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Interview

Olivier Chastan (Iconoclast): ‘Name, image and likeness will be as important as music rights in the future’

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In the business of music assets’ acquisition, there’s a new player in town with deep pockets. Iconoclast announced itself with a bang a couple of weeks ago with the news that it had acquired the catalogue of The Band‘s principal songwriter, Robbie Robertson.

But if the company’s brand new, the person at the helm, Olivier Chastan, is a seasoned executive with ample experience in acquisition. Right before launching his own acquisition and music management vehicle, Chastan was co-founder & CEO of Iconic Artists Group, the music asset management firm set up by artist manager Irving Azoff and The Azoff Company.

At Iconic, Chastan led the acquisition of catalogues from the likes of The Beach Boys, David Crosby and Linda Ronstadt.

Chastan also acted as strategic consultant to independent music publisher Big Deal Music, and its founder Kenny MacPherson, on operational, financial and strategic issues, until the company was sold to Hipgnosis in 2020. He also served as Senior Vice-President, Corporate Development & Rights Services at independent distribution and services company INgrooves Music Group, until it was sold to Universal Music Group, and was President of VP Records, home to artists like Sean Paul.

The day Creative Industries News connected on Zoom with Chastan, he had been up all night, not because he was in studio with an artist but because his dog got sick and kept him awake most of the night. “I’m not at my best,” he said, but for an hour he was as dynamic as one can be, and answered all the questions asked, well, almost.

Here’s an edited version of the conversation (which took place in English, even though the two participants are both French).

You’ve had quite a career so far, haven’t you?

Olivier Chastan: I started as session player, playing bass, when I was 19 up until 25, and then, at that point on, I followed a different path and moved on to the record label side. I had a failed label deal with Warner and worked with [Atlantic founder] Ahmet Ertegun. In 2009, I was running VP Records, one of the largest independent labels in the US, and started acquiring some of our competitors and small catalogues — that’s how I got into acquisitions and managing legacy catalogs. I was at VP for 10 years and then did some consulting work for BMG when it relaunched with Laurent [Hubert, then COO, US]. I then moved to INgrooves where I helped set up the rights management division and did some work with Shamrock Capital which owned Ingrooves and had just started their first music IP fund. I then went on to advise Big Deal and Kenny MacPherson until it was sold to Hipgnosis. I then started Iconic Artist Group with Irving Azoff and bought catalogues from The Beach boys, David Crosby, or Linda Ronstadt.

Which led you to Iconoclast.

Olivier Chastan: I started the current incarnation of the company last year. We are funded by a large investment company, but we are not really structured like a fund in that we do not have a cap on the amount of money we can invest. We are starting with a large funding base though.

Who’s backing you?

Olivier Chastan: Our backer would prefer to remain unnamed, but let’s say that it is one of the biggest asset management company in the world. [Music Business Worldwide identified the company as Pimco, which manages over $2.2 trillion in assets.]

How do you operate?

Olivier Chastan: We have an allocation of funds that is significant and as high as any funds raised in the past. Because we have a single investor with a large capital base, if we run into deals that are, say, over $800 million, we do not have to go raise additional capital.

Aren’t you coming a bit late to the party when it comes to acquisitions?

Olivier Chastan: No, there are plenty of assets still available. First, the very expensive assets — the likes of Elton John, Led Zeppelin, The Beatles, Pink Floyd, The Rolling Stones have not done anything yet [with their catalogues] — and below the very expensive deals, there are many artists and catalogues that have amazing songs and recordings and yet most of the market is not looking at them or servicing them. I am thinking of bands or artists that had three or four hits. Most of the new entrants are focused on large acquisitions, deploying capital and putting as much money at work as fast as possible via as few transactions as possible. You can build a catalogue quickly with this kind of strategy but based on where the market is at in terms of prices, you’d be hard pressed to justify these investments at this scale. We are in a weird phase where the bigger the catalogue, the more competition there is, and with the smaller the catalogues, the less competition there is. If you look at companies like Reservoir, Downtown, Concord or Iconoclast, we are primarily labels, music publishers, and do not consider ourselves to be investors. We build catalogues. Finally, I do not consider myself a new entrant since I’ve being doing this for a long time. Building a catalogue is not new for me.

It seems that there is a lot of money out there, ready to be invested.

Olivier Chastan: Yes, there is a lot of money and everybody likes to talk about the amount that they raised. I personally don’t care. What matters is what you do with the catalogues that you acquire. Some investors do not have a creative team, so they are in a different business in my view. The question is whether you are in the business of pro-actively managing assets like Iconoclast or you are in the business of investing in assets that will grow passively with streaming growth — these are two different approaches.

What’s included in the Robbie Robertson deal?

Olivier Chastan: We have acquired his publishing, the royalty stream in his record interests, and some recordings that he owns, as well as name, image, likeness, including trademarks, and then some memorabilia and archives. It is a very comprehensive deal.

What attracted you to this particular catalogue?

Olivier Chastan: The story of The Band is the story of half a century of American music and draws from all of the American musical traditions. ‘Music From Big Pink’ feels incredibly familiar – it sounds like music that you have heard all of your life — country, blues, etc — yet it blends into something that sounds like nothing you’ve heard before. It is unique and very special. The music is very cinematic, which is a trademark of Robbie’s compositions. For me, it was more than just buying catchy songs. These are songs with depth and sophistication.

How much did you pay for the catalogue?

Olivier Chastan: Any idiot with a cheque book can buy anything and be an owner of assets! The price does not matter. Just know that it was a relatively competitive deal and we got it not just by being priced competitively, but primarily won based on qualitative reasons that resonated with Robbie.

Are you looking at other assets?

Olivier Chastan: I look at everything because you never know. I looked at Springsteen and Sting alongside other bigger deals and came to the conclusion that, when majors want something, it is nearly impossible to compete with them. They all have such large catalogues that taking a huge bet [on one transaction] can be justified. In our case, every investment will be judged on its own merit. If they want to buy a catalogue for X amount of money, the Beatles or some other large catalogue will support their risks. They also have a market share strategy which we do not have. What’s interesting is that they are not involved on 80% of the deals we work on, but when they are involved, they tend to pre-empt any competition.

You recently said that a lot of the prices of catalogues that were mentioned in the press were just PR spins. Do you stand by these comments?

Olivier Chastan: There’s a lot of hype out there. There are certain publishers or buyers who specifically report higher figures than what they paid for with the belief — which I don’t subscribe to — that showing that they can spend money will attract greedy lawyers and business managers and get them more deal flow. I can tell you about a deal where I was the second highest bidder and the price was 25% of what was announced. Another recent deal was announced at a price that was easily 30% higher than it was. That was part of the strategy from the buyer — to hype it up. There’s a lot of “propaganda” and miscalculation involuntarily relayed by the press.

Similarly, you are not fond of the concept of multiples.

Olivier Chastan: Everyday I am asked will you pay this multiple, like 25 times, and I always answer, ‘On what basis?’ Is it based on normalised income, excluding syncs, settlements? Adjusted for release cycles? Is it on last year’s earning or 3 year average? Multiples do not mean anything most of the time.

What is good deal for you?

