How to safely charge and store lithium drone batteries

By Signe Brewster

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Although flying a drone might sound like the biggest risk in operating one, dealing with the batteries is potentially more explosive. At the 100 hospital emergency rooms that report electronics-related injury cases to the US Consumer Product Safety Commission, more than 200 incidents (PDF) involving drone batteries, stemming from fire, smoke, and explosions, were recorded between 2012 and 2017. Not every drone-battery incident results in an injury, but each pilot and expert I interviewed had a story about an exploding or fiery lithium battery going off especially after it had repeatedly crashed to the ground inside a drone. “When the batteries go, it’s like a little bomb,” drone pilot and HubHobby employee Brandon Reinert said. “It’s usually pretty spectacular.”

The most common type of battery that powers racing and photography drones is lithium-polymer, or Li-po, a kind of lithium-ion battery that packs more energy storage into smaller spaces. To find out how to reduce the risk of a spectacular battery failure and get drone batteries to last longer and perform better, I spoke to battery and drone experts about the right way to charge, use, and care for them.

Charging

Although inexpensive batteries and chargers like these are tempting to buy, it’s safer to invest in higher-quality versions to avoid a fire. Charging outside can also cut down risk. Photo: Signe Brewster

Charging is the most likely time for a drone battery to catch fire, so concentrate the bulk of your safety efforts there. According to the CPSC, more than half of the drone-battery incidents documented at hospital emergency rooms occurred while the drone was charging. Be particularly careful when charging batteries from a brand you’re not familiar with. “I would just assume the cheaper ones are going to catch fire at some point,” battery expert and Cadex Electronics product line manager Greg Funk said. “I wouldn’t treat it like a cell phone and plug it in overnight and go upstairs to bed.”

If you can, charge your batteries outdoors. Instead, Funk suggested, the single safest way to charge a drone battery is to do it outdoors. That’s the only place you can be sure it isn’t near anything else that can catch fire. An exploding battery also gives off toxic gases, which can be dangerous in an enclosed space. Just be sure to keep the batteries out of the sun so they don’t overheat, and away from dried-out plants or other combustibles.

If you have to charge indoors, set up fire-containment measures just in case. Many pilots, like Brandon Reinert, choose to charge indoors and take fire-containment measures. If you can’t charge outdoors, you can use any of a few different setups. Simon Cheng and Megan Proulx, who host the YouTube series Til Drones Do Us Part, charge batteries inside cinder blocks and keep a bucket of sand nearby to extinguish flames. The team behind FliteTest, another YouTube series on drones, suggests similar methods that use cinder blocks or an unsealed ammo can. If you must charge indoors and you choose one of these methods, make sure the setup isn’t near anything else that can catch fire. Never seal a battery inside a fireproof container; all that energy needs to go somewhere, and sealing it off will just cause the container to explode. That’s why good fire containment focuses on aiming flames and gases in a safe direction and then getting sand or water (yes, as Funk told us, you can extinguish a battery fire with water) on it as fast as possible.

Storage

Store batteries at around half their capacity to give them a longer lifespan. Photo: Signe Brewster

Drain batteries before storing them in a safe, temperate place. Store the batteries at or near room temperature in a location where you would spot a potential fire. If you have a healthy battery that isn’t overheating and has no punctures or puffing, it should be safe to store, but spontaneous battery fires do happen. DJI, which sells well over half of all personal drones in use today, recommends that if you don’t plan to use a drone for 10 days or more, discharge its battery to 40 to 65 percent of its capacity. A partial discharge reduces stress on the battery and helps give it the longest possible life, according to Cadex testing. Check your battery manufacturer’s recommendations for discharging, which will prevent the battery from degrading.

Transport

Keep batteries from knocking around during transport, whether you’re driving to a park or flying on an airplane. Photo: Signe Brewster

Keep batteries padded and secured in transit. As long as you monitor, charge, and store your batteries appropriately, they should be okay to transport without any extreme safety measures. Keep them secured in a place where they won’t bump around too much. Our guide to the best drone accessories has the backpacks we like best for transporting drones and their batteries.

