Audible Magic Sponsors MIDiA Research Report on The Rising Power of User-Generated Content
UGC is the next music industry growth driver and the short-term opportunity is worth $6 billion
London and Los Gatos, Calif. – Oct. 26, 2020 – User-generated content will contribute a significant proportion of the growth in music consumption over the next two years in an opportunity that is worth circa $6 billion to the music industry value chain. Rights holders could see $3.2 billion of this in the next two years, as a new report by MIDiA Research in partnership with Audible Magic, has found—with UGC already having contributed over one billion dollars to global music revenues in 2019.
‘The Rising Power of UGC’ report, which is available to download for free here, examines the dramatic and continuing growth of UGC creation and consumption and highlights that this ongoing expansion requires the implementation of new, simpler licensing frameworks, especially for music.
This report also considers some of the implications of the 2019 EU Copyright Directive, which acknowledges the importance of UGC in today’s economy and presents unique opportunities to encourage the growth of the digital streaming market.
The rising power of UGC is reflected by the sharp growth in social media platforms in 2020, totalling 7.7 billion gross users. Lil Nas X’s Old Town Road, as one example, set a new course for music industry marketers by becoming the first clear example of the ‘song as a hashtag’ – turning a song from a TikTok meme into a global smash hit. More than two billion streams later, almost every marketer in the industry is hoping to repeat the song’s success – though not necessarily with a clear blueprint as to how to do that.
Social media and UGC platforms do not respond to traditional licensing structures and as a result, opportunities are being missed. Framing these trends within the poor performance of ad-funded models, the slowing down of subscription revenues and the absence so far of alternative ways to monetise fandom, the report advocates new ways for the industry to approach UGC to become a win-win for technology platforms and content providers. Social media platform advertising revenue, meanwhile, totalled $119 billion in 2019 – a huge addressable market, while in-app purchases and virtual merch are emerging forms of monetisation.
Content owners might well ask “what’s next?” But what’s next is already here: social media is the new music consumption; it just isn’t being fully monetised or utilised.
Commenting on the implications of these shifts for content companies, a major label executive said: “It is important for music content owners to start imagining UGC as another format or channel for the delivery of music rather than simply as promotion or audience development.”
Mark Mulligan, MIDiA Research’s managing director said: “As music subscriptions edge towards maturity in many Western markets, the music industry needs new growth drivers. UGC has long been under-monetised for music rights holders but its potential now is bigger than ever.
“We are entering into an era where we are all becoming creators, whether that be editing digital photos, making a lip sync video or even creating a mashup. We are leaning forward and interacting with our content more and more, with more tools at our disposal. Music continues to be the soundtrack to both our lives and to UGC content. We sit on the cusp of the next chapter in music consumption and monetisation.”
About Audible Magic
For more than 20 years, Audible Magic has innovated solutions to identify content, manage rights, and monetize media. Audible Magic’s Emmy-winning automatic content recognition (ACR) technology powers billions of transactions monthly. The Silicon Valley pioneer is the trusted intermediary among rightsholders (including labels, studios, distributors, publishers, and collectives) and major platforms. For more details visit our website: www.audiblemagic.com
About MIDiA Research
MIDiA Research is a market intelligence and consulting firm with longstanding expertise in the business of entertainment and digital media. We help businesses formulate commercially actionable strategy to navigate the evolving digital landscape. Our clients leverage our expertise, proprietary multi-country consumer data and market forecasts to enable smarter and faster decisions. We work with record labels, TV networks, streaming services, tech firms, financial organisations, gaming and sports companies, providing unparalleled insights into trends and innovations shaping the entertainment market and audience behaviours. For more details visit our website: www.midiaresearch.com
Contacts
Julia Hutchinson
Audible Magic
Dara Jegede
MIDiA Research
User-Generated Content Brings Creators, Users Closer and Blurs Promotion With Consumption [Keith Jopling] - Hypebot
“It is important for music content owners to start imagining UGC as another format or channel for the delivery of music rather than simply as promotion or audience development.”
