Plugging Another Analog Hole in Music Royalties

While many areas of the music industry have digital infrastructure in place to facilitate royalty payments more or less accurately, a few analog corners remain. These are for music uses where royalties are calculated based on incomplete information using statistical samples and other “black box” methods. One of them is terrestrial AM/FM radio: performance rights organizations like ASCAP and BMI use combinations of content recognition technologies on limited numbers of monitored broadcast signals and periodic snapshot self-reporting by radio stations to determine how to allocate royalties among artists.

The other big one is live performance. Live performance venues such as clubs and theaters pay performance royalties to PROs that are generally based on revenue and/or ticket sales. PROs are supposed to divide up all that money and pay songwriters and music publishers accurately for the songs performed in the venues. Artists are supposed to self-report their setlists to the relevant PROs. But this happens far less often than it should, leaving PROs to apportion live performance royalties through proprietary formulas that inevitably misrepresent smaller “long tail” artists.

The bigger PROs provide online tools, such as BMI Live and ASCAP OnStage, to artists to report their setlists. They’ve done this for years, but these tools have a few shortcomings. One is that each is limited to a single PRO. This might be enough for individual singer-songwriters, but consider that today’s pop hits tend to have multiple songwriters (e.g., today’s Top 10 songs have an average of about five songwriters each), and not all of them may be affiliated with the same PRO. A single PRO’s tool also probably won’t work if the artist performs cover versions of other people’s songs.

The other shortcoming of PROs’ own tools is that artists have to input their setlists to them from scratch. This can be tedious if an artist is on tour (or in residency at a club) and plays substantially the same set every night. Artists also have to provide information manually about where they played each night so that the correct venue’s royalties can be used to calculate payouts.

The most obvious solution would be to give artists a mobile app that uses Shazam-style music recognition technology. The app would listen to each show and report setlists automatically, using GPS to determine the venue by location. If this worked well, it would be a completely automated solution and would not require extrapolation from limited data.

The problem is that technologies like Shazam and the ones used by PROs for radio broadcast monitoring recognize sound recordings, not compositions. Recognition of a composition being performed live–even by the same artist as a known studio version–is a much harder task, one that’s generally considered to be in an R&D stage. Google has its Content ID for monitoring video uploads to YouTube for copyrighted music or video; it has been adding cover-version recognition to Content ID’s bag of tricks, but it has a long way to go. (For example, I recently posted video to YouTube of a gig by a classic rock cover band that I play in. Content ID flagged less than one-third of the songs correctly.)

Yet a Texas-based startup called Muzooka has come up with what may be the next best thing to complete automation of setlist reporting. Muzooka’s approach reporting is essentially to make it as easy as possible by removing as much repetition as possible and incorporating it into other tasks that touring artists are likely to do anyway.

Muzooka backed into the setlist reporting application. It started out in 2016 as a cloud-based digital asset management platform for touring artists. Artists could use Muzooka to post all the information that venues, booking agents, and ticketing companies would want, such as photos, videos, bios, social media links, and so on, so that those companies could post them on their websites and in their apps. Those entities would pay for the service because of the work it saves them; Muzooka is free for artists.

But then Muzooka found that it could add setlist reporting to its digital asset management platform so that the task takes only a minute or two. After each gig, it sends an artist a reminder to post their setlist. Because of Muzooka’s integration with ticketing agencies, it knows where the artist played. If the setlist was the same as the previous show, it’s one click for the artist to report it again. Muzooka also has proprietary technology that integrates all of the major ticketing agents’ artist ID schemes to ensure consistency across tours.

Once the artists report their setlists, Muzooka automatically sends reports to all of the music publishers and PROs with which it has arrangements. Last week Muzooka finalized a deal with BMI, giving the company its first U.S. PRO relationship alongside its other PRO relationships in other countries, including SOCAN in Canada and BUMA/STEMRA in the Netherlands.

Setlist reporting is becoming the tail wagging the dog of Muzooka’s business as it signs on PROs and publishers, which will contribute to its revenue. The obvious next step for Muzooka is to make similar deals with the other U.S. PROs (ASCAP, SESAC, GMR) and other PROs internationally. PROs should be motivated to sign on with Muzooka, because the result will be a single setlist reporting tool for virtually all music that takes just a minute or two after each night’s gig to use. While this is of most value to artists who perform their own music, it will certainly help plug one of the last analog holes in music royalty automation in the digital age.

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