Analogy-based allocation: How it works
In certain cases when Stim distributes revenue to music creators and music publishers, we use analogy-based allocation. Here we explain what it is and why it can be useful.
Stim's starting point is that music reports from revenue areas should form the basis for the royalty payments we make. In most cases, we distribute money individually to rightsholders, so what is paid to Stim is paid directly to the rightsholder whose music has been played.
When full reporting is done, we receive complete tracklists of played or performed musical works. Every work of music then generates revenue to the rightsholder. In an ideal world, this would apply to all music that is played, in every shop, hair salon or restaurant. Currently, however, this is neither technically nor practically possible in all music areas. Therefore, something called analogy-based allocation is sometimes also used.
What analogy-based allocation means
Analogy-based allocation is the method collecting societies use in cases where a report of which musical works have been played is missing. Revenue distribution is then based on information from an adjacent music area or on playlists from music sources that Stim's customers use.
Distributing part of the revenue using analogy-based allocation is a method used by collecting societies globally. The method is used for music areas where collecting and processing music reports is not practically feasible.
Analogy-based allocation can for example be used to distribute Stim's revenue from a restaurant that plays music every day. This example restaurant normally does not submit a music report, so we cannot know exactly which songs have been played. To obtain a basis that is as representative as possible, Stim investigates which music source is used in the restaurant. If it turns out that the music source is radio and the channel played is Mix Megapol, Stim can use the playlists Stim receives from Mix Megapol. The revenue from the restaurant is then distributed based on the songs that have been played on Mix Megapol.
We strive to use the analogy-based allocation method as rarely as possible. In the future, we wish to receive even more complete playlists that can form the basis for our royalty payouts. Stim is at the forefront when it comes to testing and using new technology to be able to receive more reports, but at present there is no fully functioning technology that would allow us to leave analogy-based allocation completely behind.
Which data sources are to be used for analogy-based allocation are decided by Stim's board, after preparation by Stim's distribution committee and Stim's administration.
Read more about the different parts of the analogy area below.
Analogy allocation: Overview for the area "Online without report"