Meet Soundstr, the Tech Startup Trying To Streamline Performing Rights Royalty Payments

Royalty payments for songwriters and musicians aren’t what they used to be. And while new technologies can be blamed for some of the downturn, Soundstr, a tech startup based in Cincinnati, has sought to streamline the process by which performing rights royalties are collected.

We corresponded with musician and Soundstr founder Eron Bucciarelli-Tieger via email about their service and how it affects independent songwriters.

Wehn did you become passionate about this issue?

Prior to founding Soundstr, I was one of the founding members, co-songwriters and the drummer in the platinum-selling rock band, Hawthorne Heights. One night, towards the end of my career, I found myself settling a concert with a promoter. All of the typical deductions were there: Sound, Lights, Security, Performing Rights Fees, Catering, Insurance, etc.

Having been through a nasty lawsuit with our first label, I learned quite a bit about copyright. Our band was also at a point in our career where we had to be more mindful of our various income streams and expenses. So on this night, the Performing Rights Fees jumped out at me. This is something I had seen a thousand times before, but with the framework I just described. I now knew what the fee actually was, why it was being deducted and, as a co-songwriter, that some of it was supposed to come back to me from my Performing Rights Organization (PRO) – Just like any PRO-registered songwriter who performs live.

I realized I was missing out on royalties when my songs were performed/broadcast in the real world.

What made you turn to a tech solution to the problem?

After coming to the realization that I was missing out on royalties, I began doing some research. The problem I uncovered was the PROs were using radio play to determine royalty payments for real world music use. If a song wasn’t on the radio, the songwriter didn’t get paid. In a non or low-tech way, the PROs attempted a solution: artist submitted setlists. There were three problems with artist submitted setlists:

• There are still tons of songs played in businesses and venues which aren’t on the radio and aren’t submitted by artists.

1. When you’re worried about load out, selling merch and getting to the hotel or onto the bus, the last thing an artist wants to do at the end of the night is submit a setlist to their PRO. Never-mind most artists don’t realize they can do this and many don’t even know what their PRO does. PRO checks are “mailbox money,” if an artist even receives royalties from their music use. As a result, artists don’t submit very many setlists relative to the number of concerts each year.

• There’s no verification of a setlist. Artists could perform all covers and submit a setlist stating they played all originals.

Around the time I realized there were these problems, music recognition technology was starting to come into its own. To me, it was a logical step to apply this technology to these problems in order to build a fairer system.

Why do you think the rights collection process hasn’t caught up to modern technology?

I think there are a few reasons, not all specific to PROs:

1. Any time a PRO invests in new technology (or spends any money), it comes out of the pockets of songwriters. There has to be a justification for the investment in new tech;
2. New tech is often seen as risky.
3. Like other large enterprises, new technology adoption is a slow process. In big organizations (like PROs), there are many layers in a decision making process. Inherently, this slows things down;
4. Technology can be disruptive to the status quo and change can be scary.

You conducted a two-week study to test the need for the service. Could you explain what you did and what results you found?

We are partnered with Gracenote. We utilize their Automatic Content Recognition tech. It works similarly to apps you may have on your phone, but we have access to many more songs. We are also piloting Gracenote’s new live music recognition tech. For our original study, we built an iPhone app using Gracenote’s tech and loaded it up on some old iPhones. We installed these phones in 12 different Cincinnati area bars, nightclubs and even a casino. Over the course of two weeks, we identified almost 3,000 songs. We then compared the results to Nielsen BDS (industry standard radio chart data) from the same market and same time period. We found that only 19% of the music played in these businesses was also on the radio. So the proxy that PROs have historically used to distribute over $300 million each year in the US, was wildly inaccurate.

This study only included businesses which play “pop” music – basically a best case scenario for compatibility with music played on the radio. It did not include concert venues, EDM clubs or any other type of music. Some of the songwriters featured in our study had other songs on the radio during this time period, but with the way performances are currently accounted, these songs would not receive royalties. Many of the songs identified in the case study were in fact on the radio in the past (10, 20, 30 years ago), which makes this a concern for even the most successful of songwriters.

