MMF's Dissecting the Digital Dollar
The growth of music streaming has dramatically changed the business of recorded music. Instead of sharing in the proceeds of a physical or digital sale, music makers and rights holders are now participating in new commercial models based on revenue share and micropayments.
These new dynamics have unlocked a thousand debates - is there too little money or too much information? Are we destroying music or creating a new world of opportunities for fan engagement? Artists had questions for managers and managers had questions for record labels and music publishers. Few had conclusive answers. Not least about royalty statements and how revenues were calculated, distributed and all added up.
The resulting report, Dissecting the Digital Dollarwas published in 2015 and became an obligatory read for anyone trying to understand the digital music market. It also threw up further topics for debate. For instance: are the splits in the new digital pie broadly fair to both performers and songwriters? Should artists receive direct payments from streaming plays similar to those from radio broadcasts? What are the implications of non-disclosure agreements? How important is metadata in ensuring the money flows correctly? And how does YouTube and other opt-out services fit into the picture?
So many questions, in fact, that the MMF decided to host a series of roundtables in 2016. These involved over 200 participants across the UK, France, USA and Canada, with labels, publishers, accountants, lawyers, songwriters, performers and, of course, managers all taking part. In each roundtable we debated the issues, and in October that year we published part 2 of the report, which aimed to summarise our findings as well as outlining some key recommendations for managers, the industry and regulators for what needed to change in the world of digital music. This report has informed MMF policy positions and campaigning in the context of the EU Copyright Directive, and assisted us in joining up with other organisations representing music makers around the common cause of fairness and transparency in the digital age.
For the MMF, we realised that part of our role is helping artists and managers navigate the opportunities and innovations that music streaming creates, and so this year we researched and produced two further guides – a Digital Deals guide outlining ten types of modern label deals; and a Transparency Index outlining 20 different data types that artists and managers should demand in order to do their jobs and be assured that the remuneration received from streaming is the remuneration due. These were accompanied by a music streaming calculator that helps predict the flow and return of digital income over time, as well as that share of revenue depending on different commercial deals and the trade offs involved in each.
Given the recent news on digital deals being struck with Facebook and Google, both of which change the way artists engage with the platforms we believe strongly that they should be involved in the conversation about how the value is shared throughout the chain from audience to artist. By encouraging best rpactice and competition around transparency we hope to drive up standards in the industry and make it a competitive advantage to see artists as business partners as opposed to simply suppliers of music to the industry to extract value.
Dissecting the Digital Dollar: 2nd edition updates and combines all the work that CMU and the MMF we has done to date to try to understand this and influence the discussion. Its publication as a print on-demand report results from many conversations with people in the music industry, and with educators and music students who have asked us for a physical version. We hope you find it valuable and we welcome ideas and input on where we should go next in our quest to explain and transform the industry.
Annabella Coldrick, Chief Executive, Music Managers Forum, January 2018