Jim Routh, VP of Business Development at Smule, a leading mobile social app company, has over 18-years experience in business development and product management in software, web services, mobile ventures. He is responsible for managing all Smule's deal flows with studios, agencies, artists, music labels and publishera, as well overseeing all content and music licensing relationships.
In the following guest post, Routh responds to comments made by David Israelite, the National Music Publishers' Assn. president/CEO, made at his organization's annual meeting calling for legislative reform to fix the antiquated of system of mechanical and synchronization rights licensing.
Blanket Licensing Legislation Not the Answer to Publishing Quandary
As a mobile app development firm specializing in music-centric apps, Smule has partnered with dozens of music publishers and labels to acquire the rights we need to the content that we use to create new mobile-social music experiences. So it was with great interest that I read Ed Christman's Billboard.biz article, "President of NMPA Calls for Blanket Licensing of Mechanical and Sync Rights."
As a technology entrepreneur who's spent the last two years navigating the music licensing labyrinth, I can tell you first hand that it can be a daunting task for the uninitiated. So when I read National Music Publishers Association's CEO David Israelite's quote about the music publishing process being broken, I found myself nodding as I read. There are definitely things in the music licensing process that need to be improved upon - perhaps, must be improved upon-for the good of the industry.
The surprise for me was that Isrealite suggested that legislation is the preferred path to solving the problem. And that the process might be improved by adding a layer of designated licensing agents to act on behalf of the publishers. I think he's spot-on in his assertion that the complexities of music licensing might cause the industry to lose out on creative business models and that some change is needed, but legislation and the addition of agents managing the process is not the answer.
A publisher needs to balance the rights and wishes of its individual artists and writers, with the goal of optimizing revenue. They need to know their constituents, what their comfort levels are, how they are likely to respond to a given idea, and how to craft a deal to achieves their goals. A good publisher knows how to do this and does it well - whether it is one of the majors or a small independent publisher.
At the same time a publisher needs to do their best to try and discern which technologies, and in some cases which technology companies, they need to align with to best reach it's goals and those of it's artists and writers. Most of the publishers I work with do a great job of managing this complex balancing act.
Legislators and licensing agents would be too far removed from the business to ever be effective in this role. They would likely concoct a one-size-fits-all solution that would in effect fit no one well. The effort would take years to craft and implement, effectively stalling the real progress that is needed. Progress that is well within the current capabilities of the industry if the right people can be motivated and empowered.
So what can the music publishing industry do to move the ball forward? To start, it needs to follow through and deliver on the much talked about global repertoire database (GRD). For an industry whose principle asset is information and rights management, it is critical that the GRD get deployed and adopted as soon as practicable. Accelerating the deployment of the GRD should be a priority. This alone will increase efficiencies and reduce much of the friction in the licensing process.
Item two on my wish list would be a set of standard industry licensing terms and forms that could be used for standard licensing scenarios. Changes in technology and the marketplace will always generate non-standard use cases which will require custom agreements, but there's no reason a licensee should have to review and negotiate 16 different agreements from 16 publishers for a licensing use case that is well understood. More business, fewer lawyers, would represent progress.
Third on my list, and perhaps the most important, is for publishers to empower the people within their organizations who understand the business to make decisions. This is a core principle of the entrepreneurial culture - hire good people and empower them to do great things. The good people are in place in the publishing industry - I work with them every day. But frequently they answer to a committee or committees who can take months to make a decision, costing time and money in the form of lost opportunity. You've hired good people, time to empower them to do great things.
If the music industry can make progress in these three areas it will go a long way towards knocking out two of the "three big challenges" Isrealite set forth. There is no need to wait on change to be legislated because the kind of change needed, is not the kind that needs to be legislated.
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