Berklee/Kobalt Music Report: Need For Transparency
July 14, 2015 at 11:39 AM (PT)
BERKLEE INSTITUTE FOR CREATIVE ENTREPRENEURSHIP in association with KOBALT MUSIC GROUP under its RETHINK MUSIC initiative, released an in-depth study focused on promoting fairness and transparency within the music industry, entitled "Fair Music: Transparency and Money Flows in the Music Industry.”
The report is the culmination of a year-long examination of the $45 billion global music business and explores the underlying challenges within the current compensation structure while proposing solutions to improve licensing, revenue transparency and cash flow for musicians.
The report, developed by BERKLEE COLLEGE OF MUSIC faculty and students in collaboration with leading music industry organizations, companies, recording artists, and industry experts, exposes current inefficiencies within the industry, including millions of dollars that go undistributed to rightful creators, backroom licensing deals that leave musicians out of the rights conversation entirely and overly opaque royalty statements and accounting systems that are often impossible to interpret or verify.
The report's proposed resolutions include ideas for better adoption of technologies to power the back-end of the music industry, where multiple estimates indicate that anywhere from 20-50% of music payments do not make it to their rightful owners. Also recommended is a "Creator's Bill of Rights," which is comprised of standards for ethical treatment of musicians, artists, and other creators.
The study also advocates for development and adoption of the following:
· -"Fair Music" seal, similar to a fair trade certification, to encourage fair pay-out rates and protect creators;
· -Decentralized rights database, controlled by a nonprofit, that lowers the number of unclaimed royalty payments;
· -Blockchain technology, which powers Bitcoin and other cryptocurrencies, to manage and track online payments directly from fans to music creators; and
· -Education initiatives for all music creators regarding their rights and the operations of the industry.
DAVID BYRNE, an open critic of current industry practices, including free streaming, praised the study. “The RETHINK MUSIC/BERKLEE study is a thing of beauty... and much needed. The music business is notoriously complicated, but they have presented their findings in a clear manner that anyone can understand—though it's still not simple! “The picture the study paints is spot on and fairly devastating — as it should be. It's essential reading — and given the lack of vested interests at work it should be explosive and wide ranging in its impact. The recommendations give one hope — that there is indeed a way for this industry to flourish and benefit everyone involved.”
The report features commentary and insights from a variety of sources, including artist managers, technologists, and artists themselves. To support the goals of the report, KOBALT MUSIC GROUP, an underwriter of the RETHINK MUSIC initiative, granted access to anonymous publishing data to help researchers better understand royalty reporting in the digital age.
Commented KOBALT CEO WILLARD AHDRITZ: “Transparency and fairness are the two great battlefronts for songwriters and rights owners today. I’m thrilled that an objective body, such as BERKLEE’s RETHINK MUSIC, has tackled both of these issues and made concrete recommendations for the industry as a whole, and are very much in-line with our values at KOBALT. I highly recommend every stakeholder in this industry, whether rights owner or DSP or label, to read this paper, find ways to make changes and begin to build a future that better protects and secures creators’ rights.”
The report is now available for free download on the RETHINK MUSIC and BERKLEEICE websites. In Phase Two of the FAIR MUSIC project, RETHINK MUSIC will solicit feedback from all stakeholders interested in participation, and will host a public Phase Two kickoff event, on OCTOBER 2nd at DISTRICT HALL in BOSTON to discuss next steps. Public comment is also being solicited via the RETHINK MUSIC website now.