Olivier Chastan: Good question! Number one, I guess it’s creatively something that I can develop over time and for which I have a clear path or vision. If I can see 5, 10, 20 projects to develop and have a plan for the legacy then the first criteria is fulfilled. The music has to be amazing but we all deal with rarefied and amazing music so that’s not really a factor. For example, when I looked at Robbie’s deal, my focus was primarily about what can I come up with creatively. Can we do a show, an exhibit, etc? It’s only in the second phase that I look at the economics, and based on the creative plan, determine if I can make an offer that is competitive. They work hand-in-hand. You need to invest in something that makes both economic sense and for which you have a creative plan.

What kind of structure do you have?

Olivier Chastan: At the moment, there’s 11 of us. We started last June and announced the Robbie deal a few weeks ago so this is all new. We have made five other deals since then. We have an equal number of people working on the acquisition side than in the creative/exploitation part of the company. I put a lot of value in brand and tech partnerships. We have three people doing content production all day. Nothing revolutionary here but we spend an inordinate amount of time and resources strategising on how to define the place of legacy artists in the future of entertainment tech. We look at new platforms — and I’m not talking about TikTok here — and what kind of content to develop for these. I think a lot of people are underestimating the importance of how to engage with these new platforms.

How do you deal with royalty management and administration?

Olivier Chastan: We pick partners on a case-by-case basis — publishers, labels, etc. It depends on the catalogue and the interest of the party that wants to administer the catalogue. We have two catalogues with Warner Chappell, one with Universal Music Publishing Group, a catalogue we just acquired is with Sony Music Publishing, and we will probably move one to Kobalt. Nothing that would come as a surprise.

So what’s next for you?

Olivier Chastan: First of all, continuing to grow our catalogue. We are having very exciting conversations on a lot of deals. We are looking into expanding into artist management, and also looking at other entertainment verticals where there is real potential to grow. We are also looking at a lot of exciting new technologies. I am convinced that name, image and likeness will be as important as music rights. You have all these emerging technologies, which are much broader than just VR, and entertainment will be revolutionised by the ability to create content that was not possible in the past. In a way, we will be able to bring to life a past that was never captured on film or video. That is extremely exciting for me, and it’s a way to give legacy artists an equal footing with contemporary artists. Imagine organising a prog-rock tour five years from now with Yes, ELP, Genesis and King Crimson while being faithful to their image and their music. That’s where we spend a lot of energy. What does the future of entertainment look for artists whose foundational works are mostly behind them and how do you make it fresh at regular intervals? On a personal level, I am going to be spending a huge amount of time outside the US and I’m looking at markets that have not been very active in terms of transactions. So far, all the M&A activity has been concentrated on Anglo-American repertoire, but there are markets out there that I believe have been ignored for a long time.

Would you invest in new talent?

Olivier Chastan: No. I did it for 20 years and have no interest anymore. I made a conscious choice with Iconoclast to look in the rear-view mirror. Moreover, there is so much noise and clutter today that it is very challenging to break new talent. I am now interested in how I can contribute to perpetuating the music I love and worship, and how I can bring something new to these catalogues. That said, my definition of catalogue has changed compared to a few years ago and I do invest on a regular basis in songs that are sometimes just five to seven years old.

How do you see the market of music assets evolve?

Olivier Chastan: We have done a lot of deals but it’s quite challenging because the volume of new deals is relentless. You can ask all of my competitors. We have never seen anything like that — we can get up to three to six deals a day landing on our desk. We are bombarded and now have to pick and choose. I used to look at everything, but we can’t anymore. But I can’t complain because I prefer an active market. However, the next 6-10 months will be critical in terms of seeing where the whole industry is going. The marketplace is so overheated that maybe there will be a reckoning that some of these deals are not the wisest. We also need look at where interest rates are going and the impact on valuations. I’ve noticed that the valuations have plateaued. Some deals are even going down, so we may be approaching a correction of the market, and if that’s the case, we will have to assess what the long-term consequences will be.

Finally, why that name, Iconoclast?

Olivier Chastan: Because that’s what artists are — quite simply. They break the rules of art and question the rules of our societies, and in doing so, allow all of us to think about our lives and our world in completely different ways.

Emmanuel is a Washington, DC-based freelance journalist, blogger and media consultant, specialising in the entertainment business and cultural trends. He was the US editor for British music industry trade publication Music Week. Previously, he was the editor of Impact, a magazine for the music publishing community (2007-2009), the global editor of US trade publication Billboard (2003-2006), and the editor in chief of Billboard’s sister publication Music & Media (1997-2003).

Creative Industries

Spek (PopArabia, Reservoir, ESMAA): ‘With streaming, local language music starts to become a lot more important’

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Hussain “Spek” Yoosuf, a former member of Canadian hip hop band Dream Warriors, has become one of the go to people when it comes to doing business in the Middle East.

Spek runs PopArabia, an independent music company founded in 2011 and supported by the Abu Dhabi  initiative, twofour54. He has launched three years ago ESMAA, a new UAE-based music Rights Management Entity (RME) to facilitate music licensing in the Gulf region.

In addition, Spek works with Reservoir Media, the NASDAQ-listed music company, as EVP of International and Emerging Markets, sourcing talent and acquiring catalogues across the region. In 2022, they acquired Lebanese label and music publishing company Voice of Beirut and signed Moroccan hip-hop artist 7liwa to a worldwide recording and publishing deal.

In Egypt, they signed Egyptian rapper and singer Mohamed Ramadan to a worldwide publishing deal; and acquired Egyptian label 100COPIES. Last year, they acquired the catalogue of Cairo-based content production and distribution company RE Media as well as the master and publishing rights for the catalogue of Egyptian rap duo El Sawareekh.

They also set up a new joint venture with Saudi Arabian independent hip-hop label Mashrex. Most recently, they have signed a publishing agreement with In2Musica, the label, publisher, and production company of Lebanese artist Nancy Ajram.

And when he has spare time, Spek continues to record and put out music. Creative Industries News‘s Emmanuel Legrand had a long chat with Spek to talk about music developments in the region. Here’s an edited version of his interview.

PopArabia’s Spek and Mohamed Ramadan

A few years ago you moved to the Middle East. Why did you make the decision to go to that part of the world and what made you think that there was potential from a music business perspective?

Spek: It was a combination of factors. When I first visited the UAE, probably about 2004, copyright law had been introduced in the UAE in 2002. So it was still very, very early days. If you sort of land in Dubai, even in 2004, you get out of the airport, you’re hanging out in the centre of town, and when you’re looking around, it feels like a fairly developed market. There are not a lot of markets that have this sort of infrastructure to operate both from a connectivity perspective to just bricks and mortar architecture. Sure, you’re not going to find in a country like the UAE a system of collective management already in place. But I thought that’s what made the UAE and the Gulf rather unique. I couldn’t think of any other country that was so developed and yet, on the IP side of things, still had quite a bit of catching up to do. I felt that differential represented an opportunity for the right sort of person who understood where the opportunities are.

But you started as an artist, didn’t you?

Spek: I was a kid who grew up on hip hop in the early nineties. If you wanted to bring attention to what you were doing as an artist, as a hip hop artist in Canada, nobody really took you that seriously. Look at now, 20 years later — Drake, the Weeknd, and all of these amazing artists are doing modern contemporary pop music. The lessons that we’ve learned from the development of the Canadian music ecosystem are lessons that will help to bear fruit for us to develop a healthy ecosystem for Arab artists.

The first time you went to the Middle East to set up a business, you were not backed by big pockets.

