Campaign launched to improve royalties collection system for artists

A campaign has been launched to help musicians in Europe and elsewhere earn fairer revenues from their royalties for creative works.

A conference in Brussels on Wednesday (19 May) heard this is possible by reforming the current royalty collection system by embracing the digital age so that artists can receive payments “quickly, efficiently, transparently and fairly”.

The online event was told that during the pandemic lockdown, musical artists have been denied the opportunity to perform, and their revenue streams have suffered. Streaming channels like Spotify have benefitted hugely, but not artists.

The streaming market is showing 45% annual growth, and accounts for 19% of market share with total revenues of more than £2 billion. With much of the world still in some form of lockdown, streaming sales channels continue to grow,the conference at Brussels Press Club heard.

In 2020, music creators lost up to two thirds of their regular income, previously generated from live concerts and festivals.

The conference heard of the need to transform the “obsolete” collective rights management system to ensure that royalties from various platforms are collected “correctly, efficiently, and, most importantly, transparently”.

The lack of transparency has become a systemic issue, hindering the growth of the digital music industry, it was said at the event where speakers included Jan Taljaard, an Italian author, musician, poet and publisher, who spoke of the difficulties artists face in receiving royalties for their work.

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He added: “Once tax and other things are paid there is little left for the author or artist but digitalization, including Blockchain, offers a possible solution. For example, with this it would mean that if I sold a book online each copy would have to be registered and could not be sent on to other people unless there is a royalty agreement.

“More transparency would be a great thing. It would be good for authors like me to know how much and where their work is sold and to receive proper royalties. It is ok to track things in one country but in multiple places it becomes more difficult so I can see a technology like Blockchain would add a level of security and transparency so that someone like me could track everything that happens to one’s work.”

The keynote speaker was Valeria Brusnikina, Portfolio Manager of IT projects of the IPChain Association which was established in 2017 and whose main goal is to set out standards, technologies, and tools for interaction between participants of the IP market in the digital world.

When asked if technology offers a solution to the payment problems facing artists, she said, “Worldwide, the most important thing for artists is to be popular but also to be able to monetise what they do.The IPChain Association has established a business model for the market and to help artists maximise their income.We need to change the mind set but it takes time  to do that so small steps are best. Rights holders must be given the instrument and tools.  I stress that we don’t put personal data into Blockchain  but our aim is to give artists the instruments they need to monetise their work and receive proper remuneration for their writings and music.” 

Another speaker was Zana Messia, a Swedish singer and songwriter who has appeared on the same stage as Stevie Wonder, who said: “It is impossible to make a profit just by selling your work or making music because of free downloads and streaming.

“Artists need to be adequately compensated for their work. This is a problem and also has an effect on innovation and culture.”

She added: “The best solution is to work with someone who will track and administer streaming but even this is not perfect and an independent artist cannot afford this.Technology is also another possible answer and Blockchain, for instance, can help artists get back on track and profit from their work.

“I agree it is important to stress the importance of this and push for change.  I strongly feel that, traditionally, change only comes from practical solution so there needs to be a mechanism to do that such as IP chain and similar mechanisms.

“This technology and this platform will not eliminate rights organisations but will supplement them and offer something that currently does not exist. The IP chain is very comprehensive and has access to many different services.”

Speaking virtually, she said: “Everything I have heard today is music to my ears.”

In a video address, Alexis Georgoulis, a GUE MEP from Greece, said: “It is very important to support artists and this campaign is an import initiative. Over 50 MEPs have signed a petition to this effect. What we owe artists it to respect their work and also pay for it. But under the schemes currently in place the majority of payments go only to big name artists so little left for others, the less popular artists. This is an unfair system. Artists must be paid for their work. We must support culture.”

Brussels based lawyer Mark Clough, who moderated the event, said: “EU copyright law is very responsive to new technology and a new EU directive states that ‘the rapid technological development can continue to be transformative.

"It is clear the IPC Association and associated business companies clearly fall in this context.”

The world has become digital, but the collective rights management systems for royalties have largely remained untouched by progress. 

Artists, though, have the right to expect accuracy and accountability to show all sources of income on a regular basis. With the latest technological solutions for processing and analysing royalty statements, this can be achieved with relative ease for the industry as a whole. With efficient software, it is possible to easily process royalties every month, giving artists a snapshot of their current position and tools to better manage their careers.

The turning point for the Russian collective management system came in 2017 when the Russian Authors' Society RAO and other national collective management organisations (CMOs) initiated the creation of the IPChain Association. Their goal was to develop new universal standards for interactions in the digital IP market.

One emerging solution for more transparency in the music industry and royalty distribution lies in the use of Blockchain. 

In Russia, Blockchain has totally modernised the collective management system with the IPChain infrastructure. IPChain stores data about all transactions with IP by recording them in the distributed ledger, where all members have access to their own copy of information. 

Content creators can track each single use of their works, see where the revenue comes from, how it is calculated, and make informed decisions about how to manage their IP further using a network of interconnected services. 

After leaving the EU, the UK now has freedom to decide on how copyrighted content is shared on online platforms and a major consideration for the UK market in relation to this sector is for the creative arts to take a strategic look at the opportunities presented by Brexit. Part of that process might be for the UK to take a closer look at alternatives such as Blockchain infrastructure IPChain, which has been successfully implemented in Russia.

Valeria Brusnikina spoke at the conference of the advantages of automated systems for rights holders and CMOs. One is called FONMIX, a smart software solution to arrange music, 

video, advertising and information streaming at various  locations. It can provide an additional source of income with the low cost of its software and integration.

Another advantage is that it offers an extensive up-to-date collection of licensed pop music covering all genres and style. Its musical content  can be used legally in full accordance with national legislation.

Brusnikina said: “It is a user-friendly device which can be used across devices, including the PC, tablet and smartphone and also across platforms and applications, be it IOS, Android, Windows or the Web.

“This is an advertising channel allowing various marketing activities and an effective means of promotion  It’s also a technological platform for online streaming and music playback with a remote administration system.

“Additionally, it’s a ‘turn-key’ solution offering technical support and 24/7 backing with background music for all types of venues.”

Another service provided by her organisation, call n’RIS, is a specialized digital service for creators, owners and IP users.

One other option is GMM, a service based on AI and machine learning (ML), which allows someone to monitor and analyze the use of  audio recordings throughout TV and radio broadcasts,streaming  services, social media, podcasts and live performances with an automated reporting function on usage statistics.

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