Wednesday, January 30, 2013

The 'palace of data' is taking shape -- An update on the GRD

by Emmanuel Legrand

Is the GRD starting to get sexy? If judged by the attendance at the January 29 Midem session aimed at informing the music community about the latest developments regarding this project, the answer is yes. The Global Repertoire Database is the holy grail that will allow the music industry to jump into the digital world with the tool that will help – at least in theory – to identify all the musical works ever composed or written.

Yet, this initiative – probably the biggest and most complex joint project ever undertaken by the music industry – has remained so far a virtuality. Started four years ago, the project was first discussed and then discussed even more with the various stakeholders, namely authors' societies, music publishers, creators and digital services, with the support of Deloitte as the operator. It involved hundreds of people and dozens of companies and societies. And it was discussed so much that some in the industry started to doubt that it would ever see the light.

The message at Midem to the naysayers was: The GRD is alive and well, and significant progress has been made. To steer the project, a GRD Working Group was set up with a limited number of stakeholders to devise a strategy and a plan. It launched a Requirements and Design phase of work in October 2012 which is due to conclude in May 2013. The R&D phase will be followed by a phase of implementation of the database.

The session's moderator Stephen Navin, chief executive of the British Music Publishers Association, described the project in more than lyrical terms: The GRD is bound to become “the palace of data” and “ a new Jerusalem of data that will drive us forward”. History will say if it has also the potential to become a 'Gilded Palace of Sin' or not...

The task, said Navin, is one of massive complexity because it consists in combining the diversity of the data from collecting societies and other rights owners into one single set of data. Navin proceeded to ask very specific questions to panelists. I kept the same format, and left the verbatim answers from the speakers.

What's the point of having a GRD?
“It will be much more than just a database. It is going to be the single point of contact for publishers for agreements, a sort of holy grail for publishers. What's really going to be useful is that there will be a single acknowledgement feedback. Once registrations are in, there's going to be a single operating area that will reconcile the data, one centre from where multiple sources will be pulled together. The fact that it takes place in a single place will help us deal with conflicts. They will be spotted on the way in and the suppliers of data will solve the conflicts instead of having 50 or 60 sub-publishers having to deal with the conflict.”
Michael Battiston, Vice President, International Business Development, ASCAP

How much will it cost and who will pay for the GRD?
“During the process we asked the big questions about cost, funding and governance. How much, who pays and how is it run? We came with the figure of €30m euros, but it will probably be a refined figured. It will be funded by creators and rights owners through collecting societies.”
Jackie Alway, Director of Legal & Business Affairs International, Universal Music Publishing

Who will govern the GRD?
“In terms of governance, we recommended it to be a membership society with separate entities: A general assembly, a board of directors and a management board. There will be equal representation between creators, societies and rights owners.”
Jackie Alway, Director of Legal & Business Affairs International, Universal Music Publishing

What repertoire will the GRD incorporate and how?
“The world repertoire of music has to be there. Throughout the previous phase we thought of a big bang approach but decided that it was no the best approach so we went for a soft approach. We will start with the Anglo-American repertoire plus some continental repertoire. The sources of repertoire are STIM (Sweden), PRS for Music (UK), GEMA (Germany), APRA (Australia) and SACEM (France)."
Thimo Prziklang, Director of Corporate Development, GEMA

Who are going to be the users of the GRD?
“The key users are the core music industry: publishers, collection societies and the various licensing bodies and users [of music], but also record labels, ad agencies and print publishers who need licenses to use lyrics and notation. There will be different ways of using it.”
Pekka Sipilä, Executive Director, Finnish Music Publishers Association

What services will the GRD provide?
“Once data is in the GRD it will not do any good is stays there, so the idea is to get the data back out. The GRD is going to make possible for music users to have easy access to data. For example, if a producer is looking for synch rights, it will be there and it will be possible to do the search. Someone who is interested in using music will have far less trouble in identifying works.”
Michael Battiston, Vice President, International Business Development, ASCAP

What will be the benefits of the GRD?
“The digital age is global and for the first time we will have a tool that is global. For publishers, this is an opportunity to do it once and do it right. This will become the single point of registration for publishers, and rather than register in 200 societies, we will do it once for all. It will benefit all publishers, large and small. Their data will be distributed around the world and it will prevent the duplication of databases.”
Jackie Alway, Director of Legal & Business Affairs International, Universal Music Publishing

“There is real value in the fact that you have a shared copyright operation. The same kind of work was made within multiple societies so if we can have economies of scale through reconciliation of data, there is potential for major savings. But it is also a no brainer that if we have a clean, reconciled set of data that everyone can agree on, it will make all our lives easier.”
Michael Battiston, Vice President, International Business Development, ASCAP

“There is no database in place that people can refer to when it comes to licensing for digital services. Each and every licensors will have access to data rather than having to create their own repository of works. And there will also be just one place to identify conflicts before getting to market.”
Thimo Prziklang, Director of Corporate Development, GEMA