Pack your drone and its batteries in your carry-on baggage for a flight. If you plan to take a drone on an airplane, read up on the FAA’s current rules (PDF) for batteries. Generally you can pack a lithium battery into a checked bag if it’s installed in a drone, but you can’t check spare batteries. Regardless, it’s a good idea to keep a drone with you while you’re traveling, to avoid losing it—so count on keeping your batteries in your carry-on luggage.

Use

Drone-battery makers such as DJI usually recommend a flying-temperature range to protect batteries. Photo: Signe Brewster

Just as drone pilots have stories about charging batteries lighting on fire, many have stories about a crashed drone smoking or catching fire. Draining a battery too fast or crashing it into the ground inside a drone can cause the battery to fail dramatically—or simply to suffer from a shorter lifespan.

Avoid flying in extreme temperatures. To give batteries the longest life possible, follow the manufacturer’s instructions for flying, which should include a safe temperature range and a lowest acceptable discharge level. DJI, for example, recommends you fly drones in temperatures ranging from -10 °C to 40 °C (14 °F to 104 °F)—a range similar to that suggested by many other drone brands.

Don’t drain the battery too fast. Flying at full throttle for long periods—which can be preferable for some flying purposes, such as racing and agility—can also drain batteries so fast that they enter a dangerous process known as thermal runaway, where the materials inside the battery heat up and cause chemical reactions that prompt the battery to heat up even more.

Inspection

Dispose of a cracked or puffy battery at a qualified waste center. Photo: Signe Brewster

Before and after flying a drone or charging a battery, take a moment to inspect the battery. If your drone’s battery has any visible damage or is puffing out, you need to dispose of it. However, not every battery will show physical signs of damage. The pilots behind FliteTest recommend using an analyzer like the HobbyKing HK-010 to see a readout of the state of each cell in the battery and catch problems before they become more serious. A battery is marked with a voltage—say, 3.7 V—which should be consistent across all of its cells. Over time they might begin to get out of balance, something that some chargers can correct for to some extent. Cadex’s Greg Funk recommended retiring any batteries in which the cells are out of balance by more than 0.1 V (100 mV), because it’s a sign that some cells are weaker than others.

“These packs are prime candidates for overheating and possible fire as the individual cells can be taken outside their safe operating range during charge and discharge,” Funk said.

Disposing of a damaged battery

Not every battery-disposal center has the facilities to handle damaged batteries. Photo: Signe Brewster

Research your options for battery disposal. Look at a site such as Recycle Nation or your county’s website to find a drop-off center that accepts household hazardous waste. Check whether the collection center accepts batteries and then give the folks there a call to confirm that they will take a damaged battery—not all places will. Before turning the damaged battery in, be sure to discharge it as close to 0 percent as possible to decrease the chance of fire.

Picking a drone battery and charger

Although the steps we’ve outlined can help you avoid disaster, you can save yourself a lot of trouble by choosing the right batteries in the first place. On the Internet you can often find batteries and chargers for sale with little known about who makes them and who sells them, and some of these sketchy options carry an increased risk of fire. Batteries with lower-quality materials or corner-cutting designs are more likely to catch fire when crashed or when charged and discharged at high speed, as is common with drone batteries.

Look for safety certification and features. As tempting as it is to buy the cheapest batteries possible, Cadex’s Greg Funk told us he recommended looking for batteries that are IEC 62133 (or equivalent) and UN38.3 certified to verify they are safe to use. Not every battery listing says whether it has the certifications, and sometimes you have to go digging through a manufacturer’s website to find the certifications.

Battery makers sometimes strip away extra safety features—forgoing a hard-plastic shell in favor of a simple soft-plastic wrapping, for example—to make budget batteries weigh and cost less. We strongly recommend that you look for brands with such extra durability features or other noticeable safety features, even if they cost a little more.

Opt for a programmable battery charger. Just as it’s important to choose the right batteries, take care to choose the right charger. As drone pilot Oscar Liang writes, a programmable charger is worth the extra cost because it will allow you to perform more battery-management tasks, such as checking that the battery is charging and discharging as designed, and discharging it completely before storing it. Greg Funk also recommended using chargers made by the same manufacturer as the battery.

