The last 15 years have been a wild ride, but the dust is finally starting to settle, and we’re on the brink of a more efficient, transparent, and sustainable music business. All Together Now is a series of Q&As with some of the best and brightest minds in the music business regarding the changes they are experiencing and the steps they are taking to adapt. We interview influential artists and songwriters, as well as leaders from labels, management teams, publishers, and streaming services to hear what they think it takes for us to come together to build a faster, smarter music industry. All together now.
Subscribe here to receive our roundup of notable music business news and ideas — delivered by email weekly.
See how Songspace is powering a faster, smarter music industry at http://songspace.com
“A 70 to 80 percent success rate in tracking and compensating is not acceptable in digital…We have an accountability problem in these industries, and word is getting out. Until we fix that, it won’t be possible to do much but theorize about alternatives to current revenue model. So let’s commit to universally deployed data standards on both sides of the music copyright…”
Data, data, data. That’s one of the many drums Casey Rae is beating these days. For good reason — it’s bad (or missing) metadata that’s caused a number of the problems the music industry has dealt with lately; most notably the fireworks involving Spotify, its competitors, the National Music Publishers Association (NMPA), and the artists who feel they’ve been exploited by those digital service providers. These data issues are the sort that Rae and his cohorts at the Future of Music Coalition have thoroughly detailed in a handful of articles; the two part series, “Where’s My Mechanicals?”; “Transparency: Why it Matters in the Digital Marketplace”; and, most recently, “It’s (Block Chain) Party and You’re Invited.” Rae is the CEO of the FMC, a Washington D.C. nonprofit that pushes for a “musical ecosystem where artists flourish and are compensated fairly and transparently for their work.” The Coalition’s research and reporting is an invaluable resource for artists and music business types alike (i.e. “Metadata for Musicians”), and every year its Music Policy Summit brings music industry leaders to D.C. for the sort of forward thinking conversations that are necessary to move things closer to where they need to be.
There aren’t many individuals better qualified than Rae to discuss the state of things and to forecast where the industry is headed. Over the years, he has testified before Congress on topics ranging from emerging business models to intellectual property. He’s also written about streaming and other music business-related subjects for the likes of NPR, Washington Post, New York Times, Billboard, and L.A. Times. He currently teaches at Georgetown University and via Berklee School of Music’s online platform, in addition to running his own consultancy, Heru.us, which advises professionals in media, technology, and public consultancy. Oh, and he’s worked as a musician and a recording engineer.
We were thrilled when Rae agreed to take a few moments out of his chaotic schedule to chat with us about streaming, data, and transparency. Read on to hear his take on those topics, and to learn why he is excited about “the potential of blockchain.”
Billboard posted an article last week which declared streaming to be “undoubtedly the future of music.” And recently Darius Van Arman told us that he “truly believe[s] that sometime soon we will have a bigger music industry than what we had in the heyday of the 90s and early 2000s.” Can these two viewpoints coexist? Does streaming present a sustainable future for recorded music?
There is the possibility that the access model will one day be so ubiquitous that, coupled with piggybacking on other entertainment categories, music can return to a determined growth cycle. This outlook informs the market attractiveness of streaming for investors and some music companies. Another factor in favorability is catalog strength. If you control a sizable backlog of still-desirable recordings, you can monetize them on interactive services with no tremendous amount of anxiety. Greater availability of back catalog on streaming sites may even spur sales of scarce items like deluxe vinyl reissues.
For new material, many music companies would like a greater opportunity window their releases not only to make money, but also to motivate certain important audience segments. We also hear calls to bring other service providers into greater equilibrium with subscription-only interactive streaming. Common targets include YouTube and Spotify’s free tier. Perspectives here are influenced by career stage, genre, catalog size, revenue externalities and audience demographic. One growing realization about streaming is that scale rewards market participants in ways that are starkly disproportionate. Many artists and niche music providers are finding themselves on the wrong end the stick. Given that the independent sector is where any meaningful diversity in music tends to live, anyone who cares about the viability of music outside the mass market should put their heads together with like minds in the business or risk severe harm to musical innovation, which has always driven the technological kind.
What are some immediate improvements that streaming services can make to push the industry closer to that point?
The specific details of the recent meltdowns in the music royalties space proves that in order to even have the hope of increasing streaming adoption without virtual or actual riots, we need some basic confidence that the system can function properly. A 70 to 80 percent success rate in tracking and compensating is not acceptable in digital. Plus it’s just bad PR. We have an accountability problem in these industries, and word is getting out. Until we fix that, it won’t be possible to do much but theorize about alternatives to current revenue model.
So let’s commit to universally deployed data standards on both sides of the music copyright, common database environments for expedient matching and resolution of discrepancies, along with a protocol for universal information updates when additional data is modified by authorized parties.
We’ve heard a lot about the value of artists owning their masters as streaming grows. Is that a sentiment you’re hearing in your work at the FOMC? At this point, do you think it’s more important for an artist to own masters or publishing?
Given the current issues with scale in a full-catalog licensing environment, I’m not sure that anyone but top-level acts would be able to buy a summer home with accrued earnings. Acknowledging the nature of contracts, it is likely that some music creators may do better owning their own catalog or repertoire and having administration handled by a third party for a non-crippling fee. Still, it’s important to note that some of the most insightful structural critiques of the current interactive streaming model have come from artists who own their own masters and/or publishing. Right now the focus must be on systems and data integrity. From there, we can take a better informed look at the economic variables and experiment with opportunities beyond simply free tier or no free tier.
How do you define transparency as it relates to music rights and royalties?
structural transparency: how different services function and how they compensate artists
rates and revenue transparency: how money is split, who gets paid what and why
repertoire transparency: accessible copyright ownership information to facilitate more efficient licensing and accuracy in payment
There’s been a lot of back and forth recently about whether or not blockchain is a solution to the music industry’s transparency issues. You are a supporter of the technology. What excites you most about blockchain and what needs to happen for it to become a viable platform?
I’m excited about the potential of blockchain. I am maybe even more excited about determining a community defined minimum viable data standard that will hopefully include the bedrock standards of global numeric identifiers for sound recordings and musical works, perhaps with accompanying hashes of each unique audio recording for faster reconciliation of discrepancies in songwriting and publishing data. The broad adoption of standardized location tools is also worth pursuing, as are open source or common database environments that allow your dataset to tango with mine.
Blockchain is enticing because the decentralized but authenticated nature of the technology is a bold step into a more transparent digital marketplace. Keep in mind that none of the blockchain concepts I’ve come across compel sensitive financial or other data. It is merely an elegant way to express a complex rights bundle with associated permissions and, depending on comfort level, point-of-licensing options.
Subscribe to All Together Now Weekly to receive our roundup of notable music business news and ideas.
See how Songspace is powering a faster, smarter music industry at https://songspace.com.