# Where the Money Goes: A Map of Royalty Leakage > Music royalties disappear at 12 distinct stages between creation and collection. 160+ failure modes mapped across 15 data sources. The first systematic taxonomy. *Published by [TrackForge](https://trackforge.studio) — 2026-04-03* --- Every year, billions in music royalties are collected but never reach the rights holders who earned them. The industry calls this "leakage" and treats it as an inevitable cost of complexity. It isn't. It's a series of specific, mappable failures — and this is that map. A taxonomy of 12 lifecycle stages through which royalties disappear, identified through cross-reference analysis of 3.2 billion records from 15 independent data sources. More than 160 distinct failure modes. Every one observed in real catalogue data. --- The music rights ecosystem is a relay race run in the dark. A song is created, recorded, registered, verified, linked, exploited, and — eventually — paid for. At each handoff, data must pass correctly from one system to the next. When it doesn't, royalties disappear. Not dramatically. Not visibly. They simply stop flowing to the people who earned them. Rights holders discover the gaps retroactively — years after the fact, one work at a time, usually by accident. This paper proposes a different approach: a taxonomy of royalty leakage organised by lifecycle stage. Drawing on programmatic comparison of identifier fields, registration records, and exploitation signals across 3.2 billion records from 15 independent data sources, we identify 12 distinct points in the lifecycle of a musical work where royalties can be lost, delayed, or misdirected. Each stage has its own causes, its own symptoms, and its own detection methods. Together, they form the first systematic map of where the money goes. The infrastructure that processes music royalties is itself a source of silent failure. As we explored in [The Black Box Problem](https://trackforge.studio/black-box), IT migrations, system changes, and back-office transitions routinely redirect revenue without anyone noticing. What follows maps not just the data failures, but the structural ones — the points at which the chain of custody between exploitation and payment quietly breaks. --- ## Twelve Stages, One Lifecycle A musical work passes through 12 stages between creation and collection. At each stage, specific failure modes cause royalties to leak from the system. Two stages dominate: **Verification** (Stage 4) and **Revenue Leakage** (Stage 9). But the earlier stages — Creation, Recording, and Registration — are where root causes originate. A verification failure at Stage 4 almost always traces back to a data quality issue at Stage 1 or a registration gap at Stage 3. | Stage | Name | Failure Modes | |-------|------|:---:| | 01 | Creation | 6 | | 02 | Recording | 7 | | 03 | Registration | 11 | | 04 | Verification | 25 | | 05 | Linkage | 4 | | 06 | Data Quality | 7 | | 07 | Sync | 4 | | 08 | Exploitation | Under development | | 09 | Revenue Leakage | 27 | | 10 | Distribution | 1 | | 11 | Structural | 3 | | 12 | Time | 1 | These figures cover publishing and mechanical rights. An additional 55 failure modes address neighbouring rights (PPL, SoundExchange, MLC mechanical), and 16 more handle cross-source validation and cross-domain detection. The complete taxonomy encompasses more than 160 distinct failure modes across the full spectrum of music rights. --- ## Stage 01 — Creation: Where the Data Should Begin Before a song is registered anywhere, its ownership is determined. This is where the data that governs every downstream royalty payment is supposed to originate. Before a song has an ISRC, a tunecode, or an IPI match, writers agree on splits. Samples are cleared — or not. Contributors are credited — or forgotten. Metadata standards at the point of creation are minimal to nonexistent. Split agreements are often verbal. Co-writers may not have society affiliations. Sample clearances lag behind release dates. What makes creation-stage failures particularly damaging is their **invisibility to downstream systems**. A collecting society can only verify what has been registered. If the underlying splits are wrong — or never recorded at all — every registration built on top of them carries the error forward. A 5% split discrepancy at creation becomes a 5% revenue misdirection at every subsequent stage, in every territory, for every right type, for the life of the work. --- ## Stage 02 — Recording: Identity Fragmentation A single composition can generate dozens of recordings. When their identifiers collide, are reused, or aren't assigned, recordings can't be linked to their underlying compositions. The original studio version. A radio edit. An explicit version. A clean version. An acoustic session. A live recording. Remixes. Each recording needs