Thursday, January 24, 2013

Licensing and Data Issues Dominate Music Publishers' Agenda in 2013

by Emmanuel Legrand

[This story was originally published in issue 4 of One Movement for Music]

Ask any music publishers who are on their way to Cannes for Midem what are the key issues this year and almost all of them are likely to answer “licensing,” “monetization” and “data.” This is not to say that they do not take to heart the role of finding, nurturing and developing talent, but music publishing today has become the art of milking the multiple streams of revenues offered by the new digital eco-system.

We used to chase mechanical royalties from labels and public performances,” explains David Renzer, President of Music Ventures at Saban Capital Group, “but all this has changed. With digital sources of revenues, the business has fractured and has continued to get more complicated. We are now chasing micro-transactions. This means we have to put a lot of efforts into our systems in order to effectively collect and administer all the streams of revenue. And then we have to figure how to capture all the income streams and make sure that we license every opportunity that comes to us.”

For Jay Rosenthal, Senior VP & General Counsel for the National Music Publishers' Association in the USA, the development of all these new digital services has made it necessary for rights holders “to create easier licensing models for an industry that will focus more and more on bulk licensing of rights to users such as Internet services.” Renzer agrees that simplifying the licensing process is paramount to ensure that no opportunity is wasted. This means that there “will be pressure on collective management organizations in Europe and in the US to provide greater efficiencies and better collections too.”

Renzer – who used to run Universal Music Publishing Group – accepts that these new tasks can take the publishers away from the A&R role but he argues that it would be in nobody's interest to have the best roster of talent if there wasn't a strong admin structure behind it. “It is difficult for songwriters and composers to effectively administer dozens of sources of income. That's our role: Provide effective administration,” says Renzer.

Vital Song's Francois Millet
Every publisher is faced with the same challenge, regardless of size, says Fran├žois Millet, founder and principal at Paris-based independent music publishing house vital song. “The more we move into the 'dematerialization' of content, the more crucial the management of the original music works will become,” he explains. “And publishers are the custodians of these works.” He adds that publishers are also those who can ensure that the various streams of revenue are checked and accounted for on behalf of songwriters and composers. To manage this increasingly complex matrix of data, Millet says that the development of sound metadata is paramount in order to be able to track the use of music works, collect royalties efficiently and then make sure that the appropriate rights holders are remunerated.

Data was certainly not high on the agenda of the industry, and the concept started popping up in conversation with publishers just a few years ago. Music publishers are involved in a key project, the Global Repertoire Database, or GRD, which will be the focus of a full session at Midem. To steer the project, a GRD Working Group was set up a couple of years ago, with the inclusion of music publishers, authors' societies, technology companies and Deloitte as the operator of the project. After many discussions about the scope of the project, governance and access, the GRD WG launched a “Requirements and Design Phase” of work in October 2012 which is due to conclude in May 2013 and pave the way for concrete developments.

The summer of 2012 was spent ensuring that all parties were comfortable with the way forward,” explains Mark Isherwood, Chair of the GRD Working Group, “and that all the necessary resources for this phase of work were prepared and ready to engage in this phase of the project. This phase involves nearly 30 companies worldwide represented by nearly 100 individuals. The key outcomes of the R&D Phase will be the set up of a legal GRD entity, the completion of the business plan and the logical technology architecture for the system. The GRD entity will then take the project forward through technology build, data migration and launch.”

For the non-initiated, this must sound like a message from planet Mars, and that's probably what it is! Though many in this industry were pushing for this database to be created, few anticipated the complexity of the task, not least because of the multiplicity of stakeholders and perspectives. Yet no one under-estimated the crucial importance of this project. “Never has the need for improvement in worldwide data been more important,” says NMPA's Rosenthal. “The industry is involved through the GRD and WIPO is also involved [in the IMR project]. The resulting system will impact – at least theoretically – every music publisher on the planet. Publishers must understand and be able – and willing – to work with the new multi-lateral systems.”

[I will make a presentation on music publishing as part of the Midem Academy program on January 26 in Cannes at 2.30pm.]

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