Why The Music Industry Isn’t Transparent, and How To Fix It Right
Repairing digital music at its foundation
This week saw the release of the Berklee Rethink Music Project’s year-long study on Transparency and Fairness in the Music Industry. Its 28 pages of recommendations to the music industry highlight growing tension between music creators and corporations, and the mounting public concern over what the music industry is doing with money and how.
What is the problem?
One of the biggest hurdles laid out in the report is lack of transparency. The report highlights the reality that the music business is so complex, many royalties never make it to rights holders. Others arrive only after passing through the ominous “black box.”
“It’s simply too easy for big companies to sit on money because they can’t find out who to pay, or don’t care to know. It’s time to demand more accountability and transparency.” — Casey Rae, Future of Music Coalition
The report cites industry insiders who claim that “anywhere from 20–50 percent of music payments don’t make it to their rightful owners.” But why just use estimates? Who are the “rightful owners?” Isn’t there anyone that knows where the breakage is?
These estimates highlight the primary problem in digital music right now — too many cooks in the kitchen. In the standard streaming process model, there exist the following steps, often carried out by distinct companies:
- License the track to allow it to be streamed
- Match that license to a database of rights holders
- Deliver the track to a user
- Record the delivery of the track
- Calculate the payments owed to rights holders
- Deliver payments to administrators
- Provide reporting
This creates 6 individual breakpoints where information can be lost, obscured, or otherwise made opaque. Finally, after payments are delivered to labels, publishers, performing rights organizations, and other administrators, they are distributed to artists and songwriters.
How do you close the gaps?
The Berklee report recommends a global, decentralized rights database to increase delivered royalties. This is an option, and it’s been tried before. Why didn’t it work? As we can see above, the entire problem rests in the number of steps in the payment process. A non-profit rights database means yet another person in the chain to query when something is wrong.
“That’s essentially putting on a different coat of paint. It’s still the same engine.” — Mark Mulligan, MiDiA Research
To truly fix the problem, the library of rights and licensing must be tied to musical content at the source. If a centralized system can hold information about licensing, plays, how those plays were delivered, and who is owed what, that system is open to audit. It answers all questions in one place.
This doesn’t mean artists will like what they find. The music industry is wildly complex, and currently requires many layers to operate.
Think of it like this: the floors in your house might be sagging, but you don’t take a sledgehammer to the foundation before you’ve called a contractor to find out why. Part of the core transparency and fairness problem is that even the people who want to answer the questions don’t have the information to do so.
MediaNet has these answers.
We’ll happily get on the phone and discuss all the places digital music information gets lost. We’ve built an end-to-end music, licensing, and rights platform that identifies & closes these gaps.
We employ a sophisticated system of content & information algorithms, and a dedicated team of researchers to step in when a human touch is needed. Our exclusive tools provide complete insight into how content is being used. No matter how it’s licensed. In short, we’re building transparency, not just hoping for it.
Berklee and everyone involved at Rethink Music are putting their time and money into identifying the problems in the music industry. They’re also offering pathways to success. We applaud their efforts, and are thrilled to say we believe we’re building the system they hope for. Our technology can answer the music industry’s burning questions.
So let’s talk.
If you have questions or want to know more about MediaNet’s licensing and rights administration services, we’d love to chat!
Email: press@mndigital.com, or chat with us on Twitter: @mndigital
Website: mndigital.com
