The Weekly International News & Analysis Report
STRAIGHT FROM THE SOURCE
Nov. 15, 2020, Issue 40
Executive Editor Susan Butler
© 2020 Butler Business & Media LLC. All Rights Reserved.
IN THIS ISSUE:
STANDARDS + USE = AUTOMATION & EFFICIENCY = CREATIVE SUPPORT
DEALS & SIGNINGS IN BRIEF
STANDARDS + USE = AUTOMATION & EFFICIENCY = CREATIVE SUPPORT
By Susan Butler
When I hear someone use the term ‘efficiency,’ I often visualize a sci fi movie where people all look the same, dressed in white uniforms (or black, if they’re the rebels), marching in perfect unison toward… something, usually something scary. Certainly no creativity would be involved; creativity and efficiency march to the beats of different drummers.
But not now. Not today, not tomorrow. I’m not sure what it is going to take for the decision makers of this industry to become much more pro-active in actually ensuring that their companies are using standards of communication that are being developed and ensuring that the software applications that they are using make full use of these standards. Since this is, and has been for more than a decade now, a truly global marketplace, let me put this very bluntly.
It is incredibly unfair to creators and performers if the use of their music is not accurately identified, reported, claimed and credited for use at the lowest cost and most efficiently due to the software and information technology (IT) and administration policies that any company or organization is using or, more importantly, not using.
Efficiency in these areas is what will support and strengthen creativity in the digital marketplace, efficiency in terms of automated operations and automated communication, the resulting long-term cost reductions and an incredible increase in accuracy in identifying music and rights holders, tracking use, reporting use, and paying money. Efficiency equals creative support.
And it begins with the adoption and use of standards of communication created at a place where everyone in the digital music ecosystem of business operations is represented and has a voice (even though far too few from one particular sector have so far, disappointingly, chosen to not take an active role). That place is the Digital Data Exchange (DDEX).
Music Confidential now updates you on some of the work DDEX has accomplished so far this year in creating, tweaking and providing guidelines for how certain information is shared — communicated — between parties in the digital music ecosystem with the aim of achieving efficiency, accuracy, automation and, therefore, creative support.
The standards mostly involve ‘messages,’ with multiple standards within a particular ‘suite’ of messages aiming to automate and support efficient communication between certain types of companies or organizations in particular areas of operations and the administration of rights.
CLAIM DETAIL MESSAGE
When a digital music service (DSP) sends a report about the music used (downloaded or streamed) to the licensor of a musical work, such as a performing or mechanical rights society or a music publisher, that report is often in the form of a Digital Sales Report (DSR). DDEX has standards around the DSR that essentially list the types of information that should be provided in that report. The licensor, such as a society, then communicates a claim back to the DSP, claiming which songs it represents, and provides an invoice for payment of that use.
It is not unusual for the claim or the invoice to not be completely accurate.
Until now, there was no standard or easy way for the DSP and the licensor/society to communicate efficiently their questions or challenges regarding specific lines of information in the Digital Sales Report. For example, there may be a question about the music listed in the 689th line of the DSR, but no standard way to communicate that the questions refer specifically to that line of the report. Without this easy reference point, sifting through enormous amounts of information is anything but efficient.
Now, the Claim Detail Message standard (for the non-techie, this means a format or a template) essentially mirrors (“uses the same structure as”) the standard used for the Digital Sales Report and creates a choreography (a way of aligning information) to communicate back and forth — between the DSP and the licensor of a musical work — complaints about errors in a way that can now specifically refer each complaint to a specific line in the Digital Sales Report. No more sifting through all of the specific lines in the report to look into any problem.
Complaints may be about, for example, the licensor/society over claiming (such as claiming to represent 100% of the rights in a song when someone else is claiming to represent some portion of that song); a mathematical error; the wrong tariff/royalty rate being charged in the invoice for a particular use or song, and so on.
For those who will adopt and use this standard, there is now a proper process by which those conflicts can be raised efficiently and in an automated way.
The way this standard message links complaints to a specific line in the Digital Sales Report is very important because it means that the parties can basically follow a whole series of transactions about a specific usage line, which could not be done until now.
What is exciting to me in this field of work is that this standard message also allows pre-claiming of musical works in a more efficient way.
Keep in mind that often collective rights societies wait until they receive a usage report before they begin matching the recordings used to the songs the society represents. Music Confidential reported in the past how ICE Cube, expected to be launched in 2021, was working on ways to be proactive in matching reported recordings to songs before they were reported as being used/streamed in order to speed up this whole matching process and to be more efficient.
While DDEX has needed to update the Digital Sales Report standard for this purpose, the new standard allows the parties to conduct pre-usage or pre-claim work. For example, when a DSP does not have any usage figures to report yet for a recorded song, such as when a DSP has received a Master List Report from a label of recordings to be made available or music to be matched when there is User Generated Content, the DSP could use this standard message to obtain a picture of who owns what rights in the song before the music is streamed. Then, the process of reporting, claiming and invoicing can be much faster and, ideally, all claims regarding the rights represented resolved before the uses are reported.
