UK electronic musicians aren't getting the royalties they deserve and underground scenes are subsidising mainstream producers, according to a new report

Only ​​36% of electronic music performances in the UK result in the correct creator receiving payment. That’s according to a new study published by Fair Play, an independent Berlin-based organisation aimed at overhauling the way royalties flow to creators of dance music.

In theory, when a DJ plays a track as part of their set in a public setting, such as a club, festival or on the radio, the creator of the track should earn a royalty. However, according to Fair Play’s report, in almost two-thirds of cases those payments fail to reach the correct creators.

Fair Play’s analysis estimates that £11.25 million of royalties are generated annually from UK nightclubs (PRS + PPL combined for electronic music nights). Of that money, approximately £8.89 million remains to be distributed to musicians after administrative costs. The report estimates that £3.2 million of that is correctly distributed, while the remaining £5.7 million is misallocated.

The problem lies in the fact that there isn’t an industry-wide standard for reporting what music is being played in clubs, and much of the reporting is based on manual submissions or extrapolated from other data.

According to Fair Play’s report, there are four main ways that royalty attribution is processed in the UK. The most reliable of these are music recognition technology (MRT) – ie tools that automatically recognise and take note of what tracks are being played – and voluntary submission of tracklists compiled by DJs or promoters.

Of these, MRT is said to be 90% accurate when used but covers less than 7% of the clubs in the UK. Voluntary submission, meanwhile, is reported to be 95% accurate, but only 5% of DJ sets are actually reported. Fair Play’s report also notes a significant discrepancy between the 42% of DJs reporting regular submissions and observed compliance.

The other major method used for assigning royalty distribution is analogous distribution. This involves using data from other sources, such as data produced by other venues and radio playlists, as a substitute. While rights organisations tend to stand by their methodology, Fair Play estimates that these methods are only 50% accurate, citing issues such as the fact that – according to existing research – the majority of club tracks never appear on the radio.

Rights organisations will also sometimes send staff to conduct in-person surveys, although this is estimated to cover only 0.4% of venues.

The report also identifies other structural challenges with the current system. For one thing, it claims that only 55% of music creators are registered with PRS, and this is heavily weighted towards veteran musicians, 68% of whom are registered, compared with just 22% of newcomers with less than 5 years of experience.

The report also claims that the current methodology results in smaller venues and underground scenes effectively subsidising mainstream producers and music makers, whose music appears more regularly on the radio and therefore gets assigned more weighting through analogous distribution.

This report is far from the first time these issues have been identified within the dance music scene. Back in 2022, American DJ Zak Khutoretsky – aka DVS1 – launched the technological startup Aslice in order to create a system for DJs to track playlists and distribute revenue more accurately.

“Imagine if a producer didn't have to DJ to make a living,” Khutoretsky said to us at the time, “if a producer could earn enough money from producing, then the DJs could stay relevant as DJs and producers could stay relevant. And if a producer is good and they can be compensated and they can spend more time in their studio, they're gonna become better producers, release more music, supply more DJs, And that ecosystem gets a lot healthier, not only financially, but also opportunity-wise.”

Sadly, Aslice’s revenue sharing platform closed last year, although Khutoretsky is now acting as an advisor for Fair Play.

So what can be done? According to the report, there are three “critical gaps” to be addressed. The first of these is expanding MRT coverage to more venues. The second is encouraging the 45% of unregistered creators to register with PRS. The final recommendation is that rights organisations adjust the weighting of their distribution methodology away from the current reliance on radio playlists.

The report also identifies recent incremental improvements, such as the introduction of AlphaTheta’s KUVO system, which makes use of DJ Monitor’s MRT to provide a more affordable automated solution for clubs.

You can download the report in full from Fair Play’s website.