“From a licensee perspective, when we do licensing we have no idea what we are licensing. Now, we can actually see it. Getting rid of conflicts will be huge, since we spend to much time on small conflicts. And will be able to make the money flow much faster to our content partners who can also turn it around faster to authors, composers and publishers.”
Sami Valkonen Sami, Head of International Music Licensing, Google Play

What are the benefits for creators?
“Data access is high on our agenda. The GRD is the tool to make that part of the system transparent. We are determined to make life easier for rights owners and users.The GRD will be a tool for inventions not yet invented and music not yet composed. The GRD will be a facilitator for future inventions and for business models to be invented. It will also legitimate authors rights and copyright. It is extremely important.”
Alfons Karabuda, Executive Chairman, ECSA

What are the next steps?
“The R&D phase ends in May [2013], then we will move into building phase, and that will be a massive task. Before we go live, there could be a 13-month period but the complexity of data injection is something we have all dealt with. And we want to get it right so if it means that we need to push it back for a while, we will do it. It will be a very carefully managed process.”
Jackie Alway, Director of Legal & Business Affairs International, Universal Music Publishing

“We need to build it and fill it. It is all extremely complex but the progress is incredible. We are now past the point of no return. We've made huge progress: Last year the GRD was just a power point. We knew we needed to build the warehouse, and now there are now real people involved. But how long did it take us? Four years! Could it have been faster? Yes. But the fact that we resolved all the issues is fantastic and, as an industry, we should be proud of it. This can't fail any more. That is why important to have everybody on board. Let's get in done and deliver and if we do not deliver something in 2014, we fail.”
Sami Valkonen Sami, Head of International Music Licensing, Google Play

[Typed while listening to The Flying Burrito Brothers's 'The Gilded Palace of Sin' (A&M) and Local Natives's 'Hummingbird' (Frenchkiss Records)]

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 François 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.]

Sunday, January 13, 2013

Nibs from Groningen: Google, Martin Mills, C2C

By Emmanuel Legrand

> One of the most attended sessions at Eurosonic/Noordeslag was 'Google's view on music and the creative industry', and it was also the most frustrating (at least for this writer!). Google was facing the industry. So kudos to Simon Morrison, who works in London as part of the internet service's public affairs team (in other words, a lobbyist), for accepting to walk into the snake pit. But it was a walk in the park for him. First he gratified us with a nice fairy tale: Google is great for the creative community, copyright is important is for Google and Google can help 'you' maximise the value of your copyrights. Fair enough, since he was given time, at least he could place a few Google adverts. 

But what was then less pleasant was the inability from the panel – with included Billy Bragg manager Peter Jenner, Spotify's Will Page, Jeff Price and Buma-Stemra's head of public affairs Robbert Baruch – to come up (with a few exceptions) with questions that would destabilise the man from Google. Jenner started by asking why couldn't he get any clarity in the structure of the deal deal between Google and PRS for Music and why were there non-disclosure agreement (NDAs for the cognoscenti), and got a soft answer. 

Then Jenner and Price started bickering about the role of government in setting rates, and it went wrong from there (aside from Baruch who quite rightly pointed out that Google's lobbying aims are far from transparent – “we are quite transparent" was the answer) and Morrison was looking at it this circus with some sort of bemusement, and was probably very relieved to see that the focus had shifted. So the moral of all this: If the industry intends to take on Google, it'd better clean up its act beforehand and speak with at least some sort of united front...

> Beggars Group founder Martin Mills came across as clever, witty, unfussed, intellectually sharp and quite modest during the one-hour keynote Q&A at Groningen with yours truly. It was very pleasant and informative and it seems that the audience was listening. He was so weary and stressed before starting the interview that he asked for a glass of schnapps or “anything strong”. I guess the vodka got him going... My favourite quote from him (tweeted by Mark Mulligan): “[Former Warner Music chief executive] Lyor Cohen said '360 deals are our new religion' and I said 'Well, I'm an atheist then'.”

C2C at the Border Breakers Awards
(Photo: René Keijzer)
> C2C were the clear revelation of this year's European Border Breaker Awards. The gang of 4 French DJs proved that you can have dance music that can be both fresh and intelligent, whilst being also entertaining. Other winners/performers include Amor Electro from Portugal, French Films from Finland, Juan Zelada from Spain, Ewert and the Two Dragons from Estonia, Nahiba from Denmark and Dope DOD from the Netherlands, introduced by none other than the Dutch Minister of Culture, which in itself was quite a treat (how about hearing the word 'dope' from a politician...). Overall a good show for the tenths anniversary of the awards, hosted by a Jools Holland in good form. 

