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20.09.13 MusicWeek 29


challenge of adapting to new levels of scale in an ever-changing modern media. “In 2012 PRS for Music processed over 126


billion lines of data on music usage and matched them to the ownership shares of the respective songwriters, composers and publishers,” says the company’s CEO Robert Ashcroft. “We, and other collecting societies, are investing significant sums in our back office processing systems to enable this work to be done efficiently.” The digital age isn’t only laying down hurdles for


the sector, however - technology is also helping some companies simplify the royalty collection process for their clients. Sentric Music is both a rights-holder and a rights-administrator representing over 50,000 writers in the UK alone, with a catalogue of over 150,000 tracks. Sentric CEO Chris Meehan says that the digital


age should in theory dramatically improve the management of royalty tracking and collection thanks to more connectivity along with the increased availability and visibility of information. But he also points out that, in practice, connecting information with payments is something that “is still a work in progress”. “Innovating royalty collection is something that


is a massive challenge,” he says. “Every society you work with works in a slightly different way - although this is getting more consistent - and technological advances and development take a long time to come online.” Pierre Mossait, president of independent


publisher Strictly Confidential, concurs – highlighting “the fast and easy collection of acceptable amounts for everything that happens online” as the one of the biggest new challenges of the modern age for royalty collectors. “We’re still nowhere on the publishing side, especially for non Anglo-Saxon repertoire,” he suggests.


‘MONEY GROSSLY UNDER-COLLECTED’ Willard Ahdritz is founder and CEO of Kobalt Music Group, which contains both a publishing and neighbouring rights company, as well as label services. He stresses just how much work there is still to be done when it comes to adequate remuneration for rights-holders from digital.


“Money from services such as YouTube, Spotify, Amazon, and others is being grossly under-collected due to the difficulties in global licensing and the ability to cross-match data at the user data label,” he tells Music Week. “There are major labels, societies and tech companies that do not report where digital income is coming from, and they don’t know how to distribute it.”


“Rights-holders still have [the option of major and indie royalty admin companies] as well as one more alternative: the big independent” PIERRE MOSSAIT, STRICTLY CONFIDENTIAL


Keeping track of an increasingly complicated web


of royalty revenue streams might be a daunting task for rights-holders, but with this new challenge comes new service providers ready to meet demand. Today, rights-holders can access a wider range of


royalty collection and administration partners than ever before. In the past, clients’ royalty collection was predominantly handled on a worldwide basis by a single major company - but now options for rights- holders are now spread across a number of different operations of all shapes and sizes. “Working with majors previously caused big


delays between the moment of payment by the local society and the moment when money ended up in their client’s pockets and statements were generally much less detailed,” argues Strictly Confidential’s Mossait. “In short, it was a slow and cumbersome machine. The indie route was always much more efficient and shorter, providing more details and a bigger local concern. Today, rights-holders still have those options, as well as one more alternative to the majors: the big independent administration companies. But in my opinion these companies are not that different from the majors.” The new landscape of increased options for


rights-holders is well illustrated by the number of publishing giants now clawing back their full digital rights from collection groups - allowing them to negotiate direct with digital services like Apple over royalty rates. In the US, Sony/ATV/EMI, Universal Music Publishing and BMG have all retracted new


ABOVE Living the stream: Topping the most-played lists for a number of digital services in 2012, Gotye signed a worldwide publishing deal with Kobalt last year, excluding Australia and New Zealand


media licensing powers from ASCAP - with Kobalt, Imagem, Wixen and Warner/Chappell all expected to join them in the coming six months. In the EU, publishers are increasingly signing direct deals with bodies newly capable of specific pan-European licensing on behalf of individual clients. Niels Teves, co-CEO of Fintage House - which


collects royalties on a worldwide basis for clients including Jay Z, Britney Spears and The Elvis Presley Estate - says that the control traditionally exhibited by the largest collecting societies has started to slip away. “There are more sources of revenue than ever


and these need to be collected through the traditional channels or new initiatives,” he says. “EU rights-holders now have total freedom to


choose the collecting society they want. Previously, digital licensing ventures like CELAS, IMPEL and ARMONIA would not have been possible. “Especially in the digital space, the collecting


societies’ monopolies have eroded. This is likely to be confirmed in the expected EU Directive on Collective Management. In the US, direct licensing has existed for a long time, but as publishers we have recently seen increasing possibilities to license directly instead of having to rely on label deals. Also, some publishers have withdrawn their digital rights from ASCAP and BMI now, so we see a demand for global reaching collection alternatives from users such as YouTube and Spotify.” Sentric’s Meehan sums up what he feels is the


overall impact of increased competition in the royalty collection sector: “Over the last 20 years, the number of options available to rights-holders has dramatically changed and I believe this change has been for the better. There are now so many options available that suit the varying business models that are being used to generate revenue. “Traditional long-term deals are still available to


rights-holders, but there is also a whole host of shorter-term options available. Transparency and efficiency of royalty accounting and subsequent payments has probably been the biggest change. There are many services on the market that offer direct collection around the globe with quarterly payments being made rather than annual/semi- annual payments.”


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