All drone batteries, from the cheapest no-name brands to more sophisticated ones made by drone manufacturers, can benefit from extra care to keep them effective and safe.

A note about DJI batteries

DJI’s batteries cost more but tend to have more safety features than cheaper drone batteries. Photo: Signe Brewster

DJI drones are designed to work with the company’s own “Intelligent Batteries.” These batteries are more expensive than batteries for more basic drones, and because there are no authorized third-party batteries for DJI models, it can feel like the company is trapping you into buying its fancy batteries. But its batteries do have some built-in safety features and functions that provide extra protection compared with more basic batteries in less expensive drones or, in some cases, unlicensed replacements. According to engineers on the battery team at DJI, the company’s batteries include measures such as the ability to prevent overcharge or over-discharge and the ability to monitor the battery’s remaining capacity. Still, DJI batteries will degrade if you treat them poorly. Refer to DJI’s battery care instructions and follow the same care guidelines you would for other drone batteries.

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There's a bug stopping some iPhone XS and XS Max phones from charging

The brand new iPhone XS and XS Max devices have a weird charging error.
The brand new iPhone XS and XS Max devices have a weird charging error.
Image: mashable

Some iPhone XS and iPhone XS Max owners are having trouble charging their devices.

Owners across the web are complaining that some of Apple’s latest iPhones are not charging properly when plugged in, MacRumors pointed out Saturday. The problem seems to occur when users plug in their phones while they are in sleep mode and the screens are off.

YouTuber Unbox Therapy was alerted to this problem and performed a test where he plugged in a bunch of iPhone XS and XS Max devices to test whether they charge while asleep, and found that several XS and XS Max phones didn’t start charging until after he woke up the phone. Not only that, one iPhone XS Max was stuck in sleep mode while plugged in and he couldn’t take the phone out of its frozen state until he unplugged it.

Here’s how it looks:

Unbox Therapy tested all of the phones using a regular wall charger and noted in the beginning of the video that he hasn’t had a problem with a wireless charging block.

The issue may stem from a security feature introduced before iOS 12 came out that prevented iPhones from connecting to devices like computers if they haven’t been unlocked recently. That way a phone can’t be compromised as easily.

This shouldn’t be occurring when plugging a phone into a wall charger.

Apple did not immediately respond to a request for comment or a question about whether a fix will be coming soon. Hopefully it’s a software issue that can be fixed with an update.

In the meantime, make sure your iPhone XS or XS Max is not in sleep mode when you plug it in or else you may not actually be charging it.

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In the Dead of Night, Trump Administration Moves Hundreds of Migrant Kids to a Desert Tent City

Photo: Joe Raedle (Getty Images)

To deal with the burgeoning number of undocumented migrant
children in federal custody, the Trump administration in recent weeks has been awakening
hundreds of kids in the middle of the night at homes and shelters across the
country. Then, they are placed on buses and sent
to a tent city in the desert
in Texas, near the Mexican border, The New York Times reported.

According to the Times:

Until now, most undocumented children being held by federal
immigration authorities had been housed in private foster homes or shelters,
sleeping two or three to a room. They received formal schooling and regular
visits with legal representatives assigned to their immigration cases.

But in the rows of sand-colored tents in Tornillo, Tex.,
children in groups of 20, separated by gender, sleep lined up in bunks. There
is no school: The children are given workbooks that they have no obligation to
complete. Access to legal services is limited.

The move is part of a “mass reshuffling” that has relocated
more than 1,600 kids to the desert tent city so far, the Times said. The camp can hold about 3,800 kids after a recent
expansion. While there, they can spend months waiting for the process to play
out on their immigration statuses. According to experts, protracted custody can
lead to anxiety, depression, violent outbursts, and escape attempts, the report
said.

The number of undocumented migrant children in federal
custody has
skyrocketed in the last year
, totaling about 13,000. That is a remarkable
increase from May 2017, when the number was only 2,400.

These children either were among the 2,500 forcibly
separated from their parents by the Trump administration’s “zero-tolerance”
policy
or they crossed the border alone. Many are seeking asylum. Normally,
the kids would be held in custody at shelters or foster homes until they can be
placed with a sponsor while awaiting the outcome of their immigration process.