its own **ISRC** (International Standard Recording Code, ISO 3901). When ISRCs collide, are reused across labels, or simply aren't assigned, the recording can't be linked to its underlying composition — and the royalties it generates have nowhere to go. Our analysis of 256 million Spotify tracks cross-referenced against MLC and PRS data reveals persistent identity fragmentation. The same composition appears under variant titles, different artist credits, and sometimes different ISRCs across platforms. As we documented in [How ISRC Registration Gaps Cost Labels Money](https://trackforge.studio/research/isrc-registration-gaps), an 11-layer coverage analysis of a mid-size label catalogue showed 94.7% Spotify coverage against just 50% MLC work registration — a 45-point gap where mechanical royalties disappear into holding pools. --- ## Stage 03 — Registration: The Publisher Gap The single largest category of royalty leakage. Works that are commercially exploited but never registered for the relevant right type in the relevant territory. A work can be commercially released, actively streaming on every major platform, generating royalty obligations in multiple territories — and never be registered with the relevant collecting society for the relevant right type. The structural cause is straightforward: **performance rights and mechanical rights have separate registration pathways**. A writer who registers with ASCAP for US performance royalties has not registered for US mechanical rights at the MLC. A UK publisher who registers with PRS for performance has not necessarily registered with MCPS for mechanical. Each society, each territory, and each right type requires its own registration. The scale of this gap is staggering. Our analysis of the MLC's Bulk Work Audio-Visual Registration Matching (BWARM) database found that **954 million sound recording resources had no matched musical work** — a 72.5% unmatched rate. Of the works that were unclaimed at the MLC, 67.5% were registered for performance rights at ASCAP. The writers were known. The compositions were registered. But nobody had registered the mechanical right. - **72.5%** of MLC sound recordings with no matched musical work - **67.5%** of unclaimed works registered at ASCAP for performance - **954M** sound recording resources in the MLC BWARM database This is not an edge case. It is the default state for a majority of musical works in the United States mechanical licensing system. As we detailed in [The Unclaimed Economy](https://trackforge.studio/research/unclaimed-economy), 4.25 million works have partially or fully unclaimed mechanical royalties at the MLC — 73% of them actively streaming on Spotify. The US is not unique. The same structural gap exists wherever performance and mechanical rights are administered separately. --- ## Stage 04 — Verification: When the Numbers Don't Add Up A registered work is not necessarily a correctly registered work. Shares that don't sum to 100%. Expired identifiers. Missing cross-references. Writer and publisher shares should sum to 100% for each right type in each territory. In practice, they often don't. Shares are over-claimed, under-claimed, or left at placeholder values. **IPI numbers** — the unique identifiers assigned to rights holders by their collecting societies — may be expired, reassigned, or simply wrong. We flag these as "artifact IPIs": identifiers that persist in society databases long after the entity they represent has changed or ceased to exist. The **International Standard Musical Work Code (ISWC)** was designed to solve cross-society identification. But ISWC adoption remains partial. Many registered works lack one, and when ISWCs are assigned, they sometimes link works that shouldn't be linked — or fail to link works that should be. Dispute processes at collecting societies can take years to resolve, during which royalties are held rather than distributed. Of the 12 stages in this taxonomy, verification has the **highest density of distinct failure modes** — more than twice as many as any individual earlier stage. This reflects the combinatorial complexity: for each work, there are multiple writers, multiple publishers, multiple territories, and multiple right types, each with its own share allocation that must be independently correct. --- ## Stage 05 — Linkage: Same Song, Different Database A work can be registered at every society and still not get paid — because the systems don't know they're referring to the same composition. PRS identifies a work by its tunecode. ASCAP uses a different work ID. BMI uses another. The MLC, yet another. Spotify knows recordings by ISRC. MusicBrainz assigns its own identifiers. Unless these are linked, a work can be registered everywhere and still not get paid — because the databases don't know they're talking about the same song. The