Spek: You’re right, that was a gamble. It was a big gamble. The way I explain it to people is — I had been an artist my entire life up until the age of 30. I’m 48 now so up until the age of 30, I was an artist, all I did was sign publishing deals and record deals. And that was my only source of income. So going there was a gamble, but I’ve never been somebody who was used to a nine-to-five job and a steady salary. I told myself, okay, I’m going to move to the Middle East and set up the first publisher. That sounds crazy, but not much more of a gamble than saying to yourself, well I’m a young Muslim kid who’s going to be a famous rapper from Canada. That was a gamble as well. Everything I’ve done in my life is a gamble. So it sort of fills the pattern, I suppose.

You went back and forth between the Middle East and North America. At what time did Reservoir come into the picture? And how?

Spek: I started at Reservoir right at the beginning of 2015, but I started talking to Reservoir in 2014 about a role in New York. and the connection there, of course, was that in 2012, Reservoir acquired Reverb Music in the UK and Annette Barrett was running Reverb. Prior to Reverb, Annette was the head of international at Warner Chappell. When I first moved to London in 1997, Annette signed me to Warner Chappell, at the end of 97. Through the relationship with Annette and Warner Chappell, I developed demos, I got management, which was Big Life Management, which is now part of the Reservoir family. And then I got signed to the Echo label, which was part of Chrysalis, run by Jeremy Lascelles and Liz Helms. Everybody that I’ve worked with in my artistic career are all the people that are my right and left hands in my day to day work these days as a publisher and as a music executive. I work with Jeremy, who signed me to my solo record deal. I work with Tim Perry and Big Life who were managing me as an artist and I still work with Annette, of course, who runs our UK office. Through Annette, I met Golnar [Khosrowshahi, Reservoir Founder and CEO] and that was how the connection happened.

You joined Reservoir in New York for a few years, but what made you want to go back to the Middle East and build up a bigger infrastructure?

Spek: There was a couple of things. The one thing that sort of became obvious very quickly was that streaming became a thing. It entered the US market around 2010, and streaming platforms started entering markets around the world. If you look at the trajectory of the way it rolled out, it started mostly in Western Europe and then, over a decade, developed at a macro level. What you notice is that there are patterns to streaming entering new markets all around the world. And one of the consistent patterns is that local language music starts to become a lot more important. It sort of rises to the top, as you would have seen in many countries. For example, for the first time ever, all 10 albums in the Italian top 10 were by Italian-language artists in 2023. In India, the most popular music is in Indian languages, same thing in China, same thing in Africa. Wherever you go, local language and domestic repertoire starts to become a lot more important, which is the opposite of what it was when there was a physical business where the major labels owned the real estate at the record shops. That meant that, in effect, major corporations controlled manufacturing and distribution and were able to ensure that audiences saw whatever they wanted them to see over the course of the past hundred years of the recorded music industry. Streaming changed that. You have the whole world’s catalogue at your fingertips. It means you can go down a very long rabbit hole and within a short space of time, that tends to be the way that this all happens. So when we looked at the Middle East around 2017-18, we knew that the region had all of the metrics and criteria that would turn it, on paper, into potentially the best market in the world, or certainly amongst the best — double digit year-on-year growth, vast majority of the population is under the ages of 40 or 30, with places like Saudi Arabia, where it’s like 70 percent of the population under the age of 30. You’ve got extremely well connected people, with high levels of broadband and cellular penetration and 400 million people, which is more than in the US, which has historically been the largest music market in the world for monetisation. When you added all of the metrics together, you could look at it and say, the industry was what it was, but looking at the future, I felt it was a reasonable assumption to say that over the course of the next 15 years, the monetisation of the music industry will shift. Historically, music was monetised with 80 percent of global revenue coming from only 20 percent of the world or less. We’re going to get to a place where if we will start to monetise 50 percent of the world or 70 percent of the world. It completely changes the entire game.

How would you monetise the Middle Eastern market?

Spek: Well, it’s going to be about Arabic language music. It’s going to be about these new genres that are being developed because of social media and the advent of home studios. And since you’ve got a high youth population, it means that there’s going to be large levels of expression, communicating and storytelling, reaching a wider audience. If people have been able to communicate openly and freely, then in theory, you would think that there’s gonna be something interesting artistically that comes out of that. So that was the theory, and we saw it happening; we saw the streaming platforms entering the Middle East, and the market started reacting. It’ll take a process of time for things to heat up and for it to get really competitive. When I saw that happening, I thought to myself, I think I can do a better job than anybody else can in this space. I felt confident in what we’ve been able to do on our own and we should just go after this aggressively because we think that there’s an opportunity here. I went back to Rell [Lafargue, Reservoir President and COO] and Golnar and told them this is what I think the next 15 years of the music business is going to be about. And therefore, I think it should be incumbent on me to go back and see if I could double down and really build this thing out. Rell and Golnar said, we agree with you and we should do it together. Let’s do it as partners. That’s where the whole thing came about.

You said that you had to have a proper IP infrastructure in the country or in the region to grow, otherwise that wouldn’t work. How’s the IP situation today?

Spek: Where are we at compared to, say, 20 years ago? Well, things have moved on, but what I would say is that I don’t think you need the same sort of copyright infrastructure [as in the Western countries] to have the monetisation of music functioning properly. You don’t need the architecture in the same way that you used to. When it was a physical business, you needed a lot more of the guardrails. When it’s a digital business, if 70 percent of our revenue as an industry is coming from digital monetisation, and publishers and labels can do direct deals with the digital platforms, it means that you don’t need to wait for an entire industry to be fixed. You don’t have to wait to have the IP architecture in place in any given country. There’s a lot more that you could do without the traditional infrastructure, which wasn’t the case when it was a physical business. It’s getting better over time because of digital.

You’ve set up a rights management organisation for the region, ESMAA, correct?

Spek: Technically and legally, it’s an RME, a Rights Management Entity, but we’re also licensing performing rights, so you could call us a PRO (performance rights organisation). We license performing, mechanical and neighbouring rights, but we are technically a rights management entity.

What are the entities that you’re licensing to?

Spek: We have licensed music to a wide range of local music users in the region, such as Dubai Expo 2020, MDLBEAST in Saudi Arabia, or the Department of Culture and Tourism in Abu Dhabi. It goes from major regional live events and public spaces to broadcasting rights. We’re the only entity, either through PopArabia or ESMAA, which has been able to develop an economy around music licensing in this way. It just didn’t exist before we were here. Having said that, because it didn’t exist before we were here, when we started telling people that we were going to license, everybody told us that we’ll never going to license anybody, because the narrative that people were communicating to us was that we’d never been able to do it. We heard so many times ‘what made you think that you could do it?’ Companies much bigger than we are told us they haven’t been able to have any success. That was the sort of attitude towards it. And there was a sense that it was an impossible task, a very steep hill. What we found over time is that it is definitely challenging, there’s no question, because people who have never had to pay for music rights don’t necessarily wake up in the morning saying that suddenly they respect music and want to pay rights. That was definitely challenging, but it’s also changing and evolving in both ways. People don’t wake up in the morning suddenly with a change of heart, but at the same time, it’s becoming a more and more globalised world and the Gulf is becoming more and more a geographically integrated economy. In my view, it’s a good time, with things evolving and changing in the right sort of direction. When I moved to the region, everybody thought that that was a little bit crazy. Nowadays, most people I talk to are very excited about what’s going on in the Gulf and Middle East and all of those opportunities. Even though I looked like I was crazy 20 years ago, now I look like I had some sort of crazy vision.

