A Monumental Change to Music Publishing: Sony acquires Kobalt’s AWAL and Neighbouring Rights
The job of a modern day music publisher is to sign artists and songwriters and push them to different entertainment outlets. These may include movie studios, TV shows/networks and more. Publishers sell licenses to these organizations in exchange for use of the artist's music in a specific piece of content. However, it didn't start this way. The business of music publishing goes back into the 1800’s Tin Pan Alley Era. Composers in the “Tin Pan Alley” neighborhood of New York City, would gather to write sheet music of popular songs for sale/distribution. It evolved over time into the service it is known for today. It’s safe to say that music publishing is one of the most lucrative and long standing of the music industry, but lately, since COVID-19 rocked the entire industry, it has been running into some trouble.
There are a few reasons for these major changes. First being the COVID-19 Pandemic. With restrictions hitting many states over the past year, there just hasn't been content being created for traditional viewing such as in movie theaters. There has also been a lack of new television shows. Second, the entrance of new television streaming services such as Disney+ and Apple TV+. Finally, expansion of content from Netflix and Hulu. These factors have left the publishing departments at many major labels in decline because the streaming services already have their own Publishing departments for their original content.
Social media data has been showing the same trend, as an uptick in advertisements about how to get publishing and licensing deals have become more prevalent. Artists themselves have also been reporting that they have been having trouble contacting and gaining attention from major publishing divisions such as those at Sony Music Entertainment, Warner Music Group and Universal Music Group. After noticing this trend, the EAR News team did some investigating. Publishers and A&R’s also gave some insight on their perspective on the situation. Anonymously, employees of some reputable labels that left stated they felt underappreciated, overworked and underpaid. It seems as of now that publishing offices at many major labels have been severely downsized or shut down altogether.
This major turning point in the music industry comes at a coincidental time (or perhaps not?) As of May 19th 2021, Sony Music Entertainment has announced its acquisition of AWAL and Neighbouring Rights from Kobalt Music Group Ltd in the United Kingdom for a sum of $430 Million. While AWAL will join Sony’s independent network of online music distributors alongside The Orchard, Neighbouring Rights will begin a new chapter for the major label as under Kobalt it was used as a Performing Rights Organization (PRO), collecting royalties and other money on behalf of independent artists. The deal is not closed yet, as the United Kingdom’s Competition and Markets Authority is launching an investigation into the double acquisition. SME has released a statement saying “They continue to work closely with the CMA to secure a positive outcome later this year.”
The music industry as we know it is changing vastly every day and with the fall of major label publishing, while it presents another hurdle for artists to overcome, it will be an instrumental step forward in artists becoming more independent, a trend that industry analysts have been seeing over the past few years. As the world begins to open back up in a more pre-pandemic state, we will see these major companies hiring on new staff and reopening once again.