In this opinion piece, Jacob Varghese, CEO & founder of music rights platform Noctil, says the industry is bleeding royalties during the exceptional growth of streaming and must act now to solve the data challenge…
Imagine running a global business from a disorganised warehouse: stock is haphazardly piled, inventory records are inconsistent, and packages are often lost or misdelivered. You wouldn't tolerate that chaos in a physical business, so why do we accept it for the digital assets driving the music industry?
The music industry operates on a foundation of incredibly complex and fragmented data. From a song's creation to the royalty payment, vast amounts of information must be accurately managed and shared.
This dense network of data has been riddled with inconsistencies for decades, but with the exponential growth of streaming and the sheer volume of new music being released daily, it's no longer just an inefficiency; it’s a crisis. These issues add up to significant hidden costs for everyone involved, much like mismanaged inventory eating into profits.
One of the most persistent challenges is data silos. Every record label, publisher, PRO, and CMO historically built its own systems, creating isolated islands of information. This fragmentation means a single piece of metadata for a song might be stored differently or incompletely across various databases.
For example, an ISRC code might be missing in a publisher’s system or be different in a PRO’s, leading to a disconnect in tracking the artist’s work and, crucially, their royalties. The IPO’s Music 2025 report highlights this directly, noting "multi-layered fragmentation of metadata and a preference for proprietary walled data silos" that undermine cross-system interoperability.
These inconsistencies have profound financial and operational implications. When royalty data doesn't precisely match a collecting society's database, payments can be delayed or, worse, become part of the notorious "black box", a pool of unallocated and unclaimed royalties. These funds pile up when the rightful owner can't be identified due to bad or missing metadata.
The music industry must modernise its data infrastructure by embracing new standards for collaborative governance, transparent ownership and secure, connected systems
Jacob Varghese
It's a big problem: millions, if not billions, in royalties remain undistributed annually. For independent artists and smaller rights-holders who lack the resources to track down these discrepancies, the impact can be devastating. The IPO's Music 2025 report confirms that "unattributed income distributed on a market share basis may reward poor reporting and inevitably impacts weaker or insufficiently informed stakeholders".
Data fragmentation also impacts operational efficiency. Manual processes are time-consuming and error-prone.
The Music 2025 report notes that "some existing infrastructures still rely on paper-based transactions; reconciling the legacy data often requires significant financial and human resources, involving time-consuming manual processes". This inflates costs and pulls valuable resources away from creative activities. The Music Business Association has estimated that a lack of standardised metadata costs the industry $100 million annually in lost royalties and inefficiencies.
In this messy ecosystem, collaboration becomes a Herculean task. The ability to seamlessly and securely share relevant data is paramount in an industry built on partnerships. Yet, technical barriers and a lack of standardised data formats like DDEX often hinder effective exchange. This leads to delays in new releases, missed licensing opportunities and a general drag on innovation.
The challenge isn't just about collecting more data; it's about intelligent data governance. It’s about ensuring data has a clear lineage, that ownership is transparently tracked, and that access is granted precisely and securely. It's about building trust in data, enabling automation, and reducing the reliance on manual reconciliation.
There is no silver bullet to solve these issues, but inaction is no longer an option. In an era where music is consumed by the stream, the industry’s outdated infrastructure is buckling under the weight of billions of micro-transactions.
The time for a systemic overhaul is now. The music industry must modernise its data infrastructure by embracing new standards for collaborative governance, transparent ownership and secure, connected systems.
Only then can we move beyond the chaos of fragmented data to unlock fairer payments for right-sholders, enable faster workflows and build a truly connected global rights ecosystem that serves both rights-holders and the organisations that support them.
