SOCAN has surprised the market with the announcement that they have acquired the NY company Audiam, created by Jeff Price, for an undisclosed sum. It appeared from the announcement that SOCAN was now directly competing in the same space as the CMRRA, extending their reach beyond performance royalties to include mechanical royalties from digital platforms—and that the deal paved the way for SOCAN to become a North America-wide society. We put a few questions to SOCAN CEO Eric Baptiste. Below is our Q&A.
Earlier SOCAN and CMRRA had announced exploration of merging back-ends to provide economies of scale. This was eventually abandoned without proper explanation.
SOCAN continues to hope that a made-in-Canada solution for reproduction rights will be found sooner rather than later.
There is bound to be confusion in the marketplace as to which agencies to negotiate mechanical licenses with-- -CMRRA and/or SOCAN/Audiam. How do you address this?
Audiam has been representing reproduction rights in Canada for a while now. To the best of our knowledge, this has not created confusion and SOCAN’s acquisition of the company will not change that. Because of the current relatively small size of Audiam’s reproduction rights mandates in Canada, and because Audiam focuses on licensing digital services and does not administer physical mechanicals, there are clear delineations. Some rightsholders may see the acquisition as a means of eliminating unwanted overlap in some areas and they may choose to seek efficiencies through bundling mechanicals and performing rights. The extent to which this may happen remains to be seen, but we expect that some rightsholders will appreciate having that option at their disposal.
It is important to note that the reproduction rights element that Audiam brings to SOCAN was not the main reason for our interest in acquiring the company. Audiam’s unique technology and know-how in relation to unlocking additional royalties from major digital services were the key drivers. We see Audiam as complementing SOCAN’s industry leading technological and business strengths, as well as providing an extra layer of digital savvy to SOCAN and MediaNet, which we acquired last month.
In keeping with our strategic plan’s vision to lead the global transformation of music rights, we are working on a growth plan for SOCAN, Audiam and MediaNet in various territories reflecting the global nature of digital music services. SOCAN members or licensed businesses with questions are invited to contact us via familiar channels and we will be pleased to answer their questions and direct them to the best organization for their needs. SOCAN, CMRRA and SODRAC have had excellent relationships over the years that we hope and expect will continue to strengthen in the future.
Since Audiam continues, for now, to operate as a separate agency from, does one approach SOCAN or Audiam when seeking mechanical licenses in Canada, and is there some joint database clients can access?
Mechanical licenses for the repertoire that Audiam controls would continue to be gained from Audiam. SOCAN members will benefit immediately from the data and new technologies brought together by the three companies. Accuracy and breadth of data promise results in accuracy and depth of royalty payments for our members in the future. SOCAN members who might have questions should contact us, and we will be pleased to help them.
What immediate changes can rights’ holders expect to see in payments, and will the cheques be consolidated or issued separately?
In the immediate future, SOCAN members who earn revenues from both existing SOCAN distributions and Audiam will continue to see payments issued separately. With more and more accurate data and technology, SOCAN members can expect to see more accurate and comprehensive identification of where their music was performed, inevitably resulting in more money that they have rightfully earned ending up in their pocket.
How sizeable an increase will this be for SOCAN’s annual revenues going forward?
We won’t speculate on the future, but we fully expect additional revenues to come from this acquisition.
Simply put, the combination of SOCAN + Audiam + MediaNet will ultimately result in more royalties going to the SOCAN members who fairly earned them. Audiam brings to SOCAN members one of the world’s most complete databases of links between recorded music metadata and writer/publisher metadata, strong auto‐match technology and process with the ability to proactively find works that are not licensed as well as enterprise grade access to YouTube data.
Is there a FAQ developed to answer the considerable number of questions arising from this deal?
No, we have not developed such a document for general consumption, but both our membership relations and licensing staff have been extensively briefed on this, as they were on the MediaNet acquisition.
Does this deal need to have any regulatory approval?