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Metadata: The Music Industry’s Billion-Dollar Problem

An inconceivable amount of royalties are left uncollected due to incomplete or missing data. The glitch is hurting small artists and threatening the future of the industry. Here’s 5 ways to fix it.

With the surge in digital streaming, the volume of consumption has increased exponentially. But is that shift evident in musicians’ wallets? Not necessarily.
With the surge in digital streaming, the volume of consumption has increased exponentially. But is that shift evident in musicians’ wallets? Not necessarily.

For most artists – aka those that aren’t raking in millions from stadium tours and merchandise – royalties are their lifeline. The money generated from commercial use of their songs can sustain them through tough times, fund new music and generally allow them to make a living while pursuing their craft. With the surge in digital streaming, the volume of consumption has increased exponentially. But is that shift evident in musicians’ wallets? Not necessarily. This should concern music labels. As artists become increasingly aware of this issue, companies that prioritize the well-being of musicians can increase their appeal and reputation among this group. 

The world of music royalties is a complicated one, filled with different collection societies and data recording practices. Much like puzzle pieces from different boxes, they don’t quite fit together. From a technical point of view, metadata is they key to connecting the use of a song to the paycheque of an artist. Simply put, it’s all the background details of a track including the singer, writer and title, among other details. Any business using the song will make use of this information to pay its royalties.

The Problem with Metadata

While the practice seems straightforward, the reality is messy. First off, there’s no set method or standards relating to how this data is entered or master database accessed by the entire industry. If one database puts an artist’s last name before their first and another system does the opposite, that singer could very well lose out on a payday. Or, if multiple singers collaborate on a hit song, the presence of more than one name can cause a mismatch – meaning no one gets their due. To make matters worse, companies also have differing timeframe for royalty collection. After a while, unclaimed fees cannot be distributed to the artist, despite their rightful ownership.

The problem is widespread. By some estimates, there’s $2.5 billion in unclaimed royalties floating around. For up-and-coming musicians, this cash could mean the difference between the creation of more music or exiting the business all together. Because hits are being shared on a more global level, involvement with an overseas collection society makes things more confusing, as they may not know where to direct royalties.

How to Fix Music Royalties

There’s no easy solution to what has been a long-standing issue for the industry. However, strides are being made to improve the process – but there’s still a long way to go.

  1. Education – Many artists are completely unaware of how metadata affects their bottom line. New musicians in particular may be completely oblivious to their lost revenue. As information becomes more widely available, performers are in a better position to collectively negotiate for their own rights. Music recognition services are also popping up to help creators find out where their tracks are heard.
  2. Collection groups – The U.S. Congress designated a non-profit collection group to help tackle this issue for American musicians and their efforts have paid off. They managed to distribute nearly $1 billion to rights holders last year.
  3. Streaming services – Those at the forefront of the industry need to become part of the solution. Recently, a leading corporation hired a Global Director of Music Publishing. The aim is to better connect artists to their music and increase the accuracy of payment.
  4. Global Standards – The practice of recording metadata needs to be standardized. A huge chunk of money is unnecessarily left on the table due to mismatched records. Establishing a single format can make things infinitely easier.
  5. Verified data – Metadata needs to stop being an afterthought. Manual errors and missing information can wind up costing an artist life-changing profits.