Royalties and Where to Find Them (Simplified – Sort Of)
As if the music industry wasn’t hard enough to navigate, collecting all the royalties an artist or songwriter is entitled to can get a little overwhelming. When my band released our first album along with 4 radio singles, we had over $50,000 we didn’t know about sitting with one collections agency for years! As it turned out, all we had to do was sign up for an account and register our works. I’m going to try to make this easy to understand – if anything is confusing just ask for clarification in the comments section!
BREAKING THINGS UP
It’s easiest to think of a song as two parts. 1 is the song itself, and 2 is the recording of the song. Each has its respective royalties and you will need to be set up with a few different agencies to collect all of the royalties you might be entitled to – I know it’s confusing. They sure don’t make it easy! A note before we get into things – if you are an independent writer with no publishing deal, you are the publisher as well!
As I said, song royalties are generally split into two main categories:
- Composition Royalties (Performance Royalties)
- This is the “songs” share of the royalties and is based only off the composition (lyrics, melody, music). These are further divided into two categories – the songwriters share and publishers share. The writer/publisher may also be owed mechanical royalties on the composition.
- Master Recording Royalties
- This is the “recording” share and generally the Artists share of the royalties. It is based solely off of the master recording itself. There are two types of royalties here as well – digital performance royalties (called neighboring rights in countries outside of the USA) and royalties for the master recording itself.
SONG ROYALTIES (COMPOSITION)
Performance Royalties are generated whenever your song is performed publicly. This may be via AM/FM radio, internet radio, streaming services, etc. Performance royalties are split into two categories: The writers share and the publishers share.
As an independent songwriter, you technically own the entire publishing share of your songs. Collecting publishing royalties can get tricky. If you have your songs being played in other countries you will need to sign up as a publisher with that country’s collection agency. More on that in a bit!
COLLECTING THE WRITERS SHARE
To collect the writer’s share of Performance Royalties you need to sign up with a Performance Rights Organization (PRO). These organizations collect and distribute royalties on behalf of all music creators and users. There are a few options depending where you live. In Canada the only option is SOCAN. In the U.S. you can choose between ASCAP, BMI or SESAC.
Collecting Publishing royalties can get interesting as an independent writer without a publisher, as some countries won’t allow you to sign up for their PRO if you aren’t a citizen – so you need a registered corporation to do this.
To collect all of your publishing royalties you essentially have two options:
- Sign up with an agency that will collect these royalties. TuneCore & SongTrust are two common companies that will do this for you
- Create your own publishing company. This can be a more tedious process, but it allows you to keep 100% of your royalties at the end of the day. If you choose to go this route, you will need to manually register with all the PRO’s in each country your music is being aired.
Mechanical Royalties are collected any time your song is reproduced physically (CD’s) or digitally (iTunes sale, or streaming.) The rates will depend on how it was reproduced and generally follow a standard rate. Mechanical royalties don’t always come from a collections agency. They can be paid directly to the writer/publisher by the record label or the artist depending on what kind of deal you have set up!
If you are registering with a collections agency for mechanical royalties in Canada, these can be collected and distributed by the CMRRA, or by SOCAN on your behalf.
In the USA, a songwriter would need to sign up with companies like The Harry Fox Agency, TuneCore or Audiam to name a few. These companies will collect mechanical royalties for you if you sign up for their admin publishing programs. Once again for any physical sales (CD’s, etc) the artist/label may need to pay you directly depending on what kind of deal you have.
ARTIST ROYALTIES (MASTER RECORDING)
There are multiple revenue streams for artists. To collect all of your royalties and sales, you will need to be signed up for a few different accounts. We will go through them next, but here’s some advice; Always try to set things up yourself first. If you are going through a collections agency they will always take some off the top or charge a service fee. It might be more work doing it all yourself, but keeping all of your money is great. Right?
Sign up with a digital distribution company. There are a few different options out there (CD Baby, TuneCore, DistroKid.) These companies distribute your music to online stores and collect the royalties earned from sales, streams, etc. Do your research on each platform and choose the one that suits your needs.
Sign up with a neighboring rights royalty distributor (digital performance royalties in the USA). If you are getting plays on digital, internet, or terrestrial radio you are entitled to these. One I recommend is SoundExchange. You should consider signing up for it yourself, and here’s why:
If you are getting digital airplay regularly this can add up to a good chunk of change. Most admin companies will take a percentage off the top of your earnings to pay themselves. If you continue to get spins for years, they continue to get that percentage. It will take a bit of time and effort but it is well worth it. Be sure to sign up as both the Featured Artist and Rights Owner (label) if you are an indie artist.
Navigating the world of royalties can be a tough map to follow! I hope this has shed some light and will help you get the most out of what you’re entitled to!
If there is anything I missed, or if you have questions/comments – leave them below!