Lack Of A Centralized Song Database Stymies Digital Licensing.

A year after the Copyright Royalty Board set rates for subscription downloads and interactive streaming, digital licensing and payment accounting is still proving to be a trying task in the U.S. marketplace.

Not surprisingly, the lack of a common database containing metadata for all songs is still a big obstacle, even though it should be easier to create one in the United States than in Europe, where there are more than two dozen performance and reproduction rights societies.

It’s a topic that weighed heavily on the minds of panelists at a National Assn. of Recording Merchandisers’ Salon Series event held Feb. 22 in New York. The gathering was the second in a planned series of industry get-togethers that NARM is holding to address issues of concern to member companies.

The discussion “validated the urgent need for the industry to work collaboratively on streamlining business practices and adopting operational standards that will take costs out of the system and help advance the digital marketplace,” NARM president Jim Donio said in a statement.

Digital service providers have to license music and pay royalties directly to publishers for music consumed through subscription services and ad-supported Web sites. As a result, the lack of a central database continues to stymie the marketplace, NARM panelists said.

A centralized global database could overcome challenges still facing digital licensing. For example, an industry-wide song registry that has one code for each composition would eliminate confusion over what license is being sought in instances when many songs share the same title, said Rich Conlon, BMI VP of new media and strategic development.

SoundExchange executive director John Simson said his organization is compiling a database of performers—as opposed to songwriters—that monitors, for example, who was in the original incarnation of Fleetwood Mac in the late ’60s, who was in the band in the mid-’70s and which albums and songs are associated with which members.

But as different entities create their own databases, they duplicate efforts and costs, Roadrunner Records executive VP Doug Keogh noted. Some wonder why organizations like BMI, ASCAP and the Harry Fox Agency (HFA) don’t make their registries public. But Conlon observed that “each organization is paying money to maintain their own databases,” implicitly questioning why such organizations should give away data that they compiled.

Perhaps a congressional mandate could spur the creation of a centralized songwriter database, Conlon said. He noted that if such a resource were created and overseen by a music rights organization that issues both mechanical and performance licenses, it would help streamline the licensing process.

A global database would also facilitate the use of compulsory licensing, which would make it easier to license music and make payments. But compulsory licenses require monthly payments and reporting, which cost more to process than the quarterly payments required under negotiated licenses.

“Everyone focuses on the incremental revenue, but no one is focusing on the incremental costs associated with paying out that revenue,” said Maurice Russell, VP of licensing, collections and business affairs at HFA. “The resources to build the infrastructure to handle all the transactions is huge. We license more songs that get no uses than those that do get used.”

Moreover, SoundExchange’s Simson pointed out that 85% of the organization’s transactions are for less than a dime. Songwriters Guild of America president Rick Carnes went one better, pointing out that he recently got a check for 2 cents that was mailed in an envelope with a 44-cent, first-class stamp. “And it wasn’t even my song,” Carnes quipped.

Nevertheless, panel moderator Patrick Sullivan, president/CEO of royalty service provider RightsFlow, said that some of his company’s clients are planning to convert to compulsory licensing and that RightsFlow wouldn’t have a problem making monthly payments.

Just because digital service providers want to get music licensing done “easy, fast and cheap” doesn’t mean that the industry should lose sight of songwriters’ rights, Carnes said. He noted that songwriters were excluded from previous efforts by digital service providers and music publishers to draft congressional legislation that included mechanisms to facilitate the payment of digital royalties.

Songwriters “need to be in the room” for any future efforts to craft legislation that affects copyrights, Carnes said. “It is better to have a backbone than a wishbone.”

By Ed Christman

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