Home » 23 October 2019 » IFPI and WIN join hands to enable fair revenue distribution to rights holders

IFPI and WIN join hands to enable fair revenue distribution to rights holders

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The name of an artist, the song title, the producer, genre, date of release, writer, duration of the song etc., are just basic details in metadata in music. But to keep a tab on publishing metadata or failing to keep a tab on publishing metadata has a negative impact on the compensation for creators.

IFPI and WIN on behalf of the global recording industry have recently announced a cross-industry collaboration to create Repertoire Data Exchange (RDx), a centralised industry data exchange service.

Repertoire Data Exchange will enable record companies and music licensing companies (MLCs), which collectively manage recording rights, to submit and access authoritative recording data via a single point.

RDx will offer recording right holders of all sizes, from all countries, a single registration point to supply their repertoire data in a standardised format (DDEX MLC) that can be quickly and easily accessed by all MLCs, leading to improvements in data quality.

This will help to improve the timeliness, accuracy and efficiency of MLCs’ revenue distributions to right holders worldwide.

“RDx is a key example of an initiative that will benefit all parties involved. It will improve operational efficiencies and lower costs for right holders whilst allowing MLCs to retrieve authoritative repertoire data from a single point – enabling more accurate and timely distribution of revenues,” said Frances Moore, Chief Executive, IFPI

 

The links in the royalty chain keep on entangling themselves due to the involvement of multiple entities. Today’s approach to the multiple royalty chains for a single stream of a song requires a modern and innovative solution. A shift to a universal platform for licensing of songs will be a sensible effort in understanding and detangling current methods.

The income opportunities for musicians are multi-faceted. The royalty streams for creators are mainly,
mechanical royalties, public performance royalties, and synchronization royalties. The revenue generation takes place through licensing their music on various platforms such as TV, film, advertisements, along with the sale of physical copies, radio spins, and the latest, digital streaming.

The required amount of fairness in splitting shares is a debatable topic. The argument lies in how the shares should be split amongst stakeholders, per se.

The increasing number of co-writers on songs in some genres create problems in sharing the money in the streaming domain. Perhaps, the biggest factor also lies in the inefficient process that hinders the rightful distribution of royalties.

Often, plenty of music industry institutions are lodged between streaming services and the artists and songwriters. The streaming services negotiate licensing offers with these institutions.

After completion of deals, the services pass data and money to each licensing partners, every month. These licensing partners then pass money to artists and songwriters, either directly or through representatives. This process, therefore, creates a royalty chain.

 

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Addressing Issues in Metadata

As I have already mentioned, metadata refers to the song credits visible on any platform, however, there is an array of underlying information that is connected to the song. This chain of information that connects many stakeholders needs perfect synchronisation across the industry databases. This further lets right owners claim their respective compensations. Which, unfortunately, most often than not, does not happen.

Metadata might sound like regular and common information but it is strangely the most complex and important data for creators because it enables fair payment for their work. The simplest kind of work is, ironically, the biggest problem plaguing the music industry for several years now.

Fixing the inefficiencies in the global digital licensing landscape can be a tedious process. Tracking and tracing royalties is an expensive affair for songwriters. Embracing the required transparency between collecting societies and music publishers will enable free availability of data as a regular practice. Information on ownership of rights, the implication of royalty chain, the occurrence of deduction and delays along the chain are primary requirements.

The music publishers, collecting societies and record labels control the flow of song data. This control affects the streaming services and the artists involved, by causing a common data clash. The clash acts as a reason to delay payments or even have them cancelled in some occasions.

Therefore, a proactive approach by informing the artists in such instances can resolve blockages that hamper royalties from getting through.

The inefficiencies lying in the royalty dissemination creates a reverse Robin Hood system where the writers and publishers in need of money are least likely to receive any. However, the black box contains the royalties owed to smaller writers and publishers.

Inversely, clarity on the income allocation hardly cuts the transparency index from all stakeholders. Acquiring money from the publishers, societies and data processing hubs cannot be attributed precisely. Thus, there need to be better resolutions to address these problems.

The latest effort from IPFI and WIN can be considered as a push that publishers and collecting societies needed to manage fair play and royalty distribution. The urgent need to actively pursue the problems that slow the process of payments in the music industry that is so inter-mitten required an equitable share of responsibilities to make a positive atmosphere for all.

 

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Aakanksha Sharma

Author: Aakanksha Sharma

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