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# Addressing Inequities in Royalties
- URL: https://news.proofprofile.it/addressing-inequities-in-royalties/
- Published: 2025-10-18T10:37:10.000Z
- Updated: 2026-10-12T09:26:24.000Z
- Description: The lack of transparency and consistency in royalty reporting for songwriters, particularly with cross-channel uses like cover songs on…
- Author: Thor Pettersen
- Tags: #Import 2025-12-27 10:11, #copyrightchains-archive, #Import 2026-11-09 16:10

The lack of transparency and consistency in royalty reporting for songwriters, particularly with cross-channel uses like cover songs on platforms such as YouTube, continues to create major challenges in the music industry. For example, a significant number of songwriters report that they are not compensated adequately for cover versions of their songs used across different digital platforms. Additionally, the absence of timely International Standard Musical Work Code (ISWC) assignments often leads to delayed or missed royalty payments, which significantly impacts their income.   
This article explores how a blockchain-driven approach to copyright and royalty management can resolve these issues. By leveraging advanced metadata management, Power of Content (PoC) staking, and blockchain-powered transparency, this approach not only ensures fair compensation for songwriters but also transforms royalty tracking into a transparent, equitable system. Power of Content (PoC) staking is a mechanism that allows copyright holders to ‘stake’ their work, which essentially means committing their content to the platform in exchange for increased visibility and potential rewards.

**Challenges in the Current System**

The existing system for royalty reporting remains fraught with inefficiencies and lacks transparency, especially for cross-channel uses. For instance, YouTube, one of the largest platforms for music consumption, has a well-documented history of inadequate reporting when it comes to works such as cover songs (e.g., see reports from the International Federation of the Phonographic Industry (IFPI) and statements from various artists’ rights organizations). This often leads to discrepancies in royalties due to songwriters, as International Standard Musical Work Codes (ISWC) are not accurately assigned and tracked across all derivative content. The delay in royalty reporting from companies like UMG further exacerbates the problem, causing songwriters to miss out on timely and fair payments.

Universal Music Group’s latest financial results reveal continued growth in its revenues, along with some insights into its collaboration with YouTube Music on ‘artist-centric’ changes. However, this growth does not necessarily translate into fair compensation for songwriters, as revenue increases in recorded music and streaming often do not address the underlying issues of royalty transparency and accurate reporting for individual creators. Overall, UMG’s revenues grew 4.3% year-on-year to €2.87bn ($3.12bn at current exchange rates), including 5.4% growth for its recorded music division to €2.15bn, with publishing up 1.8% to €500m. However, the slower growth in publishing was partly due to a one-time €53m payment from the US CRB Phonorecords III settlement a year ago.

For recorded music, UMG’s revenues from streaming subscriptions grew by 7.6% year-on-year to €1.14bn, while revenues from non-subscription streaming fell by 0.8% to €354m. Digital revenues for publishing rose by 0.3% to €295m, while sync revenues experienced a notable spike of 16.4% to €64m.

UMG’s partnership with YouTube also aims to enhance content categorization and elevate premium artist content, which could positively impact the visibility of songwriters’ work. However, questions about the lack of growth in ad-supported streaming remain. UMG’s digital boss, Michael Nash, highlighted a monetization gap in the video space, particularly with short-form content, where increased activity has not yet translated to proportional revenue growth. This lag in monetization further underscores the existing challenges for songwriters to receive fair compensation for their contributions.

The lack of transparent tracking and attribution leads to significant gaps in the income that songwriters should be receiving. Cross-channel usage, including remixes, covers, and samples, adds additional layers of complexity to the royalty collection system. Without a robust mechanism for identifying and documenting these uses, songwriters are left undercompensated for their contributions.

**Blockchain-Powered Transparency and Metadata Enrichment**

A blockchain-based platform can address these systemic issues by creating an immutable and auditable ledger for rights and content usage. Unlike traditional systems, which often rely on multiple intermediaries and manual tracking, blockchain ensures transparency and accuracy by recording every transaction in real-time. This significantly reduces delays, discrepancies, and administrative costs, ultimately providing a more efficient and reliable solution for rights management. This blockchain-based system can directly resolve the challenge of opaque royalty reporting by automating the tracking and auditing of every instance of content use, ensuring that songwriters and copyright holders receive fair compensation based on real-time usage data.

