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Recap: Sony Accuses Rdio of Fraud, TuneCore Arrives in Germany, Streaming Hits New Milestone

Posted by Glen Sears | April 11, 2016 10:02 am | No Comments

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Story of the Week

Sony Music Files Fraud Lawsuit Against Rdio Executives Over Pandora Deal
In a new lawsuit, Sony Music alleges it was defrauded of millions when the on-demand service Rdio came to agreement with Pandora and subsequently filed for Chapter 11 bankruptcy last November.

The complaint states: “Unbeknownst to SME, at the same time that Rdio was negotiating the amendment to its Content Agreement with SME, it was simultaneously negotiating its deal with Pandora — under which Rdio would file for bankruptcy; Pandora would buy Rdio’s assets out of bankruptcy; defendant Bay (as part-owner, executive officer, and director of Rdio’s secured creditor) would expect to be first in line to receive proceeds of the Pandora deal; and SME (as an unsecured creditor) would receive pennies on the dollar for the amounts owed to it under the amended Content Agreement.”

Sony says that Rdio purposely kept its Pandora negotiations and impending bankruptcy secret so as to hold back Sony from demanding immediate payment of the $5.5 million and “inducing” extensions and a restructuring of payment obligations.
Read more on Billboard.

Top Music News Stories

TuneCore Launches In Germany. This marks the fifth international expansion for the company which added the UK and Australian markets in 2015.

Rhapsody, Napster Launch The Listener Network Designed To Make Music More Social. Powered by its patent-pending Music Intelligence Engine, The Listener Network connects Rhapsody and Napster users globally to form communities of music lovers with similar tastes to share and discover new music.

Streaming Hits 67.5 Million Subscribers But Identity Crisis Looms. “17% of music buyers account for 61% of spending…The question the music industry must now answer is how seriously does it want to treat the opportunity represented by these [remaining] consumers?”

iHeartMedia Gets More Time To Resolve Its Massive Debt Problems. Interest on the debt is a drag on earnings; in spite of generating $6.5 billion in revenues in 2015, iHeart paid $1.8 billion in interest expense and ended with a total net loss of $651 million.

Bandcamp Has Paid Artists $150M in 8 Years. Amidst the current streaming wars, Bandcamp has largely stayed above the fray without directly competing with the biggest players but serving as an alternative favored in large part by independent artists and labels.

3 Major Players That Could Disrupt The Streaming Music Industry. According to Hugh McIntyre of Forbes, Amazon, Samsung, and Soundcloud have enough leverage and resources to potentially be considered viable challengers.

SFX Bankruptcy Court Allocates $15 Million In Payments To Artists. The judge overseeing the SFX bankruptcy gave top tier EDM artists and their agents reason to celebrate this week with the allocation of $15 million to be paid to artists performing at the beleaguered promoter’s festivals this summer.

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