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BMG slams ‘industry consensus that turned a blind eye to a 15-year pay freeze for songwriters’ – Music Business Worldwide

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MBW readers will know that, last week, record labels and music publishers in the US reached an important settlement.

That settlement could – if accepted by the Copyright Royalty Board (CRB) – see mechanical royalties paid to publishers/songwriters in the States for the sale of physical goods and downloads increase from 9.1 cents per track to 12 cents per track.

Happy day.

However, more attentive MBW readers will know that this story isn’t one of simple jubilation.

As we laid out in a lengthy explainer the other week, the subject of songwriter pay for physical sales in the US being stuck at 9.1 cents per track is a complicated one, fraught with accusations of skullduggery from various sides.

(Crucial bit of context: when the  publisher/songwriter mechanical royalty for physical sales or downloads goes up, the record labels essentially have to pay it out of their revenues; if the same was to happen for streaming – a separate issue – then the streaming services, rather than the labels, would be the ones on the hook to pay it over.)

But let’s keep things simple: the record labels (via the RIAA) and the publishers (NMPA) initially submitted a settlement to the CRB during the current process that would have seen the 9.1 cents-per-track rate adhered to for another five years, spanning 2023-2027.

That settlement was then rejected by the CRB, leading to a new round of talks between these sides that ultimately led to the newly-proposed, 12 cents-per-track settlement proposal.

Yet the first settlement could only be rejected because of a handful of independent songwriters and their representatives.

Leading those songwriters was a sole independent artist, George Johnson, who independently litigated against (and continues to litigate against) the original NMPA/RIAA settlement in front of the CRB.

Following the trail that Johnson blazed, his fellow independent songwriters such as David Lowery, Helienne Lindvall, and Blake Morgan, who contributed written objections to the initial settlement via their attorney (and songwriter advocate), Chris Castle.

In addition, independent songwriter groups such as Music Creators North America (MCNA) – which says it represents “hundreds of thousands of songwriters, composers and lyricists” globally – also protested against the initial NMPA/RIAA settlement.

Worth noting: The 9.1 cents NMPA/RIAA settlement was also agreed by a group called the NSAI (Nashville Songwriters Association International, representing its songwriter members).

Now, following the outbreak of industry happiness that has entailed since the announcement of the new, improved settlement, BMG is refusing to join the party. At least, it’s not doing so without a little skepticism.

In fact, BMG has openly talked of its “regret” that it didn’t previously get behind the independent songwriters who stood against the initial 9.1 cents-per-track settlement.

You can read BMG’s full and surprising statement reacting to the new 12 cents-per-track settlement below.

“The entire songwriter community owes a huge debt of thanks to those who fought for this increase in the face of the opposition of major record companies and indifference of music publishers.

“Thanks to them, songwriters will get an effective 32% rate increase on the current 9.1 cents a track mechanical rate for physical products and downloads in the US.

“Without their belief and commitment, the RIAA (representing record companies) and the NMPA (representing music publishers) would not have been forced back to the negotiating table.

“Music companies have a duty to stand up for artists and songwriters. That is why BMG has put fairness at the heart of our agenda ever since we started business in 2008.

“We regret on this occasion that we did not speak out earlier and more robustly against an industry consensus that turned a blind eye to what has been a 15-year pay freeze for songwriters.”

“We regret on this occasion that we did not speak out earlier and more robustly against an industry consensus that turned a blind eye to what has been a 15-year pay freeze for songwriters.

“More broadly, this case again highlighted the dismissive approach of record companies toward songwriters who just a month ago entered a motion designed to exclude the vast majority of songwriters from benefiting from any rate increase.

“Thankfully, they have backed down. They could show further humility by following BMG’s example in abandoning unfair and anachronistic controlled composition deductions which are solely designed to depress songwriter earnings.

“This episode should be a wake-up call for all those in the industry who fail to match fine words about the value of music with a concern for the people who actually create it.”Music Business Worldwide

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Financial regulator cautions UK against rushing to create ‘crypto hub’

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The chair of Britain’s financial regulator has cautioned against a rush to add crypto markets to the agency’s remit after the government launched an ambitious bid to draw up new regulation and make the UK a crypto hub.

Charles Randell, chair of the Financial Conduct Authority, called for “realism” about how long it would take the regulator to prepare to supervise issuers and traders of “purely speculative crypto tokens”, and how much crypto firms need to improve before they could be officially authorised.

He also stressed the importance of the FCA’s independence at a time when some in the crypto industry have urged the government to press the regulator to be more accommodating of digital assets.

“It’s critical that . . . there are strong safeguards to ensure that all interests — not just the interests of people making money from pushing crypto products, but also the interests of the people whose savings will be put at risk — are heard,” Randell said, in a speech on Friday. “That requires a strong and independent financial conduct regulator.”

