Nordic collecting societies Koda, Tono and Teosto have announced that they are winding down their joint venture digital licensing hub Polaris, reckoning that collaborating on the licensing of streaming services on a Nordic scale “is no longer sufficient”.
“In light of ongoing market developments”, explains Koda chief Gorm Arildsen, “Polaris is no longer the most suitable solution moving forward. As market conditions continue to evolve, we are now focused on establishing new solutions that will enable strong agreements for our members – solutions designed to effectively address emerging demands and market developments in the years ahead”.
Polaris had licensing deals with music services like Spotify, Apple Music and Tidal, and social media platforms like TikTok, Instagram and YouTube. Current deals will remain in force until they reach completion, with plans to wind down Polaris in “an orderly fashion” early next year.
The decision to close Polaris also means an end to the hub’s relationship with NMP, the royalty admin company owned by UK collecting society PRS and the Nordic societies via their mechanical rights JV NCB. It provided admin and invoicing services in connection with Polaris’s digital deals.
When it comes to licensing song rights, digital services have relationships with both music publishers and collecting societies. With continental European repertoire, the societies generally handle everything, passing the royalties they receive onto both writers and publishers.
Digital licensing is more complex than when societies issue licences to broadcasters and venues, because it involves the societies negotiating multi-territory deals with big global platforms that drive a very hard bargain.
Plus there’s a lot of admin to be done even once a deal is in place, with each society having to process usage data, identify when its works have been streamed, claim the money that is due and then report to its members.
All of that means there is a benefit to licensing entities having a certain amount of scale. Some societies outsource some or all of the work to other bigger societies or to third party companies, or to licensing hubs that bring together multiple societies.
The other Nordic society, Sweden’s STIM, is a partner in one of the big European licensing hubs – ICE – along with PRS and German society GEMA. It provides both licensing and administration services to both societies and publishers. Swiss society SUISA also runs a joint venture licensing hub called MINT with US performing rights organisation SESAC.
Koda, Tono and Teosto opted not to follow STIM into the ICE hub, initially collaborating on digital licensing through an informal alliance before setting up Polaris as its own licensing hub in 2019. All three societies are now reviewing their options, though their statements suggest they might be looking to connect with bigger licensing hubs in one way or another.
