News: The state51 Conspiracy and PPL

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The state51 Conspiracy - Internet Musketeers

PPL may well be asking its record label members to sign New Media and International mandates over the next few months. There are a number of reasons why this might not be the best way to make sure that you get the best possible income from your catalogue.

1. PPL might not have full and accurate data about the catalogue that you own.

This will result in money collected for the performance of your sound recordings being paid to another record label, or getting included in the general share-out without being allocated to you.

2. Some of the mandates might be in conflict with digital distribution agreements.

Examples might be where a service includes a public performance element, like online radio, in a bundle with other features that PPL cannot license, leading to multiple licences for the same catalogue to the same service, and potential confusion with ‘partly licensed’ services.

3. PPL cannot perform some vital digital marketplace services.

PPL can only license, they cannot negotiate more favourable terms, or supply the music and provide sales and marketing follow up. Routing part of the revenue through a non-exclusive collective deal simply adds cost and complexity with no benefit.

4. International administration of public performance can amplify these problems

If your catalogue is not fully registered in the local territory, or if you have licensed tracks but retained public performance rights, the data on overseas performances will not be passed back to PPL along with the royalties, or might be inaccurate. Missing or badly matched data is likely to result in your money being paid to other PPL members.

What We Are Doing To Help

The state51 Conspiracy is a supporter of collective organisations such as PPL, and we firmly believe they can in future play an essential role in the emerging digital music business. We believe partnership is the way forward for all of us, so we have been doing what we can to help everyone work better together.

We are discussing the management of catalogue data with PPL, with the aim of ensuring that all the record labels and artists we work with are properly represented and therefore have a chance of getting fairly paid. This is important for all the functions PPL manage for record labels and artists. With the assistance of the Government funded Technology Strategy Board we have organised two high level events to discuss metadata management in the digital market which PPL have attended.

We have been providing information about the nature of the new digital music business to PPL so that they can understand where their policies might cause problems for independent record labels. This is a process we started five years ago when we first anticipated that there might be conflicts.

The full implications of the PPL mandates can be hard to understand, so we have invested time and effort in looking at what they mean in the context of the digital music market both at home and internationally. PPL has for some labels been a ‘sign and forget’ part of their business, but we think the digital market redefines the role for PPL so the mandates deserve close attention.

Our Advice to Record Labels

We strongly advise labels not to sign either the New Media or International mandates at this time, unless there are special circumstances that mean not signing would significantly damage your business.

Instead we feel that we should initially work with PPL to improve the management of catalogue data, and to make sure that the huge progress we have made in digital music metadata is reused and extended for PPL. To give some examples, under PPL’s management the international standard ISRC scheme failed to live up to its promise, but when iTunes entered the market Apple insisted that the code be used properly. A digital music industry consortium is developing and implementing DDEX as a standard for music metadata exchange, but PPL has not been a central part of that effort.

Assumptions about the most efficient way to enable new digital markets to grow needs serious debate, so we would also advise that both individually and through AIM and the BPI we all ask PPL for a strategic plan. For instance, how do they propose to kickstart the UK internet radio business? Is there a way to include services like Pandora and Spotify, with their line by line reporting, in the workplace, hairdressers and pubs licensing? How do they intend to ensure that every UK track is registered in every database around the world?

A healthy debate in which new ideas are put forward, and both new and old ideas are challenged, will make sure that the PPL of the future is a strong and efficient partner for independent labels. The state51 Conspiracy will continue to do what it can to bring that future closer.

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