With the Music Modernization Act’s introduction of blanket mechanical licensing in the US having recently passed into law, many argue that the complexity of music rights exploitation is becoming ever easier and standardised. Even so, there is still one hold out – the world of synchronisation – which is viewed as remaining resolutely steadfast and opaque – an opinion shared by many of those tightly entwined within its sync eco-system as well as those operating outside it.
So, what is the opportunity? Well, both the supply side and demand side are understandably guarded not only with their personal contacts, but when it comes to what are typically their high margin fees. Yet one thing seems certain: sync revenues are rising. MIDiA research recently put a figure on these transactions and claimed 2017 saw a whopping 17% growth. Total global value of sync for Ads, TV, Film and Games was, also according to MIDiA, at $1.3bn in 2018, with roughly ¾ of that going to music publishers and the remainder to labels.
The problem appears to be that despite the rise of online and on-demand gaming, movie and TV and the increasing production output of in-house content by the likes of Amazon and Netflix, buyer’s budgets are becoming stretched as more music is needed across ever-expanding platforms. Nonetheless, there has been a significant increase in the pool of rights users, particularly with YouTube and other User Generated Communities, where digital citizens are becoming aware that their own productions require licensing, an awareness that is only likely to increase following the implementation of Articles 11 and 13 of the European Union on Copyright in the Digital Single Market.
These developments have been particularly beneficial for production music libraries, who can offer a one-stop shop for 100% of controlling rights on a global basis. We are also seeing the increased requirements for established TV production companies, some of whom are studios within broadcasters, to license music from such libraries instead of commercially available music. The reasons for this are broadly the relative ease and cost at which production music can be licensed compared to commercial music, and the global availability of such masters and works. As the studio’s productions are carried around the world by external networks and online services, all these factors are decidedly important. It has also resulted in the emergence of a number of start-ups offering “sync marketplaces”, where pools of content are filled by creators and where buyers are invited to fish. This has also caught the attention of many an investor sensing disruption.
At Synchtank we have been involved in a number of platform deployments with both rights owners and rights users. As we are a pure software company, we see the requirements surrounding the licensing of music for synchronisation going beyond the sync and music supervisor teams at such enterprises and have developed our footprint of solutions accordingly. We are now just as likely to be working with the Data and IT teams and the Legal and Finance teams at corporations as we are with the music teams, as our customers seek to join the dots across all their digital activities, including royalty accounting and low value-high-volume sync licensing.
Of course, being a technology solution in a very personal business and striking the right balance between human input and IT systems is not easy. This goes from the tagging of music with semantic, descriptive metadata during the initial ingestion of music catalogues into Synchtank systems through to the automated search for sonically similar musical recordings across music catalogues that sync teams in particular are expected to know like the back of their hand. One person’s classic rock is another person’s AOR.
However, the objective is not to remove the personal element from all this, but rather to improve efficiencies and reporting and to integrate this across other departments within organisations. As Alicen Schneider, who heads up the creative music division and West Coast music operations for NBCUniversal Television rightly noted in her recent MBW interview, “I believe that we’re going to have to see huge changes in how the labels run their sync businesses. Right now, they can’t accommodate the amounts of requests that are coming in and they also can’t increase the number of heads that they need in order to meet demand. I imagine they’re all considering an IT system that could streamline the process for everyone”.
The same can be true for the rights users themselves. Whereas record labels and music publishers are looking to technology to manage the increasing amount of pitches and requests, so too are the broadcasters and networks. They need efficiencies to clear more and more music and deliver it to producers, and to report with greater accuracy via cue sheets and track budgets accordingly. They are also more motivated to focus on as fewer vendors as possible to streamline as many of such activities as possible.
We are therefore seeing interesting developments on both the supply and demand sides of the industry and we believe the future is helping the two work together as efficiently as possible. At the same time, we are seeing multinational organisations relinquishing control of their in-house technology systems and putting their trust in third-party solutions such as Synchtank. From cloud-based platforms to AI, there is a whole host of powerful technology that can streamline the process for all parties involved. All of these technologies should be designed to bolster, not replace, the human element.
The “sync” in Synchtank is part of our heritage. Our involvement now in royalty accounting (watch this space) is allowing us to approach the issues facing the music industry from a holistic perspective and we are seeing organisations adopting thoroughly modern solutions using the technology and data solutions that are available today. And you know what? We have not mentioned blockchain once!