by : Business, Featured Articles, March 2012

Waiting for GRD

Waiting for GRD

This is the second in a series of articles tracking ongoing efforts worldwide to develop a single registry of songs. In our December cover piece, Toward Global Rights, we suggested that there is growing recognition that music trades with friction. Even if a music provider has the will and patience to negotiate the complicated maze of permits required for using and selling a musical work, often clearances cannot be guaranteed for lack of unified information about ownership. Data duplication, and the resulting errors, creates inefficiencies as well that adversely affect publishers and the creative community.

We detailed some attempts to solve this problem on a global scale, and detailed movement in WIPO’s International Music Registry (IMR). IMR’s scoping report is due next month and we shall comment on it in due course. A parallel initiative, supported by the European Commission, is the Global Repertoire Database (GRD). (Although IMR and GRD representatives tend to describe both projects as being mutually reinforcing, so far they appear to be independently run and either could succeed first.)

A couple of weeks ago, at MIDEM 2012 in Cannes, France, GRD’s presence was stronger than IMR’s.  GRD produced a well-attended panel in association with ICMP, the International Confederation of Music Publishers. Present too, and supporting GRD, was CISAC, the umbrella organization representing global authors’ performance rights. Like IMR, GRD will release its own scoping study shortly.

A Value Proposition

The economic case for the GRD rests on the value of international publishing revenues, which are about $8 billion annually. One-tenth of that goes into maintaining the infrastructure for collections, but rights holders and licensees incur considerable additional expenses in processing royalties in the areas of database management, royalty distribution, and dispute resolution. The GRD believes that a one-time investment in a global database of $16-32 million is a small amount to pay compared to the $800 million routinely spent on collections today. It argues, additionally, that the production of authoritative data about musical works would ensure transparent rights clearance processes—both locally and worldwide—and therefore drive more business to every stakeholder in the music supply chain (“GRD Working Group Recommendations”, Dec. 2010, 6 & 14).

WIPO’s IMR would likely use these arguments verbatim. But in order to fund its own project, it would probably need the support of a critical mass of countries in the United Nations, on which WIPO is financially dependent. Not so the GRD group, which is proposing a more Euro-centric startup to begin with. Therefore, the chances are good that GRD can move ahead with funding sooner, either by tapping its stakeholders or by relying on commercial financing.

Grass-Roots Work Needed

The politics, though, are complex. This is frontier work that encompasses practically anyone that records, performs, or delivers music anywhere. Rights holders, including songwriters, publishers, record companies, and performers have the highest stakes. So do national author societies because the collection of global performance and mechanical rights rests on their shoulders (the same can be said of the producer and performance societies, mostly European, that collect performance rights). Moreover, if a registry gets off the ground, a single repository point would greatly simplify the identification of rights for music downloads, video streams, and other broadcasted material so music service providers have an incentive to join the talks. Finally, the sheer variety of interests at stake touches on supranational organizations like the European Union, intent on harmonizing copyright law and trading practices in Britain and the Continent, and the World Intellectual Property Organization, historically a pioneer in the field international patent and copyright management in both emerging and rich economies.

B2B database builders and data management consultants are expected to reach out to all of the parties above. GRD formed its first working group in 2009 with representatives from (i) EMI Publishing and Universal Publishing; (ii) collection societies PRS for Music (Britain), SACEM (France), and STIM (Sweden); (iii) music service providers iTunes, Google, and Omnifone; and (iv) multinational member associations CISAC, ICMP, and ECSA (European Composer & Songwriter Alliance). Its first order of business was to invite bidders to propose a technological solution. The winner was International Copyright Enterprises (ICE), a company wholly owned and funded by, respectively, British and Swedish societies PRS and STIM. Another British accounting firm, Deloitte, was put in charge of overseeing the project and producing the scoping report. In fact, French and German participation in GRD is so far somewhat diluted (although Monsieur Michel Allain, Director of Organization and Information Systems at SACEM did sit with the GRD panel at MIDEM).

Another issue is the agreement over works’ registration and data processing among publishers. Although a global database might make it easier, say, to hear Slovakian music in New Zealand (because the Slovakian rights could be promptly found, identified and, likely, traded), publishers in Slovakia would have to agree to register their works in a centrally traded repository over which they may feel they have less control than they enjoyed under the local collecting body. Fear of the new can be very real, and there will be no precedent to allay suspicion about a scheme that could be perceived as Orwellian and in the hand of the big publishers.

Getting the Ball Rolling

It is clear that the GRD project, like its IMR counterpart, is ambitious and that it will have to rely on lengthy negotiations and compromises across the board. This will take time, a luxury the GRD may not have. Sami Valkonen, head of international music licensing for Android at Google, which supports GRD’s efforts, sounded a warning alarm at MIDEM 2012. If the scoping report is delayed, he said, the whole venture might stall. There is no indication that this will happen, but action needs to follow soon as proceedings started in 2008 and there is yet no formal document mapping the way forward.

By Peter Alhadeff

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