It Is Time for Oversight in Music Distribution ⚖

The music industry is facing a crisis, one that directly affects independent entrepreneurs, creative business owners, and anyone trying to grow a sustainable brand through music. While much attention has been focused on Performance Rights Organizations (PROs) like ASCAP and BMI, there is a larger, more urgent issue hiding in plain sight: the unregulated power of music distributors.

At Delgado Entertainment Law, we are not only raising awareness through our YouTube channel, we are taking our message to the Copyright Office and directly to Congress. It is time for serious change as entrepreneurs and rights holders deserve transparency, fairness, and legal protections in the royalty ecosystem.

1. The Problem: Music Distributors Operate Without Oversight

In September 2024, Congress sent a letter to the Copyright Office asking them to investigate the practices of PROs. The goal was to better understand how royalties are collected and distributed to creators. That inquiry is ongoing.

But here is the problem: Congress is only seeing part of the picture. Some PROs are regulated and operate under consent decrees issued by the Department of Justice. Music distributors, on the other hand, private companies like Spotify, Apple Music, and Amazon Music, hold the keys to the kingdom, and yet they answer to no one.

Independent business owners cannot upload their music directly to these digital platforms. Instead, they must rely on third-party distributors to handle this process. These distributors collect royalties, enforce their own terms, and can withhold payments with little to no justification.

2. Entrepreneurs Are Being Taken Advantage Of

According to Spotify’s own 2024 economics report, the company paid out $10 billion in royalties last year. However, that money did not go directly to the creators. It was routed through distributors, companies that:

• Can withhold royalties without proof or due process

• Charge creators’ credit cards for alleged violations without evidence

• Earn interest on creator money without any obligation to share it

• Cap their liability to as little as $50 or $100, even in cases of wrongdoing

  
  

For independent entrepreneurs trying to grow their brand or earn a living, this situation is not just frustrating, it is financially devastating. Business owners are being forced into one-sided contracts and manipulated through unclear payment systems.

3. Why the Entertainment Law Community Is Getting Involved

Our legal team is taking action. Top Music Attorney and the music business community have submitted a letter to Shira Perlmutter, the Register of Copyrights, and copied it directly to Congress. Our message is simple: music distributors must be held accountable.

In the letter, we advocate on behalf of over 130,000 independent creators, most of whom are small business owners building careers through music. We outline how current practices harm entrepreneurs and call for meaningful regulatory reform.

4. Our Key Recommendations:

• Acknowledge the interconnectedness of PROs and music distributors in the royalty pipeline.

• Recommend Congressional oversight for music distributors.

• Establish fairness standards, including:

  
  

  • Advance notice before royalties are withheld

  • A ban on earning interest on creator funds without consent

  • Realistic caps on liability waivers, allowing for legal recourse

    
    

4. This Is Not Just About Music—It Is About Business

Every royalty check, every contract term, every missing dollar affects an entrepreneur trying to run a business. The lack of accountability in the music distribution space undermines innovation, independence, and growth for creative business owners everywhere.

As an experienced music attorney, I have spent years fighting for those who could not fight for themselves. But we should not need to go to war for basic fairness. Creators deserve a system built on transparency, respect, and legal responsibility.

At Delgado Entertainment Law, we are committed to educating and empowering creative entrepreneurs. Watch our full discussion on this topic over on our YouTube channel, where we break down these legal developments and what they mean for your business.

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Krystle Delgado, Esq.

CEO/Founder