It is news to absolutely no one in the business that clearing music rights is a complex, frustrating, labyrinthine process. Copyrights in compositions and sound recordings have always been convoluted, but then you factor in the role of PROs, the impact of new technologies, shifting rights usages, the switch from linear broadcasting to on-demand streams, territorial restrictions, holes in metadata et cetera and the world of rights clearance becomes incrementally more complicated.
Synchtank’s latest report, Communication Breakdown: Complexities and Solutions in Music Rights Clearance, tackles all of these issues head on – speaking to the experts involved in rights clearances, pinpointing the problems, identifying the issues looming on the horizon – and then offers a series of solutions that should remove many (not all, that’s impossible) of the headaches the professionals here experience on a daily basis.
Adam Taylor, CEO of APM Music, outlines the ongoing (and mounting) challenges as follows: “Everything has gotten more complicated. Technology has influenced every single aspect of the supply chain and the value chain of music, from how music is created to how it is marketed, distributed, discovered, monetized, tracked […] Technology has moved more quickly than the law: music rights are somewhat archaic and confusing. And, so in order to be able to issue certain kinds of licenses, you need to figure all kinds of things out.”
“Technology has moved more quickly than the law: music rights are somewhat archaic and confusing. And, so in order to be able to issue certain kinds of licenses, you need to figure all kinds of things out.”
– Adam Taylor, APM Music
A lawyer, speaking anonymously, says “there are so many forks in the road” in the rights clearance business and this is only exacerbating things. “You begin with this fork between masters and compositions,” they say. “Then you get to the fork between performing rights and mechanical and sync rights. And then you get to the fork between performing right societies and publishers.”
The new Synchtank report is heavily focused on forensically skewering these market complexities that make everything so difficult and so time-consuming here. While it does not shy away from the many problems, it uses them to lead into a series of proposed solutions.
So what are those challenges in the first place?
Challenge #1: budgets are shrinking and companies increasingly want something for nothing
There might be more outlets for music (from major streaming brands to whole new social media platforms), but it does not follow that rates and fees are rising.
Experts here spoke about “constrained budgets” and the fact “budgets have come down” as obstacles for both rights owners and rights users.
Productions might want to use more music, but there is a sense that the same budget is being spread more thinly across more music rights. But there is something darker happening, where bigger players are taking a hardline approach and trying to swap out fees for the nebulous promise of “exposure”.
Taylor notes that some “multibillion dollar corporations” will pay huge fees to actors and directors but not to music companies, playing rights owners off against each other to drive fees down or try to get music for nothing.
“[D]ue to the glut of music that’s out there, they’re willing to say, ‘We will only use your music if you give it to us for free – no sync revenue. And we know you’ll make money on the back end with performance,’” he says. “And in some cases they ask for a share of that performance revenue of the publisher’s share […] on the back end as a condition of doing business, and there are large companies that do this […] it’s a shame that they do.”
There is growing use of library music and commissioned music (or one-stop shop production music companies) and that can mean the fees offered for music controlled by labels and publishers is being pushed down. The fact these rights are also, relatively, more straightforward to clear gives them, in certain instances, an organizational and commercial advantage.
Challenge #2: the number of territories and platforms are multiplying
More territories and more platforms mean more opportunities and more revenue potential. But they also mean multiplying the existing problems and complications in the sector.
Different rules and procedures apply in different territories and dealings with different PROs in these markets will have subtle or major differences.
On the PRO issue, the fact that they all run different rights databases means they do not always communicate clearly and easily with each other. In 2020, however, BMI and ASCAP in the US partnered on Songview to offer “detailed, aggregated and reconciled ownership data” for performing rights for the 20m+ musical works that sit in their respective databases.
One music supervisor calls this “a huge game changer” and “the biggest advance in terms of finding song rights holders in the past decade”. While they say this should clearly have happened years ago, the fact that it now exists is a huge step forward and a template for other markets to look to replicate.
With the increase in the number of outlets for films, documentaries and TV series (from theaters to streaming services) comes new issues. One music supervisor says that different distributors will deal with different outlets and that means rights at the very start increasingly have to be done on “a worldwide buyout basis because it can’t be renegotiated every time it switches distributor”.
“The way the world of TV is going, it is moving more app or internet based. And if the channels move that way, you might find we’re operating more of a US model where there’s a lot more commissioned music, a lot more library music, and then more one-off license fees for commercial music.”
– Music rights executive, European broadcaster
An additional complication here is that platforms like Netflix, Amazon Prime Video or Apple TV+ do not release its viewing numbers for individual shows or series. As such, it is impossible to quantify a step deal with them as no one knows precisely what the audience is.
A music rights executive from a European broadcaster says that, despite the UK blanket licensing system, “digital platforms are a big one to solve” for the sector. “The way the world of TV is going, it is moving more app or internet based. And if the channels move that way, you might find we’re operating more of a US model where there’s a lot more commissioned music, a lot more library music, and then more one-off license fees for commercial music.”
