Sacem’s Partnership with IBM

IBM announced a deal with the French music rights collecting society Sacem last week to co-develop a new system called URights.  The system is expected to launch by the end of this year, and the partnership will span ten years.  The system will run on IBM’s cloud computing infrastructure and use IBM’s implementation of the Apache Hadoop open-source data framework.

URights will be used to process and analyze the all uses of music that Sacem has to track, from digital services, audiovisual uses, public performances, and so on.  It will provide two things that music collecting societies typically don’t provide today: powerful data analytics tools for Sacem’s members — music publishers and songwriters — and open interfaces for integration with other collecting societies around the world.

Two things are unclear from the announcement: whether URights will replace or sit alongside Sacem’s legacy databases, and whether IBM will be able to offer the system to other collecting societies (and whether Sacem would get any benefits from those sales).

The nominal motivation for this project for Sacem, one of the world’s largest collecting societies, is that its internal systems can’t scale to the number of music use transactions that it has to process — which approached a trillion last year.

But the motivation goes beyond that.  Collecting societies have historically had a few core functions: getting reports on music uses, processing royalty transactions, negotiating royalty rates, and occasionally acting as “copyright police” for certain types of music uses.  Now not only is there a much bigger need for analytics on music usage data, but there’s also more competition.

First, service providers are appearing that provide big-data analytic functions for publishers as well as composers.  One example here in the U.S. is SongTrust, which started out as a division of Downtown, an upstart record label and music publisher that acquired repertoire from artists such as the Beatles and Bruce Springsteen and is now in the Billboard Top 10 music publishers.  SongTrust manages data not only for Downtown Music Publishing but also now for others.  Another example is Kobalt, another music publisher that started in the 2000s, shot rapidly up into the higher reaches of the Billboard publishing charts, and is known for its tech and data savvy.  As publishers and songwriters come to expect to get insights into the mountains of data on use of their music, collecting societies need to provide the tools or they will lose relevance.

Another reason why collecting societies need to worry about losing relevance is that major music service providers are increasingly sidestepping them and doing direct deals with publishers.  This trend started in the U.S. ten years ago with the direct deal that Sony/ATV, the music publishing sibling of Sony Music, struck with DMX, a music service for retail stores, restaurants, health clubs, and other venues (now Mood Media).

The value that collecting societies provide needs to go beyond lower royalty rates for them to stay competitive; if they offer enough added value to publishers and songwriters, they will be less motivated to pursue direct deals with big music services solely for the lower royalty rates.

Sacem isn’t the only collecting society that’s expanding its capabilities through big-data technology, but it’s the biggest.  In the United States, SESAC has emerged from beneath the shadows of the much larger ASCAP and BMI as a tech-savvy player offering a broader range of rights management services, with its acquisitions of the Harry Fox Agency, the largest processor of mechanical royalties in the US, and Rumblefish, a service provider for music publishers and digital music services.  To the north, SOCAN of Canada has similarly acquired Audiam and MediaNet.

Sacem’s partnership with IBM goes a step further, in that it leaves Sacem’s data in the hands of the tech giant’s cloud infrastructure instead of (or in addition to) behind its own firewall.  That is a logical next step in terms of technology, and it will be interesting to see if other collecting societies follow.

By the way, we’ll be discussing this topic on the panel Money Changes Everything: Accountability and Transparency in Music Transaction Processing at our Copyright and Technology 2017 Conference next week.  Panelists will include Chris Harrison, the legal mastermind of the DMX-Sony/ATV direct deal who went on to do similar deals at Pandora and is now at SiriusXM Satellite Radio; the moderator is former MediaNet exec and current Musonomics podcast host Larry Miller.  Rounding out the panel are executives from two other major collecting societies, Randy Grimmett from Global Music Rights and Colin Rushing from SoundExchange.  Online registration for the conference ends on Tuesday January 17, though on-site registration will be available.  Join us!

One comment

  1. We’ve seen another example of the “avoid collection societies” effect in Canada, where the universities are making deals directly with publishers for anything that dosn’t fall within _fair dealing_. The latter is similar to but narrower that the US’s “fair use”.

    I suspect IBM will see a lot of this kind of dis-intermediation unless they deliver a good offering rather quickly.

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