The Black Box
Due to the complexity and time consuming nature of deal negotiation between artists, publishers, and entities looking to play the music, the industry created Performance Rights Organizations (PROs), which act as intermediaries.
The nature of the music industry creates a spider’s web of payments; one composition, which has one copyright, can be recorded an infinite number of times, producing infinite copyrights. These, in turn, can be played by multiple entities, from radio stations to concert halls. The PROs receive money from these entities, but because there has never been a central database to keep track of who is owed what, huge sums of money often end up sitting, undistributed, with the PROs.
This is the Black Box; collected but undistributed revenue. While it is difficult to know how much money sits undelivered, the conservative approximation is about $2.5 billion annually, in the West alone. Some members of the industry put the approximation as high as $5-8 billion.