Tech Focus: Music Libraries, Part 3 — Alternative Approaches Serve an Expanding Sports Industry

The landscape for production music has long been dominated by a few major names — such as FirstCom and Killer Tracks — and portals for some of the music industry’s biggest publishers, such as Warner/Chappell. Licensing ranges from one-off uses to blanket licenses that cover thousands of titles. Fees are similarly wide-ranging, with licenses for network use costing into the thousands of dollars.

However, as the amount of music increases and the number of outlets for it grows, especially with newly formed regional and collegiate networks, that landscape is evolving quickly. Alternative companies — such as Epidemic Sound, Rumblefish, and AudioBlocks — offer access to vast numbers of tracks created from a global pool of thousands of composers, some little more than hobbyists on laptops, for blanket fees of less than $100 a year for unlimited access.

Such libraries are beginning to court the fringes of the sports universe. Here’s a pitch from Rumblefish’s portal: “We make it easy for a recording artist to get their music in front of a skate-boarding teenager who’s making a GoPro video halfway across the world and make art together.”

Click here for Tech Focus: Music Libraries, Part 1 — Why Sports Sounds Like the Movies.
Click here for Tech Focus: Music Libraries, Part 2 — A Round-Up of Providers.

Licensing Models Are Key
The hook that the new generation of music purveyors offers is the promise of lower-cost, simpler licensing models. Sweden-based Epidemic Sound has had success in Europe with some sports networks, such as Sweden’s TV4, commissioning music and buying the copyrights outright from composers, according to Benjamin Page, VP/managing director, North American operations. This, he says, simplifies licensing by reducing the requirement for the customer to report music and pay public-performance royalties to the performing-rights organizations (PROs) in each country it’s used in, such as BMI and ASCAP in the U.S., and allowing users to freely use content globally and across multiple distribution platforms under a single license.

Rumblefish is a subsidiary of SESAC, the third U.S. PRO. Though not strictly a royalty-free proposition, says Kuni Takahashi, SVP, corporate and business development, it specializes in microlicenses for music, a model he considers well-suited for the expanding universe of user-generated content (UGC) that encompasses emerging sports (such as drone racing and videogaming), high and middle school sports events and programs, and even individual athletes who create their own YouTube marketing platforms in search of sponsorships and other recognition.

“All of these UGC applications need music,” notes Takahashi. For as little as $25, Rumblefish can provide microlicensed tracks valid across various distribution platforms. The company says it issues more than 50,000 microlicenses daily from a licensed portfolio of more than 5 million copyrights.

The use of licensed tracks is important for technical as well as legal reasons: many distribution channels, such as YouTube and Vimeo, deploy content-recognition software to identify copyrighted music and determine whether it’s properly licensed and whether it can be monetized with advertising. If the scanning software can’t verify that a piece of music is properly licensed, the channel may take down the content it’s used with.

“Microlicensing tracks that we can provide helps navigate that,” says Takahashi (who was previously an investment banker focused on digital media, internet, mobile, and wireless telecom and had worked in operations at Intelsat, suggesting that the production-music executive of the future will need a background rich in both music and technology).

Litigation
The direct approach to licensing is taking on new importance in light of ongoing litigation involving ESPN and BMI. The sports network, like the WWE and other sports entities, does direct licensing of some music with composers. It has asked the Copyright Royalty Board’s rate court to allow it to use an adjustable-fee blanket license, which would cost far less than performance royalties for each individual licensed song used.

BMI contends that ESPN uses more of its writers’ music than it claims and should not be able to use the lower rates available to companies like internet radio-caster Pandora. The PRO recently expanded its complaint to include music picked up by ESPN’s microphones inside sports stadiums and arenas, because “ambient stadium music is a critical component of the broadcast that allows ESPN to attract viewers by making them feel like they are sitting in the stadium cheering on their favorite team.” (It’s an argument that has been adjudicated in the past, successfully, on fair-use grounds.) BMI argues that the royalty-payments break ESPN is seeking could amount to as much as $15 million a year.

Opportunities for new entrants into the production-music side of sports will only increase as sports itself becomes more diffuse and expansive, with new sports such as videogaming and drone racing moving from the fringe to the mainstream. Benjamin Page, head of online video platforms, Epidemic Sound, cites the vast amounts of amateur and semi-pro sports available on YouTube and other multichannel networks. These, he notes, are good candidates for direct licensing because they cross territorial boundaries that would complicate traditional licensing models.

The conventional players in production music recognize that the landscape is ripe for disruption. “It’s an expanding universe, and a tough one,” acknowledges John Lentz, senior music director, FirstCom Music. “There are more sports channels, more sports, period. That creates more competition that affects pricing. But competition makes us all work harder. And, in the end, you still get what you pay for.”