In over a decade of digital music writing, one of my favorite pieces is a Wired.com article called “4 Reasons Music Needs One Big Database.” My argument there was that if every song had a unique identifier attached to it — the same identifier, regardless of the service where the song appears — it would solve all sorts of problems for music fans and the industry.
One Big Database would not only ease mergers and acquisitions within the digital music industry (see most recently Rhapsody/Napster), make subscriptions portable (and therefore much more attractive), and lead to better APIs and music apps, but it would also make more money for artists when they need it most by adding transparency, accountability, and scaleability to the various ways artists are paid for recorded music.
Case in point: the poster pictured above, which I photographed on my way to moderate a panel at the CMJ conference. I was shocked to find in 2007 that SoundExchange, which collects royalties from music streaming services like Pandora as well as satellite radio and cable radio, was holding on to money owed to thousands of artists, including prominent ones like Kraftwerk and Pharcyde. And in 2010, SoundExchange was found to be sitting on $200 million in unpaid royalties for the same reason: It claims it couldn’t find those artists, and that they never registered.
Digital music services large and small have complained about the rules for reporting plays to SoundExchange, because it means sending over lots of specific data about each song. Even then, the money doesn’t always get where it is supposed to go.
This is a major issue. According to SoundExchange’s charter, the organization must only track whom is owed what for up to three years. After that, all of the money reverts to artists who have registered — and those, roughly speaking, are the ones with lawyers. We’ve even heard that some smaller bands, in their mistrust of the RIAA-spun-off SoundExchange organization, have refused to register to receive their money on principle. They are wrong.
Think about it: Mountains of money owed to unregistered artists — money that made it through accounting and reporting systems — is not going to them, but rather to artists who have registered, and that money is divvied up by popularity. This means that tiny bands that can’t pay their rent are ceding money to Lady Gaga, every day.
To its credit, SoundExchange has been trying to convince artists to register for years, so that artists owed money from internet and satellite streaming can get it. To do this, it matched its database against those of MySpace, ReverbNation, and other distributors. And judging from the sign I saw yesterday at CMJ, it’s still working on that.
Artist compensation is a hot topic right now, as some indie labels have been pulling their catalogs from Spotify. Perhaps a Hypebot commentator put it best: “While the basic idea of Spotify is better than piracy, the pay for indie artists is about the same.”
It’s true, indie artists appear to be getting a raw deal from Spotify relative to the major labels, which reportedly squeezed Apple for a $100 million upfront payment in return for mirroring, another $100 million from Spotify, huge amounts of equity in MySpace that indie labels didn’t get (MySpace Music didn’t pan out, but it’s the thought that counts), and almost certainly advances on royalties from other music services as well. Indie bands and labels, on the other hand, have to wait for cash to trickle in on a per-play basis — and some are losing their patience before that trickle amounts to much.
By one calculation, an artist’s songs would have to be streamed over four million times per month in order for the resulting payment to constitute as much as working a minimum wage job for that month would have. That’s a lot of streams for not a lot of green.
Still, rather than pulling their music from Spotify and other services, it might make more sense for artists to license their stuff to every legitimate, royalty-paying app, API, and service on earth, gathering minute recorded music income streams from all sorts of sources — and perhaps most importantly, apps. If their songs had standard unique identifiers (or at least identifiers that easily translated from one service to another), this would be possible without negotiating deals with each service, or going through a middleman, reducing efficiency and introducing opportunities for money to simply go missing — a problem that artists have complained about for decades, even before digital distribution added new complexity to the equation.
Spotify, like Rdio, has an API that allows app developers to make apps out of all of the music on Spotify, available only to premium subscribers. Evolver.fm recently learned that Spotify plans to let those developers charge for their apps and the music they contain. Artists and labels that pull their work from Spotify or Rdio won’t be a part of those income streams.
Perhaps they’ll only amount to a trickle: But to understand the power of a trickle, one need only look to the springtime, when tiny rivulets of melting snow conspire to create great rushing rivers — a scenario that “One Big Database” can only hasten.
Photo: Eliot Van Buskirk