Congress wants to ensure all artists get paid, every time, by every streaming platform. And they want to do it by creating a single, unified licensing database.
If you’re an executive at Spotify, you might be experiencing a prolonged, extreme migraine headache. And the reason is that music data, ownership records, and a gaggle of licenses remain wildly disorganized. Because the music industry never figured out how to create one!
And that’s costing money, lawsuits, and IPOs. Last year, Spotify negotiated a $30 million settlement with the National Music Publishers’ Association (NMPA) $30 million in unpaid mechanical royalties. This year, the Swedish streaming platform also agreed to pay indie songwriters $43.4 million to cover unpaid mechanical licenses.
Ahead of their IPO, to avoid future problems, the company acquired Mediachain to fix the metadata attribution problems haunting their platform. But that was on top of a database structured with the NMPA (guess that’s not working as perfectly as imagined).
And on top of all of that, independent publishers are starting their own lawsuits that could potentially reach damages in the billions!
+ Spotify Faces $365 Million In New Copyright Infringement Claims
But this isn’t just costing Spotify billions. It’s stunting the growth of the entire music industry. Because if you can’t be assured that you won’t get sued for millions, why take the risk?
But wait: what if transparent, easy-to-find information existed for every song, in a single, unified database? Every owner, every split, and every license?
Efforts to create that database within the music industry have failed miserably. In fact, there’s a pervasive thought that certain sectors within the business are actively blocking it. You see, transparency is great for the industry but bad for certain narrow business interests, which means a broad-based database initiative is difficult to complete.
Now, to make sure all artists get paid, Congress may soon create a central, unified music database.
‘Transparency in Music Licensing and Ownership Act’
That’s right: Representatives Jim Sensenbrenner (R-WI) and Suzan DelBene (D-WA) have proposed a bill to establish a searchable digital database. The database would contain historical and current copyright ownership and licensing information. Dubbed the Transparency in Music Licensing and Ownership Act, the legislation would promote a “vibrant music licensing marketplace.”
The music licensing system would be open and accessible to those who both own and license music. All stakeholders in the marketplace would have access to authoritative and fully searchable records of music ownership. The database information would be free-of-charge to users as well as updated in real time.
The proposed legislation would aim to fix a widespread problem in the music industry. The rise of streaming has led to a strong music industry revival. Major labels have increasingly posted record revenue thanks to streaming. However, a central database of music ownership and copyright information simply doesn’t exist. Instead, a number of proprietary databases exist to cover some copyrighted works, with limited sharing.
The results have been disastrous. Due to a lack of up-to-date information, some streaming platforms may not rely on accurate copyright information. Thus, artists may not receive fair royalty payments. Or, they flat-out sue.
But there are also plenty of other benefits outside of on-demand streaming.
That includes performance licensing, which covers usage within bars, clubs, and other public places. Those licenses are covered by PROs, though these same groups that license may be obstructing the global database. After all, if you could find all the rights owners in a common database, why do you need them anymore?
Jim Sensenbrenner first introduced the bill to help small businesses. In an op-ed piece in the Morning Consult, he explained,
“The problem, simply stated, is that when a venue wants to play music, they turn to the performing rights organizations that offer blanket licenses covering millions of songs within their respective catalogs. However, this process is inefficient, confusing and costly to bar and restaurant owners. Without a clear database of options and licensing requirements, business owners are often left to guess what licenses they need and what products they’re actually purchasing.”
Performance rights organizations (PRO), according to Sensenbrenner, have also harassed small business owners. He states that PROs “control almost 90 percent of all music.”
“As a result, many venues are choosing to stop playing music or booking live performances. When venues stop playing music, it not only impacts the atmosphere at bars and restaurants, but it also affects the entire music ecosystem. This loss means less revenue is generated for songwriters and that there are fewer opportunities for artists to perform and discover new audiences.”
While PROs offer access to small-business owners, they’re often “not interoperable or comprehensive.”
He writes that with a central authoritative database, people could easily share, use, and enjoy music free from harassment.
Image: Public Domain
I would imagine that the US government is only concerned with US copyrights. Certainly a database that covers all US works would still be beneficial, but there’s still the issue of the REST OF THE WORLD.
I would think the idea is to include info about foreign works as well, at least to the extent the rights of those works are controlled in the US. Other territories have their own ways of dealing with this. Some better than others, of course.
