Vivendi today (August 31) comes out of its corporate ‘quiet period’ to announce its quarterly results.
The publicly-traded French company will have the wind in its sails – especially after Goldman Sachs valued Universal Music Group at over $23bn.
But Vivendi’s recent relationship with the music business certainly hasn’t been harmonious in every respect.
As well as UMG, Vivendi owns France’s biggest commercial broadcaster, Canal Plus.
And right now, Canal Plus is flat out refusing to pay French collection/licensing society SACEM any royalties for authors’ rights.
Yes, you read that right.
It would be a pretty scandalous situation at the best of times – but this tale contains some extra corporate spice.
Think about this: songwriters signed to Vivendi’s Universal Music Publishing Group currently aren’t being paid for the use of their music on one of France’s most lucrative TV networks.
It’s therefore an ideal time to ask: why is Vivendi’s Canal Plus refusing to hand songwriters their due royalties in France… as Vivendi’s Universal Music Group thrives from copyright?
Bear in mind that in calendar 2016, Universal Music Group turned over no less than €725m ($760m) from global licensing and related income.
It was a record year for Sir Lucian Grainge’s firm.
Yet what’s good for Universal’s bottom line clearly isn’t so good for Canal Plus’s.
SACEM, as you’d expect, is completely up in arms.
The PRO has told its members (which include some of the world’s biggest and best known songwriters) that the last pay-through from Canal Plus came for Q3 2016.
“Authors’ rights are distributed twice a year; those for broadcasts in the second half of 2016 were to be distributed on 5 July, according to SACEM’s distribution schedule,” it recently said in a note.
“Because of the position taken by Canal+, we were able to distribute royalties only for broadcasts in the 3rd quarter 2016 and none were distributed for works broadcast in the 4th quarter of 2016, since we received no payment for this period.”
It further clarified: “For free Canal+ channels and the CanalSat offer, SACEM received royalties only for the first three quarters of 2016. It must be remembered, however, that these channels also have income from other [third-party] distributors, who paid what they owed for the entire year of 2016.
“This means that the impact of the Canal+ Group’s non-payment for the 4th quarter of 2016 will be less visible in distributions for broadcasts on cable, satellite, ADSL and DTT channels.”
So what’s the outcome going to be?
SACEM isn’t messing about.
It claims that it held “constructive dialogue… for several weeks’ in order to convince Canal Plus ‘to respect their contractual obligations”.
It further warns: “In these circumstances, however, we have no other choice than to resort to all appropriate measures to preserve royalty payments for their members, including going to court.”
An intriguing bit of subtext: 2016 was the first year in Vivendi history that UMG’s revenues surpassed those of Canal Plus.
Music Business Worldwide