DMN & Tipalti Reveal Solutions to Music Industry's Black Box Problem: Tackling Unclaimed Royalties and Streaming Fraud
The music industry faces a significant challenge with unidentified and undistributed royalties, commonly known as the 'black box,' amounting to billions in unclaimed payments. This issue, combined with fraudulent streaming activities, requires immediate attention and practical solutions.
Hand burning dollar bills
The primary causes of unclaimed royalties are:
- Bad or missing metadata
- Unclaimed works
- Fraudulent activities through incorrect information
- Bot farms creating fake plays
Key Solutions to Address These Issues:
- Strong Participant Verification
- Implement robust Know Your Customer (KYC) processes
- Use validated security protocols
- Verify rights holders and creatives thoroughly
- Detailed Metadata Requirements
- Collect comprehensive split information
- Verify recording and publishing IP ownership
- Maintain accurate remittance details
- Include complete tax information
- Proper Fund Management
- Establish clear holding periods for unclaimed funds
- Create fair redistribution policies
- Follow industry standards like YouTube's model
- Dispute Resolution System
- Freeze payouts during disputes
- Maintain an in-house resolution team
- Ensure fair adjudication for all parties
Prevention Strategy:
- Block platform access without proper metadata
- Regular review of submitted information
- Monitor for suspicious activity patterns
- Implement automated verification systems
By implementing these solutions, platforms can significantly reduce unclaimed payments and combat fraudulent activities while ensuring legitimate rights holders receive their due compensation.
US Copyright Office building exterior
An effective combination of strong verification processes, detailed metadata requirements, and robust dispute resolution systems can help platforms maintain integrity while ensuring proper royalty distribution to rightful recipients.
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