CMRRA's Paul Shaver Talks TikTok and Streaming
Experience comes in handy.
Paul Shaver, who has been President of the Canadian Musical Reproduction Rights Agency (CMRRA) for the past 18 months, says his previous gig as the VP of Nielsen Entertainment Canada was the best preparation for his current position that he could have asked for.
“To be honest with you, without going to Nielsen beforehand, I don’t think this job would have been something I would have ended up pursuing,” Shaver admitted in a recent interview with FYIMusicNews.
“Nielsen taught me the importance of metadata and the accuracy around that metadata. When I was at Nielsen, it was more about tracking, being chart eligible and certifications. But now it’s making sure that we get the rights holders compensated for that usage. Without that metadata, it’s a tangled web trying to figure out who to pay for such-and-such usage. It’s a difficult task that the CMRRA does very well and has a rich history of doing so. My time at Nielsen helped form a strong foundation for me.”
Licensing, collecting and distributing royalties for the majority of songs recorded, sold and broadcast in Canada, the CMRRA represents over 6,000 clients that include music publishers and self-published writers, totalling 40 million musical works that include 142,000 music catalogues.
While he was eager to take the helm, Shaver was barely six months into his executive position when the pandemic struck and the CMRRA felt the wallop of halted business. But there was some recovery..
“The biggest lines that had a negative impact for us were our commercial radio revenues,“ Shaver explains. “They were down about 30%. Since our revenues are a percentage of revenues the stations collect, our revenue is down. Background music was pretty much turned off. The stores were shuttered, and traditional mechanicals experienced an up-and-down ride: Initially they were down as releases were kind of punted or delayed, but then they soon levelled out, and the pipeline got built again.
“Vinyl continues to perform very well. Collectively, the growth of streaming – up about 19% year-over-year - more than offset our decline at the end of the day, which was great news for our clients.”
In fact, Shaver says that streaming accounts for over half of CMRRA collections and it's growing - with the organization taking between 5% and 8% in commission per collection, dependent on the agreement.
“In 2020, streaming accounted for about 59% of our business," he said. "Year-to-date in 2021, streaming is accounting for 64% of our business, so it's definitely our model moving forward. We also see the world of vinyl hanging on and continuing to grow and thrive.”
Shaver and his organization have also been able to mine new opportunities for their Canadian constituents, ranging from the recent TikTok deal that is retroactive to 2018 when the video-sharing social media network was known as Musical.ly, to entering the field of international collections through newly formed alliances with UK-based Impel Collective Management digital rights licenser and Nashville-based Mechanical Licensing Collective (MLC.)
While he couldn't provide revenue estimates over the length of the multi-year TikTok agreement due to confidentiality, Shaver says that aside from providing an additional income source for CMRRA's affiliates, TikTok pays out an equal amount for each video that is created, adding that the number of videos streamed or the number of views recorded don't accumulate further royalties.
"It’s more the creation of the video versus the number of views for a video," explains Shaver..
But he says the deal sends a message to tech companies who use music to build their businesses.
"They need to properly seek a license to ensure that rights holders are compensated," he notes.
For CMRRA to move into international collection agreements, Shaver said he was just following the demands of his membership.
"We listened to our clients in the past year and more and more were looking beyond this marketplace, which makes sense," he explains. "So, we launched international collections to service them with some strategic partners – Impel, who are very much aligned and similar to what CMRRA is and does, and also MLC in America. Impel is involved in 76 markets, and we’ll be adding more as well with the MLC.
"It’s really meant to be an extension of what we do and a customer service initiative that we launched to get international collections to support those clients."
Shaver says the CMRRA has agreements with the majority of DSPs, recently signing license agreements with online music service ACX music (Ultimate Fighting Championship) and classical music streaming service Primephonic.
“We have all the digital providers covered along with the SoundClouds of the world; Facebook and Instagram. We recently signed a new service out of the Quebec marketplace, called Qub, which is part of Quebecor. We’re actively engaging in dialogues with other players as they come to the marketplace: the likes of Triller and Loop TV. I’m confident that we’ll have deals with them and others sorted soon. And I’m very optimistic that the Pandoras of the world will eventually make their way to the Canadian marketplace, too."
In the four years since U.S.-based SXWorks - a subsidiary of SoundExchange - bought the CMRRA in a groundbreaking transaction, combining a U.S. sound recording collective with a music publishing collective, what has the move meant for the organization?
“SoundExchange brings a tremendous amount of leadership, guidance and additional infrastructure to our organization," Shaver replies. "We’ve been able to integrate many back office functions from the world of finance and IT, and are currently working on additional integration of our processing system which will provide even further efficiencies. What we do manually will rely more upon automation. SoundExchange has allowed us to get better and more efficient at what we do."
After 46 years as an organization, Shaver says the biggest misconception about the CMRRA is that "people think that we are just in the deep world of dealing with physical mechanicals.”
“That’s what it started as, but there’s a misnomer: people just don’t think about the reproduction right. What we’ve been doing since I started and Rebecca (Webster, Director, Industry Relations and Communications) joined, is that we’ve really been working on our education and industry outreach, delivering education sessions about what the CMRRA is, what it’s about, the reproduction rights. The biggest misnomer about the CMRRA: that we’re still this private copying and physical mechanical organization. It’s the legacy of what we do, but the future is digital. And we service them both equally well.”
With one foot firmly planted in a digital mechanical future, Shaver said he's excited about future prospects and takes great pride in some of the accomplishments the CMRRA has made while everyone's been isolating at home.
"Every single department doubled down to ensure we had no disruption, and I’m happy to report that we continue to operate effectively and have met every single distribution deadline since Covid started," he states. "We also established diversity, equity and inclusion committees, and we’ve been building a playbook to ensure that foundational change in support to the CMRRA and our colleagues.
"We also finalized a three-year scholarship with Humber College's Business Administration program that we’re going to announce soon. The CMRRA Next Generation Scholarship will support a different student every year whose diverse voice and perspective broadens representation in the sector. We've increased workshops, socialized our footprint and invested in sponsorships that complement our brand and even manage to complete some much-needed office renovations."
And he feels hopeful that many of the other Canadian music industry organizations will pool together with the CMRRA and work towards a common goal.
“I think we can now have a real opportunity to have increased dialogue and collaboration to bring about hopeful change and ensure we have an active, thriving music ecosystem for years to come," says Shaver.