Transparency is probably one of the most debated topics in the music industry. The last two decades have seen a seismic transformation of the sector towards more transparency. Thanks in part to disruptors and technological advancements, rightsholders and artists now have increasingly more direct access to data on how their music is used and where their royalties are coming from. Despite that, it would probably be unjust to say that we have reached total transparency. Deals, rights ownership, rightsholder remuneration, and royalties are, for many, still shrouded in mystery.
The case for transparency
For artists and rightsholders, transparency is a no-brainer. Organisations offering real-time data allow them to track play counts, revenue streams and audience demographics across various platforms. This empowers them to make data-driven decisions. For instance, knowing exactly which song is resonating in a particular region, artists and their teams can then tailor their tours or promotions accordingly. Additionally, clear royalty breakdowns build trust by ensuring fair compensation. This eliminates the guesswork and fosters collaboration between artists, labels, distributors, promoters and the wider music ecosystem.
If transparency is so beneficial, why is it so hard to fully achieve it?
In many cases, it comes down to budgets and the ability to modernise an organisation’s infrastructure. Without the right tech infrastructure, it is hard for artists to get a full picture of how their work is performing. It can be a slow process with some reports only arriving a few times a year. By the time the artist receives the information, it may already be outdated, and they miss out on important insights about their work – without this data, it’s like making decisions in the dark.
In other cases, complete transparency for some organisations raises potential challenges. Complex music deals involving advance payments and revenue sharing thrive on a degree of negotiation. Excessive transparency could limit this flexibility, potentially leading to less favourable terms for both artists and labels. However, some argue that this is not the case and that more transparency would lead to better deals for everyone.
Another popular argument is that the music industry is a complex ecosystem with multiple stakeholders and intricate revenue streams. Some would say that sharing all this raw data with artists and their teams would lead to confusion and misinterpretation. While there may be some grain of truth there, again, this is something that technology, particularly AI, can help with. With the right infrastructure in place, artist teams can see exactly how their royalties are earned, details of music consumption to when the payment reaches their account.
There is also concern about privacy implications when it comes to sharing detailed personal data. This could include personal information such as deal value, earnings or location data. The argument here is that artists and record labels could be exposed to potential cyberattacks and data breaches, putting their financial information at risk. Hopefully, I don’t sound like a broken record but with the right technology in place, this is a non-topic. Access to such information should be only on a need-to-know basis and given to those who are on an artist’s team and have the right permissions. Moreover, the systems should have good cybersecurity and the organisations handling the data should be properly trained and certified when it comes to data protection.
A collaborative music industry
The solution lies in finding a balance. Technology can undoubtedly streamline royalty, performance and other data to provide artist teams with essential full-picture insights. The ideal scenario involves a collaborative approach. By working together, the music ecosystem can establish clear standards for data sharing while safeguarding sensitive information.
