THIS IS THE ROYALTIES CHAPTER, OUR GIFT TO THE WORLD
AVAILABLE IN PAPERBACK AND AUDIOBOOK HERE
Imagine getting a job where you don’t know how much you’re getting paid, and your money is split up and buried somewhere in the world in locked boxes and the key is an algebra equation. Music royalties are complicated. Some would say overly complicated on purpose, but that conspiracy theory is just ridiculous because who would want to be responsible for holding vast sums of unclaimed squeaky-clean cash? Not an organization that most musicians find by accident, if they ever find it at all. There are companies that know where your cash is buried and the maths to unlock it, but they take their cut of every payment.
Music royalties are the monies paid to rights holders (songwriters, publishers, performers, labels, artists, etc.) when a song is sold, streamed, downloaded or played live. This chapter gives a basic understanding of terms you need to know, and a step-by-step guide for new and existing artists to register and check that their works are properly registered. Each musician has a unique situation and song splits to consider.
TERMS TO KNOW
COMPOSITION VS. MASTER RECORDING
There’s a difference between a song (composition or work) and the recording of a song (master recording). Both generate different types of royalties.
SONGWRITER
Writer of a song (composition).
PUBLISHER
Publishes a written song. Think of a publisher as an agent of a songwriter. You are your own publisher unless you are working with a publishing administrator. At some point, the powers that be realized that publishers were ripping off the songwriters they represent, so they mandated that fifty percent of publishing royalties go to the songwriter, and fifty percent go to the publisher. If you self-release original music, you get 100% of those royalties.
PUBLISHING ADMINISTRATORS
There are companies who will collect worldwide publishing royalties called Publishing Administrators. They take 15-20% of all the royalties they collect, on top of membership fees. SongTrust, CD Baby Pro Publishing and TuneCore Publishing are publishing administrators. If you follow the directions in this chapter you don’t need to sign up with one to get your money.
TIP: Publishing administrators require that your royalties from TheMLC get funneled through them. If you have a back catalog and are thinking about joining a publishing administrator, I’d sign up for TheMLC first, get the initial backlogged chunk of change and then sign up for the publishing administrator to collect everything moving forward.
DSP – DIGITAL SERVICE PROVIDER (STREAMING SERVICE)
Amazon Music, Apple Music, Deezer, Pandora, Qobuz, Spotify, Tidal, YouTube Music
ARTIST ID CODES
Knowing your codes and ID numbers helps with more accurate reporting and distribution of royalties.
ISNI – INTERNATIONAL STANDARD NAME IDENTIFIER
ISNI codes are unique identifiers used to disambiguate artists and bands with similar names. Each member of a band AND the band should have their own ISNI. For example, I have my own ISNI, Julia has her own ISNI, and Soft Palms has its own ISNI.
To see if you have an ISNI, search the database at www.isni.org/page/search-database/.
You should also search your own name using the free Quansic database at explorer.quansic.com.
If you don’t have an ISNI, you can get one for free HERE.
IPI – INTERESTED PARTY INFORMATION
IPI codes are assigned when you sign up with a CMO or PRO. If you have aliases, those will each have their own IPI and will be connected to the same account. Make sure you register the aliases with your CMO/PRO!
IPN – INTERNATIONAL PERFORMER NUMBER
Another musician identifier, similar to an IPI.
SONG CODES
ISRC – INTERNATIONAL STANDARD RECORDING CODE
ID given to a master recording.
ISWC – INTERNATIONAL STANDARD MUSIC WORK CODE
ID given to a work / composition.
An ISWC represents a composition, an ISRC represents a recording. The song Freebird has one ISWC. Freebird (Album Version), Freebird Live and Jay-Z’s inevitable Freebird will have different ISRCs but the same ISWC. Capisce?
BOWI – BEST OPEN WORK IDENTIFIER
Another work ID. I’ve never seen any other mention of a BOWI code outside of the music database site called Quansic which I highly recommend exploring (it’s free).
WHO OWNS A SONG (MUSIC COPYRIGHTS)
The compositions and master recordings can have different owners, aka copyright owners, rights holders or rights owners. The royalties for each one are collected by different organizations called Collection Societies.
WHO COLLECTS MUSIC ROYALTIES (COLLECTION SOCIETIES)
Collection societies collect money from various sources on your behalf, and registering with them is the only way to access that money. They take a cut but there’s no way around that. You don’t have to be a citizen of the country these societies are located in to become a member. You can only be a member of one PRO but can be a member of multiple MRO’s and CMO’s. You just have to make sure they are all collecting from different territories and there’s no overlap, or else that can lead to delays in payment.
PRO – PERFORMING RIGHTS ORGANIZATION
In this context, “performance” refers to when a song is performed live or through speakers (background music). PROs issue blanket licenses for the performance of your music in a retail or commercial space. Think of it as a rental fee.
