John Josephson, CEO of SESAC, Discusses The PRO’s Acquisition Of The Harry Fox Agency And Other Developments

Performing rights organization SESAC recently announced a major acquisition—the purchase of The Harry Fox Agency (HFA), which has long been known as the leading U.S. mechanical rights organization. This is a transformative move which will enable SESAC to offer singular licenses for the works of its affiliated songwriters & publishers, combining both performance and mechanical rights collection. This allows SESAC to drive greater efficiency in licensing for music users, as well as enhanced value for music creators and publishers.

The acquisition was announced by John Josephson, Chairman & CEO of SESAC, who has been a director of the company since 1992. We are pleased to do a new Q&A interview with Josephson, to ask him about the acquisition of HFA and other new developments at SESAC.

Before we start this interview, here is some background information on the Harry Fox Agency and SESAC. For many decades, HFA has collected mechanical royalties on behalf of both major and independent music publishing companies. Through its massive network of commercial relationships with over 48,000 music publishers, HFA has created one of the largest and most comprehensive databases of musical works in the world, including metadata on over 6.7 million compositions and 21.4 million unique master recordings. HFA also has its Slingshot platform, which provides royalty tracking, administration and payment services and solutions to virtually every digital music service.

SESAC is a leading performing rights organization (PRO), which is the only for-profit PRO with significant scale. SESAC has long represented such legendary singer/songwriters as Bob Dylan and Neil Diamond. In addition, SESAC now represents such renowned songwriters as Mariah Carey, Zac Brown, Kesha, Charli XCX, Mumford & Sons, Hillary Scott (of Lady Antebellum), Nikki Sixx (of Motley Crue),Thin Lizzy, the Avett Brothers, James Napier, Teddy Riley, Bryan-Michael Cox, Billy Mann, Shawn Stockman (of Boyz II Men), Nate “Danja” Hills, Swiss Beatz, Jerry Cantrell (of Alice In Chains) and many others.

Here is the Q&A interview with John Josephson:

DK: Congratulations on SESAC’s recent acquisition of the Harry Fox Agency. Does this acquisition mark SESAC’s entry into mechanical rights collection?

Josephson: Yes. This acquisition positions SESAC as the only music rights organization in the United States with the ability to offer singular licenses for the works of its affiliated writers and publishers by allowing us to aggregate both performance and mechanical rights.

DK: Is the goal to offer your clients a singular license for both mechanical and performance rights, thus making SESAC a “one-stop” provider for music publishers & songwriters?

Josephson: Yes. When I came aboard last year, SESAC wanted to pursue a simplified and more efficient, multi-right, multi-territory licensing model. What excites us about this transaction is the ability it gives us to begin making the licensing process both simpler, more efficient and transparent, and in so doing create additional value for music creators and publishers, as well as the digital service platforms.

DK: Will you be keeping the name Harry Fox Agency, or will HFA be merged into SESAC?

Josephson: It’s too early to tell. We are still waiting for final board approval by the NMPA members.

DK: If a music publisher is already signed with HFA, will SESAC be notifying each publisher about the transition?

Josephson: As part of the transition, HFA has notified their membership on the major points of the acquisition.

DK: If a music publisher is affiliated with ASCAP or BMI for the collection of performance income, can they sign with SESAC strictly for mechanical royalty collection?

Josephson: Publishers affiliated with other PROs will still be able to utilize the services for mechanical royalty collection. We anticipate the process to be intuitive and user-friendly for both affiliated and non-affiliated publishers.

DK: Does SESAC also handle synchronization licensing for its clients?

Josephson: SESAC has a subsidiary called Rumblefish. SESAC plans to introduce an expanded suite of services for publishers on the HFA platform including micro-licensing on social video networks, automated license verification with RADKey™ and premium YouTube Content ID administration services via the Rumblefish subsidiary. These services will provide publishers on the HFA platform with enhanced access to emerging high-growth revenue streams and market-leading licensing technologies.

DK: During the past year, SESAC has signed several top artists including Mariah Carey, Zac Brown, Charli XCX and Nikki Sixx. Combined with the purchase of HFA, is SESAC in the midst of a major expansion?

Josephson: The acquisitions and signings are all part of our strategy to be more efficient and offer a more simplified model to meet the developing needs of writers, composers, publishers, music users, distributors, and other stakeholders. It’s important to note that the HFA acquisition signals growth in our connectivity – through its unparalleled network of commercial relationships with over 48,000 music publishers, HFA has created one of the largest and most comprehensive databases of musical works in the world, including metadata on over 6.7 million compositions and 21.4 million unique master recordings.

SESAC will integrate this database with its own and, utilizing SESAC’s state of the art information technology and data systems, create the leading rights tracking, royalty accounting and payment platform in the music industry.

DK: In addition to the HFA purchase, what are the other new developments at SESAC? Can you tell us about Rumblefish?

Josephson: A key element of SESAC’s strategy was the acquisition of a controlling interest in Rumblefish, a leading music technology provider and a market leader in music micro-licensing, YouTube monetization and license verification. As mentioned, SESAC plans to introduce an expanded suite of services for publishers on the HFA platform including micro-licensing on social video networks, automated license verification with RADKey™ and premium YouTube Content ID administration services via its Rumblefish subsidiary.

DK: Regarding royalties from the music streaming companies, do you feel that SESAC is currently able to collect a fair rate for its publishers & songwriters? Or are you lobbying to secure a higher rate?

Josephson: One of SESAC’s main priorities for our affiliates is to be able to create and be compensated in the most timely, efficient and accurate way possible. As a for-profit music rights organization, SESAC is always doing everything within our means to secure the best rates for our affiliates. We know streaming services represent the future growth opportunity of the music industry, but the licensing is fragmented across both multiple types of rights, as well as multiple territories.  The result is a complex, opaque and inefficient licensing regime that fails to deliver the best outcomes for creators and publishers, as well as end users. The HFA deal allows us to offer one license in an effort to achieve fair market value.

DK: Overall, what do you think of the current state of the music business, and how can SESAC help publishers & songwriters earn more income?

Josephson: It’s a very interesting time. Our fellow PROs are tied up in an arduous process to change decades-old consent decrees. As a for-profit rights organization, SESAC has never had this issue. We have always been able to negotiate the best value for our affiliates.

We’ve shown tremendous growth at SESAC and really honed in our business strategy to be efficient and simplified. SESAC has always been a leader in the latest technology in the industry. We’ve always been driven to embrace new and innovative ways to assist our affiliates.  SESAC was the first to utilize BDS technology to track and monitor performances.  And we are still the ONLY music rights organization to pay monthly royalties.  HFA and its deep assets in tech and data services align with our strategy. HFA’s Slingshot platform provides royalty tracking, administration and payment services and solutions to virtually every digital music service of scale in the market today.  SESAC plans to invest heavily in this segment of HFA’s business in order to create a best of breed suite of data and administration services to digital service providers.