A 2015 Berklee College of Music report found that anywhere from 20% to 50% of music royalties don’t make it to their rightful owners. Kobalt calculated that there are over 900,000 royalty streams per song. How do you make sure you register your work properly and obtain all of the music streaming royalties that are rightfully owed to you? Keep reading. As you study more about the global music rights, you’ll see the distinction over and over again between “artist” and “songwriter.” It’s an important distinction to make because the royalties for “artists” and the royalties for “songwriters” are completely different.
This is an excerpt from my book How to Make it in the New Music Business.
Ok, let’s go.
The reason I’m putting quotes around “artists” and “songwriters” is because so many of us are both. And many of us use these terms interchangeably. And back in the day, when labels started signing artists who also wrote their own songs (which, at the time, was quite unique), they put in clauses in the contract to limit the royalties they’d (legally) have to pay out to their newly signed artists/songwriters. One of these clauses is the infamous controlled composition clause. The major labels have always tried to screw artists out their well deserved music royalties. They look out for their own best interests and use artists’ ignorance (and blind pursuit of fame) to manipulate and deceive. This is part of the reason why so many established artists and songwriters have jumped ship from their major labels (and major publishers) and headed over to independent entities.
To not get into too much history, and really just cut to the chase, before the digital age, royalties were difficult to track, but there were fewer platforms to consume music, so there were far fewer royalty streams to worry about. With physical sales plummeting, people shifting from downloading to streaming, and the rise of digital radio, there are many more royalties out there, but they can be tracked much more easily.
We’re not quite there yet, but we’re getting closer every day.
For indie artists without a label or a publisher, you have to know what these royalties are and know where and how to get them.
So let’s break them down.
First some terms you need to understand:
Artists record sound recordings. Rihanna is an artist. She did not write her song “Diamonds.” So she is not the songwriter. Record labels represent artists. A band is an artist. A rapper is an artist. A singer is an artist. Typically whatever name is on the album is the artist.
Songwriters write the compositions. “Diamonds” was written by four songwriters: Sia Furler, Benjamin Levin, Mikkel S. Eriksen, and Tor Erik Hermansen. Publishing companies represent songwriters. A songwriter collects songwriter royalties.
Some call this the “master.” It’s the actual recording. The mastered track. Traditionally, labels (because they own the master) collect music royalties for sound recordings. Sound recordings are not to be confused with compositions. Artists record sound recordings.
This is the song. Not the recording. Traditionally, publishing companies (because they own the composition and represent songwriters) collect music royalties for compositions. Songwriters write compositions.
Performing Rights Organizations. In the United States, these are ASCAP, BMI, SESAC and Global Music Rights (GMR). In Canada this is SOCAN. In the U.K. it’s PRS. Pretty much every country in the world has its own PRO and they work together to collect royalties from each other’s territories. These performance rights organizations represent songwriters, not artists. These are organizations that collect performance royalties (not mechanical royalties—we’ll get to those in a bit).
PROs make money to pay songwriter royalties and publishing royalties by collecting money from thousands of venues and outlets (radio stations, streaming services, TV stations, department stores, bars, live venues, etc.) that have been required to purchase “blanket licenses” giving these outlets permission to play music in their establishment (or on the air).
The PROs then pool all of this money and divide it among all of their songwriters and publishers based on the frequency and “weight” of each song’s “public performance.” The PROs then pay the publishing companies their 50% and the songwriters their 50%. PROs split “publishing” and “songwriter” royalties equally. 50/50. This is not a deal you negotiate. This is just how they do it for everyone from Taylor Swift down to you and me. 50/50. Any songwriter in the U.S. can sign up for ASCAP or BMI without being invited or having to apply. ASCAP and BMI are both not-for-profit organizations. SESAC and GMR are for-profit and you must be accepted.
American Society of Composers, Authors and Publishers represents 700,000 members (songwriters and publishers) and over 10 million compositions. ASCAP is owned and run by its songwriter and publisher members, with a board elected by, and from, its membership. They have paid out over a billion dollars in 2018. They represent songwriters like Katy Perry, Dr. Dre, Marc Anthony, Chris Stapleton, Ne-Yo, Trisha Yearwood, Brandi Carlile, Lauryn Hill, Jimi Hendrix, Bill Withers, Carly Simon, Quincy Jones, Marvin Gaye, Stevie Wonder, Duke Ellington, annnnnd Ari Herstand.
