We have learned about the complexities of the royalty collection infrastructure and vast amount of data that is processed. So it may come as no surprise when we tell you the industry has built tools that can help deal with these complexities. Purpose-built royalty software exists to help labels, publishers and societies manage the royalty accounting process.
Major record labels have the resources to build their own custom tools to manage their royalty processes. Tech companies have also jumped in and built tools that can be licenced by independent record labels. When reviewing which platform works for you, it makes sense to consider the functionalities that are key to a good royalty accounting platform.
A complete royalty platform will have built tools for record labels to store their contract details. Any data points such as the different royalty rates, reporting frequency, reporting currency and any potential reserves, deductions or escalations of the contract can be stored. These data points will be used to make calculations and create royalty statements for the artists. When shopping for a royalty accounting tool, make sure to review whether the platform can handle any complex scenarios that may be common for your artist agreements.
We learned about the large amount of data that is processed by record labels, so a tool that can process this data is key to any record label. The platform will need to be flexible enough to automatically deal with the multiple different statement formats a record label may have to deal with as it earns revenue from multiple different sources. A good royalty platform is built on modern technology that scales well with the vast (and increasingly growing) amount of data that needs to be processed.
Labels won’t just report royalties to their artists. We learned that also the songwriters will need to be remunerated. A complete royalty accounting system stores your mechanical royalty beneficiaries and plugs them into your royalty accounting process for you to officially manage your mechanical royalty obligations.
A good royalty accounting software offers a form of analytics you can use on your data. This can look different per platform, but ideally you would like to be able to at least make easy exports of certain data sets in order to work with these in Excel. A more comprehensive platform will offer the ability to do this within the software itself, and will visualize your earnings for you and break them down into different datasets.
It is a record label’s responsibility to accurately but also transparently report royalties to their artists. It is important that artists can see how much they have earned and the type and source of this revenue. Access to an online artist portal can host the statements and make these accessible at all times, whilst also providing interactive tools such as an Analytics tool that is easy to use by artists.
The process doesn’t end with calculating the earnings of an artist - these amounts will also need to be paid. A royalty platform that plugs into the payment process, with artists providing their payment details and record labels making bulk payments, can provide a smooth and trusting experience for both parties.