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Part of the problem now is that the number of these
sponsors—who usually are family members or friends—is dramatically dropping due
to the threat by immigration authorities of detaining and deporting sponsors
when they come forward to claim the children.

As the Times noted,
in June officials announced that sponsors and other members of their household would have to submit fingerprints
and be subjected to background checks. That information will be shared with
immigration authorities.

According to CNN, federal immigration officials have
arrested dozens of sponsors
already. An Immigration and Customs Enforcement
official told CNN that 70% of these arrests were for immigration violations.
Last week, ICE official Matthew Albence testified to Congress that 80% of
sponsors or adult household members of sponsors are undocumented. In other
words, they have become a huge target for ICE, with undocumented kids as the bait.

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“[W]e are continuing to pursue
those individuals,” Albence said.

Meanwhile, sending kids to the desert in the middle of the
night has been a tough process on both the kids and those trying to help them.
Describing the scene at one shelter in the Midwest during such an event, the Times said:

Some staff members cried when they learned of the move, the
shelter worker said, fearing what was in store for the children who had been in
their care. Others tried to protest. But managers explained that tough choices
had to be made to deal with the overflowing population.

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Leah Chavla, a refugee advocate and attorney, told the
newspaper: “This cannot be the right solution.”

Read
the entire report
.

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Mission impossible: Can you regain access after Twitter lockout?

If you rely on Twitter for business or recreation, it’s time to worry. Although the days of frequent service outages have passed, users have a new cause for concern – getting locked out without explanation by Twitter itself.

Unfortunately, when this happens, you have no recourse, and there is no one to call. It’s bad news.

One of the top technology industry analysts in the world, Ray Wang, whom I have known personally for many years, is a victim of this situation. Wang is no newcomer to Twitter: his account has been active since 2008 and has 119,000 followers. He is also a blue-checked user, meaning Twitter has verified his identity as authentic.

Given his credentials, if this can happen to Ray, then you are also at risk.

The facts: Last Friday, Sept 28, the Ray Wang’s twitter account issued an odd tweet, with a link leading to a Bitcoin scam page supposedly run by Elon Musk. The account username was changed to “Elon.” I saw the tweet and it was obvious Ray’s account had been hacked.

The same day, Twitter locked the account, changed the name back to the pre-hacked state, and sent a form letter to Wang requesting verification to restore access. Ray responded quickly, but Twitter sent this note while continuing to deny access:

​Twitter response to request for user verification

Twitter response to request for user verification

Despite numerous emails, Twitter support eventually closed the ticket related to this issue:

​Twitter closes the case and user remains locked out​Twitter closes the case and user remains locked out

Twitter closes the case and user remains locked out

At this writing, after several days, Wang still cannot access his Twitter account.

What it means and what you should do

This problem happened because Wang no longer has access to the original email he used to sign up for Twitter in 2008. Twitter has not created processes to handle this kind of situation, so account access remains denied with no way to recover.

As we all know, Twitter has become a utility on which we rely. As a public company, we expect Twitter to deliver on their brand promise of ubiquitous communications and user-centric policies. They are no longer a tiny startup where this kind of fail is excusable.

The extent to which Twitter’s policies are incomplete and ill-formed is simply extraordinary. Of course, I understand that Twitter needs to ensure security and does not mistakenly verify an impostor, however, Wang made repeated offers to provide iron-clad methods to prove his identity.

I sent the following email to Twitter seeking a comment:

​Request for comment to Twitter​Request for comment to Twitter

Request for comment to Twitter

Unsurprisingly, the company did not respond to my request for comment.

Take these steps immediately, to ensure you are not a victim of Twitter’s policies:

  • Use a strong password and change it regularly
  • Enable two-factor authentication with a current phone number
  • Remove access from other applications
  • Keep your email address up-to-date. However, if your email no longer works, then you may already be out of luck.

Beyond those steps, frankly, there is not much you can do. Hard to believe, isn’t it?

Thumbnail image from Pixabay

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Brain-to-brain network allows three people to share their thoughts


iLexx via Getty Images

There have been experiments in direct brain-to-brain communication before, but that’s now extending to full-fledged networks. Researchers have developed a three-person brain network that lets participants send thoughts to each other — in this case, to play a Tetris-style game. It used familiar technology, but in a much more scalable format.

