Each year, hundreds of millions of dollars in royalties globally are not paid to the correct rightsholders due to incomplete or bad data.
It’s been a source of frustration amongst rightsholders for years: where the so-called ‘black box’ money goes when PROs cannot match a track’s metadata to consumption, and pay out accurately.
Warner Music Group CEO Robert Kyncl wants the industry to solve the problem and has some suggestions for how to do so.
The exec was interviewed by NMPA President and CEO David Israelite at the NMPA’s Annual Meeting in New York’s Lincoln Center on Wednesday (June 12).
During the keynote, Kyncl was asked to share his views on how positive reforms can be achieved at collection societies around the world.
Kyncl told the audience: “One of the things that troubles me personally is that we’re basically collecting digital revenue the way we’ve collected analog revenue for decades. The speed of it; everything is the same.
He added: “That’s something that we all collectively can do better and I think that will help songwriters tremendously.”
Kyncl also more directly took aim at the long-running issue of unmatched data leading to royalties going into the music industry’s ‘black-box’.
“There’s a wealth of repertoire ownership information that sits with the collection societies, PROs, the MLC and not everything matches perfectly,” he said.
Kyncl called for the industry to figure out how to “enable” collection societies globally to “collaborate” in order to solve the issue of unmatched data.
He added that “shrinking” the volume of mismatched data “is incredibly important, not only for a faster flow of money today,” but also for the music industry of the future, especially when AI tech becomes more prevalent.
“If we set the rules of the road correctly with the platforms, it will have to depend on ownership information,” said Kyncl. “It’s one of the things that we really need to focus on.”
Elsewhere during the keynote, Warner Music Group’s CEO shared his views on challenges faced by songwriters today, the music company’s approach to AI and more. Here’s what we learned…
1) Robert Kyncl argues that we risk “human creativity being replaced by machines” if the industry doesn’t get its approach to AI right.
NMPA boss David Israelite asked Robert Kyncl to comment on issues that songwriters are seeing in the age of AI.
Kyncl has notably been outspoken on AI-related issues in recent months, appearing at a Senate Judiciary Commitee hearing in April to support a US Senate bill that would crack down on unauthorized deepfakes.
During Wednesday’s keynote, he explained that Warner has “two main goals” on the AI front: “one of which is protection,” and the other “is growing the pie and figuring out positive use cases [for AI].”
He added: “Those two can coexist next to each other, but we have to pursue both and that’s what we’re doing.”
“If we don’t get this right, we risk human creativity being replaced by machines, which obviously is not a world everybody wants to live in.”
Kyncl also identified three “constituents” that the company sees as being key targets to focus on in order to address AI-related issues.
The first is distribution platforms where AI content can end up, the second is “AI engines themselves”, and the third is government, which he said involves “lobbying all around the world where there are pockets of things that we see that we don’t like and want to change”.
He added: “This is a very clear focus. If we don’t get this right, we risk human creativity being replaced by machines, which obviously is not a world everybody wants to live in.
“We take this absolutely seriously, as an equally important thing to increasing the value of music, growing the pie, and increasing participation in it. But [it’s also about] setting the roadmap for AI to protect songwriters’ rights, artists’ rights [and] doing it holistically; and solving it in a way that we can actually drive progress.”
2) Warner’s boss notes that ‘even though the pie has grown, it is just sliced thinner and thinner.’
Israelite also asked Kyncl about his views on the challenges songwriters face today from the perspective of a CEO of a major music company with experience from the digital platform side of the industry (having previously served as Chief Business Officer at YouTube).
Kyncl explained: “When you’re on the other side, on a distribution platform, you judge things by how much you are paying out in total”.
He added: “That’s how success is measured. That’s why every time Spotify, YouTube [or] Apple [are] talking about their payouts, they talk about, ‘We paid the industry X and we grew the payments to the industry by Y’.” The way songwriters and artists experience it, is by looking at their own checks. It’s individual. We have this sort of dissonance of two different views”.
Kyncl continued: “The reason that the songwriter [viewpoint] is different is because, through the democratization of distribution, there are way more people creating [and] many more people uploading content.
“So the revenue pie is getting sliced thinner. And even though the pie has grown, it is just sliced thinner and thinner. That’s one of the things that’s creating the dissonance.
“The other is that a lot of the revenue is flowing slow[ly], and some of it is trapped and that shouldn’t be [the case] for digital revenue. That [revenue] should be flowing way faster. Some of these things we just need to solve as an industry, and we haven’t yet. I look forward to doing that.”
3) Kyncl says that Warner can represent singer-songwriters “more holistically” if they work with the company on both recorded music and publishing
Robert Kyncl was asked about the “strategic benefits” of a major music company working with talent on both the recorded music and publishing sides of their careers.
Israelite cited examples of superstars that work with both Warner Chappell and Warner Records, including Teddy Swims, Dua Lipa, Zach Bryan and Benson Boone.
Kyncl explained: “I think it’s better for them. If you believe in the things that I mentioned before, the work that we’re doing on increasing the pie, increasing participation in the pie, and setting the roadmap on AI with the largest corporations in the world, it takes a whole different level of sophistication and systems and understanding things.”
He added: “If you believe that we are doing well for you on one side, then why not participate in that same work on the other side?
“In the past, [and] still now, people will [say] I prefer to divide [their publishing and record deals between companies]. In my opinion, that’s not the best way to go for singer-songwriters, because they’re under-optimising.
“If they believe they’re getting the same thing from two different companies, yes, but these are super complicated and difficult problems to solve.
“If we believe Warner Chappell is the best place and Warner overall is the best place for you, then you should put [all] your eggs in that basket. It allows us to represent you more holistically.”Music Business Worldwide