Broadcast Music, Inc. represents over 800,000 members (songwriters and publishers) and over 10.5 million compositions. They represent song-writers like Taylor Swift, Lil Wayne, Mariah Carey, John Legend, Lady Gaga, Eminem, (members of) Maroon 5, Michael Jackson, Linkin Park, Sam Cooke, Willie Nelson, Loretta Lynn, Dolly Parton, Fats Domino, Rihanna, John Williams and Danny Elfman.
SESAC is not an acronym. Really. It represents over 30,000 members (songwriters and publishers) and over 400,000 compositions. They represent songwriters like Bob Dylan, Neil Diamond, Rush, Zac Brown, Hillary Scott of Lady Antebellum, the Avett Brothers, Shirley Caesar, Paul Shaffer and one-half of Thompson Square.
Global Music Rights (GMR) was founded in 2013 by industry legend Irving Azoff. Like SESAC, it’s invite-only and for-profit. GMR pretty much exclusively represents superstars like Bruno Mars, Bruce Springsteen, Drake, Don Henley, Glenn Frey and Joe Walsh (the Eagles), John Mayer, John Lennon, Smokey Robinson, Jon Bon Jovi, Prince, Slash, Leon Bridges, Ari Levine and Pharrell. They pride themselves on getting the most amount of money for their very few clients. They have licensed over 33,000 songs with about 100 writers and 200 publishers on their roster.
You (as a songwriter) can’t sign up to multiple performance rights organizations. Only sign up for one PRO. You have to make distinctions and put ASCAP vs BMI for example, and choose which works for you.
Performance Rights Organizations in your country. Pick one and sign up.
**It’s important to note that if you go for an ASCAP membership as a songwriter, you also need to register a “vanity publishing company.” That means, just make up a name (mine is Proud Honeybee Music) and register your publishing company with ASCAP. You must do this to get paid all of your music royalties. If you don’t have your vanity publishing company registered as a corporation (like an LLC), or have a bank account under its name, make sure to tell ASCAP you are “doing business as” the vanity publishing company so they can write the checks appropriately. You can also sign up for direct deposit which expedites this entire process. ASCAP pays out 50% of the total money to the songwriter and 50% to the publisher. If you don’t register a publishing company, you will only get half of your money.
If you are an unaffiliated songwriter with BMI, you don’t need to register a vanity publishing company. BMI will pay you 100% of the money.
HOWEVER, if you sign up for an admin publishing company (like Songtrust, Sentric, CD Baby Pro, or TuneCore Publishing), they will collect your publishing money from your PRO, take their commission (15-20%), and pay you out the rest. So, you don’t need to register a vanity publishing company (if you’re with ASCAP) or register it as an LLC or open a bank account. This is a far easier option.
+Songwriters! Registering with ASCAP or BMI is Not Enough For You To Get Paid
I recommend you make sure all of your songs are registered with your local PRO and that you work with an admin publishing company. If you distribute through CD Baby, use CD Baby Pro. If you don’t, use Songtrust, Sentric or TuneCore Publishing. If you haven’t registered with a PRO yet, signup for an admin publishing company FIRST – they will then register your songs with a PRO (save some time and steps!).
Digital Distribution Company
Some people call them digital aggregators. These companies are how you get your music into Spotify, Apple Music, Amazon, YouTube Music, Deezer, Tidal and 80+ other digital stores and streaming services around the world. I reviewed them in this piece.
+Best Music Distribution Companies – A Comprehensive Guide
Harry Fox Agency. Prior to January 2021 HFA handled U.S. mechanical royalties. Mechanical royalties are another kind of songwriter royalty (full explanation down a bit more). HFA is now the organization that crunches the numbers for the streaming services so they know how much money was earned in mechanical royalties and then pays that money to the MLC (in the US) and to other Mechanical Licensing Organizations around the world.
The MLC now collects 100% of mechanical royalties from US streams. This is by law.
In early 2021, the Mechanical Licensing Collective formed. This was setup by the US government to collect mechanical royalties from streaming services in the US. The MLC is the only organization in the US that collects mechanical royalties. The only way you can get these is if either you or your publisher is signed up with the MLC. You can register (and check on your songs) at themlc.com.
+The MLC Is Sitting on $423 Million. How Songwriters Can Claim It
Admin Publishing Companies
“Admin” stands for “administration.” All publishing companies have an admin department. They also have a sync licensing department, an A&R department and many other departments. Admin publishing companies have started popping up over the past few years to help unrepped songwriters (like you and me) collect all their music royalties from around the world.
