Pioneer's New Black Box Will Monetize DJs' Club Sets

Is Pioneer’s KUVO finally a solution for decades of inaccurate (or nonexistent) nightclub royalty payments?

A solution to the long-contested issue of nightclub performance royalties may come in the form of a small black box. Leading audio-equipment manufacturer Pioneer has developed a product -- KUVO, a play on kumo, the Japanese word for cloud -- that is plugged into a mixer and tracks each song played through cloud-based technology. And the company, supported by the newly formed Association for Electronic Music, will share the data with performing rights organizations for free.

The move is part of AFEM’s “Get Played, Get Paid” campaign, which seeks to steer performance royalties into the hands of songwriters and producers by streamlining the methods used by rights organizations to track music played in nightclubs. AFEM estimates that about $160 million worldwide was lost due to misallocated performance royalties in 2013.

“For 25 years, the problem has been a lack of granular data,” says AFEM CEO Mark Lawrence, previously of the United Kingdom’s Performing Rights Society. “Now, we have that.”

Mark Grotefeld, Pioneer’s head of marketing in Europe, stresses that talks with ASCAP and BMI are in the early stages, but notes that Australia’s performing rights association has signed on and will offer boxes to clubs with membership. The U.K. and Swedish rights societies also are in talks to use KUVO data.

Pioneer builds around 80 percent of the world’s DJ booths, so the decision to give the data away wasn’t easy, says Grotefeld.

“The immediate default position was, ‘Data is money. Let’s monetize this,’ ” he says, “but the performing rights societies aren’t our customers; the producers and clubs are. We’re bringing more money to producers and ultimately our business.”

In recent months, Pioneer has been testing the technology in 500 clubs around the world. It will continue to provide boxes to clubs for free so long as the program is financially sustainable, says Grotefeld.

For the initiative to work, the fiercely independent dance-music industry will have to formalize, with producers and songwriters joining performing rights societies and registering their songs. AFEM estimates that only three of the top 10 songs on online dance retailer Beatport’s chart are registered with rights organizations. Nightclubs, too, will have to acquire licenses.

“DJs will have to start treating what they’re doing like a business,” says Gordon Firemark, a Los Angeles entertainment lawyer, “if they expect to get paid for it.”

This article first appeared in the Oct. 25 issue of Billboard.

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