While companies and organizations will need to build their services around this message to fully automate the process, the standard is viewed as having great potential.
LETTERS OF DIRECTION
DDEX has a standard for the information to be shared in Letters of Direction regarding the licensing of musical works. The Musical Works Notification (MWN) standard is a way of communicating needed information about the rights in a song to licensing entities such as record labels or DSPs.
DDEX now has two more complementary standards. One is a choreography — a description of the way of communicating the information — in Letters of Direction in the US to notify labels and DSPs of a change in ownership in the musical work, such as catalog acquisitions. There is also a confirmation message in this standard, meaning there is a specific way for labels and DSPs to then confirm that they have made the changes to the rights ownership in the songs.
Remember, this is all about obtaining all of the needed information in a way that can be automated between systems.
Up to now, this information has been communicated to labels or DSPs by rights holders in musical works sending Excel sheets, PDF files or emails. All of the information needed is often not included in these documents or communications, which requires back-and-forth messages between the parties. With the standard, the kind of information that is needed is spelled out, how to share that information efficiently is spelled out, and the process can be automated.
This standard message can be used to not only share information needed for licensing purposes, but the standard can be used to provide information about controlled composition clauses and statutory licensing. In other words, the message may be used to say, “I need a license,” or to say, “I have a license under a controlled composition provision in the recording contract or under a statutory license and here is the data that confirms that license.”
Major labels and major publishers are reportedly in the process of implementing the three standards — the Musical Work Licensing message, the Musical Work Notification message and the Letter of Direction message — between now and 2021.
It seems that currently, only the majors really have the facilities to automate this process in this way because most US indie publishers reportedly use Vistex/Counterpoint apps for their admin. For the past two years, Music Confidential has heard from numerous sources that Vistex/Counterpoint has essentially refused to adopt messaging standards that would help indie publishers streamline their operations and communicate more efficiently with other parties in the digital music ecosystem. At some point, indie publishers may want to take a closer, serious look at this seeming software lock on the indie publishing community that could be more harmful than beneficial to the marketplace and, therefore, to creators during these especially challenging times.
Meanwhile, sources say that SoundExchange’s Music Data Exchange (MDX) is “upping the game” in this area because it essentially insists that people communicate more by using web services rather than “clunky, old File Transfer Protocol (FTP) sites.”
Recall that MDX is a hub through which labels and publishers may communicate with each other more effectively to share song information about new releases of recordings and through which a link is made to the specific song recorded at the time of release, if the labels and the publishers do what they are supposed to do. MDX urges them along in this process. (Music Confidential, Issue 26, 2020: Evolving Tech & Transparency)
Sources also say that MDX could help indie publishers let the licensing parties know when there are changes in ownership of catalogs — notification of ownership, obtaining a license and catalog changes — all three of which are supported by DDEX standards.
STANDARDS FOR THE US MECHANICAL LICENSE COLLECTIVE
Under US law, the new Mechanical License Collective (MLC) is required to make certain information available related to the musical work (song), the recording of that work, the links between them, and the song’s ownership and their ownership shares.
Many parties will access that information directly from the MLC database. However, there will be times that the MLC will want to provide such data in bulk to third parties.
DDEX has created the Bulk Communication of Work and Recording Metadata standard message as a mechanism to support bulk sharing of this information from the MLC to third parties. The standard creates a format (a “database schema”) to provide a ‘data dump’ to whomever may need it.
Also for the DSPs that are required to report uses to the MLC, DDEX has updated a portion of the Digital Sales Report message (the basic audio profile) to include information required under US regulations that are not necessarily needed in other situations (such as the name of the studio producer of the recording of the song).
MUSIC LICENSING COMPANIES/NEIGHBORING RIGHTS
DDEX has a standard message for music licensing companies (a.k.a. neighboring rights societies) but has now changed the name of the MLC standard so as not to confuse it with the US Mechanical License Collective/MLC.
This standard is now called the Recording Data and Rights standard (RDR).
In addition to changing the name, this standard is now split into three different messages — the reporting message, the choreography message and the notification message.
Using the original MLC message means that a label is providing all of the information necessary to notify a music licensing company (neighboring rights society) about the sound recordings that the company would represent/collectively manage worldwide.
The choreography now essentially explains how to exchange the message between parties.
Also, there is now a standard message for the music licensing companies to provide sales and usage information back to the labels. For example, the message includes reporting what has been done, how the music licensing company has generated revenue based on those sound recordings and communicates that back to record companies.
RECORDED MUSIC CATALOG TRANSFERS
There has been no common set of rules, guidelines or approaches to communicating all of the needed information to DSPs when there is a transfer of ownership or rights in recorded music. Therefore, it is not unusual for recordings to drop off of a service for a time, drop off playlists or encounter other problems. (Music Confidential, Issues 28-30, 2019: The Pain of Catalog Transfers)
DDEX now has a Best Practices document to help support this intensively manual process. These guidelines spell out what each party should be doing for transfers.