Again, companies like Songtrust, Sentric, CD Baby, TuneCore and Audiam are some admin publishing companies who will do this. These companies will accept anyone and everyone. If you have a bit more clout, you should look into more exclusive companies like Kobalt, PEN, Riptide and Secret Road. These companies operate like normal publishers, but work on an admin (commission only) basis. They do not retain ownership – like traditional publishing companies.
+Songtrust vs. Sentric vs. CD Baby Pro Publishing vs. Tunecore Publishing
“Sync” stands for “synchronization.” A sync license is needed to sync music to picture. TV shows, movies, commercials, video games, all need a sync license to legally put a song alongside their picture. Technically, so does YouTube, Facebook and Instagram. YouTube, Facebook and Instagram officially struck deals with all the major (and most of the indie) publishers to officially allow cover videos on their platforms. That’s why for a while, Facebook was ripping down cover videos.
Back in the day, believe it or not, YouTube did it too—per the publishers’ request. But now that the platforms are licensed, publishers (and songwriters) can earn from cover videos on the platforms. YouTube was the first, with their Content ID technology, to be able to track and monetize songs uploaded by users on their platform. For verified partners, they will even split cover song earnings with the publishers and the creators of the videos.
If you want to start earning from your Facebook videos, sign up for Facebook for Creators. As of mid-2019, Facebook required creators to have at least 10,000 Page Likes, at least 30,000 one-minute views in the past 60 days, a Page in good standing, and to be based in a country that is supported by Facebook monetization.
Sync Licensing Company / Agent
Sync licensing companies, sometimes referred to as sync agents, work to get your music placed in TV shows, movies, trailers, commercials and video games.
Sync licensing companies, oftentimes referred to as sync agents, typically only represent artists who are also the sole songwriters. Sync agents are one-stop shops for music supervisors. They want to make it as easy as possible for the ad agency or TV show to use the song. Licensing companies can clear the songs immediately for the music supervisors. So if you cowrite with anyone, first make sure they are not signed to a publishing company (if they are, it makes things very difficult and will almost certainly prevent a sync agent from working with you or repping that song). And make sure you get in writing (email is fine), that you have full rights to the song to license without getting permission from your cowriters.
WORD TO THE WISE: Never pay a sync agent money up front to go pitch you. If they believe in your music, they will pitch you and work solely on commission. Commissions are typically between 25% and 50% of the up-front fee. Some will take a commission of your backend PRO royalties and some will not.
If you want to learn how to get your music synced and get a full list of reputable sync agencies, join Ari’s Take Academy’s course: Advanced Sync Strategies for Film, TV Shows and Video Games
Also, there are music licensing companies and libraries (like Triple Scoop Music, Audiosocket and Musicbed) that specialize in issuing inexpensive sync licenses for wedding photographers, corporations (for in house training videos) and indie filmmakers. This can help you bring in some extra dough. These kinds of companies are definitely worth looking into. They don’t work to get you the $200,000 Verizon commercial spot, they’re soliciting wedding photographers to pay $60 to license your song in their personal use wedding video. But these can add up. There are a bunch of these music licensing companies and libraries out there.
Just Google around a bit – try “music for wedding video” or “license music for indie film” or “license music library” and these companies will populate. Most are quite selective about what songs they bring on (to keep their quality up). But they all take applications from unknowns. If the quality is there (and it fits their format – they’re probably not going to take death metal or gansta rap for a wedding video licensing business). Most are non-exclusive, meaning you can work with a bunch of them.
Again, DO NOT pay anything up front. If any company charges you up front for these services it’s a scam. Run away (to this comment section and let us know who these scam artists are)!
+How To Get Songs on TV, Film and Video Games (and get paid for it)
A lot of people confuse SoundExchange with PROs because technically SoundExchange is a performing rights organization. But I’m not including them in the “PRO” classification out of clarity (and when most in the biz discuss PROs, they are just referring to the aforementioned ASCAP, BMI, SESAC, SOCAN).
SoundExchange represents artists and labels whereas (the other) PROs represent songwriters and publishers. Unlike the four PROs in America, SoundExchange is the only organization in America that collects performance royalties for “noninteractive” digital sound recordings (not compositions). “Noninteractive” means you can’t choose your song. So, SiriusXM radio is noninteractive, whereas Apple Music and Spotify are “interactive.” Beats1 (within Apple Music) is digital radio (noninteractive). Part of Pandora is still noninteractive as well.
