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Dissecting The Streaming Inquiry #07: Music rights data

By | Published on Tuesday 2 February 2021

Houses Of Parliament

We are currently reviewing and dissecting submissions made to the UK Parliament’s ongoing inquiry into the economics of streaming.

Based on the five years of research CMU Insights has undertaken with the Music Managers Forum as part of the ‘Dissecting The Digital Dollar’ project, we explain the background to the key debates, helping you navigate and understand each issue and the proposed solutions.

Beyond the recording/song element of the digital pie debate – ie should a higher portion of streaming income be allocated to the song rights? – there are other issues that impact on how much money songwriters make from streams: in particular music rights data and complex royalty chains.

Once a streaming service has done all its deals with the music industry, it then needs to calculate what monies each licensing partner is due each month. On the recordings side, the service assumes that whichever label or distributor uploaded a track must control the copyright in that recording. So whenever that track is streamed, that label or distributor needs to be paid.

But also contained in the track is a song, and the label and distributor does not usually control the song rights. So who does the service pay the song royalties to? This is a problem because the service doesn’t know who controls the copyright in the song. In fact, it doesn’t even know what the song is. It knows what the track is called, but lots of songs have the same title.

In most cases, the streaming services outsource this problem to their licensing partners on the songs side, ie music publishers and collecting societies.

They are sent a report of every track streamed in the previous month, with each track identified by the unique identifier provided by the label or distributor, that being an ISRC. The publisher or society then needs to work out what song is contained in the track. Songs are uniquely identified by an ISWC, so basically each ISRC needs to be matched to an ISWC.

Publishers and societies – or royalty processing agencies they employ – have databases that match recordings with songs to help with this process. But, of course, every month an ever increasing number of new tracks are uploading, meaning publishers and societies are constantly having to match new ISRCs to ISWCs.

Once a track has been matched to a song, each publisher and society then has to work out if it controls that song.

Song copyrights are often co-owned, of course, and actual control may be different from country to country, or for the so called mechanical rights versus the so called performing rights, both of which are exploited by a stream. As a result, multiple publishers and societies may be claiming a portion of any monies due to any song that has been streamed.

Ownership of song copyrights can also change over time, and rights change ownership much more frequently these days.

Crucially, because there isn’t a global, authoritative, publicly accessible, real time, music industry-owned database that matches all ISRCs to an ISWC – and then states who controls each song copyright and ownership splits – the services themselves can’t work out who is due what.

That means publishers and songwriters incur additional royalty processing costs. And also, that the processing of those royalties can take quite a bit of time, and there’s plenty of room for error, where any one publisher or society over or under claims monies.

And some monies are never properly allocated to specific songs at all, ending up in the black box, which either sits with a service or gets distributed to the industry based on total market share.

None of this is ideal. Various publishers, societies and start-ups have invested in and developed systems to increase efficiency and accuracy, but there remains plenty of room for improvement.

Songwriter group The Ivors Academy goes into these data issue in quite some detail in its submission to the select committee.

Among other things, it calls for better education of songwriters around music rights data to ensure good data enters the system. It also calls on the industry to create “a single registration portal for writers and publishers that can reconcile and propagate accurate copyright data around the world”. The UK government, it adds, “could fund a research project to establish this in the UK”.

The Academy also proposes that copyright law be changed to introduce a ‘minimum viable data standard’ on the streaming services, in terms of the data it passes on to publishers and societies. That might in turn put more responsibility onto the labels and distributors to identify what songs are contained in any recordings they upload, ie so that they provide an ISWC as well as an ISRC.

While not fixing everything by any means, having the ISWC included with the recording as it is uploaded would definitely help. Though labels and distributors would probably argue that it’s not currently easy for them to access ISWC information either, not least because with new songs an ISWC may not have been issued at the point a track is released. Some publishers also probably wouldn’t trust the labels to provide accurate data about their songs.

Nevertheless, the Ivors Academy is right to put the spotlight on music right data. Because bad or inconsistent or conflicting or inaccessible data routinely negatively impacts on songwriters, in terms of the speed and accuracy with which payments are made, whether or not money even gets through to the right music-maker, and in terms of the way song rights are valued to start with.

There’s also the issue of that black box, of course, ie the monies not matched to any specific songs. Arguably, with digital, there shouldn’t be a black box, in that a song should be identified for every single stream. Another proposal made by the Ivors Academy is that, rather than black box monies being distributed to the industry based on market share – which usually means big publishers and superstar writers get extra cash – that money should be used to address the data problem.

“Streaming black box royalties should be paid to creator organisations to run projects that will improve the awareness, understanding and timely registration of music metadata”, it states. “This will reduce the amount of unattributable streams being generated and deliver a more efficient operation for [streaming services] and collecting societies. Increased efficiency equals increased value to songwriters and composers”.

Interestingly, another submission that talks about bad music rights data is the one made by YouTube. It uses the data problem as one reason why UK lawmakers should be cautious of following the European Union in reforming the copyright safe harbour that user-upload platforms like YouTube currently rely on to avoid liability for their users’ copyright infringement.

It writes: “In the music industry in particular, data regarding ownership of rights is often unclear. Platforms do not always have access to the complete information that they need about the content they are licensing. For example, to properly account to and pay a music publisher, a licensee needs to know what songs the music publisher owns, which sound recordings those songs correspond to, and the fractional share of interest controlled by the publisher”.

“That information also needs to be updated in real-time”, it adds, “as writers switch publishers and take their rights with them, and also should be provided prior to usage of the applicable works. Historically, it has been very difficult for platforms like YouTube to obtain all of this data”.

Shoddy data combined with the safe harbour reforms contained in the 2019 European Copyright Directive could result in platforms like YouTube having to “over-block” content containing music, it then argues. Meaning videos are blocked out of caution – to avoid the risk of liability for infringement – rather than because of known copyright issues.

And that would negatively impact YouTube’s own community of creators, as well user-experience, and – it also argues – the music-makers and music companies that might otherwise earn royalties from videos that were previously monetised but instead start to be blocked.

The Ivors Academy, of course, very much supports safe harbour reform and would almost certainly reject YouTube’s arguments regarding why those elements of the European Copyright Directive shouldn’t be adopted in the UK too. Though, in the need to sort out the music rights data problem, Ivors and YouTube are unlikely allies.

YouTube concludes: “We encourage the committee to explore the development of a comprehensive musical works and sound recording ownership database that would have beneficial applications across all areas of music licensing”.

“The committee”, it says, “could take advantage of this rare and important opportunity to facilitate collaboration among the music industry to solve the data problems that plague music licensing; poor and missing ownership data cause unnecessary risk and expense for music services, and prevent timely, accurate royalty payments to songwriters and publishers”.

Tomorrow we’ll deal with the complex royalty chains.

You can follow all our coverage of the Parliamentary inquiry into the economics of streaming via this CMU timeline here.