Over the last couple of months, I’ve had a number of conversations with industry people who are very concerned about the data that’s at the heart of streaming music services. All of them–Spotify, Apple Music, Google Play Music, Tidal, Rhapsody, you name it–are supposed to report exactly what songs were streamed to how many people. Those numbers determine how much artists and composers get paid.
Here’s the problem: that data is often incomplete or incorrect. That means (a) artists/composers aren’t getting paid what they’re owed; or (b) money is going to the wrong people.
You might be surprised to learn that there isn’t some giant global database of songs which can be accessed by anyone who needs to identify a digital song file. Yes, there’s something called an ISRC number, but not every song in the 35 million-ish library of the streaming services has one. You see the problem.
MIDiA Research takes a deeper look at things.
2016 is proving to be tricky year for streaming rights. No sooner did it start to look like artists and labels were beginning to feel comfortable with streaming then along come a veritable flood of songwriter class action suits in the US, against TIDAL, Rhapsody and Spotify, twice. At the heart of the legal action is the issue of streaming services not paying mechanical rights to songwriters because they have not identified and / or not been able to identify, all of the songwriters. The streaming services counter that they a) have been adhering to the rules as they stand and b) that it is difficult / impossible for them to track everything. It is a complex issue that may even have some of its underlying assumptions turned upside down (in favour of streaming services). For a good introduction to the issues see this balanced MusicAlly piece. Whatever the legal intricacies, though, there is a crucial underling issue: bad data. Or, to be more precise, a complete lack of data.
International Music Licensing Is Excessively Complex
International music licensing is highly complex and anyone who tries to tell you differently is either wrong or lying. That is not to suggest for a moment that music services should somehow not have an obligation to invest time, effort and resource into licensing music, far from it. But it does mean that the current system is not fit for purpose.
Recorded rights, the ones licensed by record labels, are relatively straight forward, if expensive and inflexible. But as soon as you move beyond label rights, things get complicated, fast. There are performing rights (which don’t include radio in the US, but do in most other markets…oh and then there are separate radio and video performing rights, often called neighbouring rights, for labels that are often licensed by an entirely different set of bodies than songwriter performing rights), mechanical rights, synchronization rights and others too.
In practice, it is highly unlikely you’ll ever need all of those rights but in most use cases you’ll need more than one. And if you are a streaming music service you will need a few. Add into the mix that in every major music market globally there are normally a few different licensing bodies that you have to get rights from. Oh, and the bigger music publishers have often removed some, but not all, of their rights from those bodies that license on their behalf. You get the picture.