell whether this happens with other for-profit entities – but we do know that there are a lot of non-profit entities like ASCAP, PRS, and others that are very good, very effective, and do their jobs well. They actually have a business mindset about how they operate.
When Francisco Partners took over as Kobalt’s majority shareholder, FP actually highlighted Amra as a particularly exciting growth opportunity within the Kobalt Music Group structure. How has the transition from prior ownership to Francisco Partners ownership affected you?
It’s a very good partnership [with FP]. In my opinion, this is a more positive partnership [than you might assume];It’s very committed ownership and that really helps – [especially] because [FP’s] Background and experience with other technical and music-related techniques.
If you could change one thing about the music industry right now, what would it be?
The idea of being able to directly authorize and collect [from DSPs]Direct access to all data and money will continue to become more and more valuable.
However, some legislative circumstances outside the United States prevent this from happening. In South Korea, for example, Amra was unable to obtain a license for legal reasons; the same was true in Argentina.
“There are a few little [territorial] Exceptions that hold us back [of 100% global collection] From a legal perspective. So it would be very helpful if this could change!
There are several small [territorial] Exceptions that hold us back [of 100% global collection] From a legal perspective. So it would be very helpful if this could change!
Another thing is data sharing. If we can find a way to share more games and data with each other – especially the bigger platforms in our space – it will help with the cleanup [everyone’s] More data will help prevent disputes, which is something we should pay attention to and accept.
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