80% of respondents believe having one unified system for credits and all payment recipients is possible. However, they do recognize several core obstacles in aggregating a centralized payout database, such as mismatched global systems and technology, flawed systems for determining royalties/splits, and tracking mountains of metadata, income streams, and the multitude of international composers’ rights societies.
The following was created in collaboration with Tipalti, a company DMN is proud to be partnering with.
Tipalti survey participants are music industry professionals with 25-45 years of experience in the business. 90% of these respondents are financial decision-makers authorized to make decisions about software and tech meant to streamline payouts. 70% of participants handle payment volume exclusively for domestic artists, while 30% tackle an even split of domestic vs international payouts.
Survey insights paint a picture of uncertainty in music’s financial ecosystem. Even though 80% of respondents believe it’s possible to have a centralized system to manage both credits and payouts to stakeholders — artists, producers, labels, publishers, songwriters, etc. — there are still many obstacles to achieving a unified state.
10% of respondents believe ‘the entire business model needs to change’ for a unified system to exist and ‘music revenue is intentionally complicated and confusing.’
Many of the issues music companies face are critical factors that make it challenging for businesses to aggregate a centralized payment database. These companies need to deal with enormous amounts of data and metadata, a multitude of mismatched technology systems, security breaches of high-value music assets, global rights issues, and tax compliance.
Dealing with all these complexities and more, it’s hardly a surprise that financial decision-makers express concerns about liability management and recognize obstacles to achieving a centralized payout system.
In today’s hyper-collaborative music world, a single track features creative inputs from a metaphorical — and sometimes literal — busload of creators and artists. Tremendous technological evolution has set the stage for these collaborators to provide expertise from opposite ends of the world.
This ecosystem has bred notoriously challenging financial liabilities, with large volumes of payments that need to be processed simultaneously, are expected to be 100% accurate 100% of the time, and be competitively fast.
What happens if a company’s financial decision-makers and teams refuse to address these obstacles promptly?
Issues exacerbate, culminating in a destabilized financial stack ridden with inefficiencies, increased manual labor, bottlenecks, and massive amounts of unpaid royalties, leading to a collapse of the payout system.
Music payout expert Tipalti facilitates the disbursement of thousands of simultaneous payments to multiple collaborators, which is core to the evolving music business. Tipalti supports some of the world’s fastest-growing music companies like , TuneIn, Create Music Group, Thematic, Audiomack, and more.
The payments automation platform reveals it is deeply committed to music companies’ long-term growth by ensuring efficient risk management, global compatibility of systems, and reduced manual payments workload.
Whether a company is aiming for mergers and acquisitions or going public, risk management is essential to make successful leaps toward success. Fast-paced growth sets you up for higher scrutiny, increasing requirements for accuracy and transparency.
Digital transformation is a critical strategy for music companies that aim to scale for long-term growth. Key steps to attain digital transformation include establishing bulletproof crisis management processes, reducing manual transactional work, and optimizing cloud-based accessibility and security, all while promoting global remote productivity capabilities. Achieving these efficiencies is almost impossible without finance systems that can communicate effectively.
Tipalti provides the tools music companies need to ensure seamless payment operations that enable the scheduling and sending of thousands of simultaneous payments — backed by multiple payment methods and currencies — all via a single, global system.
Results from a 2018 McKinsey study concluded that 57% of finance activities and functions and 80% of general accounting operations can be fully or almost fully automated. It stated, “Knowing what to automate and managing disruption can lead to a new era of productivity and performance.”
Payout expert Tipalti believes building a robust, automated finance framework is led by small incremental changes.
Ensuring a centralized, digitized, automated liability management system ensures music-focused businesses can efficiently handle the demands of complex music payouts, track data obscurity, and offer transparency while elevating finance workers to be more strategic partners in the company’s growth.
If you’d like to learn more about how Tipalti helps music businesses streamline royalty payments, click here.