Music’s Data Problem May Be Depriving Artists Of Significant Revenue

This guest post by Eliot Van Buskirk of Evolver.fm is certain to cause strong reactions. Post yours in the comment section below.

For nearly 100 years, performing rights organizations have tracked the music played on the radio, then the television, and now the internet. Their goal: to figure out who should get paid.

These organizations  – ASCAP and BMI are the big ones – have traditionally relied on the radio, television, and internet music companies they monitor to report what they played, and to how many people, then they cross-reference that with random sampling.

In 2012, there is no longer a need for either of those ancient approaches. Back when I did college radio, we used to write down each song we played to submit them to these PROs, and to a great extent, that is still how they work. To borrow a phrase from the old Six Million Dollar Man television show, “we have the technology” to fix this: audio fingerprinting, which can identify every song and snippet of a song that plays on every radio station, television channel, and streaming radio company. Why guess when you can know?

This is why we’ve been intrigued by TuneSat, which actually sets up televisions and computers, and feeds them into other computers. The computers actually identify what is being played, rather than counting on broadcasters and webcasters to report things accurately.

I saw TuneSat’s Chris Woods explain what his company does at a MusicTech Meetup in Brooklyn last month, after which I posed a question: “Why don’t ASCAP and BMI use this technology, or simply buy TuneSat outright?” My question was met with knowing guffaws. Someone else in the audience piped up, “Where do we start?”

Woods went on to explain that those organizations are too slow, too mired in the past, and “not nimble enough.”

I’ve heard startups lob similar accusations at the establishment for years, and not always with merit, so I checked with BMI and ASCAP to see how they felt about these accusations — one reason we’ve been sitting on this story for so long. (We’re also quite busy.)

BMI, which apparently uses technology created by Shazam to find its clients music in broadcasts, declined to comment on the record. A spokesman sent Evolver.fm a lengthy email citing the fact that Information Week called it the 74th most innovative user of business technology and that it delivered $796 million to its clients out of the $931 million it collected last year.

ASCAP senior vice president of marketing Lauren Iossa was more forthcoming:

We were genuinely surprised to see those comments as ASCAP has been utilizing audio fingerprinting technology for over 15 years, as well as pursuing and utilizing technology solutions from various sources to track performances of our members’ works.

ASCAP has always sought the most advanced methods to monitor performances and we are constantly evaluating different technologies and solutions to enhance the service we provide to our members. ASCAP processes over 250 billion performances annually and we set a high bar in terms of the standards of accuracy and cost effectiveness before choosing a technology solution. This path has allowed us to distribute royalties exceeding $800 million annually to our songwriter, composer and publisher members, which we have done for the past four years, delivering a total of over $3.3 billion to our members.

There’s one big problem with both responses.

If ASCAP and BMI aren’t missing anything, there would be no reason for TuneSat to exist — or if it did, it would have no clients. Instead, it has many, including heavy-hitters such as The Orchard, Universal Music Publishing Group, NBC Sports, and around 250 more — up from around 100 a year ago, an expansion financed in part by a $6 million investment from General Electric.

“I don’t know what to say,” said Woods after we read him the responses from ASCAP and BMI. “I don’t want to speak disparagingly of the performing rights societies, but the fact of the matter is, as you said, if they were doing their job properly, there would be no TuneSat and we would have zero clients. There is beyond a lot of room for improvement in the process. It’s been a manually-reported process since the inception of performing rights organizations. A lot of the societies have postured that they are using technology, whether ASCAP with MediaGuide, which ceased operations on March 1, or Landmark Digital with BMI (which uses Shazam)… what they’re actually using that technology for, I can’t tell you.”

Woods is not just a critic of these organizations; he’s been a client of BMI since 2004 as a music composer with “thousands and thousands and thousands of performances” of “nearly a thousand works” on television every quarter, such as theme songs and network identification packages. He helped launch TuneSat in 2009, in part, to solve his own problem. Sometimes, entire quarters would go by without a single reported use of his music, when he knew it was being played.

Identifying music on broadcasts would seem to be a perfect application of “big data” — analyzing all media to find the songs and pay the pipers. But to Woods, it clearly wasn’t being used properly.

“I can tell you for a fact that they have never used technology to report the use of my music on any of the broadcasts,” he said. “They have had the technology to do so since 2005, and it’s now 2012, so something’s not right here. It doesn’t take a rocket scientist to figure that out. I don’t know what the real issue is — maybe they’re too big, or slow to adapt to new technology, or maybe it represents exposing their formulas or how they collect and distribute royalties…

“Only they know why they don’t implement technology in a way that is transparent and that benefits the affiliate members [more on that below]. That being said, until they do, TuneSat’s in business. Any content owner can come to us and receive that information, and more importantly, we’ll compare their performance royalty statements to TuneSat data as part of the subscription as Deltas to support our claims that as much as 60 to 80 percent of all music broadcast on television is never reported to the societies, and hence never accounted for in a royalty distribution.”

When TuneSat finds money that ASCAP and BMI have left on the table by failing to notice that a song or a snippet of a song has been played — something that typically happens when an intern or production assistant fails to note the song, publisher, and duration of playback manually, on what’s called a cue sheet — the client is on their own when it comes to getting that money. But at least they know they are owed.

What about the technology ASCAP and BMI say they are using to detect plays? Woods says that if they were using those properly, they would show their clients the results, which is a good point.

“If their true intention was to buy technology that was going to benefit their entire affiliate base and create accurate performance royalty distributions based on detected performances, would they not make this information available to the people who paid for it in the first place, their affiliate base? I’m sorry, but there’s some smoke-and-mirrors and cloak-and-dagger going on here, and I’m not trying to create a conspiracy. This is just a fact in the music industry,” he added. “Everybody knows there’s a problem with how performance royalties are reported and distributed. Some people think it’s a small problem and some people know it’s a large problem.”

TuneSat’s plans start at $10 per month to monitor television broadcasts in the United States for up to ten audio tracks, and increase based on media, territory, and volume. Woods says its clients can increase their royalty revenues by as much as 300 percent with the technology.