Read the full article by Hypebot here.
Novecore Delivers Lightning-Fast, Affordable Music Distribution While Protecting Artists With Audible Magic’s RightsRx™
Novecore has built its business on providing exceptional speed in music distribution at an affordable price, often uploading songs in less than a day to top music streaming services such as Spotify and Apple Music (MSS). The startup understands the challenges of fledgling musicians and offers pricing of 15% of royalties, which can change to a monthly fee of five dollars as the artist becomes established. Artists can also access an innovative online credit card and can use their royalties directly from their Novecore account.
A Business Built on Speed and Accuracy
Integral to Novecore’s business is the ability to ensure copyright compliance and maintain a preferred status with music streaming services by swiftly and accurately scanning tracks using an automatic content recognition (ACR) service before upload.
Many top music streaming services expect distributors to use ACR to scan tracks for copyrighted music prior to submission. The cost-conscious startup initially chose another ACR vendor but started to experience issues with identifications that required costly human intervention. These included:
- Files misidentified as containing copyrighted music (false positives)
- Files that the service incorrectly claimed has no copyrighted music (false negatives)
Both types of inaccuracies are bad news for music distributors and creators.
Distributors take great care to create a seamless user experience. Falsely accusing a creator of infringement creates a bad user experience, slows distribution, and undermines the credibility of the distributor.
False negatives put the distributor’s preferred status with the music streaming services at risk by allowing copyrighted material to upload.
Accuracy at an Affordable Price - RightsRx
Novecore moved to RightsRx from Audible Magic, a service known for its high accuracy and affordability. Novecore was processing tracks in less than a day without assistance from the support team at Audible Magic. The company now scans tracks against Audible Magic’s authoritative database, which includes over 140,000 labels from all over the world.
One registration to manage tracks across UGC hosting platforms
In addition, Novecore submits tracks to the Audible Magic free registry to protect their artists content on UGC hosting platforms. With one registration, Novecore can set rules for usage across many UGC hosting platforms.
“We are confident that we can take care of our artists and maintain our preferred status with digital streaming platforms because of the accuracy that RightsRx provides,” comments Matthias Merkel, Chief Operating Officer. “With Audible Magic’s registry, we can manage the appropriate use of music across major UGC platforms for our clients. The combined services help prevent inappropriate use and protect artists both before and after distribution.“
Challenge: Ensuring a clean supply chain of new artist tracks free of copyright conflicts to maintain preferred status with music streaming services.
Solution: Scanning audio tracks prior to upload to music streaming services with RightsRx and registering content with Audible Magic to manage use across multiple platforms.
Key Requirements: Accuracy, scalability, worldwide depth of the reference database.
7 Hard but Very Telling Questions for Your Automatic Content Recognition Vendor (ACR)
Consider These Issues to Avoid Costly Mistakes
Whether you are focusing on copyright compliance or licensing content for UGC, the choice of an automatic content recognition vendor may seem ancillary to your platform; the reality is that it is a crucial decision for your business. Choosing the wrong vendor can be costly and limit your ability to grow, significantly degrade your user experience, expose your service to large volumes of takedown notices, or worse.
Finding the right ACR vendor that will help you meet your compliance and licensing needs involves quite a bit of research. You may have spoken with colleagues, combed through several vendor’s websites, and possibly met with the sales representatives. Before you sign on the dotted line, there are a few key and often over-looked questions that will drive your decision.
1. Does the ACR vendor have a customer list? Are they the vendor of choice for the top platforms in the world?
Audible Magic’s customer list is a who’s who of the UGC sites both in social media and music distribution, including such services as Facebook, Instagram, Twitch, Vimeo, CD Baby, SoundCloud, The Orchard and Dailymotion, and many, many others.
