Indie Publishers’ TikTok License Is Up in April, Says NMPA Chief David Israelite

Each year during Grammy week, members of the Association of Independent Music Publishers‘ (AIMP) gather at Lawry’s steakhouse in Beverly Hills to hear a speech from David Israelite, president and CEO of the National Music Publishers’ Association (NMPA). In it, Israelite discussed the successes of the Music Modernization Act, the new UMG TikTok licensing feud, the viability of artificial intelligence regulation, and the more.

He started the presentation with slides showcasing the publishing revenue for 2022, divided by categories: performance (48.29% or $2.7 billion), mechanical (20.27% or $1.1 billion), synch (26.07% or $1.4 billion), and other (5.37% or $300 million). Synch, he says, is the fastest growing source of revenue.

Israelite focused much of his time on addressing the Music Modernization Act, which was passed about five years ago. “I don’t want you to forget is just how amazing the Music Modernization Act was and is for this industry,” he said. “I believe that it is the most important legislation in the history of the music business… You’re going to start to take for granted some of the things… but we had to fight and win to get this done.” He pointed to successes of the landmark law like the change in the rate standard to a willing seller, willing buyer model and its creation of the Mechanical Licensing Collective (The MLC).

Earlier this week, the MLC (and the digital licensee coordinator, DLC) began the process of its first-ever re-designation. This is a routine five-year reassessment of the organization and how well it is doing its job of administering the blanket mechanical license created by the MMA. As part of the re-designation process, songwriters, publishers and digital services are allowed to submit comments to the Copyright Office about the MLC’s performance. “Many of you will have a role in offering your opinions to the copyright office about that,” says Israelite. “The process needs to be respected and played out, but [The MLC] will be re-designated, and it is an absolute no brainer decision. There’s a lot about the MLC that I want to remind you about.”

Israelite then highlighted the organization’s “transparency,” the lack of administration fees for publishers and that the projection of 2023 revenue from streaming for recorded music ($6.3 billion) and publishing ($1.7 billion) “the split is the closest it has ever been,” attributing this, in part, to the MLC’s work.

He also addressed Grammy week’s biggest story: the UMG TikTok licensing standoff. “I’m only going to say two things about TikTok: the first is I think music is tremendously important to the business model of TikTok, and, secondly, I am just stating the fact that the NMPA model license, which many of you are using, with TikTok expires in April.” At that time, the NMPA can either re-up its model license with TikTok or walk away. If it were to pull a similar punch to what UMG has done, indie publishers could either negotiate with TikTok directly for their own license, or they could also walk away from the platform.

Later, in addressing artificial intelligence concerns, he pledged his support for the creation of a federal right of publicity, but he admitted “I want to be honest with you, it does not have a good chance.” Even though the music business is vying for its adoption, Israelite says that film and TV industry does not want it. “Within the copyright community we don’t agree… and guess who is bigger than music? Film and TV.”

Still, he believes there is merit in fighting for the proposed bill. “It might help with state legislative efforts and it raises the profile,” he said, but Israelite stated that his priority for AI regulation is to require transparency from AI companies and to keep records of how AI models are trained.