The mechanism
Platform deals often include payments that do not correspond to plays: an upfront advance against future royalties, a guaranteed minimum whether or not usage justifies it, or shares in the service itself. Because these are not tied to any particular recording, there is no automatic mechanism that routes a portion to the artists whose catalogue made the deal worth doing.
A worked example
What it is confused with
- Black box royalties Black box money is attributable in principle but unmatched in practice. Breakage is structurally unattributable, because it was never generated by identifiable usage.
- Physical breakage The term originally covered a deduction for records broken in shipping. That deduction survived into contracts long after the physical justification disappeared, which is why the word carries two meanings.
Why it matters
Whether an artist sees any of it depends entirely on a contract clause, and most agreements are silent, which resolves in favour of the party holding the money.
Sources: US Copyright Office
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Related: Recoupment · Black box royalties · 360 deal