I should mention, we’re currently conducting pilots within a handful of concert venues and nightclubs. We’ve already identified many more songs than we did in the original study and we plan to do a more comprehensive analysis in the future, following our wide-scale launch in November.

How does advertising play a role in getting businesses on board with Soundstr?

Soundstr connects a custom-built Android device to a business’ sound system. This device, called Pulse, is capable of identifying music and broadcasting audio. We offer a business two products:

Soundstr ID:

This is where we identify music broadcasts and provide music usage reports to the business licensing music so they can negotiate fairer license fees based on actual music usage.

Soundstr Ad:

We offer music venues the ability to “sell” their changeover time to advertisers looking to target captive concert audiences. An advertiser can programmatically purchase an ad campaign based on demographics, locations, dates and genres. Instead of purchasing a banner ad to show up in someone’s Facebook feed, advertisers upload an audio ad that gets broadcast between bands at the selected events. There is a revenue share for the venue, headlining artist and Soundstr. Venues have the ability to block out specific brands/product types.

The idea is to provide a one-two punch of value to the business. We provide context for their music licensing negotiations and at the same time give them an opportunity to generate new revenue using an asset they already have, all without lifting a finger beyond the initial setup. Since we can’t necessarily control what bed music is used in an audio ad, we only offer Soundstr Ad to businesses with music licenses. This will hopefully incentivize the many unlicensed businesses to begin obtaining licenses, which combined with our new Soundstr Ad offering will help to generate more revenue for songwriters.

How will artists be able to utilize analytics/metadata gained from the service’s identification process?

There are many ways which I ultimately envision real-world music data being used by artists. As a former touring musician, I can’t think of more valuable data to have when routing a tour or real-world promotions. Businesses play music and book artists that represent their clientele because it helps them make more money. Therefore, in most instances, it can be assumed that performance data is indicative of your fans’ likelihood of visiting a particular establishment. Imagine, from the artist or label perspective, plotting tour dates, radio ads and marketing campaigns that actually target your fans down to the specific market, even down to their preferred venue within that market. This is a game changer.

Another use case will be in matching music use with POS data. If an artist is able to show a correlation between the sale of a particular product and their music use, this gives the artist an opportunity to justify a sponsorship. We actually plan to assist artists in making these types of brand connections. Remember, Soundstr was founded by artists. Over half of our staff are musicians and the majority of those musicians were professional musicians at one point. Helping musicians and the businesses which support those musicians is at the core of what we seek to accomplish.

If fully implemented, what impact will Soundstr have on independent musicians?

Soundstr will eventually ensure independent songwriters get paid when their music is used in the real world, provided they are registered to a PRO and their music has been scanned into Gracenote’s system through one of their many content partners (many of the self-release platforms feed into Gracenote). Our data can also be used to figure out where your fans (or similar artist’s fans) are located in order to more efficiently promote releases and book gigs.

What can musicians do to get PROs on board with this tech?

We are having conversations with all of the US PROs. Support is always welcome and will surely aid us in those conversations, assuming the support given is respectful. We will be working to bring songwriters directly into the conversation soon, and will absolutely be calling upon their support through social media. For now, stay tuned!

How can artists and companies get involved with Soundstr, and when are you hoping to start implementing the service?

There are two things songwriters and artists can do to help Soundstr:

1. Sign-up for our newsletter. We send out updates and informative blogs/infographics to educate creators on the topic of Performing Rights. You will also be the first to know when we launch our songwriter/artist platform.
2. Preregister (for FREE) to learn more about our services. (Songwriter Sign-up; Venue Sign-up)

• Most importantly, help us spread the word to business owners, bars, concert venues, nightclubs. Our services will help them and help songwriters!

Soundstr is currently live in several pilot sites around the world. Our official launch will be in November of this year. We’re currently taking pre-orders from businesses and venues interested in using our services. Businesses can sign-up now and get one month of Soundstr ID service FREE!