A structural analysis of copyright architecture, royalty flows, licensing mechanisms, and the asymmetries that define who captures value in music — and why Artiquity is positioned to route around all of them.
| # | Right | Side | Who Collects | Key Rate / Mechanism |
|---|---|---|---|---|
| 01 | Reproduction The right to make copies in any medium |
Both | The MLC (mechanical), Labels (master) | ~$0.091/copy (download/physical); ~10.5% of streaming revenue |
| 02 | Derivative Works Remixes, covers, interpolations, AI adaptations |
Composition | Publisher / Songwriter direct | Covers: compulsory §115 license. Remixes/AI: negotiated or contested |
| 03 | Public Display Lyrics on websites, karaoke, music video captions |
Composition | Publisher direct or via licensing agents | Custom negotiated; widely infringed digitally |
| 04 | Public Performance (Composition) Radio, TV, live venues, streaming, retail |
Composition | ASCAP / BMI / SESAC | Blanket licenses; 50% to songwriter / 50% to publisher |
| 05 | Public Performance (Sound Recording) Digital audio only — NO terrestrial radio right in U.S. |
Master | SoundExchange | 45% featured artist / 5% non-featured / 50% label. ~$1B+ annual gap vs. international |
| 06 | Distribution Sale, rental, or transfer of copies |
Both | Labels via distributors | First Sale Doctrine (physical); no resale right for digital (DMCA) |
| 07 | Digital Transmission Streaming, satellite radio, internet radio, downloads |
Both | DSPs → MLC + PROs + SoundExchange | Created by DPRA 1995. Interactive vs. non-interactive distinction determines rate mechanism |
Labels capture ~55% of streaming revenue via master rights. Songwriters capture ~15% via composition rights. A signed artist's effective take: ~4–12% of total streaming revenue after label and publisher cuts. An independent artist owning both sides captures ~70%. This is the core economic incentive driving artists toward independence and catalog reacquisition (Taylor Swift's re-recordings are the highest-profile example).
The U.S. does not recognize neighboring rights for terrestrial radio — a legislative artifact that costs U.S. recording artists over $1 billion annually compared to peers in every other developed nation. Every time a U.S. song airs on FM radio, the songwriter gets paid; the recording artist gets nothing. This asymmetry has never been corrected despite decades of lobbying.
Royalties go unclaimed annually because ISRC codes (sound recordings), ISWC codes (compositions), and songwriter split data are maintained in separate, non-synchronized databases. The MLC distributed $3B+ in previously unclaimed mechanicals, but billions more remain in limbo. The infrastructure to collect exists; the information to route payment does not. This is a data problem, not a legal problem.
Research (WSU, 2024) shows compositions with more co-owners are significantly less likely to be licensed for sync. Four publishers = four veto points. One holdout blocks the entire deal. Major publishers are consolidating catalogs to reduce this friction — but this concentrates power, not value, among creators.
The industry's 7 AI Principles demand: consent before training, compensation for creators, transparency on data usage. This is unresolved law. If training without consent is deemed infringement, AI music licensing costs could restructure the entire generative AI economy. If permitted without compensation, creators permanently lose value from the largest use of their IP in history. The window to establish consent-first architecture is now.
The incumbents (major labels, PROs, DSPs) are structurally incapable of solving the metadata, consent, and rights-fragmentation problems because they operate downstream of creation. They inherit whatever information artists and labels provide at the point of release — and that information is always incomplete, delayed, and contested.
Artiquity operates at the point of creation. The Artist Capsule encodes rights ownership, consent boundaries, metadata, and licensing logic at the moment of artistic genesis — before the fragmentation begins. This is not an incremental improvement on existing infrastructure. It is a parallel rights administration layer that is faster, more accurate, more transparent, and more creator-favorable by architectural design.
🎵 Creators & Owners
🏢 Rights Administration
🔗 Intermediaries
📱 Platforms & Users