The FCA chair, who is expected to leave his post this spring, also said it was not clear how the regulator would pay for the “very significant costs” of adding crypto oversight to its responsibilities.

Randell’s comments follow a speech from economic minister to the Treasury John Glen in April, which laid out the government’s ambition to make the UK “the very best place in the world to start and scale crypto-companies”.

Glen said the government was determined to attract global crypto players to set up shop in the UK, a plan that would include new regulation and probably mean handing more powers to the FCA.

The bid to compete with rival crypto centres, such as Switzerland and Dubai, was met with scepticism by digital asset businesses. Many UK crypto entrepreneurs think the FCA is implacably opposed to digital assets, and crypto companies have clashed with the regulator over how it has implemented money laundering controls.

Randell said the regulator is open to innovation, including using distributed ledger technology and the potential for properly regulated stablecoins — crypto tokens linked to traditional assets like the US dollar — to “reduce costs and frictions” in the payments sector and shake up the industry.

However, Randell questioned the objective of overseeing more speculative cryptocurrencies. “Should people be encouraged to believe that these are investments, when they have no underlying value?” he said.

“When the price of Bitcoin can readily halve within six months, as it has done recently, and some other speculative crypto tokens have gone to zero?” he added.

Randell said he was opposed to including crypto firms under the financial services compensation scheme, which would mean the pot of money collected from regulated financial companies would be available to compensate their customers. The financial services industry as a whole should not be “exposed to the costs of failing crypto firms”, he noted.

The FCA chair, who has previously spoken about the need to control advertising for crypto, returned to the subject of endorsements by entertainment personalities.

“With celebrities as varied as Kim Kardashian and Larry David willing to take money to promote speculative crypto, how do we curb people’s enthusiasm to do something that may seriously harm their financial lives?” he said.

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U.S. natgas futures drop 5% on rising output, milder forecasts

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U.S. natural gas futures fell about 5% on Friday as output slowly rises and on

forecasts for milder weather and lower demand over the next two weeks than previously expected.

That decline comes despite a jump in the amount of gas flowing to U.S. liquefied natural gas (LNG) export

plants to a near seven-week high following maintenance outages at some Gulf Coast plants.

Although the weather is expected to turn milder next week, it’s still hot in many parts of the country

now.

In the spot market, next-day power at the PJM West hub and gas at the Dominion South hub

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in Pennsylvania jumped to their highest since the February freeze in 2021 as homes and

businesses crank up air conditioners to escape the heat.

High air conditioning use also boosted peak power demand in Texas to a record for the month of May on

Thursday. The state’s grid operator forecast demand would likely break that record peak on Friday.

U.S. front-month gas futures for June delivery fell 37.9 cents, or 4.6%, to $7.929 per million

British thermal units (mmBtu) at 9:17 a.m. EDT (1317 GMT).

Despite Friday’s decline, the contract was still up about 4% for the week after falling about 5% last

week.

Gas was trading around $28 per mmBtu in Europe and $22 in Asia. The U.S. contract

rose to a 13-year high near $9 on May 6.

U.S. futures lag far behind global prices because the United States is the world’s top producer, with all

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the gas it needs for domestic use while capacity constraints inhibit exports of more LNG.

Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 94.9 billion cubic

feet per day (bcfd) so far in May from 94.5 bcfd in April. That compares with a monthly record of 96.1 bcfd in

November 2021.

Refinitiv projected average U.S. gas demand, including exports, would hold near 89.7 bcfd this week and

next before sliding to 88.7 bcfd in two weeks.

The average amount of gas flowing to U.S. LNG export plants rose to 12.3 bcfd so far in May from 12.2 bcfd

in April. That compares with a monthly record of 12.9 bcfd in March. The United States can turn about 13.2

bcfd of gas into LNG.

On a daily basis, however, LNG feedgas was on track to hit a near seven-week high of 13.3 bcfd on Friday.

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Since the United States will not be able to produce much more LNG soon, it has worked with allies to

divert exports from elsewhere to Europe to help European Union (EU) countries and others break their

dependence on Russian gas after Russia’s Feb. 24 invasion of Ukraine.

Russian gas exports to Europe rose to around 8.1 bcfd on Thursday from about 7.8 bcfd on Wednesday on the

three mainlines into Germany: North Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the

Russia-Ukraine-Slovakia-Czech Republic-Germany route. That compares with an average of 11.9 bcfd in May 2021.

Gas stockpiles in Northwest Europe – Belgium, France, Germany and the Netherlands – were

about 14% below the five-year (2017-2021) average for this time of year, down from 39% below the five-year

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norm in mid-March, according to Refinitiv. Storage was currently about 37% of full capacity.

That is healthier than U.S. inventories, which were around 15% below their five-year norm, because high

European gas prices have kept LNG imports strong while Russia keeps supplying fuel via pipeline.

