European Music Rights Database Project Issues RFP August 23, 2010Posted by Bill Rosenblatt in Europe, Rights Licensing.
A request for proposals (RFP) has been issued for a Global Repertoire Database (GRD), which would contain rights holder information for music to be licensed throughout the European Union. Submissions are due in mid-October, and the GRD Working Group expects to make a decision on how to move forward by December.
Let’s fill in some of the background details to give this news some context; then we’ll talk about the GRD and its RFP themselves.
A few years ago, the European Commission (EC) determined that the lack of pan-European (or “single market”) music licensing was hurting European citizens’ access to legitimate online music services and causing more Europeans to turn to illegitimate sources for their digital music. And indeed, the bureaucratic hurdles required to get licenses to distribute music in all countries of the EU are monumental.
Yet the EC’s push for pan-European licensing has met with stiff resistance from member states, mainly for two reasons: fear that such an initiative would only serve to make it easier for US-based media giants to cram their commercial content down Europeans’ throats, and the Culture Ministries of certain EU member states’ belief that it is their duty to advance their own countries’ content and not to make it easier to license content in from other member states.
Meanwhile, the voices being heard in Brussels were those of lobbyists from large technology companies like Apple and Google and the entrenched national music rights collecting societies, such as GEMA in Germany, SACEM in France, PRS for Music in the UK, and so on. Entrepreneurial startups trying to build attractive legal music services throughout Europe weren’t represented in these debates.
The subject of pan-European music licensing fell somewhere among three EC Directorates: Information Society and Media (then Viviane Reding), Internal Market (then Charlie McCreevy), and Competition (then Neelie Kroes). Commissioner Kroes, with her reputation as a tough-minded enforcer of antitrust law against the likes of Microsoft, was able to convene an Online Commerce Working Group in 2008 that brought together stakeholders from across the spectrum. This led to a statement in October of last year in which a group of music publishers and collecting societies essentially promised to maybe someday consider the prospect of possibly working out the parameters of the shape that a potential solution might perhaps take.
Yet in the spring of this year, progress finally began to accelerate. The GRD was conceived, a Working Group was formed, and the group issued a Request for Information (RFI) from companies that would consider submitting proposals to design and build the GRD. Over 30 organizations submitted responses, convincing the Working Group that the GRD could be at least technically feasible. Meanwhile, the EU launched the Digital Agenda for Europe and put Kroes in charge of it. The “digital single market” topped the list of her objectives.
The GRD is a fine idea in concept. Although the idea of a universally accessible database of rights holder information has been a dream for many in the content industries for a long time, the inspiration for the GRD is clearly the Book Rights Registry (BRR) defined in the pending settlement between the book publishing industry and Google. However, there are two major differences between the GRD and the BRR.
First is participation. The GRD Working Group has some of the right players: online retailers (Amazon, Apple iTunes, Nokia), music publishers (EMI, Universal), and collecting societies (PRS for Music, SACEM, and STIM of Sweden) are involved. But conspicuous in their absence from the Working Group are other major collecting societies (particularly GEMA of Germany), the two other major music publishers (Sony/ATV and Warner/Chappell), and any of the new breed of online music startups looking to launch throughout Europe (Spotify, Pandora, and various others). The lack of participation by network operators like Vodafone, Telefonica, and Deutsche Telekom is also problematic. In contrast, the major stakeholders in the US book industry agree in principle on the BRR, even if they may disagree on some terms of the lawsuit settlement itself.
The second problem is that whereas Google is agreeing to spend over US $30 Million to fund the BRR, there is no source of money to build the GRD. In fact, the RFP asks respondents to submit proposals in the knowledge that the project might not be funded and that the Working Group would not consider funding options until after choosing a winning proposal.
Both of these are serious hurdles to surmount. Lack of participation from major players has killed many a well-intentioned standardization initiative. The RFP addresses the “unfunded mandate” issue by suggesting three options for funding: divert money from systems that would no longer be needed with the GRD in place; get a collecting society to run the GRD with existing technology and processes, thereby greatly reducing the costs; or allowing some other entity to run it as a commercial enterprise. More on this later.
The RFP itself is comprehensive, well informed, and well organized. Just as importantly, it is unflinchingly (and refreshingly) realistic. It is forthright about the challenges inherent in launching the GRD: not only the usual technical ones but also problems with the inconsistency and incompleteness of data coming from content rights holders, disputes over ownership, lack of participation by key stakeholders, and so on. It incorporates standards for identifiers and other things in the music industry (ISWC, ISRC, and so on) but acknowledges their current lack of universality at record labels and music publishers. The RFP is also clear about the GRD’s limitations: the GRD is meant to be a source of information about rights ownership, not an e-commerce engine.
The one problem with the conception of the GRD is that it is essentially a recipe for paving the existing cowpaths. On the one hand, it’s necessary to do this, and it would produce significant efficiencies. But on the other hand, it falls short for those who would launch new business models that don’t conform to existing licensing rules. The Google book settlement at least makes mention of new business models, admittedly without saying much about how (or if) the BRR would support them. But even if the GRD is built, entrepreneurs with new ideas will still have to negotiate separately with each of the collecting societies and other rights holders in Europe. (I’m involved in one such negotiation now, one that the existence of the GRD would probably not help.)
Yet even cowpath-paving is a major undertaking, as anyone who reads the GRD RFP will understand. It’s likely that many major technology companies and professional services firms will want to respond, if only for the visibility they would get through the process. However, one of those firms actually building the GRD doesn’t strike me as a likely outcome, because of the dubious commercial proposition. Instead, I suspect that if the GRD gets built at all, one of the major collecting societies will get the job — after sufficient conciliatory representations about cooperation and non-competition, perhaps with oversight by CISAC (the international collecting society umbrella organization).
A precedent for this is the Digital Object Identifier (DOI) standard in publishing. After it became clear that money wasn’t available to hire an outsider to run the initiative, it was given to someone from one of the major scientific publishers (Elsevier Science, as it was then called), which agreed to keep him on salary while he did the job, and while the other publishers involved in the initiative agreed to overlook competitive concerns. As a result, the DOI’s only real impact has been in scientific journal publishing.
Another precedent exists in the US, where the Copyright Clearance Center, the collecting society for text-oriented works, operates RightsLink, the closest thing there is to an online-accessible repository of rights holder information for that type of content. RightsLink is a valuable and successful service, but it only offers “lowest common denominator” rights; anyone wishing to license content on a different basis has to go talk to individual publishers.
All this shows the long journey that the European music industry must take to make their territory more hospitable to the services that are attempting to launch throughout the EU. The GRD is an important step along the way, but the challenges in getting it off the ground are more than enough to think about for the time being.