Imagine you went to your ATM and tried to take out $60 dollars. The machine makes you wait for a half hour then spits out 40 dollars and no receipt. You don't know where the extra money went, why it took so long or what's left in your account. For most people, this would be unacceptable. If you're an artist in today's music industry, it might be your everyday reality.
The music business has a transparency problem. And this problem not only impacts how -- or even whether -- artists get paid, it also makes it harder for digital services to deliver music to fans. With Congress and the federal agencies looking at music licensing, along with a Senate antitrust subcommittee hearing on March 10, this is the perfect time to give the transparency issue the attention it deserves.
The inability or refusal of some in the music business to adopt basic information standards for music rights is holding back the future. The lack of transparency and poor data is preventing the growth of a legitimate digital marketplace where artists are paid fairly and fans can find the music they want. It's compromising efficiency. It's chilling outside investment. As a musician and a songwriter, as well as someone who advocates for musicians and songwriters, I want our sector to be taken seriously. And until the music business gets its house in order, we won't be.
Embracing change is great. But it's important to embrace the right kind of change, not just the kind that will benefits a few players. Right now, major music publishers are lobbying the federal government to be allowed to directly license their digital rights to music services rather than as part of the performing rights organizations ASCAP and BMI. While this may make sense from a business standpoint -- publishers believe that such deals will lead to higher rates -- it may end up depriving songwriters of essential protections, and worse, cut into their own income streams.
My concern -- and one that is shared by the many songwriters and composers that I talk to -- is that the big publishers' plans could come at the expense of revenue transparency. Under direct deals, songwriters could have a have a harder time knowing how they're paid and why. Furthermore, money that should go to songwriters could end up in "black boxes" or divided up by the three biggest publishers: Warner/Chappell, Sony/ATV and Universal Music Publishing.
Much of this is due to a lack of transparency in information about musical works. Unlike sound recordings, which are typically owned by a single label or performed by a single artist or band, publishing can involve a staggering number of co-writers and publishers. In fact, I counted 13 writers and 17 publishers on a recent Flo Rida hit. These co-writers might not all be based in the United States, and likely belong to rights societies in their own territories. This is now a global problem. Without rock-solid data about who owns what slice, some people may not get paid on time or at all.
Services also have reason to be apprehensive. They need to know what music is available for use or is off-limits. Until now, music services big and small rested easy in the knowledge that they could play anything in the ASCAP or BMI repertoire provided they secured a blanket license. Under the direct deals sought by the major publishers, services would require precise information about ownership or else they will be on the hook for infringement. Worse, artists who need to get paid may be given the runaround by any number of intermediaries.
There are some who are trying to fix this. The digital standards consortium DDEX, for example, utilizes a Musical Works Notification Message (MWN), which delivers info about the rights associated with a song and where it is used. Likewise, there is something called the Common Works Registration (CWR), which is a format that provides publishers and societies with a standard for works registration. The real problem is that there is no centralized repository for this information.
Here are five data solutions that would make the digital marketplace work better:
- Unique global identifiers for each individual song: musical work (composition and lyrics) and master (sound recording)
- Databases that maintain accurate information about these identifiers
- Databases that are interoperable (i.e., that "talk to" other databases) to provide a complete ownership picture
- Databases that are machine-readable (i.e., that do not require time-intensive human authentication and cross-referencing)
- Industry standard information sets that are supported across databases
This isn't something that we can wait around for. We need transparency now. Without it, we will have squandered the potential of a truly global music industry built on great content and innovative delivery systems. Artists will lose, fans will lose, services will lose -- even the big music companies will lose. As someone who has lived and worked in music his entire life, this would be unacceptable. That's why I'm beating the drum for transparency loudly and often. Artists, managers and fans: it's time to join in.
Casey Rae is the Future of Music Coalition's CEO.
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