SoundExchange has agreements with twenty foreign collection agencies. When your music is played in their territory, they pay SoundExchange, and SoundExchange pays you. Like the PROs, SoundExchange issues blanket licenses to digital radio (noninteractive) platforms (like Pandora and SiriusXM) which gives these outlets the ability to play any song they represent. Like the PROs, the outlets pay an annual fee for the blanket license. But, SoundExchange collects only digital royalties. The PROs collect digital, terrestrial (AM and FM radio) and live royalties.The way the copyright law is currently written in the United States, AM/FM radio has to pay only composition performance royalties and not sound-recording royalties. Makes no sense.
The U.S. Copyright Office has recommended that this law be changed, but only Congress can do that, and the few times it has tried, the proposal was defeated, largely as the result of heavy lobbying by Big Radio.
So, again, SoundExchange = digital sound-recording royalties for noninteractive plays in the U.S.
And to complicate matters even more, not all digital radio services work with SoundExchange (but 2,500 do). Some opt out (Spotify noninteractive radio has opted out) and they just negotiate rates directly with each label/distributor.
How To Sign Up For SoundExchange or Your Country’s Neighbouring Rights Organization
If you are a U.S.-based artist, go to SoundExchange.com. If you are both the performer (artist) and the owner of the sound recording (meaning you don’t have a record label), simply select “Both” on the second page of the registration when it asks you to select: Performer, Sound Recording Copyright Owner or Both. It’s a long process and you have to submit a full catalog list. When I did this, I had to email in a complicated Excel doc with lots of info. Plan a weekend to do all of this. It’s time-consuming, but worth it.
—> If you are NOT in the United States you do NOT need to sign up for SoundExchange. Signup for your country’s “Neighbouring Rights Organization” – see below
Fun fact: I encouraged Ari’s Take reader and children’s musician Andy Mason to sign up for SoundExchange, and the first check he got was for $14,000! Apparently, Pandora had his songs included on all the most popular children’s music radio stations and he had no idea. Boom! SoundExchange will hold your back royalties for three years, so register now if you haven’t already. And if you have registered (maybe you did years ago), make sure you have also registered as the Sound Recording Copyright Owner (they previously called it “Rights Owner”). Because the “Both” option is very new, you may have missed it and are only receiving 45% of your total money.
Why 45% and not 50%? Session musicians can get some of this money too! If you are a session musician, 5% of the total money earned for each song has been reserved for you. Contact the AFM (the musician’s union) to grab this moola.
SoundExchange’s breakdown for payment: 45% to featured artist, 50% to the sound recording owner (label—or you if you self-released), and 5% to session musicians or, as they put it, “non-featured artists.”
Whether you have session musicians or not on your record, SoundExchange withholds 5% of all royalties from everyone for them. If you live outside the United States, you do not need to sign up for SoundExchange. You should register with your country’s neighbouring rights organization. What is that? Keep reading. So, just to clarify, here is a breakdown for the music royalties artists and labels earn (and how to get them):
Backup Musicians and Session Players
If you played on a record as a session musician and that record was released by a label registered with AFM & SAG-AFTRA, you are entitled to various royalties (not just from SoundExchange). It’s definitely worth checking the AFM & SAG-AFTRA Fund website to see if you have outstanding royalties.
In nearly every country outside the United States, there’s what’s called “neighbouring rights.” Yeah, if this was an American thing, it would be spelled “neighboring,” but it’s not. It’s European and beyond. Neighbouring rights are similar to what SoundExchange administers and collects (sound recording performance royalties for artists and labels); however, they also collect royalties from music played on terrestrial radio, television, in bars, jukeboxes and everywhere else in the physical world. In the U.K., the organization that does this is PPL. In Canada this is Re:Sound. Just search “Neighbouring Rights (Your Country)” to find how to collect your music royalties in your country. For clarity, if you live outside the U.S., you do not need to register with SoundExchange. Register with your country’s neighbouring rights organization to collect sound recording performance royalties.
Nearly every neighbouring rights organization works with SoundExchange to collect U.S. royalties.
The Best Route for Maximum Music Royalties (for you)
ASCAP vs BMI
When we pit ASCAP vs BMI, they both hold similar numbers in terms of members and compositions. That also rings true in terms of performance royalties payouts and other features. For example, they both make quarterly payments to writers and both are affiliated with a good amount of other services and companies. But when it comes to memberships, ASCAP will set you back $50 annually, whereas BMI will lock you in for two years without a fee.