Rightsholders recognize this and work with us to manage the appropriate use of their content. The list of rightsholders who proactively register with Audible Magic consists of over 140,000 music labels and over 1000 video suppliers across the globe. Our registry includes content from industry leaders such as Universal Music Group, Sony Music Entertainment, Sony Pictures, CBS/Showtime, Disney, NBC Universal, Warner Music Group, FOX, RTL Group, Grupo, and Canal+.
2. How does your vendor mainly acquire their customers?
Audible Magic is proud and humbled that we have built a business on unsolicited references from rightsholders and platforms. We continue to earn this praise through continued technical innovation and proven performance over many years.
3. Are you interested in a transactional relationship, or are you looking for a trusted advisor that is experienced and understands the latest regulatory changes?
At Audible Magic, we bring 20 years of experience with all types of business models. We have long-term relationships with key players in the industry and understand the challenges of compliance and licensing. We have top players on our team from the industry with extensive knowledge of rights management as well as an understanding of automatic content identification. With each identification, we understand that we are helping you make decisions that will impact your business.
Although you may think you are only buying a transactional service with Audible Magic, you are gaining access to a team with in-depth industry knowledge that can guide you through issues such as the recent changes in the EU Copyright Directive (aka, Article 17).
4. Will you have access to a support team or a bot?
Audible Magic has an experienced team of customer support analysts here to support you via phone or email 24/7 if needed.
5. Do you want a vendor that has been working to build a trusted bridge between platforms and rightsholders, or do you want a vendor that has been servicing only rightsholders?
Audible Magic has been building a trusted bridge between the rightsholders and the platforms by providing services that bring clarity to the use of audio and video. Other vendors come from a very combative history in the industry. As a platform, what kind of vendor do you want to hire? At Audible Magic, you are our customer, and because of our position in the industry, we provide a balanced bridge between rightsholders and UGC services.
6. Does the solution sound too general-purpose or feel too slick? It probably is.
We deal with many types of platforms with different business models and have found that a one-size-fits-all solution, well, doesn’t get the job done. We work with our customers to provide the best result for their specific needs, resulting in extremely high accuracy rates and at extremely high volumes (hundreds of millions of transactions per day).
The ability to provide highly accurate identifications allows your business to grow without human intervention, constantly reviewing misidentified files. You’ll want a service that minimizes the impact on user experience. Imagine telling a user that the file he just uploaded includes unauthorized copyrighted material, and it actually doesn’t. That happens with solutions with other vendors and is extremely rare with Audible Magic’s technology.
When it comes to licensing, some customers need to administer directly licensed deals, while others need sub-licenses. Your ACR vendor should be flexible enough to meet your needs for compliance, licensing, and reporting.
7. New is not necessarily better. Do you want to entrust the future of your business to unproven technology or business acumen?
Audible Magic has assembled an innovative and experienced team that has kept pace with the latest developments in the industry, whether it is short clip length or creating a solution to identify covers. Our ever-growing list of patents (51 and counting) shows we mean business when it comes to innovation. Twenty years doesn’t mean staid. It means we have successfully, over the last two decades, met the challenges our customers continuously bring us.
Twitch is Working on a Way to Delete all Clips More Easily
Over the last week, numerous Twitch streamers have been hit with DMCA takedown notices for copyrighted music, with some being targeted for years-old clips. In response, Twitch said it is creating the ability for streamers to delete all of their clips more easily as a way to avoid getting a copyright strike. The platform also said it will use Audible Magic a long time provider of automatic content recognition (ACR) services to Twitch to scan existing clips with copyrighted music and delete those without penalizing the streamer.
Read more here.
Latest Industry Gigs: Audible Magic, BMG, Sony Music UK, LiveXLive, UMG and More
Audible Magic announced that it has hired David King as strategic advisor, J. Gibson as senior director of content operations and rights administrations and Kuni Takahashi as vice president of account services and sales.
Read more here.
