March 23, 2023

Licensing Plan Gives Fresh Plays to Beatles

“I was so angry,” said Mr. Husney, who is best known as one of Prince’s first managers. “But I realized it was only natural. There is a whole audience born around 1990 that knows the Beatles, but is wholly unfamiliar with their writing.”

In response, Mr. Husney has teamed with a small music publisher on a project to introduce the songs of the Fab Four to a younger generation. One project is an album of Beatles covers by young bands, but if Mr. Husney and his partner, Herb Jordan, are successful, they will also get more Beatles songs onto television and in the movies, something that has long been difficult — and correspondingly expensive — for Hollywood producers.

Their efforts are the result of a little-known kink in the Beatles’ business history. While the publishing rights for most of the band’s work is owned by Sony/ATV Music Publishing, a joint venture between Sony and the estate of Michael Jackson, the North American rights to six early songs were held separately, by the Pincus family of publishers in New York. Round Hill Music, a small publisher, and the Adage Group, an intellectual property rights firm, bought these rights for an undisclosed sum in a deal announced early last year. (Music publishing concerns the copyrights for songwriting, not recordings.)

The new owners said they wanted to find new ways to make money from the songs, including film and television, which has become a crucial outlet for artists old and new as record sales fade. So Mr. Husney and Mr. Jordan, the chief executive of the Adage Group, began commissioning covers of the six songs, over which they would have all necessary rights.

The first example of the project’s licensing strategy was heard on Sunday night’s episode of the HBO drama “True Blood”: a version of “I Wanna Be Your Man” — a song that John Lennon and Mr. McCartney wrote for the Rolling Stones in 1963 and also recorded with the Beatles — played by Mobley, an indie band from Austin, Tex.

The album, “Beatles Reimagined,” will be released on Oct. 1 by Community Music, and features “She Loves You,” “I Saw Her Standing There” and other early Beatles songs played by mostly underground bands like Badwolf and the Well Pennies. The best known of the bunch is Edward Sharpe and the Magnetic Zeroes.

“Anyone can rerecord the Beatles,” Mr. Jordan said. “What it really comes down to is that we control both the publishing and the masters as a one-stop shop. For music supervisors, that is an ideal situation.”

Some Grammy tweets aside, the Beatles are hardly forgotten. The group’s compilation album “1,” released in 2000, was the best-selling album in the United States in the first decade of the 2000s, and it has sold more than 30 million copies around the world. But Beatles songs rarely appear on film and television both because of their price and because of the complex checklist of approvals needed.

For most Beatles songs, a user would need the approval of Sony/ATV, the publisher; EMI, the record label; and the Beatles and their estates.

Last year “Mad Men” paid an estimated $250,000 to use the Beatles’ “Tomorrow Never Knows”; Matthew Weiner, the creator of the show, said it took him several years to get the necessary approvals to use a Beatles song.

For the “Beatles Reimagined” songs, however, the process is much simpler. Adage and Round Hill control the publishing rights, and Mr. Jordan and Mr. Husney, as executive producers of the project, also control the recording rights. Mr. Jordan said that for these early songs, the approval of the Beatles was not necessary, although he added — choosing his words carefully — that they strove to maintain good relationships with all the various parties in the Beatles camp.

Gary Calamar, the music supervisor for “True Blood,” declined to say how much money changed hands in the deal for Mobley’s version of “I Wanna Be Your Man.” (So did Mr. Jordan.) But he made it clear that it was a lot easier this way.

“Of course we are paying a lot less for this master than for the Fab Four,” Mr. Calamar said. “This did cut out a lot of the red tape.”

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Media Decoder Blog: Universal Sells EMI Stake in Popular Music Series

The Universal Music Group has made the last of the divestitures ordered by European regulators as part of its $1.9 billion purchase of EMI’s recorded music division, closing a drawn-out process but significantly lowering Universal’s cost in the deal.

Universal announced on Wednesday that it had sold EMI’s share of the long-running pop compilation series “Now That’s What I Call Music!” to Sony Music. The price was not disclosed, but it has been reported at about $60 million.

Universal will retain its share of the “Now” brand, a joint venture by Sony, EMI and Universal, which began in Britain in 1983 and came to the United States in 1998. The series has sold more than 200 million albums around the world.

Universal, now by far the world’s largest music company, made its deal for EMI in November 2011 with Citigroup.

After months of negotiations, European regulators approved the deal in September on the condition that Universal sell about a third of EMI’s recorded music assets. (In a parallel sale, an investor group led by Sony bought EMI’s music publishing side for $2.2 billion.)

Along with the sale of the Parlophone Label Group to the Warner Music Group for $765 million, the Sanctuary and Mute labels to BMG Rights Management for about $72 million, and a number of smaller deals, Universal has reaped just under $900 million on the sales. That is nearly half what it had paid for EMI, although some of the assets, like Sanctuary, were owned by Universal.

This week Universal’s parent company, the French conglomerate Vivendi, reported that Universal had just under $6 billion in revenue in 2012, up 8.3 percent from the year before; excluding revenue from EMI, the gain was 1.6 percent. Universal also had $694 million in earnings before interest, taxes and amortization for the year, up 3.6 percent from 2011, or 1.6 percent without EMI.

