Insights from The Royalties Summit

Fireside Chat: Music Rights Organizations

Fireside Chat Music Rights Organizations 1 1

The music industry has changed over the course of the last several years. The shift to digital consumption of music has resulted in the need for restructuring and re-evaluation of the ways in which artists and their teams protect themselves. 

For our panel “Fireside Chat: Music Rights Organizations,” we brought in experts from the top music collection organizations to weigh in on data accessibility. Moderated by Portia Sabin, President of Music Business Association, our panelists included Colin Rushing, Chief Legal Officer at SoundExchange, James Leach, VP of Writer/Publisher Relations at SESAC West Coast Operations, and Kris Ahrend, CEO of the newly formed organization, The Mechanical Licensing Collective

Music Rights Organizations and collections 

SoundExchange provides royalty solutions for sound recording and publishing, distributing digital performance royalties for over 245,000 recording artists and master rights owners. The collective was created in response to the DMCA establishing a new revenue stream for digital artists in 1998 — the master use license. Since then the organization has helped turn massive amounts of data into revenue for creators, paying out more than $7 billion in royalties

Founded in 1931, SESAC has become a cornerstone of the music entertainment industry, licensing the public performances of more than a million songs on behalf of its 30,000 affiliated songwriters, composers and music publishers, which include such familiar names as Bob Dylan, Neil Diamond, RUSH, Disclosure (PRS), Zac Brown, Mumford & Sons (PRS), Hillary Scott of Lady Antebellum, The Avett Brothers, Shirley Caesar, Paul Shaffer and Thompson Square. 

The newest organization of the group, MLC began administering mechanical rights licenses to eligible streaming and download services in the United States. The MLC built a publicly accessible musical works database, as well as a portal that creators and music publishers can use to submit and maintain their musical works data. 

Technology and accessibility 

As royalties, revenue, and rights holding have grown more complex, collection organizations have worked harder than ever to ensure the data they use is accessible, but also accurate. SoundExchange, SESAC, and MLC have created some version of a publicly accessible database — ensuring frontend, self-serve visibility on payments and rights very early on in the signing process. 

“Because music rights organizations represent the entire industry, we are in an unique experience to help creators learn about royalty streams they didn’t even know existed — for example mechanical rights and mechanical writers,” Rushing said. “In that way it has been really rewarding to educate artists and clients.” 

Leach pointed out that the reason a lot of information on royalties, rights, and other revenue streams are unknown is because many people in the industry have worked to make sure they stayed unknown. Oftentimes, according to Leach, this has shut out a lot of independent or indie artists. In addition, the panelists discussed the role of human analysis in metadata categorization, especially with regards to the demand for a growingly complex payments process. 

“Information is key,” Leach said. “I encourage all artists to ask questions and get answers. A lot of tech companies have great solutions with regards to aggregation, but they don’t know the intricacies that’s involved with entering the metadata and understanding the levels in which all of us pay writers. You have to make sure all of that is covered in order to accurately pay writers and clients.” 

Ahrend states that these organizations are specialized places to get these answers. Music collection agencies have adapted to become a lot more personalized in order to service a broader and diverse range of artists.

“Music is timeless and everlasting,” Ahrend said. “So we are operating a business that predates every aspect of technology that today we take as a given. When it comes to music rights, the industry is the product of fifty years of aggregation through all evolutions of technology.”


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