Managing a catalog is, in large part, managing information. Whether a catalog is being administered, licensed, or prepared for sale, the answers need to be accurate and accessible. If they are not, what should be routine maintenance can quickly become years, or decades, of deciphering and tracing mismatched data, online records, term sheets, Agreements, and verbal handshakes. It sounds like a nightmare because it is… or it certainly can be.
Whether in physical or digital distribution, rights owners, royalty participants, and payors have to be able to keep track of how ownership interests, rights, revenue, and/or royalties are allocated. Metadata is the digital compilation of every piece of information needed by those parties in order to correctly identify and track a particular digital master or composition, as well as manage ownership, royalty participants, credits, and other economic and/or non-economic data. In short, they need to know: (i) who owns a piece, (ii) what they own, (iii) what they get paid, (iv) who else gets paid, (v) why they get paid, and (vi) when. Beyond the simple ‘master vs. composition’ framework, however, there can also be arrangements, remixes, covers and alternate versions of those same works, all with differing and overlapping rights and rightsholders.
Metadata is the identifying and descriptive information associated with a particular musical work, sound recording, or release. It can be embedded within the audio file itself, or stored in external databases using its many identification codes. Metadata connects those who have rights in a particular work with those who are looking to license or otherwise exploit certain rights in and to that work, while also supporting the administration and management of the work throughout its lifecycle. If any of that information is wrong or missing, it becomes much harder to pay the right people. And if you don’t know your catalog well enough, it becomes much harder to know when you’re not getting paid the right amounts, if at all.
This kind of information is stored and tracked in part between publishers, administrators, PROs, record labels, and distributors, to name a few. Each of these entities manages different types of information depending on what they control. When companies go out of business, or are bought out, transferred, and/or merged, maintenance of this kind of data is not guaranteed to be kept clean over years and decades.
Bad metadata (e.g., missing publishers, incomplete schedules, or inaccurate percentages) can go years without anyone noticing, meaning hundreds or thousands of dollars lost for an artist, including producers, songwriters, and musicians. In fact, in 2021, the Mechanical Licensing Collective (MLC) reported that, in the United States alone, there were approximately $424 million in accrued historical unmatched royalties. These monies are mechanical royalties that remain undistributed because the owners of the rights could not be determined. This issue can be particularly consequential for independent songwriters and artists who don’t have publishers and/or administrators to oversee and collect their income. While it’s not the sole cause, bad metadata is a major contributor to the problem.
Why is Metadata Important to Rights Enforcement?
The issue of Black Box monies isn’t a new idea or recent finding at all. The rise of digital distribution of music significantly increased the traffic and volume of data. As a result, the potential for royalties to go unmatched or unclaimed increased. This is the royalty problem.
Bad metadata becomes a rights problem much later, when you need to determine who actually has the rights to authorize, license, and/or object to a particular use of your music. To be clear, metadata does not determine ownership; Agreements do; however, after years of erroneous records and lost agreements, it is much harder to establish and enforce your rights.
For example…
Suppose you, Vicki, are a songwriter with a 25% interest in a Composition pursuant to a Songwriting Agreement with three other writers, Susanna, Debbi and Michael, who each also own a 25% interest. Each of you is registered with ASCAP as both a writer and publisher, but none have a separate publishing deal, so each of you continues to own and control your respective interests. Over several years, the band breaks up, but your early music starts taking off. Susanna signs a publishing deal with Warner Chappell Music, and Debbi signs with Sony Music Publishing. You remain independent, collecting your writer’s share through your PRO and administering your interest yourself. A few years later, Michael hires a small team to help manage her growing catalog. Somewhere along the way, however, various collection databases begin reflecting your interest as 10%, while Michael’s is reflected as 40%.
At a first glance, this seems like a royalty issue, which it is. That performance income generated by the Composition is reported and accounted for based on incorrect percentages for months. But you regularly review your statements, and you notice the change in income. You contact the relevant rightsholders and collection societies, and send them the Songwriting Agreement establishing your 25%. The relevant records are corrected, you receive an adjusted account, and you receive whatever additional monies are due and owing. All is well. (Yes, I’m simplifying this. I recognize the process can be more complicated, but comparatively easy to what comes next.)
Suppose, however, that you didn’t notice… for twenty years. Your band has become a nostalgic hit for the new generation. The songs are back on the radio and you’re seeing an influx of streams. That income generated by the Composition is reported and accounted for based on incorrect percentages the entire time. You begin your estate planning and need to calculate your assets, so you review some statements from the last few months to see how much your catalog is actually generating. You pull your statements and discover that your interest has been reflected as 10% for years. You have no idea how long you’ve been underpaid or where the rest of your money went. You are faced with a pile of royalty statements from the last twenty years and an empty drawer where you thought you put that one Songwriting Agreement from college.
Again, metadata does not determine ownership, agreements do. But if a piece of wrong data is relied upon for so many years, it is much harder to not only prove your rights without the appropriate documentation, but also unwind or override any licenses, publishing arrangements, or other deals that may have been made along the way in reliance upon that information. You may eventually find yourself trying to convince a major company to give up an interest they thought they held for years, without any documentation to prove it.
At that point, correcting the metadata is no longer a matter of fixing a simple entry in a database. You end up facing an entire chain of transactions built upon a clerical error, and the question becomes whether you have the documentation, records, and leverage to untangle it.
Further, suppose you found your Songwriting Agreement (yay!). You send it to the relevant parties and prove your rights interest. What now? Proving your 25% from the beginning doesn’t actually mean you can go back twenty years and recapture all the income you should have been paid. Depending on the applicable agreements and law, certain contractual provisions (e.g., audit and accounting) and/or statute of limitations may limit how far you are able to “look back” and challenge those payments, especially after twenty years.
So, the agreements may exist, but if the information pointing towards them is wrong and someone else has been collecting upon those rights for years, who you gonna call?
Ray Parker Jr. had an answer. Your metadata should have one too.
Coming Up: As a follow-up to this piece, I’ll be tackling the question you might be thinking: “Okay, what do I do about this?” I’ll address what artists should actually be doing with their metadata.