In its earnings report, Vivendi said it still expected more than $150 million in annual savings after absorbing EMI.

Ben Sisario writes about the music industry. Follow @sisario on Twitter.

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Media Decoder Blog: Apple’s Plans for Internet Radio Run Up Against Big Music Publisher

Apple’s plans for an Internet radio service have hit a snag over the licensing of music controlled by Sony/ATV, which recently became the world’s biggest music publisher.

The two companies are at odds over what rate Apple should pay to stream Sony/ATV songs on its service, a money standoff typical of such negotiations.

But what is new is that Apple needs to negotiate at all. Typically, streaming services have obtained publishing rights from the major performing rights organizations, Ascap and BMI, which for decades have acted as clearinghouses on behalf of publishers and songwriters.

In recent years, some music companies have moved away from that model, figuring that the returns would be better if they handled licensing directly and opted out of the blanket rates set by those organizations.

When an investor group led by Sony bought EMI Music Publishing in June for $2.2 billion, Sony/ATV, a joint venture between Sony and the estate of Michael Jackson, took control of the world’s largest music publishing catalog with two million songs, including most of the Beatles songs as well as current hits by Lady Gaga and Taylor Swift.

EMI already withdrew its digital rights from Ascap, and Sony/ATV will follow suit with the rest of its catalog, effective Jan 1.

So just as Apple hopes to line up the licenses it needs to operate a streaming radio service, obtaining those licenses has suddenly become more complicated.

Martin N. Bandier, the chairman of Sony/ATV, said in an interview on Friday that the disagreement with Apple was simply an effort to obtain a higher royalty rate for his songwriters.

“This wasn’t us not wanting the service,” Mr. Bandier said. “We want the service. It’s like oxygen. We just want to be paid fairly, no different than the N.F.L. refs.”

Apple declined to comment. The news of Sony/ATV’s negotiating standoff with Apple was first reported by The New York Post.

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Bids to Buy Citigroup’s EMI Group Are Said to Fall Short of Expectations

But five months later, Citigroup’s sale of the EMI Group, one of the three other companies that dominate the world music market, is drawing less confidence. Turmoil in the financial markets has driven away many potential buyers and reduced the number of banks willing to finance bids. And according to several people involved with the auction, bidding prices have been lower than expected.

EMI, which releases recordings by, among others, the Beatles, Coldplay and Katy Perry and has a music publishing division that controls the copyrights of 1.3 million songs, was seized by Citigroup in February after a disastrous four-year ownership by the private equity firm Terra Firma.

After writing down EMI’s debt by $3.5 billion, Citi put the company on the market in June, with expectations among analysts and potential buyers that it might sell for up to $4 billion.

Of the five parties that have bid on all or parts of EMI, four are other big music companies. Warner — whose new owner is the Russian-born investor Len Blavatnik — and the Universal Music Group have made offers for EMI’s recorded music division, along with MacAndrews Forbes, the holding company controlled by Ronald Perelman. Those bids are said to be from $1 billion to $1.3 billion, according to these people, who spoke on the condition of anonymity because they had signed confidentiality agreements.

EMI’s publishing unit has drawn offers of $1.75 billion to $2 billion from Sony and BMG Rights Management, a joint venture between Kohlberg Kravis Roberts and the German media giant Bertelsmann. In addition, some of these companies have made offers for the entire company, but those bids are said to be lower than what Citi would get by splitting the company up.

Those companies declined to comment, as did Citi.

Many analysts say they believe the auction is simply the victim of bad timing. Tightened credit markets have made it more difficult for potential buyers to finance their offers, and nervous banks have required bidders to put up more equity.

“The global economy is in a different place than it was in February or March,” when the Warner auction began, said Ben Rumley, a media analyst with Enders Analysis in London. “Everything you read in the news indicates that it is difficult to raise financing for any business, let alone music. It’s not the greatest time to be looking for debt financing.”

Bidders have also sought to limit their exposure to EMI’s pension liabilities, which by some estimates could be as high as $600 million.

Despite the interest in Warner, there are persistent doubts about the health and investment value of large music companies. Among those concerns are the labels’ ability to shoulder the transition from physical to digital sales. New digital services like Spotify, which sell access to music by subscription, have generated excitement but are not profitable.

“The music market is continuing to contract more quickly than record labels’ digital strategies can offset,” said Mark Mulligan, an independent analyst of the music industry. “For a prospective buyer, that brings the serious consideration of waiting until the market bottoms out and getting most value then.”

Since most of the bidders are other major music companies, the auction faces regulatory complications in the United States and Europe. EMI’s record division is the smallest of the four major companies, with about 9 percent market share. But its publishing division — which controls the copyright for the music and the lyrics underlying songs — is one of the largest and most successful, with about 20 percent market share.

Depending on which company or companies win the auction, that could mean that EMI’s recorded music and publishing halves could be further carved up as a pre-emptive move to satisfy antitrust regulators.

The last round of bids for EMI were submitted to Citi earlier this month, but the people involved with the auction said that the bank had not given an indication of when it would make a decision. These people said that it could take weeks, and that there was still the chance that Citi could postpone the auction until market conditions — and bids — improve.

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