How Blokur is saving apps and platforms from the headache of music licensing

As more and more aspects of our lives move online, we are seeing a new wave of innovative uses for music, such as fitness apps, computer games and social networks. But the entrepreneurs behind these new experiences often struggle to navigate the complex world of music licensing and royalties.

The good news is that thanks to Blokur’s deep understanding of music rights and advanced matching technology, we are able to assist these companies each step of the way: from identifying which music licenses they require to calculating what royalties they owe to whom. We take on the administrative burden, saving time and money and allowing entrepreneurs to focus on running and growing their business.

Blokur Digital Licensing Steps

Step 1 — Identifying what licences you need

The first step for any entrepreneur wanting to use music on their app or platform is to obtain licenses from the rights holders. Multiple licenses are usually needed: from the record label that released the recording, and then also from the publishers and societies that represent the writer of the song. To use a song like “Streets” by Doja Cat, which was written by five people, who may all be represented by a different publisher, a licence would need to be obtained from each publisher in order to be able to use the song. Multiply that by the thousands of songs that most apps need to use, and it quickly becomes very challenging indeed to identify all the licences that are needed.

If you’re thinking it sounds complicated — it is! But at Blokur we can simplify this process by matching music catalogues to the underlying publishing information quickly (2.4m matches analysed in 24 hours!) and accurately, reporting back on exactly which licences are required in order to use the music you want.

For example, we recently worked with a large fitness company who had already secured licenses with two of the three biggest publishers. Those licences enabled them to use a large number of songs on their fitness app, but they wanted to know exactly how many more songs they could use by also securing a license with the third. We reported back on the increase in songs that the third license would achieve so that they could make an informed decision on whether this additional license was necessary.

Step 2 — Obtaining the licences

After identifying which licenses are required, the entrepreneur then needs to go about contacting the rights holders and requesting the license. Not only can it be hard to work out who you need to contact, but there can be a lengthy process with lots of back and forth while negotiating terms.

Luckily, through Blokur’s music publisher community, we are able to offer standard licensing terms with a range of publishers for a fantastic repertoire of current hits and classic songs. We make these terms available via our easy to use Smart-Contract feature which enables users to “opt-in” to the terms provided, and then auto-generates a license.

This feature can also be used to pitch terms provided by the music user back to our publishing community, who are all keen to find more opportunities to license their music. So, if a music user provides us with their standard licensing terms, we can offer these to our client base of publishers to “opt-in” to, helping entrepreneurs to secure new licensing deals and in turn make more music available on their platform or app.

Blokur Digital Licensing - Step 2

Step 3 — Filtering catalogue based on rights

Once licenses have been agreed, many entrepreneurs think that the heavy lifting is over and they can start using music on their app or platform straight away. Yet working out exactly what music your licenses collectively cover is another extremely complicated aspect of music licensing.

Going back to my earlier example of “Streets” by Doja Cat, an entrepreneur would have to cross reference between all of their publishing licenses, society licenses and record label licenses, to check if they have the correct rights and can therefore make the recording available on their app or platform. When dealing with thousands, hundreds of thousands or even millions of recordings, it can appear almost unachievable, and any mistakes could lead to copyright infringement.

But, you guessed it, Blokur can help with this too! We partner with an audio fulfilment company to filter the recordings at source, so you have a cleared list of recordings to use on your app, updated constantly so no one is caught out by changes in ownership.

Blokur Digital Licensing clearing rights

Step 4 — Creative search

Beyond rights filtering, it is also useful to be able to identify the best music for your product from a creative standpoint, whether that means high energy music suitable for fitness or dance, top 100, or current viral songs on Instagram or TikTok. Blokur can help entrepreneurs to discover the right music, with searchable tags like genre, tempo, viral/trending, and popularity by city and country.

This was particularly helpful for one of our fitness app clients who needed to provide their virtual instructors with a list of recordings they could use to soundtrack their workout classes. The instructors used our creative search feature to choose recordings of a specific genre or speed so it suited the class they were leading. 

Creative song search step 4

Step 5 — Rights holder reporting

Once up and running and using music, the next step is to report back to the rights holders on the app’s use of their music. It’s important for this to be correct, as this is what’s used to calculate how many royalties are owed to them (discussed in more detail in the next step). Each rights holder typically has their own reporting requirements: some ask for quarterly reports and some annually; some ask for reports to differentiate between “streams” and “previews”; some require a report of all usage and some only of their repertoire. Creating all these different kinds of statements and reports can become incredibly time consuming, and often drains internal resources that would be better spent elsewhere. Again, Blokur can help by taking on this burden.

We have just been working with a karaoke app that has licenses with a variety of rights holders who all have unique reporting requirements, and needed an effective way to send accurate reports to each one. We automated this entire process for them. Since working with us, this app simply sends us a usage file every quarter, and we in turn create individual statements that fit with the requirements set out by each rights holder. This has not only saved the app from spending resources on undertaking this internally, but also gives them confidence that they are meeting the terms of their agreements, and are avoiding copyright infringement.

Royalty report step 5

Step 6 — Payment of royalties

Finally, once all of the above is in place, entrepreneurs need to actually pay the rights holders according to the usage of music, via royalty payment. Depending on the licensing agreement, royalties can be payable based on a combination of different factors, such as a per stream rate, a minimum guarantee, a percentage of revenue, or a per-subscriber rate. These factors can vary between rights holders, making it quite challenging to work out exactly how much is owed to each one. 

Blokur not only takes on the calculation element of royalties, but also offers the option to take on the payment process on behalf of music-using companies. In this scenario, the app or platform simply sends the total sum that they owe directly to Blokur. We then divide it up based on the royalty statements generated and distribute to each individual rights holder accordingly — saving finance departments who may not be familiar with the world of royalties from this daunting task.

Getting started with Blokur

For any entrepreneurs reading this, I’m sure you’re thinking “this sounds great, but how do I know Blokur is the best provider to use?”

Well, we had the opportunity to test how successful we are in this area against other industry competitors when approached by a major social network that needed to match the music usage on its platform. The platform had previously been using a well known music industry matching provider to identify the underlying publishing rights, but were disappointed with the low match rate it was achieving — as were the rights holders.

The results we achieved at Blokur were a significant improvement: We were able to match 3.7x more of the usage than the existing provider, and both the platform and rights holders were thrilled with our results.

So for an entrepreneur launching a new platform or app with plans to use music, or anyone who already owns or works for a music using company and understands the cost and workload that comes with music licensing and reporting, please get in touch for any more information at gabriella@blokur.com