A new report by the Berklee College of Music and the Institute of Creative Entrepreneurship Rethink Music estimates that around 20 to 50 percent of money generated by streaming is never returned to the artists. The initiative proposed the blockchain as a solution to tally the transactions and provide greater transparency.
The report analyzed the costs that are distributed between parties that contribute in the distribution of music.
“Of the $15 billion in global recorded music revenue for sound recordings reported by the IFPI for 2014, only a small portion of the money beyond the initial recording advances ultimately makes its way to artists as ongoing revenue,” reads the abstract. “Faster release cycles, proliferating online services, and creative licensing structures make finances and revenue even more complex to understand and manage.”
Two types of royalties are paid out each time a song is played: one to the artist or the label company, and the second to the song writer or the company that holds the rights to the song.
“The Rethink Music/Berklee study is a thing of beauty … and much needed,” stated musician David Byrne. “The music business is notoriously complicated, but … the recommendations give one hope – that