I’m sure that’s the idea, but something tells me the US gov’t won’t be funding a global works database. Funding a global war on terror though, that might just get some traction.
So someone just has to convince congress that if the US gov’t doesn’t fund the creation of this database, the terrorists win.
LOL. Awesome.
This is a pleasant fiction.
First, this bill will violate TRIPS because it denies copyright protection by imposing an unlawful formality on copyright owners large and small. Think that’s impossible? Check out the last time grandpa forgot his meds and passed the Fairness in Music Licensing Act. Thanks to Sensenbrenner, US taxpayers pay royalties to ex-US songwriters for performances that US writers can’t get paid on. Millions of dollars in royalties. How? WTO arbitration. You saw the part in the bill that said only Americans get screwed? No? Just because it’s not there doesn’t mean he doesn’t know better.
Nothing in the bill requires anyone to actually use the database if it ever gets built.
Nothing in the bill requires users to actually pay royalties to get the safe harbor. That’s like safe harbor 15 or so for the innovators, right?
Notice that there is a limited group of companies who can get the safe harbor that bears a striking resemblance to MIC Coalition members?
How does this help anybody but the MIC Coalition and Google? That would be Google who bought Rightsflow for the songwriter data and who have forced songwriters to populate YouTube’s content management system.
Do you DMN guys actually read this stuff?
Google is at the digital center of the centralized ‘one world govt’ the maniacs are trying to build. It must end.
Thanks “Ian” for the critique. One quick question: Does soundexchange pay royalties to those who do not register with soundexchange? Of course not. If you don’t register, don’t expect to get paid. Just sayin’. It’s a smart piece of legislation because it helps artists get paid, unlike those who perpetuate the current state of non-payment.
It’s not the same thing at all. The database in the bill is meantr to roll back copyright protection from the 1970’s. Either register your copyright in a special database, maintain that registration, or you are denied your rights – you are denied your legal right to sue for damages. Basically this bill is meant to let businesses have access to a lot of music wihtout paying for it.
Don’t worry. No legislation is going to make it through Congress until 2021 (or maybe 2025).
Population of this database and data updating and augmenting will be the main challenge . Data is so bloody fragmented, so even original rightholders do not have their actual data complete and up to date. I can tell you this from our own experience , dealing with same very challenging task for the last 7 years
Another attempt to integrate everything in the world together so that it can be controlled, by a few number of people.
LONG overdue!
If you want quick implementation and global reach ASK Google to do it.
Then they can keep track of the payments and supply properly coded music to 100,000 Radio stations, 5 million busy public spots and 7 STUPID streamers operating as discovery moment music stores.
We will start play subscription and advertising free music! The best for particular place or market and charge for ADDITION TO PERSONAL PLAYLIST.
$300B music industry by 2030.
UMG suicide on Ek’s and YouTube steroids has to STOP NOW!
A solution looking for a problem. Streaming companies have absolutely no problem finding people to ask them permission to use their music – when they want to. They have a problem compensating artists and songwriters, though, and that’s what this bill is about.
In the same way, if you want to have msuci in your venue, go buy licenses from the PROs. It’s simple, it just costs money. There is no reason to throw additional burdens in the way of artists and songweriters, other than to facilitate stealing from them.
Here’s a seemingly obtuse question: why isn’t this database already created? After all, we as US taxpayers are paying millions to a US Copyright Office that has already tried and failed to create a unified database, of course while flushing millions down the toilet.
Wouldn’t an agency dedicated to managing, overseeing and guiding US Copyright law have a database of the copyrights it oversees?
Why Donald Trump Should Destroy the US Copyright Office
https://www.digitalmusicnews.com/2017/04/13/donald-trump-destroy-us-copyright-office/
If I’m not mistaken, this bill is simply making it easier for businesses to play music through the license they paid for. Currently venues are playing music with a risk of songs playing through PROs they aren’t licensed to. Businesses are ceasing music in establishments because of the problem, which is hurting artists revenue in the process. The bill is putting a responsibility on the artist to keep their information up to date in the database, so businesses can play what they paid for, and artist can rightful receive their credit and etc.
All true! One licensing expense!
As a bar owner, businesses pay extremely high licensing costs to multiple entities, SESAC, BMI, ASCAP plus internet jukeboxes take another 20% off the top. How much of that money actually goes to the artists???
Good question? I think so, since each entity has CEO’s, & many employees.