In 2018, on-demand streaming services accounted for 75% of all music listening, an increase of 25% from 2016. As new streaming services flood the market to meet consumer demands, these companies must comply with regulations governing the payment of royalties under the licensing agreements in place and the controls in support of processing transactions.
The Library of Congress U.S. Copyright Office 37 CFR 210.17(f)(2)(iv) regulation requires an Annual Statement of Accounts (ASOA) certification to ensure all royalties are all accurately paid to the music labels and the artists. Most critically, the ASOA certifies:
The law requires each ASOA to be certified by a licensed Certified Public Accountant (CPA). There are options to consider when undergoing the certification (e.g., SOC 1 Exam, AT205) with the goal of ensuring the following:
Streaming royalties can be extremely complex. The issue has many nuances that must be defined in order to navigate compliance requirements. Consider these key questions:
Engage a trusted third-party advisor to help walk through the ASOA requirements, better understand the risks to your organization, gain assurance over your internal controls and obtain the required certification. For more information on this topic, or to learn how Baker Tilly specialists can help you with your ASOA, contact our team.
 Neilson 2018 Mid-Year Music Report: https://www.nielsen.com/us/en/insights/report/2018/us-music-mid-year-report-2018/