Good timing!

Spek: For a lot of these things, it is really just about the timing, and being lucky enough to sort of ride the wave at the right moment as changes are about to happen. And I think I was fortunate in that way.

When you have discussions with companies in the US or in Europe, and you try and explain to them that they can probably make money in the region, what kind of reactions do you get these days?

Spek: Now everybody’s excited, right? But when I first moved out there and I had that light bulb moment where I saw the opportunity, I went back to London and I started talking to the major publishers and asking them how they were licensing their music in the Middle East. All of them at that time, and that was almost 20 years ago, basically said to me at the time ‘We give the rights to the entire Middle East via our Turkish office or Turkish sub-publisher. Turkey is our window into the Middle East, and that’s how we see ourselves addressing this issue’. I went back to them and I said, ‘Look, no offence, but nobody in the Arab world considers Turkey to be the Middle East. I get that for 50 years you guys have been doing it this way, but it sort of lacks the regional context’. How would anybody expect to open up an entire new region if you’re trying to do it remotely out of a market that’s not even in the region? We went from that moment when people were saying ‘I don’t think we need anybody in the Middle East’, which is the position that most people took, to people starting to call us once we started proving ourselves out there. Word got around. People started coming back around to us and saying, ‘Maybe we need to have somebody who’s actually there’. The attitude towards the region has changed quite a bit in the period that PopArabia has been around.

But that would also assume that there is an interest in that part of the world for music from Europe or North America. Is that the case?

Spek: Sure, absolutely. Well, in the Middle East, there’s markets like the UAE and Qatar that are 90 percent expat, 10 percent local, which is a very unusual demographic and the total reversal from markets like Saudi Arabia or Egypt, where it’s very Arabic. It’s not one market, it’s a diverse market of 20 odd territories, and each of them have their own quirks and idiosyncrasies. My personal take on it, going back to the original question, is that I really feel that in the next 10 or 15 years this region is going to be completely delivering, not just from a financial perspective, but also in terms of impact. These high growth, highly populous markets will not only deliver billions of streams but I think that the new face of pop is going to be this global. Artistically, creatively and financially, the next 15 years are going to be really about Africa, Asia and the Middle East. As streaming services build their subscribers’ numbers up every year, in the next 10 years, we’re going to get to a place where for the first time the US will be eclipsed by other markets. English language music is no longer going to be the dominant form of music around the world. All of those changes are happening before our eyes and we’re in the middle of all of that unraveling as each day goes by.

But, at the moment, what are we talking about in terms of business? Is it million dollars or are we talking about hundreds of millions?

Spek: There’s the macro aspect with the IFPI figures and we can always extrapolate on that. But then there’s also what you can do with boots on the ground, and how you grow the market.

But is the flow of revenues coming from the region significant?

Spek: It’s significant, but we’re still early in the story, and that’s okay. There’s a lot of challenges to the monetisation of music rights in markets where that has not happened before. On one hand, you’ve got all of the excitement around the region and how growth is exploding. It’s super exciting. There’s many positive signs, yet it’s still actually not easy and not straightforward to collect. If you look at markets like Africa, India, China or the Middle East, it’s not as straightforward to make sure that you’re collecting every penny and that you’re not leaving money on the table somewhere. In fact, it’s very easy to lose money in these markets because the mechanisms for capturing collections are imperfect. It is just getting better year on year in these new markets and it can only improve. We still have some time ahead of us before we can really fully capture all the opportunities, but that’s what we’re doing now.

Another aspect of your business is to identity and invest in local talent and acquire catalogues.

Spek: When we announced the Poparabia-Reservoir deal, out plan was to go out, hit the ground running and find opportunities. We announced the deal in January or February of 2020, and then Covid hit us just a few weeks later. That sort of slowed some of the plans. Having said that, acquisitions in emerging markets is hand to hand combat. Having done this at Reservoir and at Olé before that in the West I have some experience in this, but it’s always challenging. In the West, you’re generally getting your deal flow from lawyers and managers or through your contacts. In emerging markets, you have to be out there, you’ve got to be in the studio in the middle of the night with the artist or the owner of the label. You don’t have the kind of brokers you have in the West. Therefore it’s much more challenging to find catalogues and to get to a place where there’s a deal that’s ready to do. We’ve got a significant deal flow but that’s a testament to how long we’ve been in the market and how many active conversations we’ve had.

You’re seeing all the major companies coming your way and starting to be pretty active in the region. You were the first entrant, but you’re no longer the only player. Has that changed your perspective because there’s more competition to acquire catalogues?

Spek: It’s gonna get there. Again, we’re very early in a five to 10 year story in terms of how this market is going to start opening up and where the opportunities will come from. We think of ourselves as fairly unique in the marketplace. There are definitely other labels. There are definitely other publishers. The market’s opening up. The way I see it is that there’s going to be opportunities and more people are going to move in. I don’t see what we do as purely just like a first mover advantage. Being a first mover can also be a disadvantage as well sometimes. What we have is a lot more than a first mover advantage — we’re the only independent music company in the region that has really focused in publishing rights, which is fairly new in the region, but we’ve also got a unique team of people with skill sets that have been really focused on signing A& R development, licensing a lot of the stuff that the traditional labels weren’t really that focused on in the region. I feel like we’ve developed a core set of skills that is more important than just being a first mover. You can be a first mover and still not have all of the skill sets that you need to really take advantage of the opportunities that will presents themselves over the course of the next decade. The team that we’ve assembled is people with backgrounds in music, A&R, acquisitions, and we’re about as big as some of the majors now. The PopArabia team itself is nine people. That’s about as much as the Sony office or Warner’s office in the Middle East. I think that we are well positioned. We are just going to keep fighting and trying to do what we can to help develop the market forward. Over the course of the next decade, we’re going to hit past the tipping point where we’ll start to feel the whole market open up. That’s what we’re preparing for and I feel quite confident in our steps in that direction.

Is it correct to assume that although it’s the same language throughout the region, it’s not because you sign an artist from one country in the region that it will resonate elsewhere?

Spek: It’s one common language, for sure, but there’s different dialects depending on where you are. If you are in North Africa is going to be different than Levantine and Levantine is going to be different than the Gulf. So it is definitely not one territory. but there are cross-regional opportunities. We’ve seen over the decades a number of artists, such as Egyptian or Lebanese artists, that could travel across the region. In more recent times, we’ve started to see acts cross out to not just the region, but globally. It’s an exciting time. In each of these markets, there are kids that are literally inventing new genres of music that are traveling and exporting through social media and via Reels and YouTube. I feel quite excited about where the music is going to go.

What do you think of Saudi Arabia’s initiative to set up a music-centric organisation? Do you think that this kind of initiative can bring more professionalism in the region and more awareness?

Spek: I think it’s a good thing. I like Paul Pacifico [CEO of the Saudi Music Commission]. He’s a knowledgeable person. He knows his stuff. I can’t think of any other government in the Middle East that has created a music commission and then installed somebody who’s a very experienced person to come in and run it. The more people that we have on the ground that are really experienced and knowledgeable about the way that the music industry should work, about the way intellectual property laws should be respected, about the rights of music creators and rights owners be respected, the more people like that we have in the market, the better, because the market needs to mature and it can only do that through a certain degree of education.

