NPREX, LLC announces the first transactions on the National Performing Rights Exchange (NPREX®), an electronic marketplace for music licensing transactions between music copyright owners and music users. Each transaction was a direct music performance license between a music publisher and a 31-station radio small market group. Whereas music performance licenses have historically been executed between music users and performance rights organizations, or PROs, in time-consuming negotiations in the shadow of federal antitrust regulation, these transactions occurred in mere minutes through the NPREX exchange, which automated the execution of licenses without either party having contact, whether direct or indirect, with the other.
Lee Greer, Founder and President of NPREX, said of NPREX’s first transactions, “These transactions are evidence that efficient, direct performance licensing is a reality. NPREX automated the execution of direct licenses at minimal transaction costs with no contact between the counter-parties and without the need for a collective licensing society. While these transactions are historic, the key is that a music owner and a music user coordinated with one another through a well-designed market mechanism and that each party is better off for having used NPREX. The publisher will earn higher royalties than it would have through collective licensing, and the radio stations will save money. The implications of these transactions and of the NPREX exchange that facilitated them are profound, whether you are a music user, a music owner, a rights organization, or an antitrust regulator that oversees the music licensing industry. More transactions on NPREX are forthcoming. And over the course of 2020, NPREX will roll out more innovations, unprecedented in the music industry, that empower music copyright owners and music users to transact with one another at market prices with full transparency at minimal transaction costs.”
LBK Entertainment, located in Nashville TN, is the first music publisher to execute a direct music performance license on the NPREX Exchange. Carl Kornmeyer, CEO of LBK, commented, “LBK is proud to be a part of the first transactions via NPREX's extraordinary technology. We at LBK regularly embrace technology to support our songwriters, but NPREX is no regular piece of technology. NPREX is technology that, at long last, allows publishers and songwriters to sell music licenses directly to music users at prices that maximize the value of music copyrights.”
The Cromwell Group, Inc., which manages affiliates operating 31 radio stations located in 4 states, is the first music user to execute direct performance licenses on the NPREX Exchange. Bud Walters, President of The Cromwell Group, said, “We hope NPREX helps writers and performers earn more than ever before and also saves users some money. It certainly seems to be a potential disruptor as we go forward in music licensing.”
Jeremy Smith, CEO of ClearMusic, executed the transactions on behalf of The Cromwell Group. Smith said, “NPREX is groundbreaking technology for both music owners and music users. As CEO of ClearMusic and a 25-year veteran of music performance licensing, I find it hugely gratifying to be a part of these transactions. Music users may purchase all types of music licenses directly from music publishers and record labels in an efficient and transparent way. NPREX is a remarkable achievement that music users have needed for decades.”
About Music Licensing
Music users like radio, TV, digital streaming services and brick-and-mortar establishments must secure one or more types of music licenses to comply with copyright law. For over a century, the music performance licensing industry has been without an organized marketplace where music owners sell performance licenses directly to music users. Instead, the industry has relied on performance rights organizations (PROs) to sell collective licenses to music users on behalf of music publishers and writers. A collective license covers a collection of songs owned not by the PRO but by music publishers. Without an exemption from federal antitrust law, collective licensing gives rise to antitrust issues and government regulations.
About NPREX, LLC
Headquartered in Nashville, Tennessee and founded by a team of economists, technologists, lawyers, and music industry professionals from major music licensing organizations, NPREX, LLC operates the National Performing Rights Exchange, or NPREX. Not a PRO, NPREX is a trading platform that automates the execution and settlement of direct licensing transactions for all types of music licenses. A matching algorithm automates the execution of direct transactions, and a pricing algorithm automates the settlement of direct transactions. The pricing algorithm is a mathematical framework that provides a single price mechanism that enables buyers and sellers of all types of music licenses to transact with one another at well-informed prices. This technology enables NPREX to charge minimal transaction costs - a tiny fraction of the fees typically taken by licensing intermediaries or societies. A sophisticated free- market for music licensing transactions, NPREX is ushering in a new paradigm in music licensing informed by advances in economics, mechanism design and computer science that create unprecedented efficiencies and transparency for both music owners and music users.