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Streaming services and record labels have a plan to fix the music industry

The streams are aligning to help improve the cash flow for artists. YouTube, Netflix, SoundCloud, Warner Music Group, Universal Music Group, Spotify, and myriad other music industry players, trade groups, educators, and record labels join together today to form The Open Music Initiative (OMI). OMI’s central mission is to promote innovations in the industry to help identify and compensate rights holders in this new music landscape.

On OMI’s official website and the press release announcing the new coalition, the main aim for this new consortium is to provide transparency for rights holders — a source of contention among artists in recent years. Last August, Talking Heads frontman David Bryne wrote a New York Times op-ed detailing his inability to gain transparency on his royalty payments from streaming services such as Apple Music. In the op-ed, Bryne wrote Apple Music would only disclose details of its royalty compensation deal during the service’s three-month trial period last year to the copyright holders, which usually are the labels and not the artists.

“We think transparency across the entire music economy is essential to rewarding artists, songwriters, and everyone involved in the creation of music fairly and rapidly,” said Jonathan Price, Spotify’s global head of communications, in a press release. A few OMI members touted their efforts at transparency in that release, such as Sony Music, which unveiled its new royalty tracking portal in April.

OMI will puts its ambitions where its lab is as the coalition hosts a three-week summer lab in Boston from July 11-29, where 18 students will be tasked with learning how to save the music industry. The students participating in the summer lab are selected from the 40 music, design, and computer science students who auditioned during a daylong make-a-thon at Berklee College of Music in June. As part of the audition, students were asked to design a product or service that paid rights holders for the resale of their work.

In five hours, one team came up with a barcode scanning app which registers a vinyl album and give perks to the purchaser, which can be transferred to the new owner when resold. Another group developed a Netflix-style rental service for vinyl, which provides exclusive digital content during the rental period.

The summer lab and the make-a-thon sound very similar to the Iovine and Young Academy at University of South California, started in 2013 by Apple Music execs and industry titans Jimmy Iovine and Dr. Dre. The students of the academy even imagined a marketplace where artists connect directly with fans, like Apple Music’s Connect feature that debuted years after the Academy was established. (Apple Music is the also the biggest omission from OMI.)

OMI appears to be more dedicated to developing the infrastructure to give artists more clarity, which in turn could mean more money for artists. At a panel from this year’s South-by-Southwest (SXSW) titled “Fair Music: Transparency,” Vickie Nauman, owner of consulting firm CrossBorderWorks, said “bad data” is a prominent reason for delayed and lack of payments to rights holders. Some songwriters have royalty payments sitting in an escrow account because the metadata for a song they wrote on may be incomplete.

The creation of OMI looks to be the latest example of streaming music’s legitimacy as it slowly becomes the standard of music distribution that CDs and digital downloads were before.

Here is a complete list of the founding OMI members:

  • Auddly
  • Berklee Institute for Creative Entrepreneurship
  • Blokur
  • BMG
  • CD Baby
  • Chainvine
  • Consensys
  • Context Labs
  • Downtown Music Publishing
  • Eveara
  • Fair Trade Music
  • Featured Artists Coalition
  • Future of Music Coalition
  • Giant Steps
  • Harry Fox Agency
  • Heaven 11
  • International Artists Organisation
  • Jammber
  • Komposed Music
  • Mediachain Labs
  • Metabrainz
  • Middlesex University UK
  • The MIT Media Lab
  • Music Revenue Data, Inc.
  • Music Managers Forum
  • Music Glue
  • Netflix
  • New Torch Entertainment
  • Newzik
  • Next Decade Entertainment
  • One Click License
  • Pandora
  • Pledge Music
  • ProMusicDB
  • Resonate
  • Revelator
  • RightsShare B.V.
  • Rumblefish
  • SACEM
  • SiriusXM
  • Songspace
  • Song Trust
  • Sony Music Entertainment
  • SoundCloud
  • Spotify
  • Stem
  • Sync Project
  • Terrible Records
  • TuneCore
  • Under the Window
  • Universal Music Group
  • University College London
  • Venten
  • Warner Music Group
  • WBUR
  • YouTube
  • Zoë Keating