Week ended Week ended Year ago Five-year

May 20 May 13 May 20 average

(Forecast) (Actual) May 20

U.S. weekly natgas storage change (bcf): +95 +89 +109 +97

U.S. total natgas in storage (bcf): 1,827 1,732 2,199 2,139

U.S. total storage versus 5-year average -14.6% -15.2%

Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year

Last Year Average Average

2021 (2017-2021)

Henry Hub 7.94 8.31 2.96 3.73 2.89

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Title Transfer Facility (TTF) 28.05 27.88 8.88 16.04 7.49

Japan Korea Marker (JKM) 21.79 21.17 9.65 18.00 8.95

Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days

Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year

Norm Norm

U.S. GFS HDDs 36 31 43 49 44

U.S. GFS CDDs 128 132 86 96 102

U.S. GFS TDDs 164 163 129 145 146

Refinitiv U.S. Weekly GFS Supply and Demand Forecasts

Prior Week Current Week Next Week This Week Five-Year

Last Year Average For

Month

U.S. Supply (bcfd)

U.S. Lower 48 Dry Production 95.2 95.1 95.1 92.0 83.9

U.S. Imports from Canada 7.9 7.6 7.9 7.2 7.6

U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1

Total U.S. Supply 103.2 102.7 103.0 99.2 92.6

U.S. Demand (bcfd)

U.S. Exports to Canada 2.9 2.8 2.7 2.1 2.1

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U.S. Exports to Mexico 6.2 6.2 6.2 6.1 4.8

U.S. LNG Exports 12.2 12.2 13.1 10.5 5.1

U.S. Commercial 6.0 5.0 5.1 4.9 5.6

U.S. Residential 7.0 4.7 4.8 4.7 6.7

U.S. Power Plant 28.2 31.4 30.3 25.4 26.0

U.S. Industrial 21.0 20.7 20.9 21.4 20.9

U.S. Plant Fuel 4.7 4.7 4.7 4.7 4.6

U.S. Pipe Distribution 1.8 1.8 1.8 1.8 1.8

U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1

Total U.S. Consumption 69.0 68.5 67.7 63.0 65.7

Total U.S. Demand 90.3 89.6 89.7 81.7 77.7

U.S. weekly power generation percent by fuel – EIA

Week ended Week ended Week ended Week ended Week ended

May 20 May 13 May 6 Apr 29 Apr 22

Wind 11 15 13 16 16

Solar 4 4 4 4 4

Hydro 7 7 7 7 7

Other 2 2 2 2 2

Petroleum 0 0 0 0 0

Natural Gas 38 34 36 33 33

Coal 20 18 19 19 19

Nuclear 19 19 20 19 19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)

Hub Current Day Prior Day

Henry Hub 8.21 8.53

Transco Z6 New York 7.82 7.75

PG&E Citygate 9.78 9.98

Dominion South 7.62 7.55

Chicago Citygate 7.93 8.08

Algonquin Citygate 7.94 8.04

SoCal Citygate 8.19 8.68

Waha Hub 7.33 8.01

AECO 4.58 6.41

SNL U.S. Power Next-Day Prices ($ per megawatt-hour)

Hub Current Day

New England 70.00 78.75

PJM West 153.50 131.75

Ercot North 80.00 77.75

Mid C 18.25 19.19

Palo Verde 37.50 41.00

SP-15 51.25 53.00

(Reporting by Scott DiSavino; Editing by Kirsten Donovan)

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Russia says it fulfilled obligations on Eurobond coupons in full By Reuters

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© Reuters. FILE PHOTO: A sign is on display outside Russia’s Finance Ministry building in Moscow, Russia March 30, 2021. A sign reads: “Ministry of Finance of the Russian Federation”. REUTERS/Maxim Shemetov/File Photo

(Reuters) -Russia has fulfilled obligations on paying coupons on two Eurobond issues in full, the finance ministry said on Friday, days before the May 26 deadline for coupon payouts.

The prospect of a Russia sovereign default is in the spotlight again with a deadline for a U.S. licence allowing Moscow to make payments expiring on May 25 and $100 million in interest payments due shortly after.

The finance ministry said it channelled $71.25 million on coupon payout for dollar-denominated Eurobonds maturing in 2026 and 26.5 million euros ($28 million) on papers due in 2036.

The national settlement depository has received the funds the ministry channelled, it said. It was unclear it the depository would be able to channel the funds itself so they could reach foreign holders of Russian Eurobonds.

Finance Minister Anton Siluanov said earlier this week that Russia had enough money to service its Eurobonds and would make payments in roubles if the United States blocks other options and would not call itself in default.

After the current licence allowing Russia to service debt expires on May 25, Russia will still have almost $2 billion worth of external sovereign bond payments to make before the end of the year.

($1 = 0.9461 euros)

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