BerkleeICE's Rethink Music Releases Report on Transparency and Fairness in the Music Industry

By 
Libby Botsford
July 14, 2015

Music in the Digital Age

The Berklee Institute for Creative Entrepreneurship (BerkleeICE) today released an in-depth study focused on promoting fairness and transparency within the music industry. 

Originating under BerkleeICE's Rethink Music initiative and 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 was developed by Berklee College of Music faculty and students in collaboration with leading music industry organizations, companies, recording artists, and industry experts. It 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.

Watch video highlights from a Rethink Music event on October 2, 2015:

"As the music industry evolves and streaming services become the dominant means of listening, recording artists' and songwriters’ rights and the flow of money within the industry is the single biggest challenge today's musicians face, and with this initiative, we are addressing the issue head-on for today's creators, including Berklee students and alumni," said Allen Bargfrede, Berklee associate professor of music business, founder and executive director of Rethink Music and the project’s leader. "By highlighting recommendations—and not simply uncovering existing issues—our goal is to bring together industry stakeholders, technologists, academics, and others to push forward with crafting solutions in the near-term."

The report's proposed resolutions include ideas for better adoption of technologies to power the back-end of the music industry, which is sorely missing in today’s environment; multiple estimates indicate that anywhere from 20-50 percent 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 bill underscores that all musicians deserve fair compensation for their art and every creator deserves to have insight into the entire payment stream.

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.

"There's a revolution happening in the media business today, and in some ways the creative class has been a passive observer," said Panos Panay, founding managing director of BerkleeICE. "The matters addressed are critical for all creators, and even more so for the 4,500 students and 45,000 alumni of Berklee College of Music."


Fair Music Report coverDownload a copy of the full "Fair Music: Transparency and Money Flows in the Music Industry” report.


“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!” stated musician David Byrne. “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.”

In addition to input from Berklee faculty and students, 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, who is an underwriter of the Rethink Music initiative, granted access to anonymized publishing data to help researchers better understand royalty reporting in the digital age.

Willard Ahdritz, founder and CEO of Kobalt said, “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, have 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 timing, findings, and recommendations of this report are important,” stated Brian Message, comanager, of Nick Cave & the Bad Seeds, PJ Harvey, and Radiohead. “Lawmakers both in Europe and North America should take note as they look to promote and foster the interests of creators in the digital age, shielding them from the practices of major rightsholder corporations who distort the music market for their own gain. The mistakes of the post Napster era should not be allowed to roll on, to the detriment of many and the benefit of few.”

The report is now available for free download on the Rethink Music and BerkleeICE websites. The Fair Music report will be distributed to all Berklee students and alumni. 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 2 at District Hall in Boston to discuss next steps. Public comment is also being solicited via the Rethink Music website now.
 

Media Coverage