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Downtown Music boss: ‘Music is everywhere… Music licensing tries to keep up’


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From songwriters suing streaming services to big-bucks catalogue acquisitions, the music-publishing world has made plenty of headlines in recent years.

Downtown Music Publishing CEO Justin Kalifowitz suggested that publishing is “the biggest piece of the pie” for most musicians and that it is seeing “stable and steady growth in established markets”. But, however, he felt that there were plenty of areas where things could be improved and revenues increased.

Kalifowitz was speaking at Music Ally and Music Biz’s NY:LON Connect conference in London today, where he gave the ‘publishing keynote’ speech.

“Music is everywhere… Music licensing kind of tries to keep up. In certain markets it does a more admirable job than others,” he noted.

Kalifowitz cited a recent study from Soundtrack Your Brand and Nielsen suggesting that there is a $2.65bn opportunity in licensing music to small businesses alone, because those companies are currently playing music in the office from personal streaming accounts.

He also talked about fitness startup SoulCycle, which runs indoor cycling classes where music “is integral to this experience”. However, Kalifowitz had concerns.

“This business couldn’t get people to pay $30 per class if it wasn’t for the music, but we charge them the same amount of music that we charge a gym that just has music on in the background,” he said.

Asked by Will Page (of Spotify) if there was a lot the rest of the industry could learn from the Brazilian model (where one agency collects and processes everything – recording, publishing and performance), he felt there absolutely was.

“It’s rare to talk about Brazil as a bastion of efficiency – but in that context it is!” he joked. “There is a lot of excess and duplication but people don’t like to talk about that because people will lose their jobs.” Ultimately he felt that a similar approach could make societies more efficient and the saved money could go to the artists instead.

Kalifowitz’s speech was followed by a panel discussion about innovation in the publishing world. Speakers included Gracenote VP of music Scott Ryan; Teosto senior advisor Turo Pekari; ICE director of product management Mick Hayes – ICE sponsored the panel – and AdRev president Noah Becker. Vanessa Higgins, CEO of Regent Street Records and director of the BPI’s Innovation Hub, moderated.

“Getting our hands on old money, unlocking new money and speeding up the process,” is what Higgins says is at the heart of innovation in this sector.

Hayes said that the biggest challenge “is around data management and availability.” What is holding the business back is getting robust data into all parts of the chain. He feels the sector needs to look at how you treat information and get access to it. Technology will be central to this. “But technology alone won’t solve all the problems,” he argued.

“The overall systems to bring in data is scaling up to deal with millions of lines of data,” suggested Ryan. “But the trust in some of that data is still in a difficult place.”

Becker said the onus needs to be on rights owners to ensure their data is clean. “We encourage clients to standardise their own data and their data house,” he said, but felt that a unified global database of rights is a pipe dream.

“I have no faith in a global database,” he said. “It is never going to happen. It is a Shangri-La. Get your own house in order.” He added that you need to do it yourself. “To rely on someone else to do that for you is a fool’s errand.”

There are a range of views on this, however. “We need a platform where that data can be brought together and shared, and then the industry can run off that platform,” said Hayes.

Blockchain cropped up at this point in the conversation, as it often does. “What blockchain has been useful for is to start the discussion […] Even if blockchain does not do all these things [like creating transparency and efficiency] it has at least started a conversion about what can be done,” said Hayes.

For Pekari, clean data is one thing, but a willingness to be more open about it was really where the future lay. “We are still afraid to lose control when it comes to data,” he said. “We need to share it as much as possible as that is the only way to get the money back and distributed to the rights owners.”

He pointed to the medicine and automotive industries as ones that can share data between companies. He suggested that music could learn a lot from this spirit of collaboration and become more efficient.

The notion of music shifting from a static item to something more malleable and interactive was something the speakers were excited about, even if it caused some existential questions for the business.

Pekari pointed to Netflix’s Bandersnatch (a choose-your-own-adventure show) as a new model. Viewers, in the wake of this, could start to choose the music for what they are watching. He added in services like HumTap and innovations like Massive Attack’s Fantom app as signs of where a more dynamic use of music (and therefore a more dynamic use of music licensing) could do. “This is something to watch,” he said.

Also related to this is the use of stems for fan-centric remixes as well as the growing use of UGC on social media platforms and creations app.

Ryan retuned to the problems wrapped up in the absence of a streamlined and properly organised data as a long-standing issue that the industry needs to address.

“We don’t have a clean and standardised database to be able to transact from,” he said before drawing an interesting parallel. “In banking if you went to an ATM and it only worked 50% of the time you would not accept that.”

Becker felt that too often the industry was wasting time trying to work out licensing models for new entrants that were doomed to failure from the off and he felt their energy could be better used somewhere else.

“The bigger challenge will be telling someone to fuck off as they are wasting your time,” he argued. “For every Musical.ly there will be a thousand duds.” The industry, he felt, needs to be smarter in knowing when to license new startups that reimagine rights and music usage in new ways.

Ryan raised the issue of discovery (saying the means of discovery “is getting better and better”) in the streaming age, but it is still quite shallow in the sense of how deep into catalogues it goes. “At the same time we still see so much of the consumption happening in a relatively narrow part of the catalogue.”

Becker ended by talking about the issue of money still being left on the table in the business and why the industry needed to wake up to the lost opportunities here.

“There has never been a publishing account that we have gotten into where we haven’t been able to drive revenue by 25% in the first couple of months. If it is major label repertoire or super-popular repertoire we are talking about, it’s 100% upshot in revenue over three-to-six months,” he said.

“Finding the right partners to specialise collections is vastly important. Through my own purview with YouTube revenue, the upside potential is 100-300% depending on the repertoire and who you have got on it.”

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