The first thing that most young songwriters in the US hear is “you need to sign up for ASCAP or BMI to make sure you get your songwriter royalties.”
I have to hand it to ASCAP and BMI’s PR departments. They do a great job of making themselves known. So much so, that most songwriters (and managers …gasp!) think this is all you need to do to get your songwriter money.
But guess what? It’s not! And actually most of the songwriter money you make from Spotify and Apple Music (etc) streams do NOT come from ASCAP or BMI (or SESAC or SOCAN or PRS).
Ok, lemme break this down in plain musician language.
“Songwriters” write compositions (songs). “Artists” make recordings OF compositions. When Julia Michaels co-wrote “Sorry” that Justin Bieber recorded, Julia Michales was the Songwriter NOT the Artist (of that recording – Bieber was the Artist). Julia’s publishing company collects the royalties for her, the Songwriter, and Bieber’s label collects royalties for him, the Artist. (Bieber was also a co-writer so his publishing company also collected royalties for him the Songwriter).
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Publishers represent Songwriters. Not Artists.
Record labels represent Artists. Not Songwriters.
I know you may be both (Bieber and Michaels are both) and that these terms seem the same but they’re not. And there are TOTALLY different royalties for “songwriters” and “artists.” So you need to differentiate. Get it? Got it. Good!
Do you need a publishing company to collect your songwriter royalties?
ASCAP, BMI, SESAC, SOCAN, PRS are all Performing Rights Organizations (or PRO for short). These PROs collect performance royalties for songwriters and publishers.
A performance royalty is earned anytime your song is “publicly performed.” “Publicly performed” is a loose term, but basically means anytime your song is played in public. Like on the speakers at Starbucks. On TV – TV shows, commercials, etc. On the radio – whether it’s the radio in your car or Pandora or Sirius/XM. When your song is performed live in a venue (yes even by you). And from streaming services like Spotify, Apple Music and YouTube.
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The majority of the songwriter money that comes from Spotify, Apple Music, and all other streaming services (DSPs) are called mechanical royalties.
Mechanical royalties are NOT performance royalties. ASCAP, BMI, etc do NOT collect mechanical royalties. You may have heard that 9.1 cents is earned per download or sale. And that’s true (for now – it’s going up!). So when you sell a song on iTunes, 9.1 cents is owed to the songwriter/publisher of that song. This is a mechanical royalty.
But who is downloading music anymore?
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Spotify, Apple Music, Google, Amazon, etc etc pay these mechanical royalties directly to Mechanical Rights Organizations (MROs) (or Collective Management Organizations – CMOs) . NOT PROs. I repeat. Streaming services do NOT pay mechanical royalties to ASCAP, BMI, SESAC, SOCAN or any other PRO. Capiche??
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So how do you get these damn mechanical royalties?
Well, as of 2021, you can get all of the mechanical royalties that had been generated from US streams from the Mechanical Licensing Collective (the MLC). This is a newly formed organization in the states created out of the Music Modernization Act. It is the only organization legally allowed to issue blanket mechanical licenses to streaming services and collect mechanical royalties from streaming services (via blanket licenses).
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So, if you want to collect your mechanical royalties FOR FREE, head over to themlc.com and signup. You can also search their database to see if you have any money sitting there for you.
Now, if you’re in another country, you can check your local organization to see if they collect mechanical royalties. Most countries have their own orgs (and all other countries collect US mechanicals from the MLC).
If you have a publisher or admin publishing company, they will collect your mechanicals so you don’t need to worry about signing up with the MLC.
You are legally owed these mechanicals. The MLC is holding them for you. So you either need a publisher to go and collect. Or you have to go and collect.
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But above all, most importantly, YOU have to figure out how to collect the songwriter royalties for the songs you write (and co-write). It is not the artist’s responsibility. Not the label’s responsibility. Not the other artist’s manager. YOUR responsibility. If you want your money, YOU register it with the PRO and admin publishing company or mechanical rights organization.
If this excites you and you want to learn more and go even deeper, chapter 13 in my book is about allllll the different kinds of royalties that are out there for Artists and Songwriters.