Unpaid royalties are killing artists’ earnings – could blockchain be the ultimate fix?
Leveraging blockchain for transparent royalty tracking attracts both artists and investors seeking clarity and fairness in the music industry.
Globally, music professionals are missing millions, if not billions, of dollars in royalties. This isn’t just an occasional oversight or technical flaw; it’s a fundamental problem within an industry that wants to prevent its evolution to preserve profits.
Does that sound extreme? Well, the recent lawsuit initiated by Limp Bizkit against Universal Music Group (UMG) shows just how serious the problem is. The world-renowned band claims that UMG uses royalty software that is ‘intentionally designed’ to hide payments. And if it’s that bad for Limp Bizkit, imagine how much worse it is for upcoming artists.
Metadata Isn’t Always Accurate, No Matter What They Say
At the heart of the royalty payments issues is metadata. The music industry usually represents it by the credits shown on streaming platforms like Spotify or Apple Music. However, it also includes all critical details associated with a song, such as titles, songwriters, producers, publishers, and record labels.
And to make sure everyone gets credited and paid each time a song is played, this data needs to be aligned across multiple databases. Sadly, that doesn’t always happen. That’s why many talented people miss out on their fair share.
You may wonder, what’s so hard about entering the correct information for a song? However, the music industry has faced ongoing challenges with metadata for years. There are no definitive standards for how music metadata is collected or displayed, and there is no requirement to check the accuracy of this information before it is published. To make things even trickier, this data isn’t housed in a single, centralized location; instead, it is dispersed across countless databases worldwide.
What’s even more alarming is that Limp Bizkit isn’t the only one calling out the issue. SoundExchange, a US organization responsible for managing performance rights, also filed a similar lawsuit against AccuRadio. AccuRadio is an internet radio platform that permits digital broadcasters to use sound recordings as long as royalties are paid.
Eliminating ‘Errors’ and Excuses Is Possible, but Many Industry Titans Don’t Want It
The sad reality is that the problems with today’s royalty systems go beyond late payments or missed checks. These systems depend on old technology that is prone to mistakes—both human and software errors. Furthermore, there’s always the possibility of intentional manipulation. As a result, artists frequently don’t know where their payments come from or if they’re actually getting what they should.
One technology you are likely familiar with may be a more reliable solution: blockchain. It offers a transparent, decentralized network for storing data. The mechanism isn’t too complex to understand—every time a song is played, that action is logged on the blockchain, creating a permanent record that can’t be modified.
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