Think of it as a rental fee for your music. ASCAP, BMI, SESAC* and GMR* are PRO’s. *Invite only
MRO – MECHANICAL RIGHTS ORGANIZATION
MROs collect mechanical royalties, which is a fee for every time a copy of music is made, paid to the copyright owner(s). A stream/download is considered a copy. TheMLC, a nonprofit organized by the US Copyright Office, collects digital mechanical royalties from DSPs in the US only. They collect a lot of money from streaming services thanks to the Music Modernization Act which was passed in 2018. A CMO like SACEM can collect the rest. CMRRA (Canada) and MCPS (UK) are other MRO’s worth looking into for international mechanicals.
TheMLC (MRO)
CMO – COLLECTIVE MANAGEMENT ORGANIZATION
These collect both performance and mechanical rights royalties. PRO+MRO=CMO.
SACEM (France), GEMA (Germany).
TheMLC has a list of global CMO’s here:
SACEM (OR OTHER CMO’S)
Collects the remaining mechanical royalties.
NRO – NEIGHBORING RIGHTS ORGANIZATION
NRO’s collect digital performance royalties for the copyright holders and performers on master recordings. SoundExchange is an NRO. SoundExchange Direct is the portal where artists and labels manage their catalogs on SoundExchange. A percentage of these royalties is reserved for anyone who has played on a recording, even if you’re not the featured artist.
SOUNDEXCHANGE (NRO)
RECORD LABELS & DIGITAL DISTRIBUTORS
These collect record sales from the music distributors that carry the recordings. If you self-release music, digital distributors like TuneCore, CD Baby and DistroKid should collect these royalties for you.
If you’ve ever had music featured on a TV show or a movie, you may have unclaimed royalties. Visit the link below, or search AFM SAG-AFTRA Unclaimed.
www.afmsagaftrafund.org/Search/Unclaimed
HOW TO REGISTER
Enjoy this a step-by-step guide on how to register and keep track of your music. The collection societies mentioned in this chapter are mostly in the US, but the concepts can be applied anywhere. Most countries have their own PROs and CMOs.
I. DISCUSS YOUR SONG SPLITS!!!
The most important thing for a band to do is discuss and agree on the song splits.
II. GET ORGANIZED! CREATE A DISCOGRAPHY SPREADSHEET
This can be done on a spreadsheet program like Google Sheets or Microsoft Excel. Make columns with Writer/Publisher Names and Percentages, Artist Name, Album Title, Track Title, Track Number, ISRC, ISWC, Track Length, Release Date, ASCAP Work ID, BMI Work ID, MLC Song Code. Fill that sheet in! Other things to know are BPM, Key, Catalog Number, Label, Credits, Descriptors, anything else about the track you can possibly think of. I organize mine by album and track number, with the albums color-coded. Here’s an example:
Here’s a few template downloads:
Google Sheets Track List Template – Link
And an Illustrator template for web content:
III. REGISTER WITH A PRO (ASCAP OR BMI)
1. If you don’t have one, create an ASCAP or BMI account. Pick one and search for Free ASCAP writer and publisher or Free BMI account.
• If you join ASCAP, create a writer account AND a publisher account. You should have two IPI’s, one for your writer account and one for your publisher account.
• BMI collects writing and publishing royalties in one account. They use 200% to represent this.
• IPI’s will be given to you right away, make sure you copy/paste those on your discography spreadsheet.
2. If you already have these accounts, double check your works to see if anything is missing and the percentages are correct.
3. Register your tracks. If you are registering a track that has both ASCAP and BMI members, all parties will have to register with their own PRO. There won’t be an ISWC code created for the track without 100% of the publishing accounted for. The two companies don’t communicate with each other, but they share a public database called SongView which has track info like ISWC and ISRCs. Coordinate your efforts! It takes a few days to get an ISWC after registering with ASCAP/BMI.
IV. REGISTER WITH AN MRO (TheMLC)
1. Sign up for a free account at TheMLC.com using your ISNI and IPI number (For ASCAP members, use your publishing IPI. For BMI, use either your writer or publisher IPI). It takes a couple days to verify your account.
2. Once you get verified, create a member profile.
3. Follow the directions on this page to register your work: www.help.themlc.com/en/support/how-to-register-works-in-the-mlc-portal
V. REGISTER WITH AN NRO (SOUNDEXCHANGE DIRECT)
SoundExchange Direct is the most confusing one. Take it slow, and if you get lost they have links to video tutorials for each step on the corresponding pages. If you’ve released music on a record label, communicate with your label to see if they have submitted your tracks to SoundExchange.
