THE MUSIC INDUSTRY DID NOT SOLVE PIRACY—IT BUILT A NEW SYSTEM THAT STILL SHORTCHANGES ARTISTS – Part I

For decades, the music industry fought piracy through lawsuits, digital platforms, and streaming services, yet many artists argue the financial imbalance simply evolved into a different system that continues to undervalue the people creating the music.

The modern music industry likes to present streaming as the solution that rescued recorded music from the destruction caused by illegal file sharing. Revenue returned, millions of songs became instantly accessible, and listeners gained the ability to carry nearly the entire history of recorded music in their pockets. Behind that convenience sits a far more troubling reality. The industry may have replaced widespread illegal downloading with licensed digital access, but it never fully restored the economic value of music for the people who create it. Musicians continue to write, perform, record, produce, mix, master, promote, distribute, and protect their work while platforms, labels, publishers, distributors, promoters, ticketing companies, and rights-management systems position themselves between the creator and the audience.

Napster became one of the most consequential turning points in that transformation. The peer-to-peer service did more than allow people to exchange unauthorized MP3 files. It conditioned millions of listeners to believe recorded music should be instantly available without payment. Songs that once required purchasing an album, cassette, compact disc, or authorized download could suddenly be obtained in seconds without compensating the artist, songwriter, label, publisher, producer, or anyone else responsible for creating and releasing the work. The United States Court of Appeals for the Ninth Circuit determined that unauthorized transfers through Napster were not protected as fair use, and evidence presented in the case showed harm to compact-disc sales and the legitimate digital market.

The damage extended beyond lost sales. Napster altered the psychological value listeners assigned to music. A recorded song stopped being viewed as a finished creative product with a measurable price and became another digital file that could be copied, traded, stored, and discarded without consequence. That change affected more than the largest record companies. It reached songwriters, studio musicians, independent artists, producers, engineers, photographers, graphic designers, managers, local studios, record stores, and every other person whose livelihood depended on a functioning music economy. The public gained unlimited access, but the people responsible for supplying the music were expected to absorb the loss.

The industry’s response did not restore the original relationship between the artist and the listener. Digital stores began selling individual tracks, weakening the album as a complete artistic and commercial product. Streaming later replaced ownership with access. Consumers no longer needed to purchase an album or even a single recording. For one monthly payment, they could access tens of millions of songs created across generations, genres, nations, and cultures. That arrangement delivered extraordinary value to listeners, but it also compressed the perceived worth of each individual recording into a microscopic portion of a subscription fee.

Streaming companies frequently emphasize the enormous sums paid to the music industry. Spotify states that it paid more than $11 billion to music rights holders during 2025 and nearly $70 billion over its lifetime. It also reported that more than 13,800 artists generated at least $100,000 in Spotify royalties during 2025, while more than 1,500 generated at least $1 million. Those figures demonstrate that streaming can produce substantial revenue and support meaningful careers for some performers. They do not erase the fact that the overwhelming majority of musicians will never approach those levels, nor do they show how much of the money ultimately reaches the individual artists after contractual deductions and divisions among rights holders.

Spotify generally pays royalties to rights holders rather than depositing a fixed amount directly into every artist’s account for each stream. The money can pass through labels, publishers, distributors, collection organizations, licensing entities, producers, managers, and other contractual participants before reaching the performer or songwriter. Two artists receiving the same number of streams can earn dramatically different amounts depending on ownership, territory, listener subscription type, royalty pool calculations, distribution agreements, publishing arrangements, recoupment provisions, and label contracts. The headline payout may appear enormous while the creator’s final share remains painfully small.

This distinction allows the industry to celebrate aggregate growth while avoiding the more important question: how many working musicians can sustain a career from the recordings people consume every day? Billions of dollars moving through the system do not automatically make the system fair. A structure can generate record revenue while distributing that revenue in a manner that leaves most creators unable to recover the cost of production. The existence of several thousand highly successful artists does not resolve the financial reality facing millions of others who are expected to release music continuously, promote it across multiple platforms, maintain a public presence, and compete against an endless supply of new recordings.

