Photo Credit: Marcus Herzberg
It’s a relatively amazing feat of humankind: whenever a song is played in public, it’s typically tracked and paid for, with billions of dollars reaching their proper IP owners worldwide. That is, in theory at least.
At a top level, public performances of musical works – at sporting events, coffeehouses, restaurants, airports, wherever – are tracked by a vast and complex system of loosely tied organizations. Issues aside – and there are many – it’s a remarkably complex royalty-collection mechanism for music IP owners, with PROs (performance rights organizations) worldwide tracking and charging for music the public enjoys.
But is it time for that mechanism to undergo a system upgrade?
That’s now a growing sentiment in the music industry, particularly among rights owners who feel that public performances aren’t being properly counted.
A system of estimated plays and proxies currently dominates the performance-tracking landscape, even while formats like streaming, downloads, videos, and even broadcast radio and vinyl are counted with relative precision.
Even old-school physical formats like CDs, cassettes, and LPs underwent a transition towards systematic counting by barcodes and scanners in the 90s. So why is the tracking of public performances still subject to complex estimates and formulas, when the technology clearly exists to count the actual plays – often in real time?
That’s a subject explored in an as-yet-unpublished white paper by Craig Nunn, the former COO of PRS for Music . In partnership with Audoo, a company focused entirely on precision tracking of actual performance plays, Nunn sets out to describe the current terrain of PROs and CMOs (collective management organizations).
More importantly, Nunn also explores the largely unspoken reasons preventing a mass-scale upgrade of performance rights tracking and remuneration.
With an appropriately white-paperish title – ‘Moving from proxy-based distribution policy for public performance royalties to an evidence-based distribution framework’ – Nunn articulates the current terrain and guides organizations that want to change it.
“The industry has relied on proxy datasets—radio playlists, manual returns, or limited observational surveys to approximate public music usage, and continues to do so,” Nunn describes. “While these proxies ensure continuity of payments and are simple to understand and apply, they are not random samples and carry unknown bias.
“Consequently, the distributions derived from them cannot be associated with measurable confidence intervals or known margins of error. In the absence of a better solution, stakeholders have had to rely on convention and trust rather than on statistically defensible assurance.”
The best part – perhaps obvious to most in the industry – is that the solution to this problem has already been invented.
“Modern data collection—through devices such as Audoo’s [Audio] meters—makes it possible to measure actual music usage at scale and in real time,” Nunn notes, while asserting that an infrastructure built around precision counting “would align [performance rights] societies with the standards of professional statistical practice and would strengthen the credibility of royalty payments in the eyes of regulators, creators, and the public.”
But that logic leads to an uncomfortable question: if plays can be counted more precisely with existing technology, why aren’t they?
On that question, Nunn succinctly explains that ‘this transition is not just technical, it is cultural and political,” while further pointing to potential quagmires for anyone who dares to challenge the status quo.
“Proxy systems, however imperfect, create predictable outcomes and vested interests,” Nunn states. “A fairer system will inevitably redistribute income, and those who lose relative advantage may react strongly. Common risks include active resistance, narrative distortion, policy capture, and erosion of trust.”
Beyond that, there’s also the issue of the royalty-paying venues themselves. “Licensees, the businesses that actually pay the fees that make the royalty payments possible, are also increasingly concerned that the money they pay in good faith is not being paid to the right people,” Nunn wrote DMN.
Admirably, Nunn painstakingly outlines a strategic approach to upgrade the entire performance rights system from within, starting with legacy PROs and CMOs.
The cooperative plan-of-attack involves transparency, phased transitions, and an abundance of logic, with PROs given the control over the transition towards precision monitoring.
There’s also the benefit of a well-developed, refined technology player in this field – the aforementioned Audoo, which also collaborated on this research. Audoo, which recently partnered with Digital Music News to further expand its industry footprint, has been developing and deploying sophisticated hardware (its Audio Meter) and monitoring solutions worldwide.
Audoo’s rollout also includes cooperative alliances with PROs and CMOs, including the weighty APRA AMCOS of Australia and New Zealand and other major performance rights societies in Europe, Africa, and the Americas. Also on the list is Ireland’s IMRO, part of an early vanguard of rights societies embracing more sophisticated counting methodologies.
That cooperative spirit is what Nunn advocates, though it also assumes that rights organizations can control time forever, while dictating the methodology and processes for performance rights monitoring and distribution to a rapidly changing business.
That’s been the reality so far, though disruptive technologies tend to impose their own timetables, while unceremoniously upending long-standing business models and approaches.
That reality could be motivating greater transitional efforts at mainline PROs, with advocates like Nunn potentially encountering an easier, more cooperative road ahead.
In the end, disruptive reality could be closer than PROs want to admit.
