Consumer Advice Alert: In lieu of receiving our first official ASCAP royalty payment, we also came across an excellent article by the good folks over at Sonicbids.com, a site dedicated to providing expert music advice to DIY musicians. This morning’s topic is one of high importance to any musician, regardless of genre, or skill level.

Music Royalties 101: What They Are and How to Collect

Below are some high-level snippets from the article, for those of you who don’t like to read, but you can check out the full article from Sonicbids here. Share this valuable information with a fellow artist…or yourself. It’s free.

Master-generated royalties

Recording royalties from download sales and streams

What are they?
A recording royalty is the most basic royalty artists and labels get every time their master recording is downloaded (on iTunes, Beatport, etc.) or streamed (on Spotify, Rhapsody, etc.).

How do I know if I’m earning them?
You’re definitely earning recording royalties if your music is selling or streaming on any basic retailer platform – iTunes, Spotify, Amazon, Google Play, Rhapsody, Beatport, etc.

How can I collect them?
An artist collects sales and recording royalties from the artist’s distributor or label. If you’re on a label, always stick with the label – never go directly to the distributor. This is basic etiquette that is usually laid out in distributor-label contracts.

Symphonic Distribution has tailored distribution solutions for both independent artists and record labels. Find out more about how they can help you collect your recording royalties.

YouTube recording royalties

What are they?
YouTube is the world’s largest and most oft-used platform for listening to music. As I mentioned before, master rights holders (labels or performing artists) earn royalties every time their recording is streamed within a YouTube video – if your video has an advertisement attached to it. YouTube earns its revenue from its advertising partners, then shares it with musicians and music rights owners who help the site generate billions of views.

It’s very important to clarify that publishing rights owners (publishers and songwriters) also receive money from YouTube, but YouTube sends its portion of the royalty pie to performing rights organizations (PROs), which you’ll read more about later.

YouTube collects royalties using incredible technology called Content ID, which creates an audio fingerprint of your recording, ingests that into YouTube’s massive database, and tracks every single time someone uploads and streams your recording on YouTube. That means that whenever someone you don’t know uploads a video with your song to YouTube without getting your permission, YouTube tracks that, throws an advertisement on the video, and monetizes it on your behalf.

Who collects them?
YouTube allocates the royalties to master rights holders.

How do I know if I’m earning them?
If you’re a master rights holder (i.e. a label or performing artist on a recording), and your recordings are on YouTube – whether on your own channel, your label channel, or anyone else’s channel – you have the ability to earn YouTube royalties via Content ID. The more views, the more revenue you generate.

Neighboring rights royalties

What are they?
Neighboring rights, sometimes called “related rights,” is a term in copyright law used to describe the rights of performers and master recording owners (record labels). The concept of neighboring rights is similar to that of performance rights in the field of music publishing because both kinds of royalties are earned through public performances or broadcasts of music. But while performance rights refer to the right to publicly perform the musical composition, neighboring rights refer to the right to publicly perform the sound recording. They are called neighboring rights because they are “related to” performance rights in the field of music publishing, or the right to publicly perform a musical composition.

Who collects them?
Neighboring rights royalties are collected by neighboring rights collection societies. In order to collect the neighboring rights
royalties you are owed, registering your individual master recordings directly with each collection society in the territories in which you are getting radio play is absolutely essential.

 

Publishing-generated royalties

Performance royalties

What are they?
Performance royalties are earned when a song is broadcast or performed publicly in some way.

How do I know if I’m earning them?
You are earning performance royalties when your songs are broadcast and publicly performed. You’re definitely earning performance royalties if your song is:

  • Played on internet radio (like Pandora)
  • Played on terrestrial radio (i.e. 93.3 FM, 100.7 FM, etc.)

  • Played on online streaming services like Spotify
  • 
Performed at live venues or clubs (whether by you as a performer on your tour, a well-known DJ in a club in Sweden, or a cover band in a pub in Nashville)
  • Played in businesses and retailers of all kinds (hotels, restaurants, retail stores, big offices, etc.) as background music
  • 
Broadcast on TV (whether on an episode of a TV show, a sports channel in passing, or in an advertisement for another brand)

Performance royalties are definitely a special royalty type. Just because you’re distributing your music with a digital distributor like Symphonic doesn’t necessarily mean you’re earning performance royalties. But you can increase your chances of earning them in many different ways.

How can I collect them?
In order to collect the maximum performance royalties you deserve from the PROs, you need to affiliate yourself as a writer and register your compositions with every single PRO in the territories in which you’re generating performance royalties. This can easily be accomplished through Symphonic Distribution.

Mechanical royalties

What are they?
Mechanical royalties are earned per-unit when a song is sold on a “mechanically reproduced” physical medium (i.e. vinyl or physical CDs). Nowadays, this includes digital downloads and internet streaming as well. “Mechanical” can sound confusing in the digital age. The word “mechanical” stems from the early days of the music industry when compositions were physically, or mechanically, manufactured and reproduced onto physical products for public consumption.

 

Print royalties

Print royalties are earned when a composition is transcribed onto sheet paper, printed in songbooks, and published for the general population to purchase and play your music at home on their personal instruments for fun. Print royalties are really only applicable to a songwriter if he or she has a Top 40 radio hit – think pre-teens taking piano lessons and buying Taylor Swift sheet music online, or purchasing a Guns N’ Roses hit on sheet music to sight-read on your guitar.

Be sure check out the full article from Sonicbids here.

    

Cover Image Courtesy of Dan Murtagh, which also contains some really good information on Copywriting as well. You’re welcome