Data-Driven Digital Music Distribution and Neighboring Rights With InnerCat's Paris Cabezas

On this episode of How Music Charts, InnerCat Music Group founder Paris Cabezas explains how a tech-oriented, data-driven mindset helps optimize digital music distribution and collect neighboring rights royalties.

Data-Driven Digital Music Distribution and Neighboring Rights With InnerCat's Paris Cabezas
Rutger Ansley Rosenborg
February 24, 20213 min read
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On this episode of How Music Charts, we talk with Latin music mogul Paris Cabezas. Born and raised in rural Cuba, the MIT Applied Mathematics grad got his start working on the first generation of Yamaha’s digital mixing consoles. This studio engineering stint helped him become the Grammy-nominated producer that he is now, and he's also been able to apply his technical acumen to the various functions of InnerCat Music Group, which Paris founded in 2012.

InnerCat handles artist marketing, music distribution, YouTube optimization, and neighboring rights for a range of artists, many of whom are Latin stars like Puerto Rican singer-songwriter Farruko. The music group's artists and network of owned and operated channels garner 630M+ streams per month, 330M video views per month, and 22M subscribers on all networks, and they've been able to pay out more than $7M in royalties to indie artists. InnerCat focuses on a data-driven, tech-it-yourself approach to digital assets, and the results speak for themselves.

Finding Your Inner Cat

Before founding InnerCat Music Group with his partner, Paris was at Lil Wayne's Young Money Entertainment, where he helped Lil Wayne improve his royalty collection. That effort to get artists paid what they're owed goes to the heart of what Paris — and InnerCat — is all about.

My wife had a passion for ... rescuing cats.... We both love animals, and sitting in the conference room one day, I said, 'We should name it InnerCat.' It has significance. There's a saying that you have to bring out your inner cat, you have to fight for what you have passion for. It's kind of the embedded message in what we did.... Our motto was to empower independent artists, to give them opportunities as if they were signed to multinationals, not just recording facilities, but the opportunity to have direct access to curators to the stores to playlisting to marketing ... and to educate along the way.

Tech, Data, and Digital Music Distribution

While most artists probably don't have doctorates in mathematics and computer science, it's worth noting how important technology and mathematics are for music, both on the creative side and also on the business side. It's a connection that has permeated Paris' career, infusing InnerCat with a data-driven, tech-oriented mindset that respects and supports the passions of creatives.

This is how tech helps you. Tech will be your sentinel. It will detect significant changes in engagement. It will detect the status of an artist, and it will bring it to a dashboard where you can make a decision and give that artist the opportunity of a push.

However, according to Paris, you can't provide that push without understanding the audiences that are engaging with your artist.

Every record label needs to contemplate having a data science department proficient enough to model data on the fly and run ... analysis on user behavior. The minute they start understanding that the most difficult thing to calculate is human behavior, the catalogs are going to continue producing revenue, artists are going to increase their payouts. It's all about understanding audiences and how they behave.

How to Collect Neighboring Rights Royalties

Tech efficiencies are all well and good, but what happens when music business politics enter the ring? If there's one thing the music business is good at it's making things much more complicated than they need to be. Exhibit A: neighboring rights.

Neighboring rights are also known as related rights. Neighboring rights are not publishing rights.... It has nothing to do with any other traditional rights — this is a related right for sound recording producers, record labels, and performers.... These rights are divided in two – one half is collected by the owner of the copyright of the sound recording ... and the other half is divided amongst the featured artists.... In the United States, there's only one entity that handles neighboring rights, and that entity, SoundExchange ... is governed by Congress.... They collect performance royalties from non-interactive sources ... [where] you can't determine how you playlist the sequence of songs.... Pandora Radio ... SiriusXM ... cable operators ... and private web casters are all non-interactive.

Most American artists probably don't realize that neighboring rights exist, and that's largely because the United States, due to political reasons, has refused to sign the Rome Convention for the Protection of Performers, Producers of Phonograms, and Broadcasting Organizations. Consequently, American artists not only don't receive neighboring rights from terrestrial radio (most artists outside of the US do) but many American artists also probably aren't even aware they are generating these collectible performance royalties on "non-interactive" music platforms in the first place. Fortunately, Paris makes it all a whole lot easier to understand, providing artists with the tools they need to collect the neighboring rights royalties that are owed to them.

Listen to Data-Driven Digital Music Distribution With InnerCat's Paris Cabezas on your favorite podcast listening platform here.