The ASCAP membership cost is probably the only reason anyone would turn away from this PRO. In the business since 1914, ASCAP knows their way around the industry and their intuitive website is loved by their members.
ASCAP or BMI for Independent Artists
Although a BMI membership is free, it’s not the only reason they’re chosen by independent artists. BMI vs ASCAP is too close of a match and even though they’re not the oldest in the game, they’re definitely known a very respectable and good choice for a PRO.
Sound Recording Digital Performance Royalties
In the United States, these are just from non-interactive digital streaming services, also known as digital radio. Outside the U.S., these are from radio (digital and terrestrial), TV, jukeboxes, bars, cafes, shops, night clubs, gyms, universities, and anywhere there is a “public performance” of a recording called digital performance royalties.
How to Get Paid: SoundExchange in the U.S., PPL in the U.K., Re:Sound in Canada, or your country’s neighbouring rights organization.
+Register for SoundExchange here.
These result from someone downloading your music on iTunes, Google Play, Amazon, etc.
How To Get Paid: Your distribution company. Remember, if a fan downloads your music on Bandcamp, you get a check directly from Bandcamp because Bandcamp is a self-managed (as in you manage it yourself ) store.
+Best Music Distribution Companies – A Comprehensive Guide
Interactive Streaming Revenue
There are lots of different kinds of streaming revenue. But interactive (meaning you choose the song) streaming revenue (like from Spotify, Apple Music, Deezer, Tidal) goes to the artist/label. When these services claim they pay out 70% of all revenue, the 70% is for both the artist/label revenue and the songwriter royalties (mechanical royalties and performance royalties). Streaming revenue to artists is way more than the mechanicals royalties paid to songwriters.
How to Get Paid: Your distribution company
+How to get 100 million Spotify streams without playlists
YouTube Sound Recording Revenue
Technically there are a bunch of “assets” (streams of revenue) for each video. To make it simple, we’ll just get into how you can earn money. First, for the sound recording (we’ll get into the composition in the next section). You can make music royalties off of any video that uses your sound recording (whether you uploaded the video or not) if you allow YouTube and Facebook to put ads on the video (they call it “monetize”). Either videos you upload or fan-made cat videos with your sound recordings can generate ad revenue that you can collect if you are a verified partner. YouTube splits the ad revenue 45%/55% in your favor. Facebook (and Instagram) have not publicly discussed their rates.
How to Get Paid: Most digital distribution companies have this option via an opt-in checkbox. If your distributor doesn’t handle this, you can work directly with YouTube to become a verified partner or sign up for an independent revenue collection company like Audiam and AdRev. But it’s easiest if you keep everything under one roof.
Master Use License
Any TV show, movie, commercial, trailer or video game requires both a master use license (from the artist/label) for use of the sound recording and a sync license (from the songwriter/publisher) for use of the composition. These days, most music supervisors (the people who place the music), will just pay you (an indie artist) a bulk amount for both the master use license and the sync license (because most indie artists wrote and recorded the song).
But if you’re repped by a label and a publisher, the supe (that’s short for music supervisor) will go to your label and pay for a master use license and then to your publisher and pay for a sync license. Usually it’s the same amount, but not always.
How to Get Paid: Directly from the TV studio, ad agency (for a commercial), production company (for a movie or trailer) or game company. It’s best to work with a sync license agent for this.
TV Commercial Residuals
If your music (with vocals) gets on a SAG-AFTRA union commercial you can also earn these royalties. And these definitely add up. I was in a Bud Light commercial (as an actor), and in SAG-AFTRA residuals, I got about $10,000 a month for the duration it was on the air. That was for hanging out at a (fake) barbecue holding a can of Lime-A-Rita and laughing on cue a lot. If one of your recordings with vocals gets into a union commercial, you might make something like that. Many commercials run about six months, that could be $60,000 just in SAG-AFTRA residuals. When getting a song synced on a commercial, make sure you always ask if it is a SAG-AFTRA commercial so you can call up SAG-AFTRA and get these music royalties.
How to get paid: SAG-AFTRA
If, however, SAG-AFTRA doesn’t have your mailing address, they won’t know who to pay. Contact SAG-AFTRA directly and give them your info when you have a recording played on a TV commercial. Worth mentioning, you do not need to be a SAG-AFTRA member to get paid.
