Currently for all online services wishing to use recorded music as part of their core business, or just as a supplement to it, the process is much the same as it always has been with a few improvements:
- They contact rights holders,
- agree a deal, then;
- arrange for the various assets to be sent to them for exploitation.
From what I understand, two main contenders for a solution are often discussed:
- Establish a blanket licensing concept, allowing music services an easy route to acquire the rights they require, similar to the way PPL licenses' broadcast rights, see my post 'Online Radio, Does It Pay' for more information, or;
- Create one huge database of all the known rights information to make the identification of rights and rights holders as easy as possible.
It seems that both Richard and I share similar approaches to a solution, one that is likely to be accepted by all the current stakeholders, retain the competitive aspect to the music industry and solve problems one and two above.
I am sure many of you will understand what an API is, and that it can be used to create a data transfer in 'real time' between two online databases. Most delivery systems keep their data on a web connected server. So if the government and the various official bodies and leading or just vocal companies in the music industry want to help simplify the licensing process they need to do two things:
- Create a virtual marketplace where Music Services can go to find out who the various rights holders are, and
- Establish a contract exchange process which would include all usage types and service attributes as well as the commercial aspects of the agreement trying to be reached
- Point 1: A Yell.com style searchable database where each company, be it a record company, distribution company or Artist could be listed and likely have their own profile page. Participation would be voluntary, free, and without obligation. It would also be extremely easy to use, requiring no technical knowledge. A later incarnation of this could include an API call on all connected databases to ascertain what catalogues are held and by who. This would help with targeting communications in the point below, but I don't think the industry is quite there yet.
- Point 2: Contract template as part of the UI, which once completed as a request by the licensee, can be securely sent to all rights holders who are relevant to the music service. They could be contracts sent to particular rights holders, blanket requests, or merely opt-in opportunities to anyone that wants to pitch their catalogue for a project. Due to the fast changing way in which music services are innovating and evolving, the contract template would have to be updated, but the idea is for these aspects to be for information purposes only, as opposed to actual technical integrations. For the most part many of the contracts agreed by companies like INgrooves Fontana with music services fit within a general structure of commercial terms, so individual requirements won't be too hard to cater for.
- Wholesale Price; or
- % of Retail Price; or
- % of Net Retail Price, including what makes up Net (Mechanical deduction, sales tax, etc); or
- % share of income (advertising/subscription)
- Territories Required
- Genre Restrictions
- Label Lists (Include/Don't Include)
- Explicit Content Restriction
- Album Only/Bundling Of Tracks
- Pre-Order availability
- Individual track pricing
- Audio and/or Video
The record industry today is far too fractured for this to become centralised beyond my suggestion. However I firmly believe rights holders want to be found, and for opportunities to be presented to them. Most bands want their music to be heard by as many people as possible, otherwise they wouldn't sign a record deal. Most record companies want to have that music used in as many different ways as possible, assuming it conforms to their artists or perhaps their own set of ideals and brand identity. For distribution companies, their main value is to connect with as many worthwhile music ventures as possible and manage those relationships to ease resources on both sides. So given all that 'good will' to be connected, if the opportunity to be part of a global marketplace exists, all these stakeholders will eventually see its value. As long as the following three things are considered, a centralised DCE can exist.
Don't make it complicated. Don't make it mandatory. Don't duplicate what others do already.