Audible Magic Monetizes Music On User Generated Content
Automatic content recognition (ACR) solutions provider Audible Magic has launched its UGC Music Rights Platform (UMRP), which simplifies the licensing and administration of music rights for user-generated content on social media.
Read more here.
Indiefy, an Indie Record Label & Distributor Platform, Supports Emerging Artists While Verifying Copyright Ownership
From its launch in 2016 in Guadalajara, Mexico as a music distribution service and label, Indiefy understood the importance of providing aspiring indie artists an excellent user experience while seamlessly uploading tracks free of copyright claims to digital service providers (DSPs). Striking the balance of servicing its subscribers and ensuring smooth operations, including copyright compliance, Indiefy not only built relationships with artists around the world but also maintained the platform’s status with DSPs.
Indiefy regards automatic content recognition technology as crucial to ensure the integrity of their supply chain and catalog, and to preserve their status as a trusted supplier to the leading music DSPs. Early on, Indiefy had chosen a vendor whose service was not as accurate as they needed and was forced to manually review any identified files from the vendor. They found the vendor’s service:
- Misidentified files as containing copyrighted music when they actually did not (aka false positives), falsely accusing an artist of misappropriation.
- Correctly identified files with copyrighted music but referencing the wrong metadata.
With a strong commitment to delivering reliable and affordable service, Indiefy wanted to avoid providing inaccurate data, falsely accusing an artist of copyright infringement and holding up his or her music from uploading to DSPs. The team knew the overhead of manually reviewing files could not be sustained and began looking for another automated content recognition solution (ACR).
RightsRx™– The Highest Accuracy for Any Budget
After reaching out to Audible Magic, the Indiefy team was pleasantly surprised at the various affordable service options for RightsRx, built using Audible Magic’s content identification technology – known for its accurate identification rates and virtually zero false positives. The development team also found it easy to install and use, speeding the time-to-market for deployment into production.
RightsRx compares tracks to music from more than 140,000 music labels from over 150 different territories in Audible Magic’s authoritative database and responds in seconds with a match or no match. If there is a match, it will display the conflicting rightsholder.
“The accuracy and the lack of human intervention not only builds our reputation for professionalism with indie artists, but also with DSPs that expect a clean catalog from Indiefy,” comments Gilberto Avalos, Founder and CEO at Indiefy. “The fire and forget aspect of RightsRx allows the team at Indiefy to focus on developing our platform and building artists’ careers.”
Challenge: Ensuring a clean supply chain of new artist tracks free of copyrighted content conflicts.
Solution: Scanning audio tracks before uploading to DSPs with RightsRx.
Key Requirements: Accuracy, scalability, and ease of use.
Will the Implementation of the EU Copyright Directive Be Delayed?
We live in unprecedented times. The COVID-19 pandemic has affected governments worldwide, including the member states of the European Union, as they shift their focus from day-to-day legislation to battling the outbreak. According to several news sources, including a recent Politico article, transpositions of the new EU Copyright Directive of which Article 17 is a part will be slowed. For example, France has partially adopted the new Directive but the implementation of Article 17 will now not happen in France until the third or fourth quarter of 2020.
As Andrus Ansip, the former European Commission vice president for digital commented about the transposition of the Directive in a recent Politico article, "It will take some time for the directive to be implemented in all member states. Because of the coronavirus crisis, I think not so many people are thinking about copyright". The crisis has also impacted the stakeholder dialogues, which will help define guidelines for implementation of the Directive across the EU. The seventh meeting was scheduled for March 30th but was postponed by the European Commission due to the crisis.
Several Countries are Close to Adoption in 2020
Although we cannot predict the future timing of each country, this interruption will only be temporary.
- It is likely that France and Italy, and possibly also the Netherlands and Denmark, will have completed the transposition before the end of 2020, with the remaining countries due to do so before the June 7, 2021 deadline.
- Some member states have reportedly requested the European Commission to suspend enforcement proceedings against member states who are currently in default of their obligations to transpose other, earlier Directives. The Commission does not appear to have responded to these requests but is unlikely to start enforcement proceedings against any member state while the current situation lasts.