1. Visit https://sxdirect.soundexchange.com/ to register for a free account.
2. If you’re starting fresh, to go My Catalog > Submit Recordings and start adding recordings. Make sure you have the track’s ISRC codes and other metadata embedded in the audio files before you upload them. Enter as much info as you can on the Recording Entry page for each track (all this info should be stored on your discography spreadsheet we talked about a couple pages ago). If you’re confused, they have links to videos on how to do this.
3. To check to see if your tracks are already submitted to SoundExchange. Go to My Catalog > Search & Claim to start searching and claiming. Best to use your ISRC code, but you can search by artist and song title. Claim as an Artist if you performed on a track, and Claim as an RO (Rights Owner) if you own the masters.
You will need to know what percentage of the song you have ownership of and claim that accordingly.
Note: All the performers on the record should be represented on the Claim as an Artist section of SoundExchange. Everyone in the band should have their own SoundExchange Direct account.
4. To allow SoundExchange to collect your worldwide royalties, go to your dashboard, and on the menu that says: Account Settings, Payment Summary, View Statements, Payment History, More, Click “More”, then on the dropdown menu click Membership Summary. Under Mandate Territories, make sure it says Worldwide. If it doesn’t, click Update to the left and update it on the next screen.
• SoundExchange gives 5 percent of the royalties they collect to the AFM SAG-AFTRA (American Federation of Musicians & Screen Actors Guild American Federation of Television & Radio Artists) fund for “non-featured artists” (session musicians). They don’t collect for every track, only the top 100 SoundScan recordings on the AHRA (Audio Home Recording Act) list, and the top 25,000 sound recording titles from the DPRA (Digital Performance Right in Sound Recordings Digital Millennium Copyright Act) list. These are the big tracks, or tracks on TV or movies only. To see if any of your tracks are on this list, go to www.afmsagaftrafund.org/ and explore the “Unclaimed Royalties” and the “Covered Royalties” pages.
VI. CONSIDER JOINING A CMO
A CMO like SACEM (France) will collect the remaining mechanical royalties from around the world. Just remember to tell them not to collect in the U.S., and tell your PRO not to collect in the territory your CMO is located. Again, TheMLC has a list of global CMO’s at www.themlc.com/cmo-members/.
COPYRIGHTING YOUR WORK
Your work is technically “yours” once you create it but if you want the ability to challenge someone who steals it, you have to register your work with the US Copyright office. The fee is $65 for published albums and $85 for unpublished albums. $65 for individual tracks.
www..copyright.gov/registration/
THE BLACK BOX
Somehow a term came into being that makes people think there’s a large sum of money in a black box somewhere. If you have been making music for a long time and haven’t been collecting your royalties, then yes, your money most likely still there because nobody else can collect it for you. Follow the How to Register step-by-step instructions that start on page 72 to get your money from THE BLACK BOX.
COMEDY, SPOKEN WORD AND PODCASTS
Non-musical works do not generate the same royalties as musical works because they are not represented by organizations that issue licenses (ASCAP/BMI, TheMLC).
Two organizations that collect for non-musical works are:
SoundExchange “…collects royalties for ALL sound recordings played on non-interactive digital radio. This includes recordings and soundtracks made by actors, comedians, and spoken word artists in addition to musicians.” – SoundExchange.com
SoundExchange collects on any type of sound recording: music, poetry, audiobooks, animal noises etc. Tell any comedian, poet or spoken word artist friends of yours to sign up for SoundExchange Direct .
Spoken Giants is the “first global rights administration company for the owners and creators of Spoken Word copyrights”.* They represent comedy, speeches, public readings and podcasts.
* www.spokengiants.com
WHO GETS THE UNCLAIMED ROYALTIES?
ASCAP and BMI give unclaimed royalties to their highest earning artists as bonuses.
TheMLC says the unclaimed royalties will be evenly dispersed to all members in 2027. Currently the statute of limitations on claiming copyright royalties is only three years. It doesn’t make sense to put a time limit on collecting money you don’t know you have, so we started a petition to try to change that law. Visit https://change.org/MoreTimeToClaimMusicRoyalties to sign!
WHO GETS MY ROYALTIES WHEN I DIE?
Create a will and include your royalties in it. A posthumous membership can be created for a friend or loved one who never registered their music. Contact your PRO/CMO/NRO for info.
CONCLUSION
Royalties are confusing for everyone, so don’t get discouraged if you don’t get it right away. If you’re taking it upon yourself to research royalties, go straight to the source. TheMLC has a great way of explaining the process on their site, and you can call TheMLC, ASCAP and BMI with questions, they’re very helpful. I recommend avoiding publishing administrators’ websites for your research because information on those sites is a bit more confusing. Remember, they are trying to sell you a service. Getting your royalties straightened out takes a few months to complete so be patient with it but don’t let it fall through the cracks!
NO AI WAS USED IN THE CREATION OF THIS BOOK