Composition Performance Royalties
Performance royalties come from plays on the radio (AM/FM or digital), interactive and noninteractive streaming services (Spotify, Apple Music, Deezer, Pandora, YouTube Music, Amazon), live at a concert (yes, even your own), in restaurants, bars, department stores, coffee shops, TV. Literally any public place that has music (live or recorded) needs a license from a PRO to be able to legally play music in their establishment. For some reason, American movie theaters are exempt from needing a public performance license for the music used in films, and no one gets paid residuals when songs are played in the films. Music played in movie theater lobbies and bathrooms is different and can be licensed (and earned on). When a movie is played on TV, the songs in that movie earn royalties. When that same movie is played in a movie theater, those songs do not earn royalties. Makes no sense. It’s just the way it is.
However, performance royalties are generated for movie theaters outside the U.S. And for an international smash, it could add up to be some serious cheddar. I’ve heard of amounts in the hundreds of thousands of dollars. Not yen. Dollars, baby!
Of course if a coffee shop has the AM/FM radio playing, and if you’re with ASCAP music, you (most likely) won’t get paid when your song is played there, because ASCAP most likely won’t be conducting a survey of that radio station at that exact moment, but if the shop has Pandora or SiriusXM on (or other piped-in Muzak services), this is tracked and you will (eventually) get paid on the plays.
The system is currently being worked out and not everything is tracked yet, but eventually, say, in a few years, it will be. ASCAP uses a “sampling” method, where they employ an electronic monitoring system, MediaMonitors/MediaBase, for sample performance data from commercial, public, satellite and college radio. The sample data is then loaded into ASCAP’s Audio Performance Management system where it is (mostly) electronically matched to the works in the ASCAP music database.
ASCAP states that they supplement this data with station logs and other technology vendors and methods that capture ads, promos and themes, and background music. BMI also uses sampling. They say they use “performance monitoring data, continuously collected on a large percentage of all licensed commercial radio stations, to determine payable performances.” They also use their “proprietary pattern-recognition technology.” They call it a “census” and claim it’s “statistically reliable and highly accurate.”
My song was played as bridge music on NPR’s All Things Considered (for 13 million people). I won’t be getting paid for this (unless ASCAP happened to be running a sample of NPR at that exact moment).
Tip: Most PROs (like ASCAP, BMI, SOCAN, PRS, etc.) have a program where you can import your setlist and venue information to secure payment of your live performance royalties (for performing your originals in a club, theater, grocery store, arena, wherever). This can actually be a pretty good chunk of change. In the U.K., for instance, PRS calculates this as £10 per show for non-ticketed gigs (like cafes and pubs) or at least 4% of box office sales for ticketed venues (any size from clubs to arenas). The 4% is then divided among all of the songs performed at that venue that year split between headliners (80%) and openers (20%). I recently heard that an opener of a big arena tour in Europe playing just four songs a night was making about £9,000 (about $11,000) per night in performance royalties!
So it’s super important that you register your setlists with your PRO. Some admin publishing companies (like Sentric) will register your setlists with the PROs in the regions you tour—but you must ask about this. Many PROs, however, require the artist to input their setlists directly. ASCAP also runs a separate survey of the 300 top-grossing tours of each year, according to Pollstar. This includes both headliners and openers’ set lists.
How to Get Paid: Your PRO
+From $0 to $4K a Month Livestreaming
Mechanical royalties are earned when a song is streamed, downloaded or purchased (like a CD or vinyl). In America, the rate is set by the U.S. government. In the US, streaming mechanicals from every DSP are paid directly to the MLC. What’s the MLC? It’s the Mechanical Licensing Collective created in early 2021.
And in 2018, the rate increased (for the first time in many, many years)!
Worth noting, in the United States, Canada and Mexico mechanical royalties get passed on to the label/distributor from iTunes; however, nearly everywhere else in the world, mechanicals get collected by local collections agencies before the money gets to your distributor. That’s why when you look at your statements, an iTunes download in the U.S. nets you $.69 (70% of $.99—Apple retains 30% from iTunes sales) whereas a download in England nets you around $.60.
So if you don’t have an admin publishing company, you won’t get any of your international mechanical royalties from download sales (but who downloads music anymore?!). Most international collection agencies will hold on to this money (for about three years) until a publisher comes and claims it. You technically could try to do this by calling up collection agencies in every country, but I just recommend going with an admin pub company—they already have all the relationships built (and they only take about 15%–25%; it’s worth it).
