Panelists Tracy Gardner, senior vice president of digital strategy and global business development for Warner Music Group, Bobby Rosenbloum, vice-chairman of global entertainment and media practice at Greenberg Traurig, and Ted Suh, vice president of digital music at musical.ly, discussed some of the hot-button issues in social media music licensing at SXSW session this month.
The music industry is carefully watching the Music Modernization Act, which was introduced in the House and Senate in January 2018 and aims to streamline the music licensing process.
One of the reasons startups operate without licensing agreements is the cost in terms of staff time and money, Suh said. One of the benefits of doing business this way is that it gives startups data to present to record companies that shows how their platforms can benefit artists and what they will get from these deals. Once in place, these deals generate royalty money for the record companies while giving the social media platforms legitimate access to the catalog of music.
The free model helps drive negotiations because the startup can show how many listeners they have, especially in “hot markets” like tweens and teens, Suh said.
“We have a lot of eyes and ears on our platform… How can we leverage that to partner with these companies to accomplish everyone’s goals?” Suh said.
While record companies would prefer platforms to license their music from the beginning, it’s not a reality, Gardner said, so the data startups generate by operating without a license can be helpful.
“The recognition of what these services are doing to fuel consumption both in those platforms and on other platforms; we’re taking a more open approach to licensing,” Gardner said. “We realize that these platforms are moving so quickly. If we were to try to hold them back, then we’re losing out.”
This take on music licensing has broken from the traditional method used by record labels, Gardner said. “Traditionally, perhaps the music industry has been slow to the game when it came to tech, and almost would try to block it. Now we’re actually leaning in and trying not only to focus on what we can do, but how we can grow the ecosystem,” Gardner said.
There’s also the benefit to artists of being on the platform, Gardner said.
“These platforms are helping breaking artists to cross over into a global sphere, as opposed to being in their territories and not being able to expand beyond that,” Gardner said.
Crossing over into the global sphere creates a whole new world of problems for licensing, Rosenbloum said.
“The minute that you are dealing with global licensing, you can’t just go to a music publisher … and get global rights,” Rosenbloum said. “You have to do deal with societies country by country.”
To ensure everyone is getting their share of the licensing rights, musical.ly and other platforms used third-party companies that specialize in publishing databases to track down the owners, Suh said.
Another hot spot for licensing in social media is user-generated content, or UGC, created in the form of remixes and covers of songs, Rosebloum said.
The lack of a structure in current copyright statutes may not even apply to UGC, Gardner said.
“We always want to be respectful of artist rights. This is a whole new world of creating derivative works where perhaps a lot of the older contracts don’t even address this,” Gardner said.
Startups are taking steps toward ensuring that their licensing agreement partners are compensated for the usage of their material, whether by the service or through UGC, Rosenbloum said.
Suh said his company has integrated with a third-party company to track all of the music uploaded to musical.ly. If an uploaded song matches one in the database that’s not permitted, then the song is blocked. Remixes and covers by users often can slip past the filters in place though, but Suh said he sees that problem becoming less common.
“I think we’re going to see content ID get much better,” Suh said, noting advancements in technology and artificial intelligence specifically.