Widely available commoditized content and widespread piracy of intellectual property have had far-reaching impact on the media industry. While this gives consumers a lot more options, these market disruptions present challenges to the creators, producers, and distributors of music. Digitization, which makes it possible to copy and distribute content easily, also poses several challenges. This sharing of content reduces artist royalties and leads to loss of revenue for music labels. The lack of a robust rights management system results in loss of revenue for the artist.
Various types of stakeholders exist in the rights management ecosystem, including the artist, the songwriter, the label, publisher, and digital service provider. The artists own the rights and royalties for their work. It is the content provider, such as a record label, can grant permission for the music composition to be reproduced. The mechanical royalty is paid to the artist, songwriter, and publisher based on the number of recordings sold.