The network relied on a combination of electroencephalograms to record electrical activity and transcranial magnetic stimulation to send info. Only one person could both send and receive data, but they also couldn’t see the full screen — that was up to two people who could send thoughts to the receiver. Those two would issue commands to rotate a block by focusing their attention on LEDs flashing at different frequencies, modifying their brain signals. The receiver would not only know whether or not to change the block, but could even determine whether or not one of the senders was playing a trick.

This isn’t telepathy by any stretch. It requires external intervention, and can only send one “bit” of data at a time. The technology could scale up to a much larger number of people, though, and it suggests that you could eventually transmit considerably more complex thoughts across groups. That could easily create confusion (not to mention raise serious privacy issues), but it could be useful for both new forms of communication and help scientists learn about the inner workings of the brain.

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The best way to avoid killer robots and other dystopian uses for AI is to focus on all the good it can do for us, says tech guru Phil Libin

Evernote founder Phil Libin sitting on a couch on August 1, 2018 in the San Francisco headquarters of All Turtles, a startup incubator where he serves as CEO.All Turtles CEO Phil Libin said his days as a motorcyclist offer some useful advice for the development of artificial intelligence.Troy Wolverton/Business Insider

  • Artificial intelligence (AI) is developing rapidly and starting to be adopted widely.
  • The technology has the potential to transform society.
  • But it could lead to lots of negative outcomes, such as massive unemployment, and could be put to plenty of deleterious uses, such as large-scale violations of privacy.
  • The best way to avoid those harms would be to focus on creating products that use the technology in socially beneficial ways, said Phil Libin, best known as the founder of Evernote, whose new startup, All Turtles, incubates AI projects.

When it comes to how artificial-intelligence technology might affect society, there are a host of things to worry about, including the massive loss of jobs and killer robots.

But the best way to avoid such negative outcomes may be to ignore them, more or less.

That’s the advice of Phil Libin, CEO of All Turtles, a startup that focuses on turning AI-related ideas into commercial products and companies. In a recent conversation with Business Insider, Libin likened the situation to some advice he received when he was learning to ride a motorcycle.

His instructor taught him that if an accident happened in front of him while he was riding on the highway, such as a semi truck flipping over, the worst thing to do would be to stare at the truck. Instead, his instructor said, he should focus on the point he needed to get to to avoid colliding with the truck.

“If you look at what you’re trying to avoid, then you’re going to run into it,” said Libin, who previously founded Evernote. “You’ve got to look at where you want to be.”

The tech industry would do well to follow that admonition when it comes to developing artificial intelligence, he said.

Years in the making, AI is starting to progress rapidly. It’s being used by consumers in the form of intelligent assistants such as Amazon’s Alexa to answer trivia questions and make purchases. And it’s being used by corporations to help them make business decisions.

AI has the potential for good — and evil

Many observers think the technology could transform society in profound ways, and not necessarily for the better.

Indeed, there are some potentially dangerous and dystopian outcomes and uses of AI. It’s already starting to be used in China as part of a mass surveillance scheme. It could be used to track people basically from their birth on, collecting intimate insights into their every thought and desire. It could be used to perpetuate or worsen discrimination against particular people or groups. And it could be used to power terrifying new weapons.

Technologists and policy makers ought not ignore such potential uses of the technology, Libin said. They should be aware of them. But the best way to avoid them would be to concentrate on developing ways to use AI in socially beneficial ways, he said.

“There really is a flipped-over truck, and there’s all sorts of bad things that can happen. And we definitely need to work towards not hitting it,” Libin said. “But the best way to do that is to [say] … this is where we want to go. Here’s a vision of certain products that are like obviously good, and virtuous, and the world needs them, and they solve real problems, and let’s make those products.”

Indeed, that’s what he sees as a big part of All Turtles’ mission. One of the first projects the company helped incubate is a chatbot called Spot that is designed to make it easier for employees to document and report incidents of sexual harassment and discrimination. Another is Disco, a plug-in for collaboration software Slack that helps employers give timely positive feedback to workers.

