Black Box Royalties, also known as Unallocated Royalties, is a term used in the music industry to describe royalties that are collected but not paid out because the rightful owners cannot be identified or located. These royalties come from various sources, such as streaming platforms, radio stations, and live performance venues. In short, they're meant to be paid to songwriters, composers, and publishers for the use of their music.
Here's a simplified breakdown of how these royalties become "black box" funds:
- Origins: The term "black box" refers to the portion of royalties collected by collecting societies or PROs (Performing Rights Organizations) that cannot be matched to specific rights holders due to missing or incorrect metadata. This can happen because of issues with song identification, incorrect registration, or simply missing information.
- Collection Societies: Organizations like ASCAP, BMI, and SESAC in the United States, and PRS for Music in the UK, collect royalties on behalf of songwriters and publishers. They distribute these royalties based on the usage data they receive. However, the distribution process can be challenging when the data is incomplete or inaccurate.
- Sources of Black Box Royalties
- Streaming Services: With the rise of streaming, identifying and tracking royalties has become increasingly complex. Streaming platforms generate vast amounts of data, and matching this data to the correct rights holders can be challenging.
- Radio Airplay: Royalties from radio airplay are collected by PROs, but identifying all the songs played and their respective rights holders is difficult, leading to potential black box royalties.
- Public Performances: Live performances, background music in businesses, and other public uses of music also generate royalties. However, tracking these uses and matching them to the correct rights holders can be problematic.
- Identification Problem: The organizations that collect these royalties must then determine who owns the rights to the music to pay them accordingly. However, due to missing, incomplete, or incorrect data, it's not always possible to find out who the rightful owners of the music are.
- Challenges:
- Data Accuracy: Incomplete or inaccurate metadata makes it difficult to match royalties to the correct rights holders.
- Data Volume: The sheer volume of data generated by streaming and other platforms can overwhelm existing systems, leading to errors and missing information.
- Transparency: The lack of transparency in how royalties are collected, processed, and distributed can contribute to the black box issue.
- Impact:
- Artists and songwriters may not receive royalties they are owed, leading to financial loss and frustration.
- The lack of transparency and the perception of unfairness can erode trust between rights holders and collecting societies.
- Your publishing percentage on a song is what you own. By not registering your song accurately or in a timely fashion, you are losing out on royalties and losing out on your ownership of that composition.
- Solutions:
- Improved Data Management: Investing in better systems to track and manage data can help reduce the occurrence of black box royalties.
- Collaboration: Industry stakeholders, including collecting societies, streaming platforms, and rights holders, need to work together to improve data sharing and transparency.
- Advocacy and Education: Educating rights holders about the importance of accurate metadata and advocating for fair distribution practices can help address the issue.
Please remember, every PRO and Society around the world operates independently and has their own Black Box royalties.
For a full breakdown of all PROs and Societies and their black box royalties, click here.
