Fair Music Berklee Pic

Berklee ICELast summer I had the pleasure of meeting Panos Panay, who is devoting his life to helping musicians. In 2000 he founded Sonicbids, a site where musicians can find opportunities and the home of what is probably the best blog for DIY artists nowadays, so full of practical and easy-to-access information. After 13 years as CEO he sold the company and embarked in new projects like the recently founded BerkleeICE (Institute for Creative Entrepreneurship), “an initiative designed to inspire, educate, and launch the next generation of creative entrepreneurs.”.

Rethink Music LogoThe institute’s research arm, Rethink Music (led by Allen Bargfrede), recently published a thorough research dealing with the complex dynamics with which music rights are compensated and paid out to right owners today.

To outsiders it might come as a shock to know that music royalties payments are by a large amount obscure due to a quasi-complete lack of technology organically implemented into the process. The details are often lost in stacks of papers, delivered with huge delays and carrying a number of mistakes due to the nature of the process itself. The final effect is that an estimated 20-50% of the rights paid by the users of music do not make it to their entitled right-holder, but remain unallocated in the so-called “black box”.

So not only the music industry revenues have been shrinking over the past fifteen years, but there seems to be a lack of transparency about how a big chunk of these revenues is split.

The report identifies the source of the lack of transparency in the music industry in the incredible complexity that has been formed over decades, driven by complex regulations and inadequate and non standardised systems used by the stakeholders. When complexity can be reduced, it is unfortunately only natural to be met with resistance by those who will suffer (or who think they will suffer) from a change in the environment. It is human, but it is not conductive to value creation. Change is inevitable and if proactively harnessed it can be positive.

Every musician out there should take all this in at least in two ways:

  1. it is crucial to know the workings of the business side of music, in order not to be ripped off. If you don’t want to, or can’t do it, then do team up with somebody who does know and whom you TRUST (on the power of trust, some additional words later);
  2. it is as important to know that there are people out there like Panos and Allen that are spending their entire professional lives raising awareness about key roadblocks to a more fair music industry, doing all they can to make their findings ACTIONABLE, so it’s vital to show them love, support and appreciation, and to spread their findings and contribute to their work.

How are BerkleeICE and Rethink Music making their research and standpoints actionable? For starters by including in the document very concrete recommendations and by engaging with all the stakeholders in what they want to make a true and deep DIALOGUE, another magic word that does miracles when introduced as part of the formula for the solution of any kind of problem. Last October 2nd a first roundtable with music industry professionals and enthusiasts was held at Berklee’s premises in Boston.

Here is the list of recommendations for further consideration:

  • The development of a “Creator’s Bill of Rights”;
  • A “fair music” certification of transparency for digital services and labels;
  • The creation of a decentralised, feasible rights database;
  • The investigation of blockchain technology and cryptocurrencies to manage and track online payments through the value chain directly from fans to music creators;
  • Educating all types of music creators regarding their rights and the operations of the music industry.

More details can be found in the 29 pages of the report.

I said I would spend a few words on another key ingredient, in business as well as in life: TRUST. Many years ago I read “The Power of Trust”, by Stephen M.R. Covey, which presents a translation of a supreme human value into economic terms, through the following equation:

(S x E)T = R

Here we see a “traditional” business equation where (R)esults equal (S)trategy multiplied by (E)xecution, but everything becomes a factor of (T)rust. High trust can multiply a positive outcome, while low trust can reduce it and potentially bring it close to zero. Being trustworthy people and acting transparently will yield innumerable benefits.

So let’s welcome and support all the initiatives aimed at decreasing complexity and increasing transparency and therefore the overall level of trust.