[Disclosure: As one of the founders of these awards, I am still in charge of the pre-selection of artists. To qualify, they must have released a debut album which has had some airplay and sales traction outside of the artist's country of origin (tracked through Nielsen data), plus having played live in several countries outside of theirs (especially through the ETEP programme). In addition, programmers from EBU stations chip in with some editorial suggestions. The EBBAs are supported by the European Commission.]

> After resisting for over a year, I have finally opened a Twitter account... You can now follow my words of wisdom @legrandnetwork

[Typed while listening to The Byrds's 'Younger Than Yesterday']

Streaming gets star status at Eurosonic

by Emmanuel Legrand

It took just a few years for streaming services to become fully part of our streams of consciousness. One thing for sure: Streaming is probably the number one focus on the industry, if judged by the number of times the word occurred in discussions at Eurosonic/Noordeslag.

The trade show/conference/festival in Groningen (Netherlands) usually kicks off the year with its mix of panels on serious and not so serious issues and its impeccable line-up of concerts, and sets the agenda for the industry, especially for the live sector. Several sessions were focused on the impact of streaming on the biz and it is fair to say that the rise of the likes of Spotify and Deezer, alongside Simfy, Rdio and many others has given hope to many and much food for thought.

Jeff Price (Photo: Mike Breeuwer)
Obviously it is going to take a few more years before streaming revenues give the music industry some comfort, but there is optimism in this field – and a few question marks. Former Tunecore founder/CEO Jeff Price is on the side of the optimists. For him, streaming will happen when it will be fully part of an experience that will make the users feel it is free even if it isn't. His case in point is to say that streaming will get traction when services will be bundled into cars, for example. “I am waiting to see what will happen when the cost of music is bundled with the cost of hardware,” said Price in his keynote presentation. 

Another source of optimism for Price is the imminent launch by Apple of their answer to Pandora. “They have half a billion with iTunes accounts,” he said, explaining that this should give Apple a lot of leverage. He strongly believes that streaming services will provide the opportunity to scale revenues to the level of their audience. “It is there. It will happen. More money will flow into the system,” he claimed.

Another converted to the positive force of streaming is former PRS for Music economist Will Page who now works for Spotify. He took Spotify's home country, Sweden, as an example of what can happen when streaming gets mass acceptance. Music revenues have been revitalised since Spotify has started operating, and it also keeps piracy levels down. “Spotify helped stabilise Swedish market,” said Page, who added that Spotify now accounts for the vast majority of digital revenues in Sweden, ahead of Apple.

Page then turned his attention to the Netherlands, which he said has become the second big country after Sweden to reach critical mass with streaming and predicted “some light at end of tunnel in Holland” thanks to the rise of streaming usage. For a start music sales have seen a slight upsurge, with an estimated 677% growth of ad-supported and subscription revenues during the first half of 2012, while digital downloads sales continued to grow by 40%. But what is more important, according to Page, is that measurements suggest that piracy levels in the Netherlands have been steadily dropping (Forrester put the number of people using pirate sites in Holland at 5m in 2008, while a recent report by MusicMetric puts the figure at 2.25m). Page sees “streaming as an alternative to piracy”. “It gets sexy when it gets to critical mass,” he concluded.

However, not everyone is convinced that streaming has such healing power. Analyst Mark Mulligan was far more cautious in his presentation. “Streaming is everywhere but let's be realistic: It is a technology to get content into devices. It is not a business model: It is a delivery means,” he stated. The overall digital music picture is still dominated by falling sales of CDs and download sales that are “sluggish”. And, he added, “subscriptions are finally getting some traction, but is niche.” More so to the point: The conversion rate from free with ads to premium, with subscriptions, if extremely low. [A representative from Deezer on another panel suggested that out of 26 million adopters, Deezer has about 10% who paid for a subscription.]

In an other presentation, Buma-Stemra's Andy Zondervan crunched a few figures. He said that the accepted idea is that subs should be in the region of $10 or €10, but since only a few consumers are actually ready to pay that sum, he suggested that it would be more beneficial to focus on the bulk of consumers who were not going to spend more than a few euros for music (around €3). There is certainly there matter for debate and certainly more in-depth research.

Like Price, Mulligan sees streaming taking off when bundled with devices, cars or with telcos subscriptions, where the cost will be invisible to the consumers. For him the upside is that car and devices manufacturers, and cable or internet service providers will use streaming to offer their clients a better experience. “If you buy a car for $12,000 and you pay 3$ for customized music subscriptions, it is a meaningless cost,” he said. “You have to make music feel like free or close to free even when it isn't.”

[Typed while listening to Electric Guest's 'Mondo']

Sunday, January 6, 2013

Greetings from Legrand Network

Best wishes for 2013!

Perhaps it’s the color of the sun cut flat
An’ cov’rin’ the crossroads I’m standing at
Or maybe it’s the weather or something like that
But mama, you been on my mind
Bob Dylan
'Mama, You Been On My Mind'