Digital Trends: Sesac Acquires Harry Fox Agency

Music licensing is about to become a whole easier for brands, streaming companies and media as Sesac, a boutique rights group backed by private equity, has agreed to buy the Harry Fox Agency, a major clearinghouse of songwriting rights, the two groups.

Sesac, Inc. the Nashville-based performance rights agency, announced Tuesday that that it has entered into an agreement to purchase New York mechanical rights management firm Harry Fox Agency for $35 million.

The deal comes at the end of a year-long attempt by Sesac, who competed against bidders like Socan and BMI since HFA went up for sale in May of 2014.

“Licensing is fragmented across both multiple types of rights, as well as multiple territories for the streaming services that represent the future growth opportunity of the music industry. The result is a complex, opaque and currently inefficient licensing regime that fails to deliver the best outcomes for creators and publishers, as well as end users,” Sesac Chairman and CEO John Josephson said in a press release. “What excites us about this transaction is the ability it provides to make the licensing process both simpler and more efficient, and in so doing create additional value for music creators and publishers, as well as the digital music platforms.”

Sesac’s acquisition of HFA is part of a previously announced strategy under its new leadership team to pursue a simplified and more efficient, multi-right, multi-territory licensing model utilizing an ongoing focus on information technology and data science to meet the developing needs of music users, distributors, writers, composers, publishers and other stakeholders. The transaction enables Sesac to enhance value by offering music streaming and other digital platforms greater efficiency and transparency in the music licensing process, thereby delivering better monetization outcomes for its affiliated writer and publisher clients.

The Harry Fox Agency is owned by the National Music Publishers Association.
“I am thrilled that we have found the perfect strategic buyer in Sesac given their forward-looking approach to rights management and commitment to servicing publishers and songwriters efficiently in the new digital music economy,” said NMPA President & CEO, David Israelite added. “Not only will this transaction ensure that mechanical licensing continues in the method best for creators, it will also strengthen NMPA for the many battles we are fighting on behalf of all songwriters and music publishers.”

Billboard reports that as of 2014 Sesac’s revenue had grown to $182 million (from $167 million the year prior). HFA, however, has seen declining revenue over the years despite a new strategy the agency hoped would capitalize on increased streaming activity. SESAC is home to a catalog of over 40,000 songs and HFA brings 48,000 publishing clients to the deal.

In Canada

In Canada, mechanical licensing agencies CMRRA and Sodrac, and PRO Socan announced in 2012 that they are exploring opportunities to create a more integrated approach to the management of performing and reproduction rights of music creators and publishers in the market. Together they represent more 100,000 Canadian composers, writers and publishers, as well as over 3 million international clients. In addition, an integrated approach would simplify the licensing process for companies that use music to enhance their business activities.

In December the following year, a vote by the board of directors of the Canadian Musical Reproduction Rights Agency Ltd. (CMRRA) pulled the plug on the proposed alliance.

Socan’s President Stan Meissner at that time said he was disappointed with the outcome. “We at Socan have always believed that a simplified system of licensing for music rights in Canada makes sense and we had high hopes for the efficiencies of an alliance model. While I have great respect for our colleagues at CMRRA and Sodrac, I am disappointed that a mutual agreement between the parties could not be achieved. Regardless, we feel that SOCAN is well positioned to embrace future opportunities.”

CEO Eric Baptiste added then that considering and trying bold new collaborative initiatives will continue at Socan, and Socan will continue to work closely with CMRRA, Sodrac and other Canadian organizations that look after the interests of songwriters, composers and publishers.

Sources: Sesac, NYT

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