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Sony Music to boost royalty reporting and speed up payments

By | Published on Tuesday 21 May 2019

Sony Music

Sony Music has announced two significant upcoming changes to its royalty portal, which is pretty big news. Even though – as is often the way with things like this – to anyone outside the music industry the new functionality soon to be on offer would seem like something you’d expect ever royalty reporting system to offer pretty much as standard.

The innovations, dubbed ‘Real Time Royalties’ and ‘Cash Out’ by the major, will allow artists signed to Sony labels to access royalty information about their music much faster and access monies they are owed quicker and more frequently.

A memo sent by Sony to artist representatives explains that “once launched, Real Time Royalties, available anytime, anywhere through the Sony Music Artist Portal, will provide you immediate updates about your global royalty earnings and account balances as soon as we receive financial reporting from hundreds of digital distribution services on a monthly basis”.

It goes on: “This major speed improvement eliminates the need to wait for periodic reporting cycles to see your royalty earnings and account balances. You’ll also be able to use the Sony Music Artist Portal’s industry‐leading analytics capabilities to interpret your Real Time Royalties data in robust and powerful ways, giving you faster insights into your earnings trends so you can make highly‐informed decisions”.

On the payments innovation, the memo adds: “Cash Out will give you even greater control over your money by providing you with the ability to request a withdrawal of all or part of your payable balance every month using the Sony Music Artist Portal”.

The MMF ‘Transparency Guide’, produced by CMU Insights and published in 2017, outlined the 20 pieces of data and information that artists and their teams needed from their label and distribution partners. When you apply that ‘Transparency Index’ to different labels and distributors – ie you look at which partners are providing which information and how often – there is huge variation across the industry.

Generally, the digital distributors score highest (although no one gets 20/20), partly because they built their systems from scratch to process, crunch and report the plethora of usage and royalty data that comes in – daily in terms of usage data, often monthly for royalties – from all the streaming services currently operating around the world.

That includes the DIY distributors which work directly with new self-releasing artists. So that you have the slightly bizarre situation where the first experience any new artist has of a distribution partner – in terms of reporting and speed of payments – is probably the best experience they will ever have. As their career progresses and they start doing bigger deals with bigger labels, the quality of reporting will only go down.

Most traditional labels know this, of course, and as artist and managers have demanded more transparency in the digital space, some labels have invested in building better reporting platforms. Initially more focus was put on improving the delivery of usage data. Even though the lack of industry standards means that – for many managers who have acts signed to many different labels and distributors – it’s often easier to get usage information directly from Spotify and Apple’s artist portals, which managers have learned to navigate.

However, royalty reporting is only usually available via the label or distributor, so arguably it’s more important that improvements are made in this domain. And there are often many more improvements to make, given that most labels traditionally reported on royalties on a quarterly or twice-yearly basis.

Again digital distributors have often been better at reporting financial information, but innovations such as these announced by Sony yesterday are definitely a good thing, and will put further pressure on everyone else to improve both reporting and speed of payments.

So, things are definitely improving. In recordings. Issues around quality of reporting and speed of payments are even higher on the songs side of the business, as outlined in the MMF ‘Song Royalties Guide’ launched at the CMU+TGE Digital Dollars Conference earlier this month. However, there are innovators in this space too who are slowly raising the bar, though even the innovators are often constrained by industry-wide limitations.