Business

Inside Track: Apple Music Is Clearing DJ Sets; Twitch Distances From Dance Music

David Guetta
Mauricio Santana/Getty Images

David Guetta performs live on stage during the first day of the Tomorrowland music festival at Parque Maeda Itu on April 21, 2016 in Sao Paulo, Brazil.

Edited by Dan Rys

Apple Music Clears the Way for DJ Mixes

For years, dance music DJs have enjoyed near-complete autonomy to play whatever music they want in nightclubs, even when that means dropping in samples of well-known songs or mixing live mashups of two recorded works. But DJ mixes -- which are notoriously complicated to deconstruct -- have encountered more scrutiny on digital services, where recorded playbacks can’t so easily be cleared for legal use.

Apple Music has been solving that issue by using Shazam-style technology and an internal clearing team to determine what tracks DJs are using in their mixes -- and then directly paying rights holders for those usages, Billboard has learned.

The new process, which Apple says it created in cooperation with major and independent labels, was set to pay out at least $2 million to DJs and suppliers in the 12 months ending on March 31, according to one person familiar with the matter as well as confidential Apple documents reviewed by Billboard.

Apple, which acquired audio-recognition mobile app Shazam in 2018, can now take small slices of an hour-long DJ mix and analyze them for music samples, explains one person who was briefed on the new clearing process. Apple Music is allowing mixes to go live after the streamer has identified at least 70% of the combined tracks, the person says.

The technology could have implications for platforms like Twitch, where on-demand playbacks of DJ sets are not covered by mechanical licenses and are often hard to dissect for possible copyright violations. And by helping to get rights holders paid properly, it could give DJs from indie labels more exposure for their creative compilations and live, often-improvised performances.

As Billboard previously reported, a number of music recognition technologies, including Pioneer’s KUVO, can already make the monitoring and reporting of DJ sets easier and more accurate. One of them, the Amsterdam-based DJ Monitor, functions like Shazam, identifying tracks within its library of nearly 80 million songs submitted to DJ Monitor by PROs -- and creating set lists with 93% accuracy, the company claims.

Such technology can help avoid collected fees ending up in the wrong hands. In 2016, the nonprofit Association for Electronic Music (AFEM) projected that dance music producers missed out on an estimated $120 million in royalties from live performances.

DJ mixes already utilizing Apple’s new clearing process include 41 sets from last year’s Tomorrowland: Around The World virtual live stream and 16 sets from Tomorrowland’s New Year’s Eve digital festival -- all of which are available on Apple Music. The streaming service has also used the process on mixes from Boiler Room and artist-supplied mixes and live sets from the likes of Marshmello and Paul Kalkbrenner. (Conspicuously absent from the Tomorrowland 2020 mixes were sets from headliners David Guetta and Tiësto.)

In an interview with Billboard last year, Tomorrowland co-founder Michiel Beers acknowledged the arrangement with Apple Music to license many of the sets from the virtual festival in July of 2020. Beers said the streamer also requested that the festival upload “some legendary Tomorrowland sets” from previous years. (Apple Music currently features Tomorrowland sets from 2016 from Guetta, Galantis, Steve Angello and the Chainsmokers, among others.)

Apple has established blanket deals with Sony Music, Warner Music and Universal Music, as well as indie label rights organization Merlin -- and is using its internal label- and artist-services company Platoon to enable the backend metadata collection and organization, says the person briefed on the program.

Last year, Apple created separate pools of $1 million each to pay suppliers and DJ fees, according to the documents describing the program. On a quarterly basis, Apple calculates the number of royalty-bearing streams of greater than 30 seconds for each of the tracks across all of the DJ’s mixes on Apple Music. Using that total, Apple determines the market share of the DJ and pays a pro-rata share of the DJ Pool.

To pay for the master recordings in the DJ mixes, Apple Music looks at each royalty-bearing play within a DJ mix and reports and pays the label or distributor as if they had delivered the track, the company says in the documents. —Alexei Barrionuevo

Twitch’s Dance Music Issue

As the coronavirus pandemic set in and in-person events shut down, Twitch became a magnet for music livestreams, particularly those by artists from the dance music community who were eager to stream sets that they’d previously been playing in clubs.

Sensing an opportunity, the Amazon-owned platform quickly began offering financial deals to various dance labels, brands and artists to make their content exclusive to the platform, rather than them also broadcasting it across other channels like Facebook and YouTube. One such content creator was offered $30,000 for six months of content, the person tells Billboard, estimating that various artists were being paid several hundred dollars per livestream hour.