You were an artist in the first place. Do you still have time to produce music and record songs?

Spek: Yes, I’m putting out a Spek album this year and I’ve been recording a lot lately. In the last couple of years Nitin Sawhney — who is a Reservoir writer — and I have been writing and recording together. I was supposed to play with them at the Albert Hall in September and I got Covid the day before the gig so I had to pull out of it. I always felt somewhat shy about being an executive who started his career as an artist, I always felt slightly embarrassed about that whenever I would meet people because it felt like it made me less of an executive.

Do you mean you had the imposter syndrome?

Spek: Yeah, total imposter syndrome. When I started taking meetings as a publisher, I was very self conscious initially that most of these people already knew me, but as a composer, because I had done so many writing camps and sessions and meetings and the rest of it. I was so conscious about that, to the point where I didn’t really want to put music out as Spek anymore because I felt like it would be a conflict. Now, I am at a point where I don’t care about the conflict anymore. That’s what I was put on this earth to do. The skillsets that I’ve learned around the making, production, writing, and touring of music has made me a better music executive who can appreciate the nuances of an artist’s career, in a very real and direct way. I’m no longer embarrassed about it, but I have consistently continued to make music. I never stopped making music, even though I’ve been an executive for the past 20 years.

You have lived in Toronto, London, New York and now Dubai. Do you still feel Canadian?

Spek: I am Canadian, but I live in Dubai. I live in the UAE.

When you look back at your trajectory, how do you feel about it? Would you have expected that kind of life?

Spek: No, not at all. I was completely convinced, rightly or wrongly, that I was going to be a hippie musician my entire life. I never thought of myself as an executive, or an entrepreneur, or any of those sort of things. I never really thought of myself in that sort of way. The shift to becoming a music executive was a difficult one because I felt like if you’re gonna do the art, you have to really throw yourself into it. When I got into the music executive part of my career, the only way to be fair to it would be to really throw myself fully into it, and that’s what I did. I think I’ve had a decent career as an executive, but it was a difficult decision to make. I really battled with the idea that I wasn’t going to sit there and make music for a living. These days I found a better balancing act between those two things and I’m really proud of the music that we’re just finishing up. We learn about ourselves every day.

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Data

FX Nuttall (Quansic): ‘With Luminate we can finally manage to gather in one place all the music metadata in the world’

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data and analytics

French metadata expert FX Nuttall has been a data evangelist for the past 30 years or so, trying to help the music sector get the measure of the work that was need on the data front.

Very early on, Nuttall has tried to combine identifiers, from recordings (ISRC), compositions (ISWC) and artists (ISNI), into one repository that could be used by the industry to improve processes and royalty payments.

In 2019, Nuttall launched Quansic to build a database that would connect ISNIs with other identifiers in order to create a database with the most accurate and complete set of data relating to artists.

Nuttall has in the past worked as a consultant for 10 year for the International Confederation of Societies of Authors and Composers (CISAC). He also founded in 1995 his first music metadata company, AudioSoft. Before launching Quansic, Nuttall worked for Google and YouTube, at their Publishing operations in charge of data quality, where he convinced YouTube to become an ISNI agency.

Nuttall announced on February 6, 2024 that he sold his company to Luminate, one of the world’s leading provider of music data (see story here). Creative Industries News talked to Nuttall about the sale and how he viewed the evolution of music data.

Quansic’s FX Nuttall

How long have you been in selling mode?

FX Nuttall: For quite a moment. We had some serious and some eccentric offers. There were deals that seemed to advance well and then hit the wall. Now, it’s come to fruition with the Luminate deal.

Did you know Luminate?

FX Nuttall: I certainly knew of them, their products and their history. They also share the same goal of delivering a database with global identifiers. I was in discussion directly with the CEO [Rob Jonas] and it was quite a smooth negotiation.

What are the benefits of combining the two companies?

FX Nuttall: It’s the perfect marriage in the sense that we can finally manage to gather in one place all the music metadata in the world. This has been my goal for a long time, but a large part of the ISRCs were missing, so having access to a database like the one Luminate has been developing fits perfectly with Quansic’s mission.

Will Quansic stay as a stand-alone entity?

FX Nuttall: For the time being, Quansic will stay as stand alone unit. It’s business as usual. We continue to serve customers like before and we will work on the integration of data and products. The team of six people stays in place. We are currently going through the administration procedure as it happens with all acquisitions.

How much is Luminate paying for your company?

FX Nuttall: Well, frankly, for a young French start-up, I am am quite happy. Actually, I am doubly happy because being a start-up founder and selling your company is an achievement but, for me, the industrial project remains the priority, and with this acquisition, it feels like a relaunch. We are really complementary.

What’s your assessment of the state of music data today?

FX Nuttall: There’s been progress, but not everywhere. Publishing has not moved much I have to say. ‘I’m good enough’ seems to be their motto. Where we’ve made progress is with artists’ identifiers. It has enormously evolved, in the sense that almost all DSPs are now artist data hungry. It’s a field riddled with problems. For example, there are so many issues with homonymy, with groups or people who have the same name, whose data gets mixed to a point that you will find on DSPs content from artists that are completely different, except for the name. DSPs have taken the bull by the horns and want identification for leading artists. Apple has been the precursor, followed by Amazon, but Spotify and Deezer are evolving in a positive way.

Why does it matter?

FX Nuttall: When you factor in that there are 100,000 new recordings per day by 2,500 different artists, mostly self-released, it has become an unmanageable volume in terms of artist identification. This is where ISNIs would find their place. I suspect that for CD Baby and Tunecore, there’s too much volume to invest in identifying all their clients with ISNIs. But all the majors have started working on artist identifiers.

You’ve been a pioneer in trying to match ISRCs with ISWCs. Is that still part of your mission?

FX Nuttall: Certainly and I am convinced that linking ISRCs with ISWCs will be a crucial part of the work with Luminate. We are going to be testing CISAC’s ISWC API. And at Quansic, we have set up a qualified scores scheme. We look at the coherence between recordings and works and we give it a confidence score based on what we believe is the quality of the data. Take The Beatles recording ‘Let It Be’. There’s an ISRC for the recording, there are ISNIs for Lennon and McCartney and for The Beatles, and the song is identified as a Lennon-McCartney song with its ISWC. So we can safely say with high confidence that the data is at a superior level of accuracy.. We are not saying that it’s the truth but there’s a high level of confidence that it’s right. We started this work at Quansic and we’re going to accelerate that with the new entity.

Three years ago you launched a new identifier named BOWI (‘Best Open Work Identifier’) for musical works as an alternative and a complement to ISWCs. Is the project still alive?

FX Nuttall: Yes, but it has been moving forward slowly. We didn’t have the resources to do much promotion. There are some heavy users, though. It will be relaunched under new entity with Luminate but it needs promotional support. BOWI is the ideal candidate for identifying AI creations since they have nothing to do with the traditional context. BOWI’s open source responds to the problem of works generated by AI.

What do you make of pro-data projects such as Session?

FX Nuttall: These are good initiatives, but they are forward looking and concern new compositions. At the moment, we have so many problems with existing data. It does not help DSPs to promote the creators of the songs, and there is a need for it. Providing access to songwriters’ databases is crucial. This is what we are working on to build a future.

