If you are a music artist, and you write your own songs, you are entitled to 200% of the royalties.
200%?! How is that possible?
This means you are entitled to 100% on each side of the pie. 100% on the artist side (sound recording / master), and the other 100% for the underlying composition (song).
To put this into context, if you were signed to a record label, you would hand over your master(s) to them to exploit commercially. And as part of your agreement with them, they would give you a royalty on sales and streams.
If you were signed with a publisher, they would own your song(s). Giving you a % of royalties on the composition side.
Artist / Master Side Royalties
These are the royalties you collect as the person who owns the sound recording / masters.
This includes, but is not limited to, the following:
- Interactive steams (Spotify, Apple Music etc)
- Sales (iTunes Downloads etc)
- Non-interactive streams (Pandora)
Songwriter Side Royalties
These are the royalties you collect as the composer and owner of the song. These include:
- Mechanical royalties (mechanicals)
- Performance Royalties
Performing rights organisations (PROs) issue licences to businesses to use your music. Businesses such as radio stations, shops, bars, live venues, all obtain a blanket license from the PRO in their territory, then the PRO collects and distribute that money to you, the songwriter. In the UK, we have PRS, in the US they have ASCAP, BMI, SESAC, and Global Music Rights.
To collect these royalties, you must either sign up with a PRO in your territory, or you can use your distributor’s publishing admin services who will register with the PROs for you. PROs pay songwriters and publishers each their 50% cut, so make sure you are getting 100% of that pie if you are your own publisher.
This refers to streaming services where the user chooses the song they want listen to, such as Spotify, Apple Music, TIDAL, and Amazon.
This refers to the kinds of streaming services where the user doesn’t choose the song.
An example of such services is Pandora, where it functions more like a radio station, as opposed to an “interactive” platform where the user selects the song or album they want to listen to.
In order to collect these royalties, you need to sign up to a collection agency such as SoundExchange who would represent you as the artist / owner of the sound recording.
This refers to the rights of the owner(s) of the sound recording (master) when it is performed in a public setting.
Publishing Administration Companies
Publishing administration companies do what they say on the tin, they administer the publishing side of your music business.
These companies can collect all of the royalties on the composition side, including performance and mechanical royalties.
Some distributors also give you the option to opt-in for their publishing admin services, allowing you to collect all royalties on both sides of the pie.
Youtube’s Content ID system can detect when your work is being used on someone else’s content, and from there you can choose to block the use of your music, or take a share of the ad revenue generated by the video it was used in.
When your music is properly protected, you can hugely benefit from people legitimately using your music in their videos, not just for the ad revenue, but for the exposure.
The easiest way to make sure this is all in place is to opt-in with your distributor.
Yes, you can opt-in to receive royalties when someone uses your music on Facebook.
This functions a bit like Youtube’s Content ID system, in the sense that people can easily share your music, and you can monetise their use of it.
Facebook and Instagram Stories now also have “Music Stickers” where users (your fans) can easily add snippets of your music to their content.
This is a sign of things to come with regard to Facebook and music, so make sure you’re good to go!
I have personally tried to find many indie artists’ music via Facebook and Instagram stickers, but many of them aren’t there.
So you must make sure you opt-in for this. Otherwise you are making it difficult for them to spread the love and leaving money on the table.
On the songwriter side, you are entitled to mechanical royalties whenever your song is reproduced in some way or another. This includes when your song is streamed, downloaded, or pressed onto CD or Vinyl.
You can find the current statutory rates for mechanicals at The Harry Fox Agency website.
To collect your mechanical royalties, you’ll need to sign up to a publishing administration company.
If you want to be successful in this business, it helps to understand how it works.
Here are two books I highly recommend you purchase and keep with you at all times for your reference.
Everything You Need To Know About The Music Business — Donald Passman
How To Make It In The New Music Business — Ari Herstand
And here are some more articles on how royalties are generated, and how they (eventually) flow into the hands of artists.
For your convenience, we have created a PDF version of this guide. You can get it HERE.
Note: This article contain affiliate links