At the core of this solution is metadata enrichment technology. By using AI, such as machine learning and natural language processing, metadata can be enhanced to ensure comprehensive information is linked to each musical work. This includes International Standard Work Codes (ISWC) and International Standard Recording Codes (ISRC), which are vital for correctly attributing royalties. Enhanced metadata provides songwriters with the assurance that every version of their work, including covers, remixes, or adaptations, is documented and monetized effectively.

**Power of Content (PoC) Staking: Incentivizing Quality and Visibility**

The Power of Content (PoC) staking mechanism offers a unique value proposition for copyright holders. PoC staking allows creators to ‘stake’ their content, which means they commit their work to the platform using tokens. In return, they receive increased visibility and rewards based on the engagement and quality of their content, providing a simple and effective way to monetize their creative works. This system allows songwriters and other content creators to stake their content using utility tokens, demonstrating confidence in their work’s value and potential. By staking their content, creators gain increased visibility and access to rewards that are tied to the popularity and quality of the staked material.

The PoC staking model creates a virtuous cycle where songwriters are incentivized to produce high-quality work, with their earnings directly linked to community validation and platform engagement. This model ensures that songwriters are not just passive recipients of royalties but active participants in the growth and value creation of their content. The mechanism also enhances the liquidity of utility tokens and fosters a dynamic and engaged creative community.

**Real-Time Royalties and Automation with Smart Contracts**

The use of blockchain technology and smart contracts allows for the automation of royalty calculation and distribution. For example, smart contracts automatically trigger royalty payments whenever a song is played, ensuring accuracy and eliminating the need for manual intervention. In contrast, traditional methods often involve multiple intermediaries, manual reporting, and delays, which can lead to discrepancies and slow payments. Every time a song or a derivative work is used — whether it’s streamed, covered, or remixed — the blockchain records the transaction, calculates the royalties, and distributes them to the appropriate rights holders in real-time. This eliminates the delays and inconsistencies often experienced with traditional royalty collection methods, ensuring songwriters receive fair compensation as soon as their work is used.

Moreover, the automation facilitated by smart contracts reduces reliance on intermediaries, which means fewer fees and faster distributions. This not only benefits songwriters financially but also provides greater transparency for all stakeholders involved in the music creation and distribution process.

**Estimating the Loss of Income without Blockchain Solutions**

Without blockchain-powered solutions, the loss of income for songwriters due to inadequate reporting and delayed royalty payments can be substantial. For example, estimates suggest that songwriters could be losing up to 20–30% of their potential income annually due to unreported or underreported usage, which could amount to millions of euros in lost royalties industry-wide. Based on UMG’s financial report, streaming revenues continue to grow, yet non-subscription revenues saw a decline of 0.8%. The lag in monetization for short-form content, combined with slow or inconsistent reporting practices, means that songwriters are likely missing out on a significant portion of their deserved earnings. If the monetization gap in platforms like YouTube remains unaddressed, songwriters could potentially lose out on millions of euros annually due to unreported or underreported cross-channel usage.

With blockchain solutions, the transparency provided by an immutable ledger and the automated tracking of metadata ensure that every usage of a song is accounted for. This would significantly reduce the revenue lost to inadequate reporting, with the potential to recover millions in lost royalties each year. For instance, with a 7.6% growth in streaming subscription revenues, ensuring accurate royalty tracking through blockchain could increase the income flowing to songwriters, aligning it with actual platform growth.

**The Potential Impact on Songwriter Income**

Integrating blockchain-powered solutions into the royalty ecosystem would have a transformative impact on songwriter income. By ensuring that every use of a song — including covers and adaptations — is tracked and monetized, these solutions can significantly reduce lost revenue due to unreported or underreported usage. This is achieved by leveraging blockchain technology to create an immutable record of each usage, combined with smart contracts that automatically verify and log every transaction in real-time, providing accurate and transparent tracking. Real-time reporting and transparent auditing mechanisms guarantee that songwriters are compensated fairly and promptly.

Furthermore, the combination of enhanced metadata, PoC staking, and automated smart contracts introduces new income opportunities that extend beyond traditional royalty streams. Songwriters can benefit from increased exposure of their content, higher earnings through community-driven visibility, and a predictable royalty flow that enhances financial stability.

