5.2.3 Two-step communication

Figure 2 describes a two-step scenario where two music licensing companies have to communicate with each other before payments are ultimately made to the rights controller or administrator.

This typically occurs between two music licensing companies for international collection and payment of royalties. For example, a local music licensing company has collected revenue data from the local broadcasting company as in Figure 1 and some of the revenues are being claimed by a music licensing company in a different territory for revenue to pay a rights controller or administrator there.

Another scenario leading to a two-step communication occurs when the role of a music licensing company as described in Figure 1 is shared between more than one music licensing company in the same territory. Here the collection of revenue for licences granted is being undertaken by one music licensing company in that territory while the rights are being claimed by another music licensing company in that territory for onward payment to the rights controller or administrator. In some instances, one of those two roles can also be executed by a facilitating company. Italy, Canada and Brazil are examples where the roles of revenue distribution from licences for sound recordings and/or music video, and/or audio-visual resources containing music is being shared domestically. In both cases described here and shown in Figure 2, it is paramount to identify the role the sender and the recipient of the revenue data is fulfilling in any given communication context.

The initiating event is the collection of revenues for which the music licensing company has or may receive a claim. The music licensing company then wishes to report these or some of the revenues to another music licensing company. In this instance the former is the collecting music licensing company and the latter the claiming music licensing company. The claiming music licensing company then wishes to report these revenues to the rights controller or administrator.

In this scenario there are two recipients for the revenue reporting as outlined in Figure 2:

  1. The first message is received by a music licensing company (MLC B, claiming music licensing company) that made a claim for a sound recording and/or music video, and/or audio-visual resource containing music to the collecting music licensing company MLC A, which is sending the message;

  2. The second message is received by a rights controller that made a claim for a sound recording and/or music video, and/or audio-visual resource containing music to the music licensing company (MLC B, claiming music licensing company), which is sending the message.

Both music licensing companies will at certain points in this process be also paying music licensing companies. In Figure 2 outlining the two-step scenario, at least two revenue reports/statements will need to be prepared; (i) the statement from music licensing company to music licensing company, and (ii) the statement from music licensing company to rights controller. This latter statement can be from the collecting music licensing company as outlined in Figure 1 or from the claiming music licensing company as outlined in Figure 2.

For the example represented in Figure 2, the following Cells shall be populated with the stated data in the two revenue reports:

  1. From collecting music licensing company (MLC A) to claiming music licensing company (MLC B):

    1. CollectingMlcName MLC A

    2. ClaimingMlcName MLC B

    3. PayingMlcName MLC A

  2. From claiming music licensing company (MLC B) to rights controller or administrator

    1. CollectingMlcName MLC A

    2. ClaimingMlcName n/a

    3. PayingMlcName MLC B

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