- The situation in Italy should be closely monitored. The Italian government intends to transpose the Directive by Decree before the end of the year. In recent cases, Italian courts ruled that even before the Directive comes into force, platforms are directly liable for making available content uploaded by users and have awarded substantial damages. Transposition of the Directive in Italy will give platforms the benefit of a new safe harbor if they comply with the requirements of Article 17(4).
It is highly likely that the Copyright Directive will already be law in several European countries before the end of 2020.
The June 2021 Deadline Still Applies
This delay does not change the June 2021 deadline for EU states to adopt the Directive into law. This is fixed in the law, although it is possible that the European Commission may be flexible when it comes to enforcing this deadline.
Plan Now
It is important to start planning now on how to meet the requirements and understand the impact of the Directive on your business.
Below are some resources to help you understand the Directive and how it may impact your business.
- Take our A17 Assessment Survey for platforms to assess if the Directive affects your company and then assess your readiness to comply
- Learn more about the impact of the EU Copyright Directive on live streaming platforms
- Understand how small social networks will be impacted
- Read the full text of the Directive
- And more is available on our Article 17 page as well as in our blog section
Audible Magic Review: An Article on Live Streaming and the New European Copyright Directive
Whether you agree with the new European Copyright Directive or not, an objective of the Directive was to ‘clarify’ the definition and obligations of online content sharing service providers (“OCSSP”). One area which remains unclear, however, is the application of the Directive to ‘live streaming’ platforms – which in these times are becoming an increasingly significant category of media.
A new article by one of Europe’s leading copyright law experts, Dr. Eleonora Rosatii, examines live streaming services in the context of existing EU copyright law and the new 2019 EU Directive on Copyright.
Conclusion: Live Streaming Platforms Classified as OCSSPs
Dr. Rosati’s analysis concludes that live streaming platforms fall within the definition of an ‘online content sharing service provider’ under the new 2019 EU Directive on Copyright in the Digital Single Market (The Copyright Directive). These platforms can, therefore, be held directly liable for copyright infringement by making infringing streams, initiated by their users, available to the public.
In this respect, the Copyright Directive does not materially alter their position as it stood under EU law prior to the Directive being passed. What is different, is Article 17 provides live streaming platforms protection from liability, if they make best efforts to get licenses and take measures according to high industry standards to ensure the non-availability of infringing content via their platform.
Summary of Analysis
Given the huge spike in live streams of DJ sets during the COVID-19 pandemic, this timely article looks at live-streamed performances and notes that, if the performance had taken place in a public venue, the venue would have been required to obtain copyright licenses.
Dr. Rosati examines the situation of a hypothetical Platform X: DJs upload live streams of their performances which include the playing of copyright sound recordings. Platform X stores the material only for so long as necessary to enable the uploads to be transcoded and then streamed to an audience of frustrated would-be club-goers. Storage is therefore ephemeral, and no copies of the DJ sets are stored for future on-demand streams or downloads. The live streams are indexed by the platform, enabling would-be listeners to search and find streams or DJs they like.
The author explores the platform’s direct liability under the principles of existing EU law for making user-generated content available to the public. These principles were developed in successive cases decided by The Court of Justice of the European Union, culminating in the express finding of direct liability in the 2017 decision in Ziggo (the Pirate Bay case)(C-610/15). The precise nature and scope of this liability remains uncertain as evidenced by the number of CJEU referrals currently pending in this area (YouTube, C-682/18; Elsevier (C-683/18); Stichting Brein (C-442/19); and Puls 4 TV (C-500/19)).
Dr. Rosati says that it is not surprising that the Copyright Directive is characterized (in Recital 64) as a ‘clarification’ of existing law. She points out that where Article 17 goes beyond the pre-2019 EU copyright regime, it is not in the direct liability of OCSSPs for acts of communication or making available to the public, but in the regime that it establishes around that potential liability.
