Panel: Building Efficiency & Transparency In Royalty Reporting

Moderator:
Mark Isherwood, Rightscomm

Panelists:
Matt DeFilippis, ASCAP
Larry Miller, MediaNet
Daniel Susla, TouchTunes
Les Watkins, Music Reports Inc.
Rob Weitzner, Consolidated Independent

 

On the second day of NARM's Music Biz, being held in Los Angeles through May 9, delegates continued to marvel that it took 15-years worth of digital distribution evolution to get a conference on metadata -- still one of the main issues holding back further growth for the music industry.

If royalties have been flowing unhindered from labels and radio to publishers since copyright was invented, why all of a sudden is there a big fuss around the issue, asked Rightscom co-founder Mark Isherwood, who moderated a panel on efficiency and transparency in royalty reporting.

A big issue in the U.S. is the process involved in licensing streaming music since it consists of both mechanical rights and performance rights.  While music users can get performance licenses directly from the three U.S. collection societies, they have to rely on individual labels to supply proper publisher data to get the proper licenses and pay publishers accordingly. In most of the rest of the world, the collection societies do all the licensing.

Since the publisher data is often inconsistent if not wrong from labels, a whole cottage industry have sprung up to help music users to properly license and pay royalties on reports with players like Music Reports Inc., MediaNet and Harry Fox Agency's Slingshot operation,

The biggest challenge of any organization or music service in trying to pay royalties is the quality of the data supplied by content owners," said Consolidated Independent North American head Rob Weitzner. "Our challenge is no garbage in so we don't have to worry about garbage out," he said. "We insure quality of data so it can be tracked in the marketplace.

Music Reports Inc. senior VP of business affairs and business development Les Watkins says his company eliminates those headaches for music services and the film and television industry, which hire MRI to license and pay royalties to content owners. "We consider ourselves the problem solvers," he said.

It is even difficult for the performance rights organizations to ensure they get paid properly and in turn make proper payments to songwriters and publishers. If it plays in the digital environment, it has to be discoverable and payable, which is a noble ambition that requires ASCAP to traverse a lot of hurdles to find and make a payout on every single performance, said ASCAP VP of new media technology Matt DeFilippis.

While ASCAP will require content owners to supply data in a certain format and increasingly provide audio with each song registration, songs is the easy part of the equation. "It’s the musical cues used in films and television that is the difficult part," DeFilippis said. "They have all kinds of musical cues and you could have happy cue No. 1 through happy cue No. 49,999."

Nowadays, ASCAP relies heavily on music fingerprinting and monitoring of services, radio and television as supplied by Media Monitors, Soundmouse and Competitrack.

"In the old world, we did cumbersome things including teams of people wearing headphones and listening to thousands of hours of television and radio programming," but had to use proxies for what was playing in places like bars and clubs, DeFilippis said. Now, ASCAP is very reliant on technology to insure proper reporting and payments.

But MRI’s Watkins said that even though his company ties data and technology together wherever it can, "we still have about 30 people doing copyright research," however they can through the internet and contacting people. "You still need the human element," he said.

One way of insuring better data from the labels, according to Weitzner, whose  Consolidated Independent acts as a digital pipeline company from indie labels and indie aggregators to music services, is to require the labels to supply "better quality metadata.”  "We began to address that by letting our clients know through flags when something is wrong and it needs to be fixed," he said. "When we began to block content so that it wasn't serviced to digital services, we started to get better quality metadata."

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