Songwriters and their Slice of Pie

Photo by Alexey Ruban

After data (which, have no fear, is going to feature) the economic landscape for music publishing in a digital world is one of my favourite topics to explore. Well… alongside licensing frameworks, systemic politics, global society pipelines- which are all, of course, different facets of the same dynamic. Whichever way you look at it, songs don’t receive value on par with what’s shared by the rest of the industry. And even when value is ascribed, it’s struggling to get through.

In an era where a single song can generate billions of streams and serve as the fuel for everything from cultural moments, to viral trends, to billion-dollar catalog acquisitions, it's worth not losing track of this core dynamic- why does the underlying composition still get the smallest slice of the pie?

This isn’t a new issue, but it remains an unresolved one. Underneath the surface of streaming's unparalleled consumer experience is an industry consistently undervaluing the very thing it depends on: the song.

The Song Is the Foundational Asset

The music industry rests on two core copyrights: the composition (the song- the lyrics and melody) and the recording (often referred to as the master- a ‘realisation’ of the composition). Every micro-penny generated by a music stream is split roughly as follows:

• 30% retained by the streaming platform (Spotify, Apple Music, etc.)

• 55% to the owner of the master recording

• 15% to the song rights (Publishers, Societies and eventually on to songwriters)

That means the people who wrote the song receive less than a sixth of the revenue, while those who release recordings embodying that very same song earn over half. The imbalance is stark- and baked into the system.

How Did We Get Here?

The short version is: it's a pervasive legacy issue. The rules that underpin how songs are valued date back over a century, including to a 1908 U.S. Supreme Court ruling that resulted in government-controlled mechanical rates for publishers. Originally designed to protect from anti-competitive practices by the (at the time) dominant publishers, these rates have changed little alongside evolving formats- from vinyl to CDs through digital downloads and intro streaming- without ever fully recalibrating to reflect the true value of songs, especially now in a digital-first era.

Any attempt to raise the publisher share must come from somewhere- either the label or the platform. Labels have historically, and understandably, resisted any reallocation that would reduce their portion. This has set up a zero-sum game for value, where labels have often sided with licensees against publishers- the licensing of ringtones as but one example. This has followed through to the streaming age. Independent publishers and collecting societies were largely excluded from early DSP negotiations and left to accept terms after the fact, with no real leverage to change them (sound familiar as AI has entered the scene…?). Over time, publishers gained the right to negotiate directly with DSPs, improving their position slightly- but the fundamental economic structure remained stubbornly skewed.

Should governments intervene to readjust? This was one of the key focus points of the UK’s DCMS inquiry into the economics of music streaming, but one only has to look Stateside to see the implications of overly onerous statutory intervention- given the market is still heavily influenced by a century old government action.

In the U.S. publishing rights are still subject to government oversight via consent decrees (for ASCAP/BMI) and Copyright Royalty Board (CRB) rulings. Unlike labels, publishers cannot freely negotiate market rates for many uses, leaving songwriters beholden to outdated frameworks and statutory rates. Attempts to reform this system, like the Music Modernization Act and subsequent creation of The MLC, have offered modest improvements- but the core imbalance remains. In effect, the very laws that were designed to protect songwriters are now part of what limits their earnings in the digital age.

Arguably this structural imbalance is also maintained by incentive. The three biggest music publishers- Universal Music Publishing, Sony Music Publishing (formerly Sony/ATV), and Warner Chappell- are all part of the world's three biggest record labels.

Even if one of them wanted to advocate for songwriters to receive a greater share, they’re constrained by the fact that increasing the share to songs comes at the expense of their parent label’s bottom line (with record deals also typically drawing a greater contractual profit than publishing equivalents).

Could This All Change?

Hypothetically… yes. In practice, however, it’s less likely.  If a large enough catalogue of song rights were controlled independently, outside the reach of the major labels, it could wield enough leverage to renegotiate the economic balance in favour of compositions.

This did form part of the financial thesis that firms like Hipgnosis originally championed, betting that songs were undervalued while lobbying for a correction. While a compelling theory, it hasn’t led to a meaningful rebalancing. Even if you shift the ownership of rights (or more often than not, the ownership of ‘revenue’ rather than rights), you’re still stuck with the same underlying infrastructure, much of which is funnelled via the 3 majors companies anyway.

A Quick Sidebar that societies could fulfil this 'independent' remit… except their leverage is effectively an extension of that ‘allowed’ by the major music companies anyway, blunting their non-US free-market capabilities somewhat.

Leaky Plumbing and Missing Royalties

Even if the revenue share could be redressed, songwriters still wouldn’t be made whole- because whatever their rightful income, money struggles to reach them anyway.

It’s well documented how the global publishing ecosystem is plagued by fragmentation, data mismatches, and opaque royalty chains. Co-written compositions (an average of nearly 5 writers per song) are collecting royalties through a daisy chain of intermediaries:

Writer → Publisher → Admin/Sub-publisher → Society → Platform (e.g. Spotify)

At each link, there’s potential for delay, data loss, or error. Multiply that by millions of works, with inconsistent metadata standards, aging database formats, and hundreds of societies worldwide, and the scale of the problem becomes clear. Worst-case estimates suggest 25% of songwriter royalties are lost/misattributed due to administrative inefficiency and data issues.

Even with the right rate, we need the right infrastructure to realise it.

Building a Future for Songs

The system that governs how song rights are paid is undeniably complex, outdated, and structurally imbalanced- the result of legacy legislation, entrenched stakeholder interests and leaky infrastructure.

History suggests that meaningful change in the music industry rarely comes from within. Just as Napster forced the digital conversation, iTunes redefined consumption, and Spotify reshaped access, the next catalyst for reform may well come from outsiders.

Capital influx, tech innovations and even business model evolutions are beginning to challenge the status quo- not out of altruism, but because the song is perhaps finally being recognised as an undervalued asset.

With growing transparency, smarter tools, and new-entrant pressure to reallocate value more fairly, there’s an opportunity for a new era- one where creators at the root of the entire music economy no longer subsidise an industry built on their creativity.