Berklee study seeks solutions to streaming payment dysfunction

berklee fair music chartThe Berklee Institute for Creative Entrepreneurship has released the results of a year-long study of the contemporary music industry, a whitepaper with recommendations for creating better rights tracking for music creators and owners. The study is called Fair Music: Transparency and Payment Flows in the Music Industry, and is available for free download here.

The comprehensive, immaculately written whitepaper is part primer on how the music industry works, part backgrounder on digital disruption of the last 15 years, and part recommendation document that offers theoretical solutions to problematic issues in the music industry.

The main problem, according to Fair Music, is that payments for streaming music do not get to the proper rights holders, because of byzantine mechanics in the U.S. royalty system. The paper refers to the Black Box which contains ownership rights to recorded music, and estimates that 20% to 50% of revenue never makes it to the proper recipients. Improper payment flow is a complaint we’ve heard from Jeff Price, founder and CEO of Audiam, which has built technology to solve the problem on YouTube and other platforms.

The paper’s central question:

“Of the $15 billion in global recorded music revenue for sound recordings reported by the IFPI for 2014, only a small portion of the money beyond the initial recording advances ultimately makes its way to artists as ongoing revenue. Faster release cycles, proliferating online services, and creative licensing structures make finances and revenue even more complex to understand and manage. To strike the right balance, we must address a difficult question: Are the compensation structures fair?”

Berklee cites the recommendations issued by the U.S. Copyright Office (RAIN News coverage here), which advocates for a simplified royalty structure, and expands on them with its own suggestions. The main points involve better data, and better access to that data. In particular, a global, transparent “rights database” that would contain a set of metadata that documents the various dimensions of music ownership — e.g., performer rights and songwriter rights. Berklee also advocates for musician education about the complex legal and administrative ecosystem in which creators work.



Brad Hill