Rights owners should make it easy for digital start-ups to acquire temporary music licenses to encourage the development of innovative monetization concepts for artists, said speakers at a Music 4.5 event in London.

That was one of the conclusions at a panel during Music 4.5’s Global Is the New Licensing Territory conference on 25 February at Cliffords Inn (pictured), the London district housing the country’s top legal firms.

During the session called Generating Value from Users for Content – Models for Monetization and Licensing, legal expert Alex Damon feared the state of today’s digital music sector contradicts the panel title’s meaning.

Damon, who is head of digital media and technology at London law firm Russells Solicitors, said start-ups that need licenses to drive their digital-music ideas are being stymied by tough conditions imposed by music labels and publishers.

“There are digital platforms of different sizes. On the one hand, you have Apple, YouTube, Spotify. Then there are the start-ups with innovative ideas for communicating music to a new audience.”

Providing them with authorized music to kick start their business is in everyone’s interest, Damon argued.

“But it is really hard because you’ll never prise (the required) rights out from the labels and music publishers, who are also competing (against each other). We need to exploit a moratorium for new services, which would give start-ups time to prove themselves. They will receive a one-stop licensing for 12 to 18 months, during which time you will see whether or not they can deliver.”

He said there is currently no single uniform solution because of rights holders’ past negative experiences. “Rights owners have had their fingers burned. But when you come across good ideas (from start-ups), let them build up some steam and audience, then have a sensible negotiation afterwards.”

Caroline Champarnaud (pictured below), director of recorded media and online licensing at French copyright organization Sacem, said something similar is being tested in France. “We at Sacem are currently working on a simplified way of licensing for start-ups, but I can’t say anymore now. We want to find a temporary solution just to see what works and how to simplify the way we process the (resulting) data for distributing royalties in a more pragmatic way.” 

Champarnaud also disclosed that Sacem is working with BMAT (the digital music service provider based in Barcelona), “which has the technology that can help us track and identify works (used digitally) and build a better metadata system.”

Music licensing would be equally fairer if emerging artists who performed cover versions on YouTube had access to the relevant permissions required, suggested Rebecca Lammers, director at YouTube music consultancy Laniakea Music.

“People making cover versions of songs (after all, that is how Justin Bieber started) should also get paid using a micro-licensing system, so that they make money for themselves while enabling the original content owner to get a share.”

Sophie Goossens, senior attorney-at-law at Paris-based August & Debouzy, was optimistic about the future. “Solutions designed to reconcile technology and copyright do exist,” she said. “But these efforts have not been divers enough or well-known, so they could benefit from greater awareness.”

Damon still urged rights owners to take risks for the long-term benefits. “Investors won’t be interested unless the start-ups are licensed, and the start-ups need investors to get going if an idea is a good one,” he noted. “But the current required upfront hefty fees will drive the industry into the Dark Ages and no one will get paid.”

Discover more about technology’s impact on the creative businesses in the latest issue of TechMutiny Issue No.9