Report reveals prolific problems with royalties in the music licensing landscape for artists and companies
An infographic report “State of the Music Licensing Industry: 2013” published by The Music Licensing Directory provides alarming new data that shows an increasingly problematic music licensing landscape for recording artists, labels and publishers.
The report provides analysis based upon detailed research into companies that license music from independent artists into film, television, games and advertising.
“We have analyzed over 1500 music licensing companies globally, allowing for an accurate assessment of the market place and providing valued insight for artists and the industry.” said Winston Giles, CEO & Founder of The Music Licensing Directory.
The new report highlights that whilst the Music Licensing Industry continues to grow as a multi-billion dollar segment of the global music industry, there remains some unhealthy practices, most notably the prolific practice of retitling. Retitling is where a music licensing company re-registers a song under a different title with a performing rights organization (PRO), allowing for the royalties to be separately tracked when that song is licensed for a specific third party use. This allows the music licensing company to control and earn a significant share of the royalties collected.
The report states that 40% of music licensing companies retitle works for a share in royalties garnered from sync placements.
“The practice of retitling is considered unhealthy for artists and for the music licensing industry. It can be very problematic, as one piece of music with many titles is confusing and can lead to multiple parties claiming ownership of the same work and ultimately artists not receiving royalties owed, if at all.” stated Giles. “Music supervisors are becoming more and more reluctant to accept retitled works, and some of the bigger studios and companies are now refusing to work with retitled works in their productions.”
The practice of retitling may soon come to an end as a new technology called “Digital Fingerprinting” has emerged that should make retitling no longer an effective practice. Every individual piece of music contains a unique “fingerprint” and no two tracks are digitally identical, meaning that when music is broadcast it can be automatically detected and identified and the broadcast details recorded. This will be much more effective and accurate than physical cue sheets, which is the current method of reporting. Cue sheets are a highly ineffective and manual reporting process that leads to a significant amount of inaccuracies and missing artist royalties. Digital fingerprinting will make things too difficult for companies that retitle tracks as a unique piece of music can only have one unique ownership.
“Some royalty collection societies have begun the implementation of digital fingerprinting, however there remains no industry standard and the adaption away from archaic cue sheets to the new technology has been very slow.” said Giles. “There are suggestions from within the industry from companies like Tunesat, who claim that up to 80% of songs are not reported properly. When you consider that in the USA the collection societies collect over 2 Billion dollars annually – there is potentially a lot of money owed to artists going missing.”