Digitalization has revolutionized the music industry. Streaming platforms now provide detailed data on every single use of a song: when it was played, in which country, on which platform, and how often. At the same time, we are living in the age of big data, automated rights management, and artificial intelligence.

Despite these technological possibilities, the practice of collecting societies shows that a fully work-related accounting of music usage is still not a reality, and every year I ask myself anew "WHY"...

A recent statement by the Austrian collecting society AKM clarifies how this system works – and why many independent artists can be structurally disadvantaged in self-publishing.

The reality of royalty distribution

According to AKM, certain uses – especially those with low streaming numbers in individual countries– remain below a so-called minimum threshold for payable amounts.

Specifically, this means:
Not every single stream of a song is actually billed on a work-by-work basis.

The company explains:

Some usages remain below a minimum threshold for payable amounts, and therefore not all plays of a work are billed.

If these minimum thresholds are not reached, the corresponding revenues will not be allocated to the individual plant, but will flow into other distribution categories.

These revenues are then distributed as surcharges to other billing areas, such as:

• Online uses

• Live performances

• Radio broadcasts

The money therefore does not necessarily go to the song that is actually streamed, but is statistically distributed within other categories.

Independent artists in self-publishing are particularly affected

For large repertoires with millions of streams, this effect plays a relatively minor role.

The situation is different for independent artists who release their music themselves.

Typical scenarios for independent releases include:

• low streaming numbers in many countries

• Niche markets

• organic growth over a long period of time

However, precisely these uses can fall below the minimum billing thresholds.

The result:
A portion of the actual streams are not compensated on a work-related basis.

What about other collecting societies?

A common argument is that this practice is an isolated case. However, a look at other collecting societies reveals a different picture.

Germany – GEMA

GEMA also uses surcharge distributions when certain uses cannot be clearly attributed to a specific work or click. Revenues from online platforms or social media can sometimes be distributed as statistical surcharges across other distribution categories.

This means that revenue can also be generated here that cannot be fully attributed to individual songs.

Switzerland – SUISA

SUISA generally distributes revenues between authors and publishers according to fixed distribution keys. At the same time, correct work registration and metadata structure are crucial so that streams can be recognized and accounted for in the first place.

If works are not registered in time or rights holders cannot be clearly identified, revenues may initially be withheld or not distributed.

This also shows that the allocation of individual uses is not always fully automated.

USA – Broadcast Music, Inc.

In the US, performance rights organizations like BMI or ASCAP also use complex distribution systems. Distributions are typically made quarterly based on reported usage and available data.

There, too, part of the distribution is based on samples, weightings or model calculations, especially in the case of media usage where complete playlists are not available.

A structural problem in the music industry

International comparison shows:
The practice of partially flat-rate or statistical royalty distribution is not an isolated case, but a structural feature of many collecting societies.

Historically, there is a simple reason for this.

These systems were developed at a time when music usage was hardly measurable:

• Radio playlists were reported manually.

• Clubs rarely provided complete setlists.

• Streaming didn't exist yet.

In order to still be able to distribute revenues, statistical models and minimum thresholds were introduced.

The problem in the AI age

Today the situation is completely different.

Streaming platforms deliver:

• Usage data accurate to the second

• geographical information

• unique song identifications

• Billions of data records per month

Technologies such as

• Audio Fingerprinting

• AI-based data analysis

• automated metadata systems

Theoretically, they could precisely identify and bill for every use of a song.

Against this background, a system with minimum limits and statistical distributions increasingly seems like a relic from the analog music industry.

Why modernization is inevitable

The central question is therefore no longer:

Whether a more precise royalty distribution is possible.

Rather:

Why it won't be standard by 2026.

A modernized infrastructure would be crucial, especially for independent artists and self-publishing producers.

A future-proof system would need to:

• Record every usage precisely

• Reduce minimum limits

• Automatically process metadata

• Make billing more transparent

In the age of AI, the technological tools for this have long been available.

Conclusion

The statement by AKM highlights a problem that affects the entire music industry.

Other collecting societies such as GEMA, SUISA or BMI also sometimes work with statistical distributions or surcharge models.

For an industry that has become completely digital, this system seems increasingly outdated.

The future of royalty distribution will depend on whether collecting societies consistently modernize their systems – or whether pressure from artists, technology and transparency forces this change.

Because if every use is measurable, it should also be fully and fairly compensated.