by : Music Law, Oct. '12

Copyright Efficiency

Copyright Efficiency

It is true that in recent years technology has been challenging the entertainment industry, not only allowing a widely unauthorized circulation of copyrighted works, but also empowering individuals with tools to easily produce new content based upon previous works. Though not new, the concept of “borrowing” has certainly gained larger dimensions in the so-called Remix Culture that we presently live in. It is easy to argue that the centuries-old copyright model does not fit in the new way of consuming and producing culture.

However, the evolutions of technology should not only be viewed as disrupting the industry, but also as a provider of more efficiency to a trade that is dependent on the exclusive rights that are reserved to content creators.

In the music-publishing realm, due in part to technological advancements, songwriters and composers are leveraging copyrights of their works arguably better than ever. Strong communication networks permit the exploitation of music through direct licenses, and placement opportunities for songs are found all over the world. Songwriters and composers have been establishing themselves as their own publishing company too, just signing administration deals with larger companies that, without requiring the ownership of rights, can provide easier and faster royalty computations more accurately.

Moreover, technology has reshaped how media companies find music for their productions. Radio broadcasters, TV companies, film directors and producers are increasingly relying on production music libraries to find songs and underscores that fit perfectly for their purposes, whether it is for an auto ad campaign or for a blockbuster movie. License transactions are all fulfilled online, and thanks to strong search engines and a bandwidth that permits sending large audio files, the process of picking the track and delivering it is extremely reliable and fast.

Roughly a hundred years ago, when technological improvements denied writers and composers collections from the public performance of their works, they rose to the challenge and created, in 1914, the first performance rights organization. The American Society for Composers, Authors, and Publishers (ASCAP) was meant to deal as one and collect license fees. The model was consolidated over time and performance rights societies are now responsible for collecting more than $9 billion a year worldwide. However, since then, the process of tracking music usage has not changed much. It has relied on cue sheets and data sampling, which leads to human error and inaccuracy.

Today, companies like Tunesat are introducing more efficiency in collections. Tunesat uses fingerprinting technology that identifies the unique audio characteristic of each musical recording. The system monitors satellite and cable TV signals, as well as music streamed on the Web, and matches audio signals with its own library of audio records. It generates a report that it sends to the copyright owner. That report can be used both to claim more royalties from performance rights organizations and scour the usage data across different platforms.

Moreover, one of the biggest challenges in copyright administration is the so-called Black Box problem. Rights societies around the world collect monies for the usage of all songs, but those monies are distributed only to those works that are registered. However, due to many different factors, such as the absence of representation of a publisher in a given territory, there are a larger number of unclaimed works that are entitled to receive royalties but do not get that consideration. This large pool of money is divided among major publishers according to the market share after a set period of time.

In order to streamline the royalty distribution process there are now ambitious global initiatives to create a comprehensive database of music copyright ownership. One is the International Music Registry (IMR), led by the World Intellectual Property Organization (WIPO), an agency of the UN, and the other is the European initiative known as the Global Repertoire Database (GRD). Both entities are studying ways of working together, and the idea is that once deployed, such databases will bring benefits for all stakeholders involved in the exploitation of music rights. Costs incurred duplicating data will be saved, more attention will be given to proper registration, and, generally, administrative barriers to businesses seeking to distribute content online will be lowered–ensuring that creators of music are quickly and efficiently compensated for their work.

Gradually the music industry is reshaping and adapting to a new order of music consumption. Illegal file sharing is being gradually substituted by legal alternatives. Yet Spotify and YouTube still need to demonstrate effective royalty payments for artists as they strive to reduce their costs.  Recently, YouTube reached a promising agreement with the National Music Publishers’ Association (NMPA) and the Harry Fox Agency (HFA).  Independent music publishers will collect royalties for synchronization rights from YouTube videos that earn advertising revenue worldwide.

In addition, scholars from the Berkman Center for Internet & Society at Harvard University, as well as others, have proposed alternative compensation schemes to deal with file sharing and sampling. Such schemes would utilize collective management systems, similar to rights societies. A small copyright fee would be levied from Internet users and distributed to the rights owners, enabling a legal and compensated settlement.

Hence, if from one perspective technology brings challenges to the music industry, from another perspective, technological resources are forging new scenarios in which authors, songwriters and artists are able to profit from their creations.

By Luiz Augusto Buff


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