(Picture under license from AdobeStock)

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Creative Industries

Darryl Ballantyne (LyricFind): ‘The overall lyric business is comfortably into nine figures a year in monetisation’

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Over the past two decades, Toronto-based LyricFind has developed a global footprint in the business of licensing lyrics and in delivering to rights owners a new stream of revenue that was hardly tapped into by music publishers 20 years ago.

LyricFind was co-founded in 2004 by Darryl Ballantyne, who serves as CEO, Mohamed Moutadayne who acts as CTO, and Chris Book, who sits on the Board of Directors). All three were attending the University of Waterloo, and they started building a web site with lyrics. The story could have ended 20 years ago with the three partners sued into oblivion by music publishers.

But they did something unusual for a start-up — they went legit and started seeking licenses from music publishers in order to be able to license lyrics to third parties, in particular DSPs. At the time, sites offering access to lyrics were ubiquitous online, but not a single platform was licensed. At the same time, demand was high as lyrics usually appeared among the top three in Google searches.

“You have to remember that lyrics were not licensed before them,” explains Ted Cohen, the Los Angeles-based music tech specialist. Cohen recalls that in 2003, he spoke at Canadian Music Week in Toronto, and at the end of his session, a young man came to see him. They went for a coffee and Darryl Ballantyne asked Cohen, who was at the time dealing with digital at EMI, if he could intern at EMI. “He seemed to be a very smart and personable person,” says Cohen.

Eventually Ballantyne went to LA for an internship and the bond between him and Cohen grew stronger. Ballantyne went back to Toronto to finish his degree, and after he graduated, he contacted Cohen asking him if there was a job opening at EMI, but at the time Cohen had left EMI.

Ballantyne then told Cohen that he and his university pals had started a lyric site but wanted to do it as a business and asked for help and guidance. The idea was to aggregate all the lyrics possible from various music publishers and then sub-license them to third parties, and generate a new licensing revenue.

“I introduced him to EMI Music Publishing, They asked me what I though. I said — this is a brand new revenue stream,” says Cohen. EMI — now part of Sony Music Publishing — was first major publisher to commit, then they went to talk to Harry Fox Agency (and got a deal) and then to Universal Music Publishing and Warner Chappell.

Cohen remembers a major hiccup on the road to licensing when one of the major publishers said it had received $250,000 from a competitor to not license LyricFind. Eventually the publisher signed a licensing deal. “If the publisher had taken the money and not licensed LyricFind, that would have probably been the end of the project, but they got the deal,” remembers Cohen.

Now LyricFind has deals with hundreds of music publishers from around the world, as well as deals with collective management organisations, the latest being IPRS in India. The licensing successes of LyricFind owes a lot to the efforts of the licensing team, in particular Robert Singerman, SVP of International Publishing, and Nik McLeod, VP of Publishing.

For Cohen, LyricFind is a success story like there are few in this sector. “It’s been an amazing experience for me in that they created a new revenue that did not exist before, and they have never taken money from anyone, except a loan from Darryl’s mother. And they’ve been the good guys, literally.”

He continued: “I still think of him as the kid I met in a hotel lobby 20 years ago. Darryl has never been a dick. He is a lot more realistic today but basically, he is same person I have met 20 years ago. He’s somebody I would take a bullet for. He has a wonderful wife and two great kids. The company now has some 120 employees, and they collaborate, they communicate. He has created a culture that is collaborative and open. He has matured, but is still a good person, and he is certainly a better businessman.”

Creative Industries News sat last week with Darryl Ballantyne for a zoom conversation to talk about the company’s business. Here’s an edited version of the interview.

LyricFind’s Darryl Ballantyne

How’s the lyrics business these days?

Darryl Ballantyne: It’s good. I mean, it continues to just grow and be embedded in so many different places. And we’re still seeing tons and tons of growth every year. That is obviously something that we’re very happy about. We’re expanding rollouts with different DSPs. We have a number of DSPs that are working on implementing translations now. As you know, Deezer’s live with translations, and we’re going to see a lot more of that over the next year, including implementations of word by word synchronisation, instead of line by line, which really just makes the experience that much better. Plus the automotive side is really ramping up: we’re live in Mercedes right now and we have five different OEMs (original equipment manufacturer) launching next year. So it’s going to become that much more standard on the automotive world as well. So it’s been really interesting. The other fun thing that we’ve been working on lately that’s cool is that we launched an experimental kids project a couple of weeks ago. It’s called LyricFind Kids. Because of all the lyric video work that we’re doing, we wanted to just get a better understanding of YouTube monetisation and how that system works. So we recorded a bunch of children’s songs that are public domain songs. We did animations for them and then we’ve created regular videos, lyric videos, and lyric translation videos for them, under the LyricFind Kids channels. Initially, the purpose was just to learn, but it’s been live for about two weeks now and we’ve slowly been adding content to it. The reception has been amazing. There’s hundreds of thousands of views and the subscriber count is is growing really fast. It’s been fascinating to watch and it might actually turn into a real business line for us, like an actual revenue generator rather than an educational project. And it’s been a fun new experience.

When you started the company, what was your vision and almost 20 years down the line, did you fulfil that vision?

Darryl Ballantyne: Almost 20, yes! We can’t call ourselves a start-up anymore. I don’t know at what point you cross that threshold where you can no longer say that you’re a start-up, but wherever it is, we’ve passed it. (Laughs) The vision originally was just legalising the use of lyrics and having lyrics websites and streaming services have lyrics available legally where publishers and songwriters are getting paid. And that part we’ve accomplished. Lyrics are effectively in every meaningful DSP at this point. The lyric sites that remain are all licensed. And it’s turned into a real revenue stream for publishers and songwriters. So that part, we’re very happy about. And I never envisioned putting the lyrics in cars. I never envisioned doing lyric video creation or becoming a mini record label for kids content. So much of that stuff has all been different. The people that we get to work with and the parts of the music industry that we get to work with were not things that I ever expected to do, but they’ve also been a lot of fun. We kind of checked the box on lyric legalisation and lyric monetisation a while ago. So being able to get involved in different aspects of the music businesses has kept things interesting and allowed us to experiment and grow in different areas.

Did you have problems initially in trying to explain to music publishers what you wanted to do with lyrics?

Darryl Ballantyne: Yeah, yeah, yeah, definitely. (Smiles) Initially when we reached out to, like, the major publishers and others, they didn’t even know if they could license it. Lyric licensing at that time was all these one-offs and it was for a book or merchandise, and it was all done based on single approvals. There was no real ability for the publishers to license everything, all at once. But slowly that became the case. We even had one of the major publishers telling us when we reached out to them and told them we wanted to license all of their lyrics, ‘Okay, well, here’s our lyric licensing form. If you could fill that out, tell us the song that you want to license and what the purpose is, and things like that, and fax it to us at this number, then we’ll get back to you.’ And the form was just for a single song. This is a major publisher that owned like a million songs. And they wanted us to fill out a million forms and fax it to them! So there was a huge educational process at the beginning when we went to publishers and said ‘We want to license everything that you have. We want to monetise every song and create a revenue stream for you, and make sure that you’re getting properly compensated for all this use that’s out there.’ It was educational on both sides too. Obviously, I did not know much about music publishing and licensing. Fortunately, I had Ted Cohen helping out on a lot of that stuff. He knew everybody and everything. But I needed to learn a ton of things about how the industry actually works and how rights work.

Why and how did you get into this business in the first place?