Under these Best Practices, the labels must first get their metadata on all of the recordings. This sounds strange that a label would not have metadata on its own recordings, but when labels go through an aggregator to deliver recordings to DSPs, the label personnel nearly always enter the related information (the metadata) through the aggregator’s web portal and fail to keep copies for themselves. When those labels sell their catalogs, they don’t have the metadata on the recordings being sold or transferred — it’s with the aggregator.
The metadata belongs to the label, so labels must first get their metadata from the aggregator under these guidelines.
Then, the selling label should communicate that metadata to the purchasing label and advise the aggregator so everybody knows what is going on.
The labels can communicate in a crib sheet (an informal document) to the DSPs what they will be soon providing to the DSPs. Crucially, the labels should provide old identifiers for the recordings and the new identifiers to the DSPs so the old can be mapped to the new.
Then the parties should agree on how the take-down and the pick-up of the recordings and related metadata should occur at the DSP. Since the DSP now knows what is about to occur, the music should not fall off of the platform.
Finally, the selling label sends take-down notices to the DSP, and the purchasing label sends new deal information to the DSP — ideally using the DDEX Electronic Release Notification (ERN) message standard.
DDEX reports that through this pandemic, the group has continued to work intensely, publishing more than a dozen standards, with nearly half as updates to existing standards. A number of things they believe are truly important steps forward in achieving effective communication throughout the digital music ecosystem.
For more information on these DDEX standards, visit the group’s site at ddex.net.
DEALS & SIGNINGS IN BRIEF
- Sony/ATV Music Publishing signed an agreement with SmartStudy, the global entertainment company behind the children’s brand, Pinkfong, to publish their entire catalog of children’s songs; separately, Sony/ATV signed rising country singer-songwriter and artist Brad Cox to a worldwide publishing deal who will be collaborating with the company’s creative teams in both Nashville and Australia; separately, Sony/ATV signed songwriter and producer Jason Evigan to a worldwide publishing administration agreement.
- Canada’s SOCAN announced final 2019 financial results, including record domestic and international collections for the company’s member music creators, music publishers and visual artists. The company also announced significant financial losses due to past investments in the acquisition, creation and financing of the new business venture Dataclef. Highlights of SOCAN’s 2019 results: CA$405.6 million in total collections, an 8.2% increase compared with 2018; record-setting domestic collections of CA$315.1 million, 10% more than 2018; a 2.2% year-over-year increase in international royalty collections (CA$90.5 million); a 37.6% increase in revenue from digital sources (CA$86 million); and reproduction rights collections increased to CA$12 million. Distributions to members totaled CA$296 million, a 6% decrease compared with the CA$315 million distributed in 2018. SOCAN reports the disparity was due primarily to the steep learning curve required for the company’s newly deployed technology to process international and television income. Significant progress has been made in these areas in 2020, as SOCAN continues to leverage this new technology to meet the data-intensive demands of the digital age. Further, in 2016, SOCAN through its wholly owned subsidiary Dataclef Inc., embarked on a plan to implement the organization’s strategic vision. The 2019 financial results include losses that resulted in an impairment of CA$41.7 million to the advances made by SOCAN to fund its subsidiary operations since 2016. Through extensive evaluation and analysis, SOCAN has developed a plan to manage the losses, which have not impacted distributions. Aspects of the plan include the sale of Dataclef assets, a significant reduction in SOCAN’s overhead expenses, a reorganization of the Dataclef operation, and new management leadership, all of which have already been put into action.
- Warner Chappell Music renewed its deal with Mandopop artist David Tao, a pioneer of Chinese R&B.
- Sentric Music Group and Beatport struck a deal that will see the independent publisher collect royalties directly from Beatport.
- Top Dawg Entertainment’s Kendrick Lamar signed an exclusive, worldwide administration agreement with Universal Music Publishing Group.
- Reservoir signed singer-songwriter Ben Harper to worldwide publishing deal. The deal includes global rights to Harper’s entire catalog of works.
- Concord Music Publishing signed singer-songwriter Donovan Woods covering all future works as well as several songs off of his latest album.
- The US Intellectual Property Enforcement Coordinator released a forward-looking plan to continue America’s bipartisan tradition of strong intellectual property policy and enforcement. The plan includes a commitment to review the impact of the copyright safe harbor in Section 512 of the Digital Millennium Copyright Act (1998) on IP protection and enforcement domestically and around the world.
- Warner Music entered into a new licensing agreement with artist-first music streaming platform Audiomack, making the record company’s catalog available on the service across Africa, Canada and Jamaica for the first time. Audiomack, which boasts more than 16 million monthly active users, will also provide support for Warner Music’s A&R research activities across these territories.