The subject of this dissertation concerns the state of the music industry in the era of digitization relating to the oversight and distribution of income from the perspective of its stakeholders. It gives a brief historical overview of the emergence and development of music and the music genres, defines a piece of music as an immaterial property, and explains the legal frameworks of copy protection. This thesis also provides a historical presentation of the emergence of the music industry, and has evaluated the status of the music industry within the Republic of Croatia based on available documentation and legal settlements. It determines its status within the Croatian economy, as well as in other cultural industries that have gained traction all over the world in light of recent research which demonstrated their inherent value, even in times of economic crises. This dissertation pinpoints both the primary and secondary stakeholders in the Croatian music industry and defines the process of monetizing a piece of music within the collective rights management system. Thanks to digitization and the Internet, music as a service has, through its products, once again become one of the most neglected, ubiquitous, and pirated services on the planet, and most of the damage was dealt to its stakeholders who work in the industry’s creative sector. Namely, the process of digitization has caused a radical change in the way music is consumed (caused by the appearance of new digital distribution channels), which has resulted in the need to redefine the management model and the distribution of income within the music industry. This dissertation has conducted an analysis of pre-existing, global models of the music industry, both in regards to a traditional and a contemporary context. It has also developed a model of illustrating the way in which the Croatian music industry operates, with special emphasis on detecting the threatened rights of its members. For the purpose of this dissertation, qualitative and quantitative inquiries were conducted involving the primary stakeholders of the music industry. The qualitative research, conducted through a set of standardized interviews, presents a perspective on the music industry and an understanding of its workings from the viewpoint of important members and high-ranking associates in the industry. The quantitative research was intended to measure the effects of digitization on the Croatian music industry, both pertaining to the music creators as well as to the music industry in general. It has shown how industry members perceive the workings of the system, and has confirmed the key hypotheses which state that most of them are not adequately informed with their rights. These rights involve issues concerning ways to protect and monetize a musical composition, as well as relate to the distribution models of their realized income. This doctoral dissertation contributes in the theoretical sense by serving as a complete structure open for a more detailed analysis and as a presentation of the Croatian music industry. Furthermore, in terms of its applicative contribution, this thesis serves as a possible prerequisite for necessary changes in terms of adopting a better and more modern performance model for the music industry, which would amend the effects of digitization in favor of the most vulnerable stakeholders.