Darryl Ballantyne: Originally we started off when we were in university back in 2000. You know, it was the first dot com boom. Everybody was starting something. Everybody had a start-up and making a huge pile of money in a matter of months. We decided that that’s what we were going to do too, starting a lyric website, just as a regular consumer facing product. When I was in university, I was the ‘name-that-tune’ guy. Everybody would come to me and ask like what’s this song or what’s that song and then I would tell them and Chris Book, one of my co-founders was trying to figure out the name of a song, came to me and asked me what’s the song, and it goes like this, telling me the lyrics. I didn’t know, so he went and tried searching online to figure out what the name of the song was, came back and said, ‘All these lyric sites that are out there suck, none of them let me search by the actual lyrics, let’s start our own’. So we started our own. It quickly became very popular because we were allowing searching by lyrics and we had this crazy notion of allowing people to comment on songs. At the time, it caused people to keep coming back and arguing with each other. It became really popular and we realised very quickly that we actually needed to figure out licensing. So we shut it down a few months after we launched it, tried to get licensing, realised it was a gigantic clusterfuck, for lack of a better term, and ended up shutting down completely. But that got us started on the lyric licensing side. Then, once we’d finished university, we came back to it and the industry had matured a little bit and was willing to work with us as an aggregator to monetise it all.

Unlike a lot of start-ups, you did not raise insane amounts of VC money. Why is that?

Darryl Ballantyne: We tried. We did try. In the earlier days, we did go out and try to raise funding, but I was terrible at it. I sucked at raising money, and I went about it in entirely the wrong way, and therefore was never successful in actually raising money. In hindsight, it turned out to be a good thing, because if we’d raised money in 2005, 2006, something like back then, we never would have hit our stride, we wouldn’t have been around to do it. We would have ended up needing to have some sort of liquidity event, so that the fund could close, and it would have just been a terrible outcome. We wouldn’t have hit the point where we were really starting to grow significantly and have meaningful revenue and profitability, and were creating more value. In hindsight it worked out really well, but it was tough in the first bunch of years. We were kind of living with our parents and not paying ourselves any real salary and bootstrapping everything as much as we could. In the end, we came out with a business that we still have complete control over and we can make our own decisions and not worry about a fund’s liquidity timeline or any external pressures to do things a certain way that we don’t agree with.

And if someone now came to you and said, ‘I want 51 percent of the company and here is X millions of dollars’, would you take the offer?

Darryl Ballantyne: I mean, there’s always a price, right? If it’s something that we think is the right fit and the right people and the right price, we’ll have a look at it. Not that anybody’s gonna offer this for us, but if somebody said ‘Here’s a billion dollars for 51%’, obviously, we’re gonna take it. But it’s it’s not something that we need to do. It’s something that we can decide to do when we feel like it’s the right time and the right fit for the company overall. We’re happy to do it either way. And we don’t have a pressure from investors or others to have that kind of liquidity event.

How do you make money? Where are the monetisation points in the whole process?

Darryl Ballantyne: It’s funny because a lot of people on the outside look at it and say, well, I’m not paying for lyrics. They’re free. So how are people making money? For us, it’s kind of the standard free adjacent monetisation models where services are monetising through advertising, then we’ll take a share of the advertising revenue. Or if they’re monetising through subscriptions, then we can take a share of the subscription price. Or a per display fee, or a per device fee. If you think about automotive, licenses, for example, were paid per car by the car manufacturers to have the feature in there. So, all of that is kind of customised to each individual implementation, based on what is the business model that makes sense for that service that is using the content. Generally it’s either a revenue share on advertising or subscription prices, a price per device for hardware things, or a price per display of the lyrics. These are kind of the common models that we use for monetisation. In all of those scenarios, the end user isn’t directly paying for lyrics. It’s getting bundled in with overall features that are available.

And from that pot, then you pay the rights holders, right? And do you pay them through the collective management organisations, or do you pay directly the publishers and the songwriters?

Darryl Ballantyne: All of the above. Usually the vast majority of it is direct to publishers or CMOs. We work with HFA, for example, or APRA AMCOS [in Australia] or CSDEM [France’s music publishers’ association], or we have CMO partners all over the world for different regions, but we also work directly with a lot of publishers. And we have artists that can sign up directly with us if they are not represented by a publisher. We can work with them that way. We try to encourage people to go through one of the aggregators as much as possible. We’re not huge fans of sending out micropayments or large numbers of payments for small amounts. It’s easier for us if it gets bundled in with other revenue streams that an indie artist is receiving. We work with DistroKid, for example, and DistroKid passes along licensing for the publishing where their independent artists control it. And then we pay the royalties to DistroKid and they include it in their overall payment. So it’s much more efficient for everybody to use those aggregators. It means that people get paid faster for the use.

One of the things about being a privately-owned company is that you don’t have to disclose your financial results, which is very frustrating for people like me because we don’t know how much money this business generates. Are we talking about millions of dollars or hundreds of millions of dollars? What’s the scale?

Darryl Ballantyne: Tens of millions on a yearly basis, if you look at the value of the lyrics licensing business, including us, our competitors, direct licensing from publishers, or the work that we do managing direct licenses. A major publisher will license a DSP for the rights, but we provide the content and the administration of those rights, so that licensing portion that is paid directly to the major publisher from the DSP, and doesn’t show up as revenue for us and our competitors. So in terms of the overall lyric business, it’s comfortably into nine figures a year in monetisation that flows through the industry.

And that’s money that did not exist in the past.

Darryl Ballantyne: Exactly. It’s all a brand new revenue stream that wasn’t getting captured.

This business also creates a certain volume of data. How do you deal with it?

Darryl Ballantyne: The data is a patchwork of many, many different sources. It can be the lyrics themselves that are being created by our in house content teams and teams all over the world that work on translations, for example — or the feeds of lyrics we get from indie distributors, wherever possible, or third party professional translation firms — this all helped build that data. And then the ownership data that we have comes from our CMO partners, our publisher partners, our own research, our direct publisher relationships. It all gets kind of merged together and matched to recordings and matched to different compositions across different publishers. But there’s not one simple way to do it. It’s just a whole lot of aggregation from multiple sources for pretty much every piece of our data set. We work with companies like Rovi, MusicStory and GraceNode and others to help us organise that data and try to have the recording side information to match publishing compositions too. It’s a complex process that gets more and more complex with all the different pieces of data that we add in, such as international rights from different sources. It’s a gigantic data problem.

What’s your appreciation of the state or the quality of the data itself?

Darryl Ballantyne: It’s definitely a lot better than it was 15, 20 years ago. Publishers in general are much more open with their data. When we were first getting started, we had publishers just refusing to tell us what they owned. Well, how are we supposed to use it and earn any money for you? That was definitely a challenge. Some people wanted to match usage after the fact, and so they’re effectively saying, ‘okay, tell us what you used and we’ll claim and tell you what’s ours’. Well, our answer was, ‘you’re telling us that we should go on and infringe on copyright and then you’ll just clear your own stuff? But how do we know what we have the rights to use in the first place?’ So those were some significant challenges early on. It’s definitely better, but we have a lot of challenges with people claiming things that they shouldn’t or people claiming things that they might control in their own territory, but when they claim it worldwide it creates conflicts in the systems. We have to clean up that data and figure out who we’re supposed to be paying in order to pay the proper owner. The more deals that we do and the more global we become, the more work it is to clean up those conflicts. There’s no global source of truth. It’s one of those things that we’re working on, and 30 other companies are also working on it. We’re all doing the same work. There’s got to be a better way. I’m sure there is!

