This article on SoulCycle's DJ-fueled fitness phenomenon explains how the growth in performance royalty may not just be attributed to 'new media', but also to general licensing in physical spaces (clubs, restaurants, fitness clubs, etc) thanks to increased personalization and the mainstream integration of DJs as curators. Thus the Performing Rights Organizations (PROs) need to update how they calculate distribution of these royalties as it's based on an outdated system of presumption.
With respect to distribution, the procedures used by the PROs today are perhaps as inadequate as the licensing fees themselves. While technology makes it possible to track every song actually performed in any given (fitness club) spin class, general licensing revenues are not distributed with this data. Rather, the money received is put into a larger pool, and mostly distributed using a number of inaccurate proxies such as a sample of television and radio performances that overwhelmingly favors “Top 40” hits.
The genesis of this allocation makes sense if you consider that, at the time this licensing category was originally created, there was no cheap, reliable method to track general licensing. Today, several companies, such as the tech start-up Music Play Analytics, are producing inexpensive, unobtrusive and simple song identification technology on a B2B basis. Requiring chain-wide music usage reports, in an easily digestible format, is hardly a burden to either party.
Apart from fitness clubs, many retailers, restaurants, hotels and other general licensees are increasingly personalizing their music offerings. This results in more songs from niche genres getting more exposure than ever before. And nowhere is this truer than at SoulCycle where they have whole classes devoted to a specific artist, DJ or theme (like 90s hip-hop or 70’s funk). Continuing to distribute these license fees by following a homogenized pop radio chart defies logic and underserves the vast majority of PRO affiliate songwriters and publishers.
This has been a problem since the rise of non-top 40 DJ music over four decades ago. That underground nightclub that only books the most cutting edge DJs, and dutifully pays their required ASCAP and BMI fees? Chances are those fees have been going to mainstream songwriters, not the ones actually being played in the club. The time for incorporating song identification technology is now … device installation should come with a venue's PRO membership.
As an aside, some other countries with stricter performance royalty laws have attempted to solve the problem in unwieldy ways that make one understand why our current system was adopted. I know many clubs in Italy and Mexico will make a DJ write down information for every song played in a set – or, alternately, any song that could potentially be played, if the DJ doesn't plan sets – so these details can be reported to that country's PRO. Not only is this a big headache for the DJ, but there's no guarantee for accuracy; one DJ friend told me that he once listed a large number of my songs (even though he didn't actually play them) to give me a 'boost.' I didn't end up seeing an influx of royalty from Mexico because of that, but it's the thought that counts.