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Navigating Music Licensing ft. Pretzel Rocks Founder
Pipeline Team-Profile
by Pipeline Team

As streamers, we are all aware of the issues such as loss of revenue or muted VoDs that can stem from copyright violations, most often relating to music. It is incredibly frustrating to see your in-game reactions and audience exchanges - the things that make your stream distinctly yours -  reduced to isolating silence in VoDs muted by your platform. Muted VoDs are also frustrating to your viewers who missed the live stream and are now prevented from catching up on your insights. Luckily, there are an increasing number of ways to find no-copyright music and protect your stream and VoD content from accidental violations. Pretzel Rocks, for example, advertises itself as the “first music player built for Livestreamers,” boasting hours of music safe for streaming on Twitch, Mixer, YouTube, and Facebook.Pipeline interviewed Pretzel’s founder, Nate Beck, for more advice on navigating music and copyright. Read on below!

What inspired you to create Pretzel Rocks? What sets it apart from other royalty-free music services?

Pretzel actually started 4.5 years ago under Ninety9Lives, a record label. Since we own the record label, we own both parts of a track's copyrights - the song and the recording - which makes it easy to own license [for streamers to use the music in their content]. The needs for music production and live streaming are entirely different. A single broadcaster would go through an artist's entire catalog within a couple days of streaming. Pretzel is taking a new approach by licensing content from the copyright holders specifically for this purpose - live streaming. It takes a lot of convincing.There are a lot of production music catalogs like Epidemic Sounds and Beats Music, which follow more of a live-style model where they own everything in the catalog. Some artists there make 20-30 tracks a day, but they’re all generic and quickly made, like a “Cajun-sounding track.”We don’t call Pretzel rocks "royalty-free." We are a catalog of real music. Our goal is not to own the music, but to work with artists so that streamers can eventually get license to play whatever music they want, including mainstream favorites.

So what is copyright? Why does it happen? What’s going on in the background between the streaming platforms, the record labels, and the artists?

Let’s see: “Happy birthday” is a song. You making a kazoo cover of the song is the master recording - the sound file that you created. You separate those two, and there’s rights associated with each. Often they are owned by completely different companies. Typically publishers own songs, and record labels own the recordings. Rights associated with song, like lyrics and sheet music, ability to perform, ability to distribute - these are owned by publishers. There are other rights, too. For example, grand right is the right to perform the music in a Broadway musical - but we don’t work with that one.Ultimately, to play music in a livestream - and this is where it gets confusing - we see a difference between video and audio-only content. We’re talking about Twitch, but in the music industry, [livestream] means both video and audio, so you actually need 3 licenses to be able to put music in your video live stream content: public performance license, synchronization license owned by publishers, and then a master use license owned by record label - whoever owns the audio file.Public performance is interesting - say you go to a bar with live music. The restaurant in this case has to purchase the license. When it comes to streaming, Twitch [or whatever platform you use] is the venue. So Twitch should be the purchaser [of the licence]. We don’t know if Twitch has done this yet. But I believe they’re negotiating public performance licenses right now.We [Pretzel Rocks] only have to deal with synchronization and master use licenses. This process is typically easier with indie artists because they own both sets of rights - the song and the master recording. Contrast that with Drake. "God’s Plan" has 19 record labels and in total, like, 25 different entities you must negotiate with. You have to go to each individually, with each asking for a different price - just for the license. Even Drake himself saying Ninja has the okay to play the music on stream, is not enough [to be legal].Ultimately we’re trying to get [the record labels] to agree to let Twitch use the music. But this is on the far end, worst-case scenario, for a mainstream artist.Side note: This is the reason why you’ll see covers of songs in commercials rather than the original recording. Companies get the music publisher to buy in, then make their own recording of the song, and get synchronization license to avoid paying a fortune for the original work.

How has the music industry reacted to the streaming boom? Do you see opportunities for music production companies and artists to create partnerships with specific platforms or streamers?

