Music Rights Management: Everybody’s and Nobody’s Problem

/ Nov 6, 2013

moneymic

It all began with the Digital Millennium Copyright Act. The landmark copyright law, passed by the US Government in 1998, is arguably the most practical reason for why copyrights are an issue when it comes to music on the web, and even more specifically, music on YouTube. It grants online service providers like YouTube a “safe harbor” provision, which means that as long as service providers take down infringing content when notified of its existence, they cannot be held responsible for the actions of their users.

“I think Congress had to strike the right balance between the rights of artists and the future of the internet,” says Larry Iser, an entertainment lawyer specializing in artists’ rights and intellectual property. “When you have a platform that has billions of things being posted to it every day, how can it possibly be expected to police that?”

It’s a fair question, but it also means that the job of policing the illegal use of copyrighted material fell on the rights-holders themselves. “It required artists and songwriters to be vigilant,” adds Iser. “Is it fair to them? Probably not, but if you don’t give service providers immunity, they wouldn’t function and we would not have YouTube.”

It’s a gargantuan task, though, made even more complicated by the fact that properly copyrighting music sounds like a complex undertaking.

“Think of it as squares within squares,” says Brandon Martinez, founder and CEO of INDMUSIC, the largest music-focused MCN on YouTube. Each song, obviously, has a sound recording. Those who own the sound recording (often music labels) have its Master Right. Embedded within that is the song’s composition — lyrics and music — which fall under Publishing Rights. For a song to be properly used in a video, licensees need to clear both the Master and Publishing Rights.

Sounds easy, right? Well… “In most cases, the Master is owned by one person, whereas in publishing, it’s possible that numerous entities have ownership of the composition,” says Brent McCrossen, co-founder of Audiosocket, a music licensing company and tech provider. In these instances, for a song to be properly licensed, the licensee would have to not only identify who owns each part of the composition, but contact them to get those rights.

As you might have guessed by now, there is no up-to-date database that outlines who you need to call to secure a license, partially because, that data itself (who owns what) is not readily available. It’s a very complicated problem, which companies like YouTube have tried to solve by acquiring “blanket rights” from labels and performing rights societies for UGC content, according to McCrossen.

Congress might get involved again, adds McCrossen, in an effort to push rights-holders to make this entire process easier. “They’re largely saying to rights-holders: ‘You can’t not help people understand what they need to do and who they need to call, and then sue them when they don’t properly license.”

Except the problem is, until relatively recently, the music industry did not know or care much about YouTube outside of the official music videos, which were/are largely distributed via VEVO. According to Martinez, it wasn’t until the industry saw large sums of money being poured into various MCNs, and the runaway success of YouTube-based cover artists and viral songs like “Gangnam Style” and “Harlem Shake,” that the industry fully came to grips with how much money it was missing out on from third-party content — which, for labels, can account for anywhere from one-third to two-third of views.

“That really began to create a rift between the music industry and YouTube,” says Martinez. After seeing creators become successful while illegally using copyrighted material, Martinez says “publishers are now like, why are we going to give you the rights, when you’ve already made millions of dollars off of us?”

Publishers are awake now, he says, and want their cut of the revenue being generated on YouTube.

Unfortunately, when the music industry is not busy litigating the alleged infringers, it’s still having trouble putting a system in place to prevent such abuses.

“For a long time, the music industry has expected other companies to solve their problems,” says McCrossen. “We need to be developing our own tech to solve our own problems, otherwise we’re always going to put our destiny in the hands of some other party.”

“Do you remember Napster?” adds Iser. As he describes it, when the music industry was confronted with the issue of digital downloads, instead of banding together to come up with a way to monetize this new form of music distribution, each record company essentially went its own way. “Each record company aligned itself with a different tech company,” he says. “They wanted to be the company to not only protect their own music, but also be able to license their tech out to others. And as a result, no one was successful at it.”

One person/company was successful — Steve Jobs, when Apple changed the industry forever by introducing iTunes and the iPod.

“I think the same problem exists here [with music rights issues],” continues Iser.

And to the music industry’s credit, it appears they are getting the memo. “I know the RIAA and NMPA have been working together with rights-holders to find ways to solve for these inefficiencies — for the industry to finally take responsibility for these issues,” says McCrossen.

And to YouTube’s credit, even though its largely able to protect itself from being sued by the music industry, the site has made steps to reduce the issue of copyright infringement — from holding classes/seminars on best practices for music creators who want to use copyrighted material, to looking for ways to improve upon technologies like ContentID. “I can tell you that there is a sincere effort on [YouTube’s] part to resolve the issue,” says McCrossen.

Maybe that’s why the company is introducing the concept of “managed” and “affiliate” creators, to make it easier for both YouTube and the embattled MCNs to police those who might illegally use someone else’s work.

Because as McCrossen describes it, if the music industry and YouTube do their parts, then the responsibility for legally using copyrighted material will fall on those who should be held responsible — the creators.

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  • Boris

    I’m in shameless hope you may help me having better understanding of above issue : what if the creator has all his/her products ( music and/ or songs )registered at his/her own label & publishing with all the products also being properly registered with organizations like ASCAP & SOCAN ?
    Would there be any worries for them related to YouTube placement and if there will be , what that could possibly be ?
    Thank you in advance !

  • yilley

    From the outlet side, radio specifically, recent actvity from entities like ASCAP, BMI and SESAC has seen a shameless hustle for increased fees from the radio industry. Labels have lobbied Congress relentlessly for new artist fees for radio. There is a concerted effort here to maintain the status quo for the recording labels, one in which the labels keep up to 85% of an artist’s generated income for the label. By law, radio stations cannot take fees from artists or labels to play specific music. Yet as an industry we have to pay licensing fees to these organizations – something that flies in the face of the symbiotic relaionship all these outlets have with artsts and labels: by playing the artists and labels we sell cds and downloads for them … their production of music makes commercial radio formats possible. SESAC does nothing short of extortion – they refuse to provide a list of their licensees so radiko stations do not even know what they pay SESAC for.
    In the end, this is only about money – who it flows to and how. Outlets like radio really are not part of this equation – with cds in rapid decline and downloads the order of the day, the recording industry (labels) is trying to monetize a fluid situation. When they go after their music outlets, they do bite the hand that feeds them.

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