The projects All Turtles works on “is all stuff that we should be able to, right from beginning, right by design, feel good about,” he said.

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Woman accidentally informs the U.S. that she's a terrorist via online travel form

Flying over the Atlantic.
Flying over the Atlantic.
Image: Getty Images/EyeEm

While planning a visit to the United States, a British woman unwittingly answered “Yes” to an online travel application query asking if she had ever engaged in terrorist activity.

Accordingly, Mandie Stevenson’s U.S. travel application was promptly denied, reports the BBC.

“At first I thought it was a bad dream and then I realised what I had done,” Stevenson said on the BBC radio show “Mornings with Stephen Jardine.”

A screenshot of the U.S. Department of Homeland Security ESTA homepage.

A screenshot of the U.S. Department of Homeland Security ESTA homepage.

Image: screenshot/department of homeland security

Stevenson had been applying for a travel application using the U.S. Department of Homeland Security’s Electronic System for Travel Authorization site, or ESTA, when she erred. Specifically, Stevenson was applying for a “visa waiver program,” wherein citizens of some countries can enter the U.S. without going through a more tedious visa process.

To rectify the digital mishap, Stevenson had to visit the U.S. embassy in London. There, after a series of interviews, U.S. authorities granted her a travel visa to visit the States, but she had to significantly alter her travel arrangements and fly at a later date. The embassy appointment cost 320 pounds ($416).

And so goes this latest instance of beware of what and where you click — especially on government websites. 

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Red Sox fan somehow hits Yankees player with his own home run ball

Yankees power hitter Giancarlo Stanton hit multiple home runs against the Boston Red Sox in Fenway Park this weekend.
Yankees power hitter Giancarlo Stanton hit multiple home runs against the Boston Red Sox in Fenway Park this weekend.
Image: Maddie Meyer / Getty Images

The Boston Red Sox should consider signing one of their fans that got ejected from Fenway Park on Saturday.

After New York Yankees power hitter Giancarlo Stanton blasted a home run to the top of Fenway Park’s infamous Green Monster at the top of the seventh inning on Saturday, a Red Sox fan took that ball and whipped it back onto the field in protest, hitting Stanton in the arm after a hop as he rounded second base. That’s a pretty impressive feat.

Stanton, who didn’t seem to be hurt in the slightest by the ball, was impressed himself, looking up at the fans on the Green Monster and giving them a smile and a salute as he trotted his way to home base to put the Yankees up 8-2 in the second game of the teams’ final series of the regular season. The Yankees ended up winning the game 8-5.

In a post-game interview, Stanton smiled when asked about getting hit by the ball, saying that he didn’t think the fan meant to hit him and noting that home run balls from opposing teams get thrown back onto the field at Yankee Stadium all the time.

In fact, it’s not unusual for Yankee Stadium to erupt in chants of “throw it back” after someone catches a ball that the opposing team hit into the outfield stands.

After the game, Stanton posted a video on Instagram that cut the footage of the Red Sox fan with footage from the 1993 movie Rookie of the Year, which was about a child who had an unnaturally strong throwing arm after getting a freak injury.

Whether the Red Sox fan meant to hit Stanton or not, Fenway Park security later told ESPN that the fan was ejected.

The final game between the Red Sox and Yankees of the 2018 regular season kicks off on Sunday before the respective no. 1 and no. 2 teams of the American League East division head into the playoffs.

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The war over music copyrights

VC firms haven’t been the only ones raising hundreds of millions of dollars to invest in a booming market. After 15+ years of being the last industry anyone wanted to invest in, the music industry is coming back, and money is flooding in to buy up the rights to popular songs.

As paid streaming subscriptions get mainstream adoption, the big music streaming services – namely Spotify, Apple Music, and Tencent Music, but also Pandora, Amazon Music, YouTube Music, Deezer, and others – have entered their prime. There are now over 51 million paid subscription accounts among music streaming services in the US. The music industry grew 8% last year globally to $17.3 billion, driven by a 41% increase in streaming revenue and 45% increase in paid streaming revenue.