How do you get the lyrics in the first place? Is it something that you do in house? Is it something you get from the publishers or from the songwriters?

Darryl Ballantyne: A chunk of the data, we get it from the artists and songwriters themselves when it flows through a digital distributor, for example. Taking DistroKid as an example, an artist will submit the lyrics to them and then they pass that along to us along with the licensing right when they have it. But for most of the popular content, we’re creating it ourselves. And we’re doing that through our content team that literally sits with headphones on transcribing the lyrics and synchronising them as well as working on the licensing information to make sure that they’re properly cleared. We have a big team here in Toronto that works on our core languages, but then we also have external teams all over the world. We have a team in Vietnam, in India, in Morocco, in Eastern Europe that works on it. A number of those teams all over the world working on their local languages to make sure that content is available and properly done in our system.

Is AI going to put you out of business?

Darryl Ballantyne: No, I don’t think so. We’ve obviously looked at a lot of those tools and we continue to experiment with ways to make the process more efficient. AI is something that can be a helpful tool in the process, but it’s nowhere close to being able to do a perfect transcription or a perfect synchronisation. It’s just not that easy for that type of content. Plus, the AI is terrible at figuring out ownership data, license management, negotiating rights and being a clearinghouse and aggregator for all of this content. It’s something that we view as a helpful tool, but not a threat.

And in general, do you see AI and the music sector as a good match or will it be a risky one?

Darryl Ballantyne: I think it’s both, right? At the same time, is it something that can truly be prevented? It’s a good match for some people and it creates some good content. It also creates terrible content. And it’s a licensing nightmare. For most people involved, when you look at training models and if you’re training it off of copyrighted material, how do those rights work? Is that a right that a label or a publisher, for example, can even grant? When does that infringe on moral rights or name, image, and likeness rights, or things that they can’t actually control themselves? How do you know what an AI model has trained on for sure? That cat’s out of the bag. There isn’t a world without AI content generation that is going to exist going forward. It’s here, and it’s here to stay, and the question is will it add value to users and to the ecosystem. There’s a clear value added from these AI models for many different purposes, whether it’s background music or music in gaming or commercials, where if you can just automatically generate it, it’s,a pretty good value proposition for people who need music. But it a licensing mess, and it’s gonna take a long time to figure out. I personally believe that if AI is using copyrighted material to create that value, then there should be some sort of compensation to the owners of that material. Those are massive challenges that the music industry is going to have to figure out, along with many other industries.

In terms of growth, you probably have covered pretty well all the Anglo-American repertoire and you are now expanding in other markets. You recently you did a licensing deal with IPRS in India. Is that your new frontier — Asia, Africa, Latin America?

Darryl Ballantyne: Certainly. A lot of those countries are big value generators. Brazil is, for example, our number four country right now. So it’s a huge area of focus for us. India, obviously the publishing rights there have been extremely messy over the years, but it’s a huge area of focus for us and it’s an area where our clients are asking for more and more coverage and more and more availability there. That’s an area that Robert [Singerman, SVP of International Publishing] and Nik [McLeod, VP of Publishing] have been really focused on this year, delivering the IPRS deal and a number of other deals to make sure that all the rights are in place. China is another big area of focus where the traditional copyright regime there has been kind of non existent, but they’ve done a lot of work over the last years to clean that up and turn it into a market that a rights holder can actually thrive in. We’ve been doing a lot of work there to build up the rights and the licensing. And for us a key market is the automotive sector. Those other areas are major frontiers for us where we still believe that there’s a lot of growth to be had and a lot of traffic to capture particularly if you look at India and China. Just population wise alone, the scale there is incredible and we’re only tapping the surface of that at the moment. We think that there’s a lot of growth that we can have there and to a lesser extent in other international territories, outside of North America and Europe. There’s certainly more growth to be had places like Africa as more and more people come online and services get larger. International is a big area of focus for us. And translations are something that will have more and more value on the international stage than in the the US or Canadian markets, for example.

What’s the lyrics business of tomorrow going to be? More direct licensing to the consumer or there will still be third parties like the DSPs or others to provide access to lyrics?

Darryl Ballantyne: It’s going to be indirect because the key with lyrics is that you want them at the point of consumption of the music. When you listen to a song, you want to be able to follow along, see the translation, see the synchronisation. Music services are going to continue to thrive. They’re going to continue to serve all of that need. Lyric consumption is going to end up being wherever you’re listening to music. And it’s not something that people can handle directly.

What feedback do you get from your conversations with DSPs?

Darryl Ballantyne: Pretty much everybody now knows that lyrics are a feature for a streaming service. So there’s no real question anymore about why should I have lyrics. They know that it’s key. For a while we were kind of in that in-between period when we’d go and talk to DSPs that didn’t have lyrics, and without exception, they would tell us that it was their number one or number two requested feature from their users. There’s always been a lot of demand, even pre-DSPs, based on the huge amount of traffic that lyric websites received back then before there were more sources of lyrics available. So the demand has always been there. Lyrics was Google’s number one search term for a long, long time. DSPs have recognised that, and it’s something that is really key to create really great experiences. Lyrics and, and lyric translations become that much more important in a global music world where we’re listening to all different things in all kinds of different languages and trying to understand that. So there’s just that much more value that can be added to the lyric experience and the user experience.

Where do you see LyricFind in the next 5 to 10 years from now? Are there new businesses that you want to start?

Darryl Ballantyne: Our big areas for growth, as I mentioned early, are translations and word by word synchronisation. That’s a big area, but we also look at the video side. We’ve been doing a lot of work on the lyric video tool, and I think we will be expanding into more video formats and more platforms, and doing integrations. That’s an area that we’re really heavily investing in and is going to become more and more important. So much more of the entertainment experience for music is built around video now, so being able to service that part of the ecosystem becomes a really key strategic plan moving forward. With automotive, we see a lot of growth there within five years. It’s going to be fairly ubiquitous. Obviously, the automotive development timelines are a little longer than what we’re used to in regular tech and DSP builds, but the groundwork has been laid there and that’s becoming much more of a standard process, with every car now is connected effectively. So that makes that much more of a possibility. And, who knows, maybe we’ll have a giant kids record label in five to ten years. that’ll be a whole different division. We’ll continue to focus on translation and synchronisation, video and further metadata services, like Lyric IQ and analysis that we can do to help people filter and discover music in a world where there are millions of songs being released in a year.

Are you still having fun doing it?

Darryl Ballantyne: Not every day, but most days. Anybody who tells you that they have fun every single day in this world is not being honest, but I have way more fun days than not. And being able to do different things in different areas of the music business really helps with that. I’ve been able to get to know a lot more people on the label side and building the video side has been really enjoyable for me.

Longevity must give you a sense of actually belonging to the ecosystem. You’ve weathered quite a few storms, so that probably gives you some peace of mind, doesn’t it?

Darryl Ballantyne: Absolutely. You know, we feel pretty secure in what we’re doing and in how the business operates. With time and resources, we’ve been able to build a team that has so much expertise, in so many areas that are really integral to making sure that we don’t do anything exceedingly stupid. It definitely helps being able to look at the whole music business in a holistic and knowledgeable way and understanding our place in that world.

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