challenge is not just identifier mapping. It's **title normalisation** (is it "Don't Stop Believin'" or "Dont Stop Believin" or "Don't Stop Believing"?), **writer name matching** (is "Diane Eve Warren" the same person as "D. Warren"?), and **version disambiguation** (is the recording on Spotify the same one registered at PRS?). CISAC's CIS-Net system provides a global work identifier network, but participation and data quality vary significantly across its 230+ member societies. --- ## Stage 06 — Data Quality: The Metadata Tax Every piece of incorrect or missing metadata becomes a matching failure somewhere downstream. These are quiet, systemic erosions that compound across millions of records. Duration fields that read 0:00. Territory codes that don't map to any CISAC standard. Works attributed to labels instead of publishers. Rights type fields left blank. These are not dramatic failures. They are the everyday noise of imperfect data that, multiplied across millions of records and dozens of databases, creates a persistent tax on royalty accuracy. Our cross-reference analysis systematically flags data quality anomalies: comparing the same field across multiple sources and identifying records where values conflict. The most common anomalies are not errors in any single database — they are **inconsistencies between databases** that prevent automatic reconciliation. --- > "The industry does not have a leakage problem. It has twelve leakage problems, occurring simultaneously, at different stages of the same lifecycle, with different root causes and different solutions." --- ## Stage 07 — Sync: The Unregistered Placement Sync licensing is one of the fastest-growing revenue streams in the industry. It is also one of the least consistently reported to collection societies. When music is placed in a film, television programme, advertisement, or video game, it generates both **performance royalties** (from broadcast and public performance) and **mechanical royalties** (from reproduction). Sync deals are negotiated directly between licensees and rights holders. The resulting placements are supposed to be reported to the relevant collecting societies so that royalties can be collected. In practice, reporting is often delayed, incomplete, or missed entirely. --- ## Stage 08 — Exploitation: Usage Without Tracking Music is exploited in more ways than ever. Not all of that usage is tracked, sampled, or reported to collection societies. Streaming platforms, broadcast radio, satellite radio, live venues, retail spaces, fitness classes, podcasts, user-generated content, AI training datasets. The ways music is exploited have multiplied. Broadcast monitoring systems sample a fraction of total airplay. UGC platforms operate under blanket licences that may not produce per-work reporting. As we described in [The Black Box Problem](https://trackforge.studio/black-box), the infrastructure that processes this data is itself a source of failure. --- ## Stage 09 — Revenue Leakage: The Growing Pools This is where the cumulative effect of every upstream failure becomes visible. Money has been collected. It can't find its owner. And the clock is ticking. The **MLC alone held $569.9 million** in royalties across usage years 2021 to 2024 — approximately $142.5 million per year, collected but not distributed. The MLC is one organisation, covering one territory and one right type. With over 230 collection societies worldwide, each managing their own holding pools for their own right types and territories, the global scale of unclaimed royalties is measured in billions. In the UK, the MCPS holds significant sums in unmatched mechanical royalties. PRS maintains a separate pool for unclaimed performance royalties. Our analysis identifies **14.1 million PRS unclaimed performance records** spanning 2021 to 2025. ### The Drain Clock Societies hold unclaimed royalties for a defined period — typically three to seven years — before **redistributing them to existing members based on market share**. Once redistributed, the original rights holder's claim is extinguished. Not because they weren't entitled to the money, but because nobody connected the dots in time. This creates a structural transfer from smaller, less well-administered catalogues to larger, better-administered ones. --- ## Stages 10-12 — The Long Tail **Distribution (Stage 10)** — Many societies set minimum payment thresholds, typically £1 to £10 per accounting period. For catalogues with thousands of low-earning tracks, these micro-payments accumulate into material sums that may never be paid out. **Structural (Stage 11)** — When a link in the publishing administration chain breaks — a company is dissolved, an administrator changes, a catalogue is sold without proper society notification — royalties accumulate against an entity that can no longer