Can Swedish songwriters help save the music-publishing business that they have come to dominate?
Auddly, a Swedish startup co-owned by songwriters Max Martin and ABBA front man Björn Ulvaeus, will on Thursday (Aug. 31) announce partnerships to address this issue with ASCAP; U.K. performance rights organization PRS for Music; and their Swedish counterpart STIM. Together, the three deals establish Auddly as a formidable force in industry efforts to more accurately account songwriting royalties at a time when streaming services have made this more important than ever.
Auddly is one of several companies trying to address the music business’ “metadata problem,” determining who gets paid for the use of a song — and in many cases what percentage the various writers and publishers control — when accurate information is not always attached to tracks. The Stockholm-based company, which has 22 employees, runs an online data platform that allows songwriters to enter information about who owns a composition as soon as it’s written. These deals will allow ASCAP, PRS and STIM — which have been working with the company in some ways already — to take in this information directly from Auddly.
“It’s so important to solve this problem, and we want to be the standard for creators,” says Auddly CEO Niclas Molinder, who founded the company three years ago and is also a songwriter himself. “Our whole strategy is to get as close to the creators as possible.”
The fact that Auddly is both managed and partly owned by songwriters — along with angel investors and a Swedish government venture capital fund — gives it an advantage when it comes to partnerships. Unlike solutions that rely on Blockchain, Auddly involves relatively familiar technology. It also involves industry insiders: For some established music business entities, the only thing worse than the current accounting problem would be having it solved by an online music service that could potentially leverage its control over that information in negotiations. Spotify is working on a system to improve its ability to account to publishing rightsholders, and in 2011 Google bought the startup RightsFlow, which now operates as a subsidiary of YouTube.
When it comes to Auddly, however, “our goals are very much aligned,” says PRS director of operations Paul Dilorito. “We want to improve the workflow of the music industry to make more money for everybody.”
The metadata that tracks the ownership of compositions is more complicated than many songwriters realize. Each composition has an ISWC (International Standard Work Code), which references the IPI (Interested Parties Information) numbers of the writers and publishers who need to be paid for its use. This information should link to the ISRC (International Standard Recording Code) numbers of performances of that compositions, which in turn should be linked to the IPN (International Performer Number) identifiers that are used to pay performers.
Confused yet? Many songwriters are, too.
“Ninety-five percent of songwriters don’t even know what an IPI is, and it’s like not knowing your social security number,” Molinder says. Without that number, songwriters are often at the mercy of accurate spellings of their names — which Molinder jokes is a particularly thorny problem now that so many hits are written by Scandinavians whose names have vowels like ‘ø’ and ‘å.’
“There are two sides to the publishing business — creators and people who handle the rights,” Molinder says. “Creators call each other by name, but on the other side they can’t do that. These codes are the key to everything.”
So far, the onus of recordkeeping has fallen mostly on songwriters. “Publishers always ask songwriters to get the IPI numbers of everyone they work with, but that rarely happens,” Molinder says. Asking one’s collaborators for their numerical identifiers isn’t exactly conducive to a creative flow. Auddly confirms and stores these numbers so songwriters who collaborate can simply enter information about who wrote how much of a given composition.
That gives the company an important advantage. “Auddly’s focus on offering songwriters a tool to empower them to collect and authenticate song metadata is an important component in capturing composition ownership information as early as possible in the creative process,” says ASCAP CEO Elizabeth Matthews.
Now three of the most important collecting societies worldwide will have access to that information as well.