Yes. Everyone here wants to make money. Everyone’s trying to figure out what’s the best way to make money in this space. The biggest labels - Sony, Universal, and Warner - do know this market. Sony and Universal invested $7 million in Pex, who have been running external content identification for streams. So they know every stream that has infringed upon copyright in the past 2 years. But they’ve learned suing individuals wasn’t the best way to go about solving the issue [of copyright infringements].There are still a handful of streamers getting temporary bans because Atlantic and Warner are working together with WhiteGREY, going through channels and issuing DMCAs [Digital Millennium Copyright Act] - which is why Twitch streamers are getting upset over slips from years ago. There are a lot of streamers who think Twitch is protecting them by muting VoDs, but the music industry still has proof that you’ve infringed, and they’ve just chosen not to [take action].Live streaming is not any different from YouTube in terms of copyright infringes. All music is copyrighted. Streaming unlicensed material [i.e. on Twitch or YouTube] is the same as if you were to actually stream an NBA game, and you can get in trouble for it. It is getting more risky to stream unlicensed content. Normally VoDs only last 60 days, but clips last forever. It may seem unfair, and it happens about 3-4 months that someone gets upset about this. Pretzel’s sign-ups go through the roof every time this happens.Especially with Ninja going so mainstream and Twitch promoting individual content creators, I don't see how the music industry doesn’t get involved. With regards to making partnerships with streamers, we’ve seen that already with NINJAWERKS, and Ninja releasing new music from Alesso.But we’ve seen it to varying success. DJ Khaled at OWL [Overwatch League] was a flop. At TwitchCon, Dillon Francis, who sells out shows to hundreds of thousands of people or playing EDC, was playing to an empty parking lot. This is odd. But the music industry is smart enough, so I think there’s going to be a breakthrough at some point. You can cross-pollinate these audiences [of streamers and musicians]. Take Craysounds, a streamer who is hitting more mainstream, putting out new music.Some of our Pretzel and Ninety9Lives artists do “Twitch roadshows,” playing with content creators and advertising their music. This works to varying success.

What advice do you have for streamers new to content creating?

Make sure [the music is] licensed. There are a lot of options. I think we [at Pretzel] have one of the best options for it. We have to keep an updated list of safe and not-safe things. There are a lot of things Pretzel does, so you don’t have to worry about it. Even we have a hard time getting Twitch not to mute things, even if a particular track is licensed. We’re trying to work with Twitch, but the time-frame is 2 years. It’s a slow process.In terms of advice, most games out there are unlicensed whatsoever. One game developer struck Pewdiepie with a DMCA for a game played years ago. So just having a base understanding of licensed content is the best thing you can do. Other than IRL streams, if you’re using anyone else’s work, it needs to be licensed. The game industry is a lot more lenient than the music industry is going to be. Still, there is no ambiguity in the law - if you don’t have a license, you can’t use it. If you didn't create it you don’t own it. And if you don't own it, get the license. Understand the risk. How risky is it to play music? What are the chances you’ll get demonetized? Now, it’s not all that risky to play unlicensed music. But to treat this as a business, you should know. And you shouldn’t be caught off guard. Littlesiha’s Just Dance YouTube videos get demonetized, but it’s still a marketing vector to her Twitch channel. Twitch is making money, Littlesihia’s making money, but the artists aren’t. The music industry realizes Twitch can lead to sales, but the issue is, right now there isn’t really a good way for viewers to listen to a song, search for it, then find out what it is.Aside from licenses, consistency of content and [stream] schedule is super important.

What is your goal for Pretzel? How do you see your company’s role changing in the near future?

There’s a lot going on behind the scenes I’m really excited about. Our goal for Pretzel is to revolutionize licensing for content creators. It can cost $20,000-50,000 even for licensing a YouTube video. A lot of money is being left on the table. We should be able to facilitate if a streamer wants to use Katy Perry’s song for $100. There are musicians out there who want this, but the licensing is prohibitive at the moment. So we’re trying to show labels the powers of influencers.100 viewers means 100 impressions for a track being played, but there’s no easy way for viewers to find that song. We’re looking to solve some of that. We don’t want to have a catalog of 1 million sub-par tracks. The goal is to be able to license top music for live streaming. Right now Pretzel is $5 a month, but this number will probably increase as we get larger bands to agree. This is all a big experiment.We want to enable content creators to leverage music as a way to enhance content and earn more money back from it by increasing quality and media share. We know song requests work, but the person who actually made the music will [generally] get nothing. Right now, Pretzel Rocks Twitch extension does song requests, and we facilitate that $0.14 of a dollar goes to artists, and 80% of a dollar goes to the content creator. The way the request system works is, a viewer puts money in, then there’s a delay [before the song is played]. SongDuel allows viewers to pay to change songs right away - this is where the most money can be made. Our free tier might go away because of that.McLaffytaffy has had huge success, bringing in over $8,000 from song requests in the past year, using the Pretzel Rocks Twitch extension. He is an outlier, but he swears by it. He always says, “I have to have it, because it makes money for me.”Overall, we’re really looking to how to solve this [licensing] issue for broadcasters. Ideally, streamers should be able to pick a song from their favorite artist and use it as a theme song, and everybody gets paid.

Last question: What are some of the most popular songs, artists and genres on Pretzel right now?

We’re focusing on working with labels right now because they’re the largest collections of music. We already have the Ninety9Lives and FiXT catalogs - rock and metal, a lot of synthwave, which has been the most popular station for past 3 months in a row. There’s also NoCopyrightSounds, which has 3.7 million YouTube subscribers right now. We're going after individual artists and mainstream indie game musicians like Chipzel and Big Giant Circles, as well as pressing forward and getting mainstream music. The idea is, one day you’re able to request a Taylor Swift song on stream for $1. But right now, Pretzel is sitting at just under 10,000 tracks, and growing every day.

This interview has been edited for clarity.

For more info on music and copyright, check out our previous blog post here.

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