Challenge #3: ensuring rights are cleared and that everything is being properly tracked
This is nothing new, but the fact that more contemporary songs involve a larger number of co-writers (and they may all be signed to different publishers) makes it incrementally more complex to clear rights and ensure payments are split accordingly.
One rights executive at a US TV network outlines just some of the hurdles here. “17 years ago, you usually cleared music for one use, that was with one writer,” they say. “Everything that we are doing right now, the [clearances] have been extremely complex. It is very challenging. Why? Because you have many writers, you have a lot of independent writers that are maybe in the process of being signed by a major music publisher, but in between you don’t know how to locate them.”
Then there is the music catalog acquisition bonanza that is currently happening where whole song catalogs or just those of an individual writer are being sold. This means there is a transition period and clearing rights and making payments will take far longer than is normal in the business.
“You have many writers, many shares, some of these new songs have samples in them (samples are already negotiated in the share of a song) and sometimes the publisher has not negotiated with the other publisher for these shares, so that’s very complex.”
– Music rights executive, US TV network
Throw in the fact that recordings will have samples and the number of writers and publishers involved in a track can easily run into double figures.
“You have many writers, many shares, some of these new songs have samples in them (samples are already negotiated in the share of a song) and sometimes the publisher has not negotiated with the other publisher for these shares, so that’s very complex,” says one music rights TV executive. “It’s challenging to get the clearance that you need because the publishers may not have negotiated their deal internally.”
Challenge #4: searching for music and having robust metadata
Metadata (or, to be more precise, watertight metadata) is a perennial problem in the music business – and one that is not getting any easier. If anything, with the increase in the number of writers on songs and the number of platforms where music is used, it is getting even more fraught. As more new tracks flood into the market every day (upwards of 100,000 being added to DSPs daily according to some estimates), this problem just becomes more bloated.
We are also seeing an explosion in the number of genres and subgenres that are being coined on a rolling basis – and there are often multiple names for a new genre in its nascent stage before an agreed-upon label sticks. This all makes searching for and categorizing music a tightrope walk in a hurricane.
One response by boutique music libraries has been to go super-niche in what they curate, keeping their catalogs small and manageable.
Building a technological infrastructure to handle this is akin to painting the Golden Gate Bridge; as soon as it’s done you have to start all over again.
Adam Taylor of APM Music says the tech here has a lifespan of a decade, making this an ongoing worry for the business.
“Each search engine structure seems to last about 10 years, so I’ve had two and we now are just finishing up the third, really writing from scratch a completely new architecture that takes advantage of the newest structures, and artificial intelligence and APIs,” he says.
The metadata problems from the music business are now crashing into the metadata problems of the TV and film business. While there are uncertainties around the use of music genre labels, the same applies to TV show and film categorizations.
Getting these two ill-fitting systems to run together smoothly is a mounting worry, according to Ryan Neill of PrimalHouse Music.
“The biggest challenge in the world is that there isn’t one defined set of genres. Someone calls it ‘documentary’, someone else calls it ‘drama, emotional’, someone else calls it ‘world ethnic’.”
– Ryan Neill, PrimalHouse Music
“Our challenge on our end is, when we receive new catalogs, we receive new music, we tag this music with the appropriate metadata that fits our search terms,” he says. “And the biggest challenge in the world is that there isn’t one defined set of genres. Someone calls it ‘documentary’, someone else calls it ‘drama, emotional’, someone else calls it ‘world ethnic’. We don’t have a set group of search terms. I’ve heard talk about fixing that, but no one has really taken the lead on that on a global scale… and that’s quite a challenge to have everyone agree!”
Challenge #5: supporting different tools
As the number of different platforms and different use cases for music grow, so too do the problems in how to handle things and streamline processes.
Companies are left with “a patchwork of spreadsheets, services and tools” that are not always fully compatible.
Supervisors all talk of the bumpiness here and their desire to get smoother integration between platforms and the software solutions they use.
Companies are having to use a suite of tools to ensure that rights are properly licensed for the right exploitation in the right territory over the correct time frame. They also need to ensure there is a clear audit trail and approvals process (as well as covering off payments and accounting out of the back end).
Increasingly complex sync processes are being handled by a mosaic of tools that were never designed for a workflow of this nature. This is made all the more challenging by the fact that different parties in the process might all use different tools.
On top of everything else – rights clearances, metadata challenges, platform multiplication – the software that was intended to make things easier is actually making things harder.
Of course, the music clearance business continues to operate and play a hugely important role, but the problems and the complications here should not simply be accepted and, in being accepted, become normalized.
For a business to be truly fit and viable for the 21st century, legacy problems such as those outlined above, as well as the emerging complications, need to be eradicated for the business to live up to its true potential.