Optimise Music Royalty Reporting with Curve's Flexible Software and Services
The music industry thrives on creativity, but its lifeblood is royalties the financial compensation that flows back to artists, songwriters, composers and other rightsholders for the use of their work.
However, navigating the complexities of music royalties can be a daunting task. From understanding the various types of royalties to ensuring accurate and timely reporting, music professionals face a constant challenge in optimising their royalty calculation processes.
This comprehensive guide explores how Curve Royalty Systems’ Services can either assist or take on the full responsibility of record labels, publishers and distributors reporting royalties to their artists, songwriters, and other rightsholders. Curve can help clients navigate the evolving music landscape and achieve optimal reporting efficiency, empowering them to focus on other projects.
We'll delve into the intricacies of music royalties, explore the impact of streaming services and key industry regulations, and demonstrate how Curve's innovative solution and services team can streamline royalty calculation, ensure accurate calculations, and generate insightful reports.
By embracing Curve's flexible tools and in-house expertise, music businesses can achieve transparency, improve efficiency, and ultimately, maximise their revenue potential.
Catalogue management and royalty accounting are complex processes. This intricacy arises from a wide range of factors among which figure:
A single song or recording can have multiple rightsholders, including songwriters, composers, artists, performers, sub-publishers and record labels. Each is entitled to a share of the royalties generated from the use of the music.
The rise of streaming services has revolutionised music consumption, making music more accessible than ever before. While streaming has opened up new avenues for music discovery and accessibility, it has also introduced new complexities for royalty calculation and distribution:
Streaming services utilise complex algorithms to calculate royalties based on a variety of factors, including the number of streams, subscriber base, and territory. These complex payment models can be difficult to understand and can vary significantly between different streaming platforms.
While streaming platforms provide some data to rightsholders, there can be limitations in terms of data transparency and access. Rightsholders may not have complete visibility into the calculation models used by DSPs (Digital Service Providers, such as Spotify or Apple Music), which can make it difficult to understand their royalty earnings and identify potential issues. We will specifically discuss transparency issues and regulations later in this guide.
Streaming services typically pay royalties in fractions of a penny per stream. While this can lead to significant revenue for rightsholders with highly streamed set. works, it can also result in very small payments for less popular songs, making it difficult for some to recoup their investment in creating music. Recent developments in the industry have seen DSPs moving away from paying out royalties until a certain threshold has been met, which has impacted a significant number of songs.
Platforms like YouTube and TikTok have become significant sources of music consumption. However, the rules governing the use of music on these platforms are complex and constantly evolving, making it challenging to track usage and collect royalties.
The streaming revolution presents both opportunities and challenges for rightsholders. Complex payment models, data transparency issues, and micropayments complicate royalty calculation, both through their complexities and their scale. Software solutions like Curve Royalty Systems are crucial to navigating this complex landscape, automating processes, and ensuring fair compensation for creators in the digital age.
Download the GuideTo address the challenges associated with streaming royalties and ensure fair compensation for rightsholders, the music industry has established key regulations and best practices. While the specifics vary across markets, transparency and accurate metadata are crucial in all markets.
In 2023 and 2024 the UK government and various music trade bodies were involved in the creation of two agreements for the wider music industry, to establish common standards and improve the overall quality of metadata and good practices around transparency in the industry.
The agreement aims to address the growing complexity of music distribution in the digital world as well as improve the accuracy and consistency of metadata associated with streamed music. Accurate metadata, including artist names, song titles, ISRC codes, and songwriter information, are essential for ensuring that royalties are correctly attributed to the appropriate rightsholders. By establishing clear guidelines for data submission and management, this agreement paves the way for more transparent and efficient royalty distribution.
Download the Guide
Standardised Metadata: The agreement encourages the adoption of standardised formats for music metadata across the industry.
Accurate and Complete Information: There’s a strong focus on ensuring that metadata is both complete and accurate, as it plays a crucial role in ensuring that royalties are correctly allocated to the correct rights holders.
Improved Data Sharing: The agreement supports better data-sharing practices between record labels, music publishers, streaming platforms, and rights organisations. By improving how metadata is shared, it’s easier to track music usage and ensure that all parties are properly compensated.
Collaboration Between Industry Stakeholders: It emphasises the need for collaboration among various players in the music industry, including streaming services, labels, and rights organisations, to ensure that metadata is handled effectively and transparently.
The code was introduced to improve transparency and fairness in the music streaming industry, especially concerning the relationships between rightsholders (such as labels, publishers, artists, songwriters, and producers), streaming platforms, and other industry players. The goal is to foster better communication and data-sharing practices, ensuring that everyone involved in the process can make informed decisions. Key aspects of the code include:
Clear and Accessible Reporting: Streaming platforms are encouraged to provide rightsholders (such as labels, publishers and distributors) with clear, concise, and easily understandable royalty statements so they can track earnings. Labels, publishers and distributors are in turn encouraged to provide high-quality, transparent reporting to their rightsholders. This way, the data should be clear all the way down the reporting chain.