The surge in music streaming means a surge in income for those who own the copyrights to songs, and the growth of entertainment in emerging markets, growing use in digital videos, and potential use of music in new content formats like VR only expand this further. Unsurprisingly, private equity firms, family offices, corporates, and pension funds want a piece of the action.

There are two general types of copyrights for a song: the publishing rights and the master rights. The musical composition of a song – the lyrics, melodies, etc. – comes from songwriters who own the publishing right (though generally they sign a publishing deal and their publisher gets ownership of it in addition to half the royalties). Meanwhile, the version of a song being performed comes from the recording artist who owns the master right (though usually they sign a record deal and the record label gets ownership of the masters and most of the royalties).

Popular songs are valuable to own because of all the royalties they collect: whenever the song is played on a streaming service, downloaded from iTunes, or covered on YouTube (a mechanical license), played over radio or in a grocery store (a performance license), played as soundtrack over a movie or TV show (a sync license), and for other uses. More royalty income from a song goes to the master owner since they took on more financial risk marketing it, but publishers collect royalties from some channels that master owners don’t (like radio play, for instance).

For a songwriter behind popular songs, these royalties form a predictable revenue stream that can amount to tens of thousands, hundreds of thousands, or even millions of dollars per year. Of course, most songs that are written or recorded don’t make any money: creating a track that breaks out in a crowded industry is hard. This scarcity – there are only so many thousands of popular musicians and a limited number of legendary artists whose music stays relevant for decades – means copyrights for successful musicians command a premium when they or their publisher decide to sell them.

Investing in streaming economics

In 2017, revenue from streaming services accounted for 38% of worldwide music industry revenue, finally overtaking revenue from traditional album sales and song downloads. Subscription streaming services hit a pivot point in gaining mainstream adoption, but they still have far to go. Goldman Sachs media sector analyst Lisa Yang predicted that by 2030, the global music industry will reach $41 billion in market size as the global streaming market multiplies in size to $34 billion (nearly all of it from paid subscriptions).

Merck Mercuriadis is seen on the left. (Photo by KMazur/WireImage for Conde Nast media group)

Earlier this week, I spoke with Merck Mercuriadis who has managed icons like Elton John, Guns N’ Roses, and Beyoncé and raised £200 million ($260 million) on the London Stock Exchange in June for an investment vehicle (Hipgnosis Songs) to acquire the catalogues of top songwriters. His plan is to raise and invest £1 billion over the next three to five years, arguing that the shift to passive consumers paying for music will take the industry to heights it has never seen before.

Indeed, streaming music is a paradigm shift from the past. With all the world’s music available in one interface for free (with ads) or for an affordable subscription (without ads), consumers no longer have to actively choose which specific songs to buy (or even which to download illegally).

With it all in front of them and all included in the price, people are listening to a broader range of music: they’re exploring more genres, discovering more musicians who aren’t stars on traditional radio, and going back to music from past decades. Consumers who weren’t previously buying a lot of music are now subscribing for $120 per year and spreading it across more artists.

Retail businesses are doing the same: through streaming offerings like Soundtrack Your Brand (which spun out of Spotify), they’re using commercial licenses – which are more expensive – to stream a broader array of music in stores rather than putting on the radio or playing the same few CDs.

Much of the music industry’s market growth is happening in China, India, Latin America, and emerging markets like Nigeria where subscription apps are replacing widespread music piracy or non-consumption. Tencent Music Entertainment, whose three streaming services have roughly 75% market share in China (a music market that expanded by 34% last year), is preparing for an IPO that could give it roughly the same $29 billion valuation Spotify received in its IPO in April. Meanwhile, music industry revenue from Latin America grew 18% last year.

Western music is infused in pop culture worldwide, so as these countries enter the streaming era they are monetizing hundreds of millions of additional listeners, through ad revenue at a minimum but increasingly through paid subscriptions as well.

At the talent management, publishing, and production firm Primary Wave, founder Larry Mestel is seeing emerging markets drive more revenue to his clients (like Smokey Robinson, Alice Cooper, Melissa Etheridge, and the estate of Bob Marley) as new fan bases engage with their music online. He raised a new $300 million fund (backed by Blackrock and other institutions) in 2016 to acquire rights in music catalogues amid a market he says has improved substantially due to growth opportunities stemming from the streaming model.

