What Is “Pro Rata”?

“Pro rata” is the percentage each platform applies to the total revenue generated by the songs distributed through their service. This calculation happens before the platform pays Morac Distribution, and does not affect the confirmed royalties reflected in your user account.

Example: How Pro Rata Works

To understand how this model is applied, let’s break it down step by step:

1. Platform Revenue

Let’s say a platform earns €10,000 in gross monthly revenue from subscriptions. Before distributing this revenue to artists and rightsholders, it deducts:

• VAT: €1,489

• Processing Fees: €500

• Collective Management Organizations: €680

After deductions, the net revenue comes down to €7,331.

2. Artist Activity Ratio

If an artist’s tracks got 1,000 streams and the platform recorded 10,000 total streams, that artist’s activity ratio is 10%.

3. Applying the Pro Rata Rate

The platform uses a fixed pro rata percentage (for example, 50%) to determine how much of the net revenue is allocated to distributed content:

• 50% of €7,331 = €3,665.50

This amount is then divided among all artists based on their individual activity ratios.

4. Artist’s Earnings

Now the artist’s activity ratio is applied to that pool of distributable income:

• 10% of €3,665.50 = €366.55

That’s the amount the artist would receive, and it would appear in their Sales Report.