Once upon a time, major labels like Sony Music Entertainment kept their accounting methods close to the vest — very close the vest.
Indeed, royalty audits and contentious lawsuits were once a normal event at major label groups — including Sony Music Entertainment. But thanks to nearly two decades of intense competition and technological upheaval, obfuscation simply doesn’t cut it anymore.
That’s right, technology — at least as it relates to royalty accounting and transparency — is actually making the music industry better for talent and rights owners.
Case in point: just this morning, Sony Music has taken an aggressive turn towards accounting transparency. In a memo issued to Sony artists and their various reps, a sweeping shift in royalty accounting, payouts, and overall transparency was announced.
The new program involves two major components: ‘Real Time Royalties’ and ‘Cash Out,’ both of which sound refreshingly different to major label artists. Basically, Sony is now planning to layer in realtime (or near-realtime) royalty details into its Artist Portal, while enabling easier and faster payments.
“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,” the letter states.
Sony further promises that the update will “allow our artists and royalty participants to view and withdraw earnings faster than ever before.”
When does this all arrive? According to Sony Music, it’s all happening this fall (i.e., a few months out).
On top of the quicker data and payments, Sony is also aiming to provide greater data and analytics to its talent.
“This major speed improvement eliminates the need to wait for periodic reporting cycles to see your royalty earnings and account balances,” the note continues. “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.
“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 development isn’t so shocking when the broader competitive landscape is considered.
Hey, no arguments from any Sony-signed artists, who will certainly benefit from the enhancements. But for those shocked to see such a profound swing towards transparency, consider the competitive landscape.
Suddenly, companies like Kobalt Music Group and STEM are providing fast-and-reliable royalty data and information. But players like Kobalt have been taking things further by actually representing artists both on the publishing and recording sides. That is attracting huge clients, including larger indies like Glassnote Records and major artists like deadmau5 (just to rattle off two examples).
All of which makes opaque accounting and legal battles an avoidable mess — while making transparency a must for big labels like Sony.