The cost of creating professional music has not vanished simply because distribution became digital. Musicians still purchase instruments, computers, microphones, interfaces, studio monitors, software, plugins, storage, artwork, photography, mastering services, promotional materials, advertising, and distribution plans. Many also pay session musicians, producers, engineers, videographers, publicists, managers, attorneys, and licensing fees. An independent artist can invest thousands of dollars into a release before earning a single cent. When the resulting recording generates only fractions of a cent per qualifying stream, the artist may need an extraordinary number of plays merely to recover the original expense.

The pressure to remain visible creates another financial burden. Streaming platforms reward continuous engagement, fresh releases, playlist placement, listener retention, and algorithmic momentum. Artists can no longer assume that a carefully developed album will receive sustained attention. They are pushed toward frequent singles, short promotional cycles, constant social-media production, vertical videos, behind-the-scenes content, livestreams, email campaigns, and paid advertising. The musician is expected to become a performer, producer, marketer, editor, graphic designer, salesperson, data analyst, and full-time content generator while still finding time to create the music.

This structure also weakens the album as an artistic statement. Albums traditionally allowed musicians to develop themes, sequencing, emotional progression, extended narratives, and a recognizable body of work. The streaming environment often reduces that work to isolated tracks competing for placement in playlists designed around moods, activities, algorithms, and listener habits. A song may succeed while the album surrounding it remains largely unheard. The platform gains engagement, the listener receives continuous background audio, and the artist’s broader creative intention can disappear inside an automated queue.

Distribution companies occupy another powerful position in this chain. Digital distributors perform a necessary service by delivering music to streaming platforms, assigning or processing metadata, reporting earnings, and helping artists reach global audiences. That service does not mean the distributor created the recording, wrote the composition, financed the project, or should control the artist’s intellectual property beyond the authority explicitly granted in an agreement. Artists must read those agreements carefully because distribution, licensing, administration, monetization, and ownership are not interchangeable concepts.

A distribution agreement may authorize a company to deliver recordings, collect royalties, administer platform rights, manage social-media monetization, or enroll music in automated identification systems. Those permissions can produce unexpected consequences. An artist may upload a video containing his or her own recording and receive an automated copyright claim because a distributor submitted the same music to a platform’s rights-management database. DistroKid openly explains that artists enrolled in its YouTube Content ID service may receive claims on videos containing their own music through its rights-management partner. The claim may be part of the monetization service rather than an allegation that the distributor created the music, but the experience demonstrates how quickly administrative control can become confusing for the actual owner.

YouTube states that Content ID automatically compares uploaded material against reference files supplied by approved rights holders and music partners. When a match occurs, the system can monetize, track, or block the video according to the selected policy. YouTube also requires partners to claim only material for which they possess the necessary rights and warns that repeated erroneous claims can result in loss of access. The system is designed to protect copyrighted work at enormous scale, but its effectiveness depends heavily on accurate ownership data, valid contractual authority, and responsible administration.

For the artist, the larger problem is control. A musician should not have to fight through layers of automated claims, administrative departments, distribution dashboards, and contractual procedures to prove ownership of work he or she created. Technology intended to protect creators can become another barrier when inaccurate metadata, overlapping claims, unclear licensing authority, or poorly managed accounts interfere with the artist’s own use of the material. A rights-management system that cannot reliably distinguish between the creator and an unauthorized user risks reproducing the very power imbalance it was supposed to correct.

Music ownership is also divided into distinct rights that many listeners never see. The sound recording and the underlying musical composition are separate copyrighted works. A performer may own the master recording but not the publishing. A songwriter may own part of the composition but have no ownership interest in a particular recording. Producers, publishers, labels, estates, collection societies, and licensing administrators may each control different portions. Royalty systems must identify the correct work, match it to the correct rights holder, apply the proper rate, process territory-specific information, and distribute the money accurately. When data is incomplete or ownership remains unmatched, royalties can be delayed or held while creators wait.

The United States Copyright Office has repeatedly identified fair compensation, efficient licensing, authoritative ownership data, transparent usage reporting, and accurate royalty distribution as central concerns within the music marketplace. Those goals sound basic, yet they remain difficult to achieve across an industry built from overlapping contracts, databases, organizations, territories, and technological systems.

