Seeking a Global Solution for a Global Problem: Collective Licensing

TMV’s UK Staff Writer Laura G Thorne was on hand for the latest debate on the subject of collective licensing, hosted in London by 2Pears under their Music 4.5 brand (“bringing together music tech start-ups, serial entrepreneurs, investors, artists, band managers and key industry players to share knowledge, discuss strategies for business success, debate market trends and evolution”).

In 2011, Music 4.5′s “Death of Collective Licensing” event drew a capacity audience of senior industry figures to examine issues related to rights management, revenue collection, copyright infringement, and the development of databases and unique identifiers to aid in the licensing of music and other content, as well as the accurate reporting of such activities.

A year later – last Friday, the 29^th June – 2Pears convened a similarly august group to discuss how things have changed since then.  Speakers included Nic Garnett, IP specialist and former Director General of IFPI (International Federation of Phonographic Industries); Mark Isherwood of Rightscom; Frances Lowe, Head of Regulatory & Corporate Affairs, PRS for Music; Paul Jessop, former CTO of IFPI & the RIAA, Davin McDermott, Director/Head of Music RSM Tenon, and Tom Frederikse, Partner, Digital Media/Intellectual Property, Clintons among other panelists.

Nic Garnett opened the discussion by providing a framework describing the challenge at hand, quoting from the executive summary of a recent directive issued by the European Commission, paraphrased here: the need for collection societies to adapt to the needs of a single market, and to provide rights holders the means to exercise more efficient control of their works, making licensing easier as well as compliant with the standards of the digital world.  Of course an essential precursor to the realisation of these objectives is the availability of complete and accurate data to identify digital works, without which any initiative will ultimately be doomed to fail. This provided the perfect segue for speaker Paul Jessop, ex IFPI CTO, and currently a principal in his own firm, County Analytics. Quoting Rudyard Kipling’s poem The Elephant’s Child (I keep six honest serving-men (They taught me all I knew); Their names are What and Why and When And How and Where and Who), Jessop delved into the types of identifiers currently in use and the databases that have been created to manage this information, asking and answering questions such as “Who needs identifiers? Who is building registries? Who would use registries?” and so on. Examples of currently used identifiers include ISRC for recordings, ISWC for works and ISNI for artists; databases include the Global Repertoire Database, which was initially conceived by the EU Commission in 2009 to “investigate how a GRD for musical works might be created and deployed” (and ultimately will include a “Global Release ID” or GRid). as well as proprietary databases such as Gracenote, Nielsen and Decibel.

As with many complex problems, the devil lies in the details, and there are many. Progress can seem glacially slow. The technology now exists to move and track huge amounts of data. However, as Tom Frederikse of Clintons observed, “The problem is not the technology, it’s that the stakeholders aren’t working together,” continuing, that it would be a long time before the people representing those interests say, “I need to cut off my finger to save my hand.”  Frederikse also commented on the secret agreements negotiated by collection societies with Google covering YouTube, a familiar déjà-vu going back to last year’s panel (and beyond).

Frances Lowe of PRS & fellow panelist, singer/songwriter Kirsty Hawkshaw, along with Frederikse, considered the subject of collection societies, governance and accessibility, moderated by new media attorney Rick Riccobono.  As Lowe affirmed the PRS allegiance to core principles of transparency and efficiency, she was challenged by Hawkshaw, who stated that the data she’d received from PRS & PPL was inaccurate, and she had lost significant income due to mistakes in registrations. The subsequent discussion revealed possible confusion as to which works were royalty-bearing and which were not, but what was clear – and broadly recognised – is that errors are not unusual for numerous reasons, improper reporting not the least among them. (If there was any doubt about how this could happen, Jessop offered the example of 100 ways to report Guns N Roses’ “Knockin’ On Heaven’s Door” – computers don’t make educated guesses, so each of these variations generates a separate entry that then has to be reconciled.)

A panel with Ed Averdieck (CueSongs), Chris Jackson (Meta Broadcast), Peter Bradbury (BBC), Sem Bakker (Rohe Advokaten) and Mark Isherwood considered trends in music licensing, and were asked by moderator Nic Garnett their opinions on where the industry stands now, and where they see it going in five years’ time.  Isherwood was blunt: “What needs changing is the infrastructure to manage copyright…it is no longer fit for purpose.” The BBC’s Bradbury saw “huge changes to online and mobile,” while license for broadcast and performance has largely remained static. As far as the future is concerned, more fragmentation was anticipated, with a need for greater flexibility in terms of opt-ins and opt-outs. Averdieck quoted the example of Phillip Glass, who said of collection societies, “they’ll protect me into obscurity.”

Whenever an existing business model is in flux and challenged by new technologies, there will always be those upstarts who seek to bypass the traditional infrastructure altogether. Presenter Tom Högland of Swedish company Epidemic Sound is one such enterprise. Offering production music for broadcast and other uses, they operate independently of any collection society, and control all rights of the compositions they represent. Clients pay a subscription fee, but are not subject to any further royalties. While one can see the attraction of this proposal for some uses, Epidemic doesn’t deal in back catalog, so if you are a high-profile brand looking to associate yourself with a name artist, Epidemic’s offering – at least of yet – may not be the solution for you.

China is an important emerging market, and those present had the opportunity to hear from internet entrepreneur Jun Wu, CEO of R2G, the developer of the “first centralized music distribution platform in China promoting the consumption and monetization of legitimate digital content.” Wu estimates the value of the music market in China to be between $80-120 million dollars US, but it is one where piracy is rampant, and identifying authentic, original content remains a problem. Audience member Peter Mason of PPL queried Wu as to the percentage of music content in China made up of local repertoire – as it turns out, 90% of music content is in the Chinese language, with 5% Korean and Japanese, leaving only 5% of the market for Western music.

Presenter Davin McDermott, ex Warners and EMI Finance and currently Director/Head of Music at financial services and investment consultancy RSM Tenon, cut through much of the chaff by bringing the perspective of the potential investor into the room. For McDermott, getting a “perfect agreement” or getting caught up in “antiquated, legacy models” was all part of the problem, rather than the solution.  The sense was that the music industry is still engaged is still rearranging deck chairs while the ship is sinking, rather than grasping the importance of bringing money into the sector, and finding ways to encourage prospective investors, who are often “frightened off” by the lack of transparency.

What’s evident is that there are significant hurdles left to clear before the concept of a global music registry becomes a reality. While there are very smart people making this objective their life’s work, they answer to various constituencies, with their own territories to protect. Opportunities pass by; new ones emerge. So it goes.

Related posts:

1. Non-exclusivity, direct licensing and the granting of digital composition rights
2. Direct Pan-European Licensing Deals Making Life Harder for Digital Businesses
3. Interview: Rdio CEO Says Subs Will Boom (But First, That Apple Problem)
4. David Jones – Global CEO, Havas Worldwide
5. EXCLUSIVE INTERVIEW: Liz Schimmel, Global Head of Music – Nokia

Posted by Laura Grivainis Thorne on Jul 3 2012. Filed under featured, Labels. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.