The new law establishes a central U.S. mechanical licensing collective (MLC) that will issue blanket licenses, oversee selection of the vendor for the development of the aforementioned database, receive reports of usage, and collect and issue payments to publishers and songwriters under Section 115 of U.S. copyright law. The MMA also allows for other private companies to administer direct deals for mechanical rights. Globally, there are hundreds of entities that perform similar rights management and royalty distribution functions for a wide range of uses.
Music rights are undergoing constant change of ownership and approximately 25,000 new songs are released every day, with parties performing duplicative tasks to ingest, clean, and maintain metadata throughout the globe. A set of open standards from which rights ownership data can be updated and interoperably shared across other databases and systems will not only vastly improve back office functions, it will enable all parties to participate in the industry's growth and enable greater innovation and new income generation.
We are at a critical juncture between lawmaking and implementation. The U.S. Copyright Office is already hard at work putting together the structure and processes for how the new MLC will be selected and formed. The MLC will in turn determine how a publicly accessible database of rights owners will be developed, administered, maintained, and structured, likely through the selection of a qualified third party vendor. Given this database's critical importance to a healthy and vibrant music ecosystem, our view is that its foundation must be an open protocol for rights ownership identification that can and should serve the entire industry in a secure, shared, interoperable, and trusted manner. This protocol must be based on open standards that are overseen and set by a neutral entity and governed through an industry-wide structure.
Such a structure already exists: The Open Music Initiative was launched in 2016 by Berklee College of Music and the MIT Media Lab with this specific mission, to advance and foster music rights owner data interoperability in a digital era. Open Music has broad industry support with over 200 entities across the music, technology, and media industries having joined as signatories of the Initiative's open protocol principles. This includes the three major labels: Universal Music Group, Sony Music Entertainment, and Warner Music Group; leading music services such as Spotify, YouTube, Pandora, SoundCloud, SiriusXM, and Napster; media companies such as Netflix and Viacom; tech companies including IBM and Intel; innovation and design consultancy IDEO; leading publishers including BMG, Round Hill Music, Atlas Music Publishing, and Downtown Music Publishing; performing rights societies like France's SACEM, Germany's GEMA, Canada's SOCAN, America's SESAC, and The Netherland's Buma/Stemra; digital rights entities like SoundExchange; and hundreds of artists, entrepreneurs, and startups.
The Open Music Initiative espouses an open source governance model, overseen by two leading, neutral, and non-profit academic institutions, and with its membership and governance wide open to all industry participants and vendors. Our annual summit is coming up November 15 and 16 in New York City, and we invite all music business stakeholders to attend and help create together the future of our industry.
Our view is that Open Music's efforts can add tremendous value in the development of open and shared protocols necessary for the successful implementation, deployment, and ongoing maintenance of rights owner data for both the new MLC-administered database and the global creative industry as a whole. They are critical for the proper identification and remuneration of the very people that are the lifeblood of our industry: the music creators.
Open Music's structure is modeled around how other industries such as aviation, telecommunications, global positioning systems and the Internet itself have dramatically benefited from open standards. According to a 2013 report by McKinsey Institute, open data can help unlock over $3-$5 trillion in annual economic value across multiple sectors of the global economy.
Wouldn't it be great if some of this value is in fact captured by the hard-working songwriters, performers, producers, record labels, music publishers, and associated rights owners in the music industry?
The Open Music Initiative was launched in 2016 by Berklee College of Music in collaboration with the MIT Media Lab to advance open source standards for identification of music creators and rights holders. Its membership consists of over 200 leading music, media and technology companies as well as creators and entrepreneurs. For a full list, see open-music.org/members.
Panos A. Panay is the Vice President for Innovation and Strategy at Berklee College of Music and is a co-founder of Open Music. He leads strategic initiatives at the college and also serves as the founding managing director of the Berklee Institute for Creative Entrepreneurship (BerkleeICE). Prior to Berklee, he was founder and CEO of the online platform Sonicbids.
Professor Alex "Sandy" Pentland directs the MIT Connection Science and MIT Media Lab Human Dynamics group and previously helped create and direct the MIT Media Lab and the Media Lab Asia in India. He is one of the most-cited scientists in the world, and Forbes recently declared him one of the "7 most powerful data scientists in the world" along with Google founders and the Chief Technical Officer of the United States.
Dr Thomas Hardjono is currently the Director of the MIT Trust-Data Consortium, located at MIT in Cambridge, MA. For several years prior to this he was the Executive Director of the MIT Kerberos Consortium, championing the Kerberos protocol to become the most ubiquitously deployed authentication protocol in the world today. Over the past two decades, Thomas has held various industry technical leadership roles, including Distinguished Engineer at Bay Networks, Principal Scientist at VeriSign PKI, and CTO roles at several start-ups.