Artists who cannot earn enough from recordings are frequently told to make their money through touring. That answer ignores the expense and risk attached to live performance. Touring requires transportation, fuel, lodging, food, rehearsal space, equipment, insurance, crew, venue arrangements, promotion, merchandise production, and time away from home. Smaller acts can travel hundreds of miles only to perform before a limited audience and discover that the final income barely covers the cost of reaching the venue.

The live-event market adds its own layers of control through promoters, venues, ticketing systems, service charges, resale platforms, and exclusivity agreements. Fans may pay far more than the advertised ticket price, yet the increased total does not necessarily flow to the performer. Artists can face pressure from powerful companies controlling promotion, venue access, ticket distribution, and consumer data. The United States Department of Justice and several states pursued an antitrust case against Live Nation and Ticketmaster, alleging conduct that harmed competition. A 2026 proposed resolution included operational restrictions and a settlement fund exceeding $280 million, demonstrating that concerns surrounding competition and consumer harm were substantial enough to produce major federal and state action.

The public often sees a successful concert and assumes the performer collected most of the money. The actual revenue may be divided among venue expenses, promoters, ticketing companies, agents, managers, crew members, transportation providers, insurers, production contractors, and tax authorities. Merchandise sales can provide critical income, but some venues demand a percentage of those sales despite having no role in designing, producing, transporting, or selling the merchandise. Every stage creates another opportunity for someone positioned around the artist to take a share from the artist’s work.

The same underlying imbalance affects independent journalism, publishing, photography, film, podcasting, and other creative industries. Audiences consume enormous quantities of work while platforms condition them to expect constant access at little or no direct cost. Advertising revenue is unstable, subscription fatigue is real, algorithms determine visibility, and social-media companies can benefit from content without carrying the full expense of producing it. The creator finances the work, assumes the risk, builds the audience, and supplies the product. The surrounding systems monetize attention generated by that work.

None of these industries can exist without creators. Spotify has no catalog without musicians. Ticketing companies have no events without performers. Streaming platforms have no programming without writers, actors, directors, producers, and crews. News aggregators have nothing to distribute without journalists and publishers. Social platforms lose much of their value without photographers, commentators, musicians, filmmakers, podcasters, and independent creators continuously supplying material. The people producing the work are not a minor component of the system. They are the foundation supporting everything built above them.

The answer is not to reject technology or pretend the industry can return to the compact-disc era. Digital distribution offers genuine benefits. Independent musicians can release work globally without obtaining approval from a traditional label. Fans can discover artists from nearly any region. Creators can communicate directly with audiences, sell merchandise, offer memberships, host livestreams, distribute limited editions, and develop communities around their work. The problem is not digital access itself. The problem is an economic structure that treats the creator as an interchangeable supplier while concentrating power in the companies controlling discovery, distribution, monetization, and audience data.

A stronger system would give artists meaningful control over their catalogs, clearer ownership records, transparent royalty calculations, faster payments, understandable contracts, reliable dispute procedures, and direct access to the people supporting their work. It would allow musicians to combine streaming, premium releases, physical products, memberships, ticketed video events, exclusive material, merchandise, licensing, and direct sales without surrendering unnecessary authority to intermediaries. It would treat artist data and audience relationships as valuable assets belonging primarily to the creator rather than information locked inside platforms.

Technology must also become more effective at preventing unauthorized distribution without punishing legitimate owners. No system will eliminate every act of piracy. A determined individual can attempt to copy, record, extract, or redistribute nearly any form of digital media. Success does not require perfection. A system that substantially reduces casual theft, identifies large-scale infringement quickly, improves traceability, disrupts unauthorized monetization, and makes circumvention more expensive could protect an enormous amount of creative work.

The music industry’s greatest failure was not merely allowing piracy to spread. Its deeper failure was replacing that crisis with a structure that restored corporate revenue without fully restoring the artist’s value. Illegal downloading taught listeners that music should be free. Streaming taught them that nearly all music should cost roughly the price of one inexpensive monthly subscription. Automated rights systems placed new administrative power in the hands of companies and databases. Touring pushed artists toward another marketplace controlled by major promoters, venues, and ticketing operations.

Musicians are not asking to be protected from competition, guaranteed fame, or paid simply for uploading a song. They are asking for a system in which successful use of their work creates a fair and traceable return, contracts do not quietly absorb unnecessary rights, distributors remain distributors rather than becoming de facto controllers, and platforms cannot build enormous businesses while treating the creator’s compensation as an afterthought.