How to Get Paid: Admin publishing company, the MLC (in the US) or your country’s mechanical rights organization.
+Songtrust vs. Sentric vs. CD Baby Publishing vs. TuneCore Publishing
Like the master use license, any TV show, movie, commercial or video game requires a synchronization (sync license for short) license to put the com-position alongside their picture.
How to Get Paid: Directly from the TV studio, ad agency (for a commercial), production company (for a movie or trailer), or game company. It’s best to work with a sync licensing company for this.
+How To Get Songs on TV, Film and Video Games (and get paid for it)
How to Release Cover Songs (Legally)
If you want to release a cover song (remember, song, not video), you have to get a mechanical license. The U.S. law states that once the song has been publicly released, anyone can cover it, without permission from the copyright owner as long as they get a compulsory mechanical license for the song. Sounds scary and complicated, but it’s actually quite simple. Your digital distribution company may handle this for you. But if they don’t, you have to get a license via HFA’s Songfile or Easy Song Licensing.
+How To Legally Release Cover Songs (with images)
You made it! See? I told you you could do it. You’re now a music royalties master. Now go educate all of your musician friends. Ok, yeah, that was a helluva lot of information. Bookmark this page so you can reference it. And make sure to signup for my email list below to get more tips like this to your inbox.
Frequently Asked Questions
What is ASCAP?
ASCAP is a community of songwriters, composers, and music publishers. A performance rights organization that’s run by its members. They provide music licenses to businesses to allow them to use the music publicly and provides music royalties to its members from that revenue.
Which Song Has Made the Most in Royalties?
You may have guessed it – it’s the “Happy Birthday” song by The Hill Sisters (1893). The rights to the song was bought by Warner Chappell for $15 million, and to this day brings in an annual $2 million dollars in music royalties.
What Are Royalties in Music?
Songwriters, artists, composers, and representatives receive music royalties from other companies or establishments that want to play their music publicly. It’s a form of compensation for a license that allows public use of the media and ensures everyone receives what should be a fair share of the income.
What is PRS?
PRS stands for the Performing Right Society. If you’re asking ‘what is PRS?’, then there’s a lot you need to know about music royalties to ensure you always get your fair share. When your work gets broadcasted on TV, in public, on the radio, or elsewhere, the Performing Right Society (PRS) and the Mechanical Copyright Protection Society (MCPS) pay royalties to their members.
What Does SESAC Stand For?
If you find yourself invited to join SESAC, you may be wondering ‘What does SESAC stand for anyway?’ – well, first of all let me congratulate you on your invitation! Second, SESAC is an acronym for the Society of European Stage Authors and Composers. SESAC collects music royalties from different avenues and is considered a leader in the space.
SoundExchange vs BMI – Which One Should I Choose?
SoundExchange and BMI are both PROs that collect performance royalties for public performances. You need both to maximize your songwriter royalties. SoundExchange vs BMI is the same as digital vs live/public. For Pandora, SiriusXM, and other non-interactive mediums, SoundExchange is needed to collect songwriter royalties from them. Whereas BMI will collect royalties for public performances such as radio or restaurants.
Why Choose BMI Publishing?
To be clear: BMI is not a publisher. BMI is a performing rights organization (PRO). You can register your vanity publishing company with BMI so you have a publisher, so to speak. You can register for BMI for free, whereas ASCAP charges a fee of $50. I spoke about the similarities and differences for ASCAP, BMI, and SESAC earlier in this article.
How to become a paid songwriter and earn song royalties?
When you start looking into how to become a paid songwriter, you’ll quickly realize that earning song royalties isn’t a get rich quick scheme, or an easy route to fame. Hard work is synonymous with songwriting and it will take tons of work, practice, working with others, and persistence. Oh, and make sure all of your sounds are copyrighted and registered properly so you can start collecting your royalty checks (that’s why you’re here!).
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How do songwriting royalties work?
There are three ways to earn songwriting royalties. Performance royalties, mechanical royalties, synch fees, and publishing royalties. Mechanical royalties refer to digital downloads at 9.1 cents split between co-writers and publishers. Performance royalties are for live/public/broadcasted performances paid out through Performing Rights Organizations (PROs). A sync fee is received by a songwriter (and/or publisher) when a TV show, ad agency, production house, or company purchases a sync license to use a piece of work to synchronize with video.
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