The article also examines whether a live streaming service can be considered an Online Content-Sharing Service Provider (OCSSP). Article 2(6) of The Copyright Directive defines an OCSSP as an online service, one of whose main purposes is “to store and give the public access” to large amounts of copyright content which it “organizes and promotes for profit-making purposes.” The issue is whether the ephemeral nature of the storage disqualifies the live streaming platform from being classified as an OCSSP. Rosati examines this question in-depth in the context of the Copyright Directive and the E-Commerce Directive and concludes:
“Live streaming providers that behave like Streaming Platform X in the example above are to be regarded as OCSSPs, even if the storage made of user-uploaded content is limited in time. What is relevant for the qualification of a provider as an OCSSP in principle is the purpose that it pursues (to store and give the public access to a large amount of protected subject matter uploaded by users) and, with that, the role that it performs (organization and promotion of such subject matter for profit-making purposes), not the duration (e.g., permanent or temporary storage of protected content) of the activity at hand.”
Dr Rosati concludes that the activities of the live streaming platforms are therefore governed by Article 17(4) of the Copyright Directive, and because of that, OCSSPs can protect themselves from liability, if they make efforts to obtain licenses for the content, and in the absence of any license, use best efforts, according to high industry standards, to prevent the availability of unlicensed content contained in the live streams. In conclusion, if live streaming platforms are classified as OCSSPs, the new Copyright Directive provides them a new ‘safe-harbour’ from liability provided they meet their other Article 17 obligations.
Commentary: Platforms Benefit from Safe Harbour as 2019 Copyright Directive OCSSP
The relevance of this article to live streaming platforms is clear and the implications are significant. Any live streaming service that gives public access to large amounts of copyright content uploaded by users, which it organizes and promotes for profit-making purposes, can be held directly liable for copyright infringement. This applies to both pre- and post- 2019 EU Copyright Directive regimes.
Prior to the Directive, even if a live streaming platform tried to get licenses and employed content recognition technologies to prevent unlicensed uploads, the platform would be liable for any infringing content that managed to get uploaded to its platform.
The new Copyright Directive changes that: The platform can now protect itself from direct liability by taking the steps prescribed in Article 17(4). These include using best efforts, according to high industry standards, to ensure the non-availability of content, in respect of which the copyright owner has provided relevant and necessary information.
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[i] Associate Professor in Intellectual Property (IP) Law at Stockholm University; Guest Professor at CEIPI-Université de Strasbourg; Research Associate and Lecturer at EDHEC Business School; Associate at the Centre for Intellectual Property and Information Law at the University of Cambridge; Of Counsel at Bird & Bird; and Editor of the Journal of Intellectual Property Law & Practice (Oxford University Press, peer-reviewed). Dr. Rosati holds law degrees from the University of Florence, an LLM from the University of Cambridge, and PhD from the European University Institute.
Audible Magic Corporation Review is issued for informational purposes only and is not intended to be construed or used as general legal advice. Please contact the author(s) or your Audible Magic Corporation contact if you have questions regarding the currency of this information.
For more than 20 years, Audible Magic has innovated solutions to identify content, manage rights, and monetize media. Audible Magic’s Emmy-winning automatic content recognition (ACR) technology powers billions of transactions monthly. The Silicon Valley pioneer is the trusted intermediary among rights holders (including labels, studios, distributors, publishers, and collectives) and major platforms.
Audible Magic is a service mark and trade name of Audible Magic Corporation ©2020 Audible Magic Corporation. All rights reserved.
Plan Now
It is important to start planning now on how to meet the requirements and understand the impact of the Directive on your business.
Below are some resources to help you understand the Directive and how it may impact your business.
- Take our A17 Assessment Survey for platforms to assess if the Directive affects your company and then assess your readiness to comply
- Understand how small social networks will be impacted
- Read the full text of the Directive
- And more is available on our Article 17 page as well as in our blog section