Recorded music still holds tremendous cultural and personal value. People use it to celebrate, grieve, worship, remember, protest, exercise, travel, heal, and connect across generations. Songs become attached to weddings, funerals, childhood memories, national events, private struggles, and defining moments in people’s lives. Society clearly values music. The financial system surrounding it simply does not reflect that value fairly.

The industry does not need another public-relations campaign announcing that artists have more opportunities than ever. It needs a creator-centered economic correction. That correction must begin with ownership, transparency, direct audience relationships, enforceable rights, responsible technology, and compensation substantial enough to allow talented people to continue producing the work everyone else depends upon.

Piracy did not disappear. It changed forms, moved across platforms, and became intertwined with a legal marketplace that can still strip value from the creator. The industry may be earning money again, but too many musicians remain trapped in a system where everyone profits from music before the musician does.

Until that changes, the music business cannot honestly claim that it solved the crisis. It merely found a more organized way to live with it.

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TRJ VERDICT

The music industry successfully reduced some forms of piracy, but it never solved the underlying problem. Instead, it replaced one flawed system with another that made access to music easier while leaving many of the people creating that music struggling to earn a sustainable living. Streaming transformed how audiences consume music, yet the economic balance remains heavily tilted away from independent artists, songwriters, and many performers whose work fuels the entire ecosystem.

Technology itself is not the enemy. Innovation has expanded global access to music and created opportunities that never existed before. The failure has been the industry’s inability to build a model that consistently rewards creativity with fair compensation. When millions of streams often translate into only modest earnings for creators, the system deserves careful examination.

The future of music should not be defined by how cheaply content can be distributed, but by how effectively artists, songwriters, publishers, and audiences can coexist within a marketplace that respects both accessibility and creative value. Until that balance is restored, the debate over piracy may have changed its form, but the struggle over fairness remains far from over.

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United States District Court for the Northern District of California, Maria Schneider and Pirate Monitor LTD v. YouTube, LLC, Google LLC, and Alphabet Inc., Class Action Complaint, Case No. 5:20-cv-04423, Document 1, filed July 2, 2020. (Free Download)

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National Music Publishers’ Association, “NMPA Reaches Resolution of Copyright Infringement Lawsuit Against YouTube: Agreement Results in New Licensing Opportunity for Music Publishers,” August 17, 2011. (Free Download)

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United States District Court for the Southern District of New York, The Football Association Premier League Limited et al. v. YouTube, Inc., YouTube, LLC, and Google Inc., Opinion and Order, Case No. 07 Civ. 3582 (LLS), Document 133, signed July 3, 2009. (Free Download)

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American Association of Independent Music, “NMPA and YouTube Reach Agreement to Distribute Unclaimed Royalties,” December 16, 2016. (Free Download)

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U.S. Copyright Office, Library of Congress — Copyright and the Music Marketplace: A Report of the Register of Copyrights (February 2015; second printing May 2016). (Free Download)

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U.S. Copyright Office, Library of Congress — Unclaimed Royalties: Best Practice Recommendations for the Mechanical Licensing Collective (July 2021). (Free Download)

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U.S. Copyright Office, Library of Congress — Circular 56A: Copyright Registration of Musical Compositions and Sound Recordings (revised March 2021). (Free Download)

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U.S. Department of Justice, Antitrust Division / U.S. District Court for the Southern District of New York — United States and Plaintiff States v. Live Nation Entertainment, Inc. and Ticketmaster L.L.C., Case No. 1:24-cv-3973-AS. ( Free Download)

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U.S. Department of Justice, Antitrust Division / U.S. District Court for the Southern District of New York — United States and Plaintiff States v. Live Nation Entertainment, Inc. and Ticketmaster L.L.C., Case No. 1:24-cv-3973-AS. ( Free Download)

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U.S. Department of Justice, Antitrust Division / U.S. District Court for the Southern District of New York — United States and Plaintiff States v. Live Nation Entertainment, Inc. and Ticketmaster L.L.C., Case No. 1:24-cv-3973-AS. ( Free Download)

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Roger Scott Craig, the Music Industry, and a 90-Minute Conversation That May Be the Beginning of Something Much Larger

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