Courtesy of Twitch

While such deals were not necessarily uniform across partnerships, a source with knowledge of the situation notes that the funding they did receive “basically covered our production costs for six months. It wasn’t like we made any money from it, which is a good deal for Twitch. Basically, they got us to make content for them for free.”

“I would argue they did very well out of it,” says the first source. “A lot of those collectives brought their fan base to the platform, which I’m sure aggressively grew Twitch’s music presence, because they didn’t really have a huge music presence prior to the pandemic. I think dance music was a huge force in driving it.”

Another source from the dance music scene agrees: “They were riding on this vision of easy content.”

Twitch’s music-related programming did indeed soar during the pandemic, with the platform’s music vertical logging 17 million hours watched in April 2020. These numbers accounted for a 385% jump year over year, according to a recent report by software developer StreamElements and analytics company Arsenal. The situation proved mutually beneficial for both Twitch and the dance-related entities who were delivering their fan bases to the platform and also growing these bases via Twitch’s native audience.

“For a while, for every stream we were on the front page of Twitch with 10,000 to 15,000 people watching,” says one artist whose dance label entered a partnership with Twitch at the beginning of the pandemic. “It was a crazy experience. There'd be our core community and then this influx of gamers.”

As the pandemic wanes, however, Twitch is now relegating the dance genre to its back pages. In late March, representatives from Twitch made calls to several dance-related affiliates, letting them know that the way they’d be featuring dance music on the site was changing.

“They were like, ‘Yeah, we’re not going to support dance music anymore because we’re negotiating with the majors and don’t want to be seen to be supporting DJ culture and dance music culture while we’re having these negotiations,’” says the source. “It sort of felt like they got what they needed from it and then were like, ‘Cool, we’ll sort of not support you anymore and use that as a negotiation tactic.’”

Dance music livestreams -- which are typically made up of hundreds of songs by various artists, with some DJs streaming for as many as 10 hours at a time -- are particularly tricky to license, given the sheer amount of music and the varied uses of it within a given set. And Twitch’s lack of music licenses with the major labels and publishers -- it does have agreements with performances rights organizations, including ASCAP and BMI -- has brought it squarely into the music biz’s crosshairs during the pandemic.

In the last several months, the RIAA and NMPA lodged tens of thousands of complaints and forced takedowns of infringing streams, essentially forcing the platform to the bargaining table to head off a revolt among its streamers.

Dance brands are finding workarounds to DMCA takedowns for Twitch streamers. Labels like Anjunabeats and Insomniac Music Group offer DMCA-safe playlists composed of hundreds of label songs that have been cleared and made available for use by the Twitch community, which fall under Twitch’s Soundtrack banner, though those label partners do not get paid for streams. Dance label Monstercat offers a subscription service that gives users access to thousands of cleared tracks from the Monstercat catalog for $7.49/month.

But such systems remain limited, and now, until Twitch comes to a licensing deal with the major labels and publishers, the genre that helped it become a big name in music circles will no longer be featured on the site’s main page or marquee carousel -- placement that typically ensures a major traffic bump to any livestream featured there.

Such carousel placement, says the source, is “where you’d get placed by Twitch if they wanted to support you. That’s how you get 20,000 people [tuning in at once]. You’re not getting that organically, unless maybe you’re a major gamer.”

In a November blog post, Twitch itself announced, “We are actively speaking with the major record labels about potential approaches to additional licenses that would be appropriate for the Twitch service. That said, the current constructs for licenses that the record labels have with other services (which typically take a cut of revenue from creators for payment to record labels) make less sense for Twitch.”

Within a week of Twitch’s calls to dance streamers, dance live streams had been relegated largely to the harder-to-locate “dance” and “electronic” tabs on its music page. The dance label streamer says that viewership for its streams has decreased since early April, but notes this drop is also likely a function of dance fans starting their return to live shows.

Twitch’s long term vision for the dance native content they were initially funding was likely for it to become self-sustainable -- with streamers earning enough money from the platform to pay for production costs themselves. But creators of this programming argue that it’s now harder to create such sustainability, when Twitch is no longer offering the placement that would allow them to bring in big viewership numbers.

Now, under pressure from the music business on one side and its own users on the other, Twitch is feeling the squeeze. The company did not return a request for comment. —Katie Bain