As electronic music booms globally, outdated royalty systems are quietly failing the very creators who power the industry.
Here’s the thing. Electronic music has never been bigger. From underground club nights to billion-stream festival headliners, the genre is now one of the fastest-growing segments of the global music industry. Yet behind the scenes, a structural problem is leaving a majority of electronic music artists underpaid, or not paid at all.
According to new research from Fair Play, 71.6% of UK nightclub licence fees never reach the right artists. The reason is not a lack of money, but a lack of data. In an ecosystem still heavily reliant on manual reporting, most DJ performances are either never logged or logged incorrectly. The result is a royalty system that systematically misallocates millions in revenue every year.
This is not just a technical glitch. It is a structural failure with long-term consequences for artists, publishers, and the future economics of live electronic music.
A Growing Industry Built on Broken Infrastructure
Electronic music is projected to grow at a compound annual growth rate of 9.31% globally, according to Wise Guy Reports. Festivals, clubs, and large-scale DJ events now account for a significant share of live music revenues worldwide.
But while performance volumes have exploded, the systems used to track them have barely evolved.
Fair Play’s research shows that the vast majority of DJ and club performances go unreported. In practice, only around 5% of DJ performances are supported by voluntary setlist submissions. That means most performances never enter the royalty system at all.
The financial impact is huge. In the UK alone, over 70% of nightclub licence fees are effectively misallocated because the underlying performance data simply does not exist.
As one Fair Play report bluntly puts it:
“Without accurate setlist data, royalties are distributed based on proxy data, not real-world usage.”
In other words, artists are being paid based on estimates, not on what actually gets played in clubs.
Why DJ Setlists Are So Hard to Track
Unlike traditional live concerts, DJ performances are inherently fluid. Tracks are mixed continuously, often layered, sped up, slowed down, or only partially played. DJs improvise in real time, changing track order and duration on the fly.
No two DJ sets are ever the same.
This makes manual reporting deeply impractical. Setlists often need to be reconstructed after the event, relying on memory, incomplete notes, or crowd-sourced platforms. The process is time-consuming, inconsistent, and prone to error.
In many cases, setlists are never submitted at all.
When this happens, royalties fall into what the industry calls the “black box”. These funds are then redistributed using proxy data, typically based on radio airplay, chart performance, or historical averages.
This creates a systemic bias against electronic music.
Fair Play estimates that around 60% of tracks played in clubs never appear on radio. So when radio data is used as a substitute for real club data, a large share of electronic music is effectively invisible in the royalty system.
The Black Box Problem and Who Really Gets Paid
The black box is one of the most controversial aspects of modern royalty distribution.
When performance data is missing or unusable, Performing Rights Organisations (PROs) still need to distribute the money. So they rely on statistical models and proxy datasets.
In theory, this keeps money flowing. In practice, it shifts royalties away from the artists actually being played and towards artists who perform well on radio or streaming platforms.
This is why underground and independent electronic artists are disproportionately affected. Their tracks may dominate clubs and festivals, but if those performances are not logged, the money flows elsewhere.
The Guardian recently reported that more than 106,000 performances in the UK failed to distribute royalties due to missing setlists. At Creamfields, one of the country’s largest electronic festivals, PRS revealed that only 10 out of 230 DJs submitted setlists.
That is not an edge case. That is the norm.
A Royalty System Under Growing Pressure
The burden of this broken system falls heavily on publishers and rights organisations.
Publishers are forced to process paper setlists, chase missing data from DJs and venues, and manually re-enter performance information into multiple systems. Each country operates through different PROs, all with their own templates, formats, and submission rules.
International tours often require the same performance data to be recreated several times, just to satisfy different national systems.
PROs, meanwhile, receive massive volumes of incomplete or incorrectly formatted data. This leads to delays, increased manual workload, and further errors in distribution.
According to Fair Play, over 82% of industry stakeholders believe current royalty systems are poor. That is an unusually strong consensus in an industry not known for agreement.
Why Automated Music Recognition Is Gaining Momentum
This is where technology starts to matter.
Advances in music recognition and artificial intelligence are now making it possible to identify tracks directly during live DJ performances. Instead of relying on DJs to submit setlists after the fact, software can capture what is actually being played in real time.
These systems work even in complex DJ environments, where tracks are mixed, pitched, and layered.
The implications are significant:
- Royalties can be distributed based on real usage, not proxy data
- Publishers and PROs can reduce massive amounts of manual work
- Artists can receive faster, more accurate payments
- The black box starts to shrink
Some companies are already deploying these tools at scale. Vollou, for example, works with DJs such as Martin Garrix, Armin van Buuren, and Hardwell, as well as publishers like Armada. Their app-based systems are used across festivals, clubs, and international tours to automate setlist reporting using AI-driven music recognition.
This is not just incremental improvement. It represents a structural shift in how live music data is captured and processed.
What This Means for the Future of Music Royalties
The core issue is not a lack of money in electronic music. It is a lack of accurate information.
As performance volumes continue to rise, manual reporting systems become less and less viable. The scale of modern live music simply cannot be supported by paper forms, voluntary submissions, and fragmented national systems.
Automated recognition offers a way out of this deadlock. It replaces estimation with evidence, and guesswork with data.
For artists, it means being paid for what actually gets played.
For publishers, it means fewer operational bottlenecks.
For PROs, it means cleaner data and fairer distribution.
The industry now faces a clear choice. Either adapt to scalable, automated systems, or continue operating a royalty infrastructure that systematically misallocates value in one of the fastest-growing sectors of global music.
The uncomfortable truth is that the technology already exists. The question is no longer whether the system can change. It is who is willing to change with it, and who will keep losing money in the meantime.
