Emirates embroiled in audio situation

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Emirates, which carries one of the most vast inflight entertainment libraries in the industry, says it is currently “in direct discussions” with major record labels regarding music rights, after labels suggested they want to broker direct audio licensing deals with airlines across the globe. But Emirates has also revealed it is encouraging UK licensing body PRS to formalize the establishment of a collection agency in the region, ideally across the GCC but at least in the UAE.

“We have not only ‘come to the table’ but have led this discussion [regarding audio licensing],” Emirates VP communications Patrick Brannelly told RGN after an executive with a music publisher in the Middle East suggested that the carrier has a different interpretation of copyright law than his firm.

That’s not to say Emirates hasn’t paid at all for the music it plays – the airline just hasn’t paid everyone they owe, according to the executive, whose company works with UK’s leading collecting agency PRS to represent the rights to catalogues of major record labels. However, in an email exchange and a follow-up conversation with my editor, the executive stressed that Emirates is not resisting paying copyright holders, but again that the two sides interpret the situation differently.

The simple fact is that a lot of popular music has both a performer – the “recording artist” – and a publisher (the songwriter or composer). As is their due, both entities have rights and need to be paid when airlines play their work. An example is the chart-topping song, “Happy”, performed and recorded by Pharrell Williams but co-written by Williams with Heitor Pereira. Both Pharrell and Pereira are ASCAP members, meaning that if an airline features “Happy” on its IFE, both record label and publisher expect payment.

Emirates’ Brannelly stresses that the airline is absolutely not sitting on its hands. He notes, “Music rights collection agencies are established locally throughout the world, and we are not aware of any other business that has to deal with one established thousands of miles away in another continent. In September, we were verbally informed by the UK’s PRS that they were supporting one of two applications currently with the UAE authorities, to establish a local collection agency in the UAE. Emirates fully supports this and looks forward to this being completed. We are also in direct discussions with the major record labels at the moment related to music rights.”

As a general rule, says the executive with the Middle East music publisher, “performance rights are protected under the copyright laws of each territory and this places the onus on the airlines to ensure they are fully licensed irrespective of whether there is a collecting society in their home territory. National collecting societies make it easier to license, but the legal obligation to airlines remains even if licensing is more complex.”​

However, there are certainly different legal perspectives each side can take and it doesn’t necessarily equate to the same as ‘resisting to pay’ as much as each side taking a different legal position, which is not necessarily the same. “Music rights is clearly an important facet of all content available – not just audio, but including audio-visual content like films where music always plays an important component of the production,” adds the executive.

In this complex global licensing environment some airlines have considered attempting to get music directly from indie artists, so as to avoid tense negotiations with major record labels, but this might push airline execs back into the same negotiation room. Adele is signed to XL, which is one of the biggest independent record labels in the world. Somebody could say, “Well, we’re not going to use any of the stuff from Sony or Universal because we can’t negotiate with them, so we’re just going to do one deal with one independent record label, which is XL.” But, guess what, Adele is a songwriter and she’s published by Universal.

It’s increasingly clear that offering music on board will cost more money than some carriers will be willing to pay. Indeed, we’re hearing that some airlines are mulling forgoing offering audio altogether.

Interest on the part of indie artists to get their music on board at cost may also fade. Even CD Baby – the digital distributor of independent music that artist Macklemore used to release multiple recordings –  encourages artists to register with ASCAP and BMI. These collection agencies are inescapable. Why? Because, if artists don’t register, they just won’t get paid when their music is played.

RGN spoke with a major record label to see what it thinks about negotiating directly with airlines, and the potential that CSPs would be bypassed. RGN’s source said, “We want to work with airline partners to find the best way to get content out widely, as widely as possible, because that makes us more money. … We work with third parties to sub-license those terms out — we also work in one-to-one relationships as well. We’re open to both.”

Even so, during the recent APEX Asia conference, Lauri Rechardt, director of licensing for IFPL – the non-profit organization representing over 1,300 record companies around the world – stressed that the most effective way for airlines or their content service providers to properly license music from labels will be to work with those labels directly, as reported by the APEX media platform. “More than one attendee questioned the practicality of negotiating with dozens of labels. Rechardt admitted this would be difficult, but suggested that content providers be proactive and approach labels with proposals,” noted APEX.

Global Eagle Entertainment declined to provide comment for our story, in the wake of announcing a managed music service to be available on board Wi-Fi enabled aircraft at Southwest via Beats Music. This model presents one alternative to inflight music service options to date and serves as an example of what Ed Shapiro of Global Eagle predicted as a growing market opportunity back in September at the APEX Expo opening session: third party businesses paying airlines in order to reach their targeted and captive audience.

During its third quarter earnings conference call yesterday, Global Eagle announced it has brokered a settlement with Sony over alleged audio licensing abuses, though it did not discuss details of the settlement or financial terms. This indicates that there is a threshold at which the music labels are willing to accept to sanction a carrier or CSP as being in their good books when it comes to audio licensing.

[Additional reporting by Mary Kirby]

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