### **Summary**

The existing inefficiencies in royalty reporting and compensation for songwriters have long hindered their ability to fully benefit from their creative contributions. An innovative use of blockchain, AI, and PoC staking provides a comprehensive solution that not only addresses these challenges but also reshapes the royalty management landscape to be more equitable and transparent. By empowering songwriters with real-time royalty payments, transparent tracking, and increased opportunities for visibility and earnings, the foundation is laid for a fairer digital content ecosystem.

Through a blockchain-based platform, songwriters can finally realize the full value of their work — ensuring that their creativity is both protected and rewarded in the evolving music industry.

### **Estimated Loss of Royalties**

#### **for Songwriters and Composers**

According to the 2024 CISAC Global Collections Report, global royalties for music creators reached a record high of EUR 11.75 billion in 2023, showing an increase of +7.6% compared to the previous year. However, despite the growth, the report highlights significant disparities in income distribution between artists and songwriters. A major portion of digital income continues to benefit a relatively small group of well-established artists, while the majority of songwriters and composers are left with insufficient income to sustain their careers.

A study by CISAC members SACEM (France) and GEMA (Germany) on the impact of generative AI and inadequate royalty reporting suggests that around 27% of potential revenue for creators is at risk in the medium term due to challenges in accurately tracking and reporting music usage across platforms. Additionally, CISAC’s analysis indicates that songwriters and composers could be losing up to EUR 3.5 billion annually due to insufficient tracking and underreported usage of their works across digital platforms.

The difference in income distribution is further evident when comparing the earnings of artists with those of songwriters. According to CISAC data, the average income of artists who are also performers is substantially higher than that of pure songwriters or composers, due to additional revenue streams such as live performances and merchandise. In contrast, songwriters primarily depend on publishing royalties, which are subject to significant delays and discrepancies in reporting.

For example, digital collections accounted for EUR 4.62 billion in 2023, making up 39% of all music collections. Despite this, the report highlights that the majority of songwriters do not see a proportional increase in their earnings, as digital platforms often fail to adequately report cover versions, remixes, and other derivative uses of their compositions. This lack of transparency and consistent reporting leads to an estimated annual loss of EUR 1 billion specifically for songwriters.

Recent shifts in music licensing models, such as TikTok’s direct licensing deals with Ditto and UnitedMasters, indicate a move towards more direct relationships between platforms and creators, bypassing traditional intermediaries. These direct licensing models have sparked debates on their benefits for creators compared to traditional licensing methods.

### **Licensing Models**

**Direct access with source licensing:** Revenue from end-user subscriptions is allocated based on individual consumption, ensuring that every play, cover, remix, or derivative use of a song is accurately tracked and recorded. All royalties are paid out in near real-time.

**Intention**: To ensure that every song usage is tracked and monetized accurately, providing creators with a fair share of the revenue generated by their work. **Result**: Transparent and precise royalty distribution, where each creator receives compensation proportional to their content’s actual consumption. **Consequences**: Demands robust data tracking and reporting mechanisms, but guarantees fairness and maximizes revenue for creators.

**Direct Licensing**: Allows creators to negotiate and license their content directly to platforms, reducing intermediaries.

**Intention**: To provide creators with more control and maximize their revenue.**Result**: Direct relationships with platforms, faster payments, and increased transparency.**Consequences**: It requires access to tools that support creators in managing negotiations themselves but can lead to greater earnings.

**User-Centric Licensing**: Revenue from a user’s subscription is distributed based on what they consume.

**Intention**: Fairer revenue distribution aligned with individual listener preferences. **Result**: Smaller, niche artists benefit as they receive a share of listener engagement. **Consequences**: Requires sophisticated data tracking and hasn’t been widely adopted yet.

**Service-Centric Licensing**: Revenue is pooled and distributed based on overall popularity.

**Intention**: Simplify revenue calculation and distribution for platforms. **Result**: Revenue is concentrated among popular artists and major labels. **Consequences**: Often leaves smaller creators with a smaller share, despite their engagement.

Direct licensing combined with proper registration could increase royalties by an estimated 60% for songwriters, as it eliminates multiple layers of intermediaries and ensures more accurate reporting of usage.

Furthermore, a direct licensing model helps distribute income more equitably, benefitting popular artists and niche and emerging songwriters. In this scenario, leveraging blockchain technology and direct licensing could lead to an estimated additional EUR 2 billion in royalties for songwriters globally, ensuring that even less popular creators receive a fairer share of the income generated from their works.