Wednesday, April 26, 2017

Streaming generates vast amounts of royalty data, and not all collecting societies are coping | UNLIMITED | CMU


The growth of streaming has meant a vast increase in the amount of data being supplied to collecting societies in order to calculate the royalty payments due to songwriters and music publishers. Some are processing this data better than others, but issues with conflicting information in some society databases only makes things more difficult, says Tomas Ericsson, CEO of Kobalt-owned collecting society AMRA.

As part of this year’s Global Creators Summit at Canadian Music Week in Toronto, CMU Insights presented a series of sessions on the streaming market. Based on the ‘Dissecting The Digital Dollar’ reports CMU Insights produced for the UK Music Managers Forum, representatives from the digital market, collecting societies, artist management and entertainment law spoke. The audience heard a detailed breakdown of how streaming services are licensed, conversations about ensuring that the streaming business works for all parties, and a discussion about ongoing transparency issues.

In an interview with CMU Business Editor Chris Cooke, Ericsson discussed the mammoth task of processing the data fed to collecting societies by the streaming services each month, and the issues that can arise when some societies are unable to do so efficiently.

“In terms of the size and complexity of the market, you can’t blame societies for not investing in high technology solutions in every territory around the world”, said Ericsson. “It would be impossible not only from a financial perspective but also from a competency perspective. Therefore, what has evolved over the years are smaller licensing and administration hubs that have the capability to license and process enormous amounts of data. Whether they do it correctly or not hinges partly on the technology, but also partly on the data”.

There are various bodies of data at play here. The usage data the streaming services supply, the music rights ownership data that the societies control, and then the royalty payment data that is generated by comparing the first two. Whereas the streaming service knows who to pay when a track is streamed on the recordings side – ie the label or distributor who provided the content – on the publishing side the digital platform doesn’t know who controls the rights. So that task falls to the societies.

To do that the society must first identify what song is contained within what recording. Track titles alone are insufficient here because, for example, there are at least two very famous songs called ‘Hello’. Once the song has been identified, a society must work out if it controls that work. Because of co-writes, it may only control a portion of the song. It must then claim royalties for that portion. But, with multiple people claiming royalties for the same work, it’s important all parties have the same information regarding how ownership of the song was split between each writer.

For the societies, it’s important to complete this data processing task accurately and quickly, and cost-efficiently, because of the vast quantity of usage data coming in from the services. “It’s trillions of transactions that are constantly being processed”, explained Ericsson. “It never really stops. We’re getting fed data from many of these platforms on a daily or weekly basis and we don’t stop processing, we just make cut offs in between to make payments”.

Bad music rights data, and inefficient processing of usage data, can stop songwriters from being paid royalties. “I think the reason why money’s not flowing in some parts of the world is due to societies not having the right systems”, Ericcson went on.

“It’s due to high deductions and commissions that are taken in these territories, and it’s due to a lot of conflicts. Conflicts in the sense that there’s one party, maybe AMRA, claiming a specific song from Spotify. The same share of the same song is being claimed by a local society in Taiwan. Spotify’s view is, ‘that’s not our problem, you guys have to sort that out’. And there’s a lot of that going on around the world”.

With the streaming services generally passing these problems back to the music industry, how these conflicts over song ownership are then resolved varies from society to society. “In the case of PRS, I think we would have that resolved within a week”, said Ericsson. “Both of our systems are very accurate, and if there is a flaw then the dispute is probably because one of us didn’t update in time”.

The fact that song ownership information can also change adds to the complexity. Further issues arise, Ericsson said, “when societies don’t update their systems with new songs, or their relative IPI [Interested Parties Information] for that song or songwriter may have shifted from one period to another between societies”. Where the actions of other societies are impacting on payment, entities like AMRA need to try to educate their counterparts around the world. “It takes a little longer” to solve problems this way, he says, adding “we have to put some effort into it”.

The obvious solution to all this is a single global database containing all of the information for all registered songs in one place, which societies and the streaming services themselves can use to calculate who is owed what. But we know that this is not as easy as it sounds. “There have been attempts”, Ericsson recalls. “I was on the board of the GRD [Global Repertoire Database] for four years – it didn’t work, it fell apart, but all due to political reasons in my opinion, and some funding reasons”.

All of this could leave songwriters feeling somewhat helpless, but there are things they can do to try to ensure that their royalties flow back to them as smoothly as possible.

“If you’re not published, you’re likely to be a member of the collecting society in the territory where you operate”, said Ericsson. “If you’re published, you have two ways of getting in there. You have the society plus the publisher registering your works throughout the world. So when you register works with your publisher or your society, make sure you have as much information as is possible about co-writers, about shares, about the song, if there are ultimately different titles, translated titles, whatever it may be. As much information as possible helps”.

The need for songwriters to clearly agree ownership splits with their new works, and for that information to be quickly logged with relevant societies, is something we went into in detail at last year’s CMU Insights @ The Great Escape. Read more about that here.


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