It’s not just streaming music platforms that are driving growth either. Streaming video has exploded, whether it’s from short YouTube videos or the growing number of shows on platforms like Hulu and Amazon Prime Video, and with that comes growing sync licensing of songs for their soundtracks; global sync licensing revenue was up 10% year-over-year in 2017 alone. Over the last year, Facebook signed licenses with every large publisher to cover use of song clips by its users in Instagram Stories and Facebook videos as well.

The inflating valuations of songs catalogues

Catalogues are commonly valued based on the “net publisher’s share,” which is the average amount of annual royalty money left over after paying out any percentages owed to others (like a partial stake in the royalties still held by the artist).

When Round Hill Music acquired Carlin for $245 million in January to gain ownership in the catalogues of Elvis Presley, James Brown, AC/DC, and others, it paid a 16x multiple on net publisher share, which is high but not uncommon in the current market when trading catalogues of legendary artists. Just three years ago, multiples anchored in the 10-12 range (or less for newer or smaller artists whose music has not yet shown the same longevity).

Avid Larizadeh Duggan left her role as a general partner at GV to become Chief Strategy & Business Officer of Kobalt

Kobalt, which raised $205 million from VC firms like GV and Balderton Capital to become a technology-centric publisher and label services powerhouse, has also become an active player in the space. Aside from its core operating business (where it stands out from traditional publishers and labels for not taking control of clients’ copyrights), it has raised two funds ($600M for the most recent one) to help institutional investors like the Railpen pension fund in the UK gain exposure to music copyrights as an asset class. In December, their fund acquired the catalogue of publisher SONGS Music Publishing for a reported $160M in a sale process against 13 other bidders looking to buy ownership in songs by Lorde, The Weeknd, and other young pop and hip-hop artists.

Too high a price?

The natural question to ask when there’s a rapid surge of money (and a corresponding surge in prices) in an asset class is whether there’s a bubble. After all, last year’s industry revenues were still only 68% of those in 1999 and the rate of growth will inevitably slow once streaming has captured the early majority of consumers.

But the fundamentals driving this capital are in line with a secular shift – it’s evident that music streaming still has a lot of room to grow in a few short years, especially as a large portion of the human population is just coming online (and doing so over mobile first). Plus as new content formats like augmented and virtual reality come to fruition, new categories of music sync licensing will inevitably accompany them for their soundtracks.

Each catalogue is its own case, of course. As Shamrock Capital managing director Jason Sklar emphasized to me, the rising tide isn’t lifting all boats equally. The streaming revolution appears to be disproportionately benefiting hip-hop, rap, and pop given the youth skew of streaming service users and the digital-native social media engagement of the artists in those genres.

Beyond the purchase price, the critical variable for evaluating a deal in this market is also the operational value a potential buyer can provide to the catalogue: their ability to actively promote songs from the past by pitching them to new TV shows, ad campaigns, and any number of other projects that will keep them culturally relevant. This is where strategic investors have an advantage over purely financial investors in publishing rights, especially when it comes to the longer tail of middle-tier artist’s whose music doesn’t naturally get the inbound demand that the Beatles or Prince catalogues do.

With strong long-term market growth and a wide range of possible niches and strategies, music copyrights are an asset class where we’ll see a number of major new players develop.

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These Fans Take Their Stormbreaker Replica Very Seriously

Even Thor is impressed.
Image: Marvel Studios

Thor’s lightning-wielding, Thanos-threatening axe is quite a weapon. And these fans take the process of making it reality very seriously.

The creators at The Hacksmith, in their Make It Real series, go beyond cosplay weapons and build detailed, real-life replica. Cool stuff, in other words. Now, they’re taking on Thor’s Stormbreaker from Avengers: Infinity War, and in the first part of a series on the weapon they show off the detailed process of creating the axe blade.

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From computer design files to plasma-cut steel, the process of forging Stormbreaker, while not involving any alien suns, is impressive, and a blast to watch. If you ever got a kick out of the Mythbusters building some wild prop, this is a video for you. Check it out below.

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