MODELS OF DISTRIBUTION AND THEIR IMPACT ON ROYALTIES

AUTHOR – HARGUNJIT SINGH* & MS. SONAKSHI VARSHNEY**

* STUDENT AT AMITY LAW SCHOOL, NOIDA

** ASSISTANT PROFESSOR AT AMITY LAW SCHOOL, NOIDA

BEST CITATION – HARGUNJIT SINGH* & MS. SONAKSHI VARSHNEY, MODELS OF DISTRIBUTION AND THEIR IMPACT ON ROYALTIES, ILE MULTIDISCIPLINARY JOURNAL, 4 (2) OF 2025, PG. 81-91, APIS – 3920-0007 | ISSN – 2583-7230.

Introduction

This chapter explores the various models of royalty distribution in the evolving landscape of digital music, with particular focus on the pro-rata and user-centric payment systems. The rise of streaming platforms such as Spotify, Apple Music, and YouTube has significantly altered the traditional mechanisms of calculating and distributing royalties to artists, labels, and performers. The pro-rata model, which has been the dominant system for decades, operates by pooling revenue from subscriptions and ads, distributing it based on market share. On the other hand, the user-centric model, gaining traction in recent years, proposes a more direct method of compensation where royalties are allocated based on the specific listening habits of individual users. This chapter examines both models in detail, comparing their structures and implications for fairness and transparency in the distribution of royalties. Through this analysis, it becomes evident that while both models have their advantages and drawbacks, they also present critical challenges in ensuring equitable compensation for creators in a rapidly changing digital economy. The discussion further explores the potential for future reforms in royalty distribution systems to better align with the interests of artists and foster a more balanced music industry.