receive them. Our analysis cross-references Companies House dissolution records against active society registrations. **Time (Stage 12)** — Most retrospective claims are subject to limitation periods. By the time a registration gap is discovered, years of royalties may already be beyond recovery. Early, systematic detection is the only effective defence. --- ## Why Leakage Multiplies These 12 stages do not operate in isolation. A work with a creation-stage split error (Stage 1) that also has a registration gap (Stage 3) and a linkage failure (Stage 5) is not three times as hard to recover. It is **exponentially harder** — because each fix reveals the next problem, and each problem exists in a different system administered by a different organisation. Manual auditing — the industry's traditional approach — can catch individual failures. But it cannot systematically detect patterns across all 12 stages simultaneously. As we argued in [Why TrackForge Exists](https://trackforge.studio/why), the information asymmetry in catalogue transactions is a structural problem. --- ## The Neighbouring Rights Gap A parallel set of failures affects the rights of performers and record producers. In the UK, PPL collects neighbouring rights. In the US, SoundExchange handles statutory digital performance royalties. Neither system talks to the other. The neighbouring rights dimension adds 55 additional failure modes to the taxonomy. | Rights Domain | Failure Modes | |--------------|:---:| | Publishing | 96 | | Neighbouring Rights | 55 | | Cross-Source | 16 | --- ## What Systematic Detection Looks Like By organising leakage into discrete, detectable stages, the problem becomes tractable: 1. **Registration Check** — Is this work registered for this right type in this territory? 2. **Share Verification** — Do the registered shares sum to 100%? Do they match across societies? 3. **Linkage Validation** — Is the registration linked to exploitation data? 4. **Chain Integrity** — Is every entity in the administration chain active and solvent? 5. **Recovery Window** — Is there a retrospective claim window still open? Each question can be tested programmatically against real data. The combination of results across all stages produces a complete picture of a work's royalty health — or reveals exactly where the chain is broken. --- This research builds on: [The Unclaimed Economy](https://trackforge.studio/research/unclaimed-economy) (March 2026), [How ISRC Registration Gaps Cost Labels Money](https://trackforge.studio/research/isrc-registration-gaps) (March 2026), and [The Black Box Problem](https://trackforge.studio/black-box). > The industry treats royalty leakage as an inevitable cost of doing business. It isn't. It's a series of specific, identifiable failures at specific, identifiable points in the lifecycle — and every one of them can be detected, measured, and systematically addressed. --- ## Frequently Asked Questions **What is royalty leakage in the music industry?** Royalty leakage is the systematic loss of music royalties between the point of exploitation (when a song is played, streamed, or broadcast) and the point of payment (when the rights holder receives money). It occurs at 12 distinct stages in the lifecycle of a musical work. TrackForge's analysis of 3.2 billion records across 15 data sources identifies more than 160 distinct failure modes across these stages. **How much money is lost to royalty leakage?** The MLC alone held $569.9 million in unclaimed mechanical royalties across usage years 2021 to 2024. The MLC covers one territory (US) and one right type (mechanical). With over 230 collection societies worldwide, the global scale of unclaimed royalties runs into the billions annually. **What are the main causes of royalty leakage?** The three largest causes are: (1) Registration gaps — works that are commercially exploited but never registered with the relevant collecting society. Our analysis found 72.5% of MLC sound recording resources have no matched musical work. (2) Verification failures — registered works with incorrect shares, expired identifiers, or missing cross-references. (3) Revenue pool drainage — collected royalties that sit in holding accounts until redistribution deadlines expire, typically 3-7 years. --- ## Related Research - [The Unclaimed Economy](https://trackforge.studio/research/unclaimed-economy) — 4.25 million works with unclaimed US mechanical royalties at the MLC - [How ISRC Registration Gaps Cost Labels Money](https://trackforge.studio/research/isrc-registration-gaps) — 94.7% Spotify match vs 50% MLC work registration - [The Black Box Problem](https://trackforge.studio/black-box) — IT infrastructure failures that silently reshape who gets paid --- *Source: [Where the Money Goes: A Map of Royalty Leakage](https://trackforge.studio/research/royalty-leakage-map)*