Transparency and Fairness: Comparing Royalty Distribution in Israel and Western Countries

In the music industry, the fair distribution of royalties is a critical factor for the success and motivation of creators. However, the methods of royalty distribution can vary significantly depending on the country, with each system presenting unique features and challenges. In this article, I will explore the methodology of royalty distribution in Israel and compare it with approaches used in Germany, the United Kingdom, and France.

Unique Aspects of Israel's Royalty Distribution System

The Israeli royalty distribution system is characterized by several unique aspects:

1. Repertoire Classification: Works in Israel are classified by repertoire types, which allows for the consideration of their use in different contexts, such as folk dances or festive events.
2. Data Sources: In Israel, significant importance is placed on DJ reports and expert assessments. Data on the use of works at private and public events are used to form a database and calculate the "usage coefficient" for each work.
3. Royalty Distribution: 78% of royalties are distributed based on expert evaluation, which creates opportunities for subjectivity. Additionally, 10% is distributed among the most popular works based on DJ reports, and the remaining 1% is distributed among works performed at specific events.

Challenges in the Israeli System

Despite its flexibility, the Israeli system faces several significant challenges:

• Lack of Transparency: Royalty distribution based on expert evaluation and DJ reports is opaque for creators and may raise doubts about the fairness of the process. Evaluation criteria often remain unclear, reducing trust in the system.
• Risk of Corruption: Dependence on expert opinions creates conditions for potential manipulation and corruption. This can lead to unfair royalty distribution in favor of certain creators.
• Subjectivity of the Process: The evaluation of works and decision-making processes are based on subjective data, making the process less objective compared to the automated systems used in other countries.

Advantages of Western Systems

In countries like Germany, the UK, and France, royalty distribution methods are more transparent and automated:

• Objective Data: In these countries, royalties are distributed based on objective data provided by streaming services, radio stations, and other media. This reduces the risk of manipulation and ensures fair revenue distribution.
• Transparency: The automation of the process and the availability of data on the use of works make the system more transparent and accountable, increasing trust among creators.
• Reduction of Corruption Risks: The absence of reliance on subjective evaluations minimizes the possibility of corruption and manipulation.

Conclusion

The Israeli royalty distribution system has its advantages, such as flexibility and adaptation to the national context. However, to make the system more fair and transparent, it is necessary to consider the possibility of implementing automated and objective distribution methods similar to those used in Germany, the UK, and France. This would help reduce corruption risks, increase trust among creators, and make the royalty distribution process more equitable for all participants in the music industry.

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