Breakage explained

Breakage is a type of "black box" royalty, derived from any monies left over when a catalog or distributor negotiated an advance or minimum guarantee from a DSP, but didn't rack up enough plays to actually hit that minimum. The leftover money kept by the catalog or distributor is deemed "breakage," and gets pro-rated across the catalog(s) based on the plays that *did* occur. 

E.g. if a catalog's licensing deal with Spotify includes a $100 minimum guarantee, and then only racks up $90 worth of plays, the $10 leftover is not directly attributable to a specific track/release/artist, so it gets pro-rated based on the $90 worth of plays that did occur. 
Note: breakage "units" aren't actual plays, but the number used to pro-rate appropriately. 
Did this answer your question? Thanks for the feedback There was a problem submitting your feedback. Please try again later.

Still need help? Contact Us Contact Us