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Data Accessibility: Platforms should provide rightsholders access to data about how their music is being streamed, including streaming volumes, listening habits, and geographical data.
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Clearer Contracts: Rightsholders should be provided with clear contract terms that explain how royalties will be allocated to them. Labels, Publishers and Distributors agree that rightsholders can audit them and that they will cooperate with such audits to the best of their abilities. DSPs agree that they will clearly outline how their service operates to avoid ambiguity.
While most other territories don’t have government-mandated agreements and best practices in place, the wider industry does recognise the critical importance of accurate metadata and transparency in ensuring fair compensation. As the Code of Good Practice establishes: any supply chain can only be as transparent as its weakest link since no party can supply information that it does not have or that has not been provided to it.
Creating a framework for reporting and transparency aligns all parties and gives them a way to hold each other accountable. While the agreements technically only apply to the UK and have been created with the involvement of UK-based trade bodies and industry partners, this could inspire other countries to set up their own frameworks as well. The US market in particular could benefit from this, as they have a more complicated collection and reporting network than most countries with more parties working in the same space.
The emphasis on transparency in royalty reporting is further highlighted in articles like "Downtown's Tom Allen on the Mission to Improve Trust and Transparency in Royalties Reporting" in which Tom Allen, President of Downtown Music Publishing, emphasises the importance of trust and transparency in the music industry.
He argues that accurate and timely royalty reporting is not only a legal and ethical obligation but also a crucial factor in building strong relationships between rightsholders and the platforms that distribute their music.
Complying with the regulations and best practices involves completing your catalogue metadata, providing clear statements, and giving rightsholders an easy way to analyse their data. A software solution with the tools to do this will make it easier to meet the required standards (as set out in the best practice agreements) and to deliver the best possible service.
At Curve, we believe the best practices in the agreement are a good starting point for improving the overall quality of data in the industry, but we are committed to taking them even further. Our software provides all parties with transparency, allowing them to query and examine every royalty in analytical and reporting tools, and providing on-the-go access via our web and mobile app. We go above and beyond to include all relevant data points in our statements, promoting transparency and data accessibility.
Curve's innovative platform empowers music businesses to navigate the complexities of royalties, global rights, and intricate agreements and achieve optimal reporting efficiency. Here's how Curve streamlines the process:
Curve streamlines the entire royalty reporting process, eliminating the need for manual data collection, processing, and distribution. By integrating with various data sources, Curve seamlessly gathers data from streaming services, performance rights organisations (PROs) and other royalty partners.
This automation significantly reduces the time and resources required for royalty reporting, allowing music businesses to focus on core activities such as artist development, A&R, and strategic planning.
Curve's robust calculation engine ensures accurate royalty allocation across various revenue streams. The platform considers complex royalty splits and agreements and can accommodate your contract terms, including:
Multiple Rightsholders: The exact allocation of royalties to songwriters, composers, artists, and other rightsholders based on their respective ownership shares.
Specific royalty rates depending on source, territory, right type or catalogue: Curve allows you to set different royalty rates for different types of income. You can specify different rates based on the source, territory, right type, catalogue group or a combination of these different variables. It will automatically apply the correct rate to each individual royalty.
Currency Conversions: The careful conversion of royalties from foreign currencies to the appropriate local currency.
Curve provides users with a comprehensive suite of reporting tools that enable them to:
Generate Customised Reports: Create customised reports tailored to specific needs, such as royalty statements, performance reports, financial summaries, and artist royalty statements.
Visualise Data: Utilise interactive dashboards and visualisations to gain a deeper understanding of royalty data and identify patterns. For example, identify which songs are performing best in which territories, which artists are driving the most revenue, and which types of income are generating the biggest earnings. Your rightsholders will have access to these tools for their catalogue as well.
Identify Revenue Opportunities: Analyse data to identify new revenue streams and explore new market opportunities.
Curve facilitates seamless communication and collaboration among all stakeholders in the royalty chain.
Centralised Platform: Curve provides a centralised platform for managing royalty data, enabling all team members to work in the same intuitive platform.
Improved Data Sharing: Streamline data sharing between rightsholders, publishers, collecting societies, and other partners, ensuring all parties have the information they need to make informed decisions. Our royalty solution can ingest any file, and we can deliver a publishing catalogue in CWR format to any collection society and process their Acknowledgement (ACK) files.
Enhanced Transparency: Improve transparency and trust within the music industry by providing rightsholders with access to accurate and timely royalty information as well as analytics and reports functionalities.
