Being a musician is not as simple as writing a song, recording an album, selling it, and getting money from your sales. As an independent musician trying to learn a real living off of making music, it’s vital that you understand what kinds of royalty streams are out there.
The first thing to understand is that in the most general sense, there are 2 parts, or 2 “sides,” to every “piece” of music.
1) Master
The master is the sound recording. It’s the thing you hear when you play an mp3, vinyl, CD, YouTube video, etc.
2) Publishing
The publishing side has to do with the underlying musical composition, which is embedded within a sound recording. The “publishing side” refers to the notes, melodies, chords, rhythms, lyrics, etc. to the piece of music. The “publishing side” is the musical composition.
Various usages of each “side” to a piece of music generate their own royalties.
If you write your own song, record it, and release it to the public, you will then generate both master-related royalties and publishing-related royalties.
There are so many different ways in which music is used these days, and new royalty streams are being created as the music industry and technology continue to evolve. In 1950, no one could ever imagine that sixty years later, people would be going on a computer, searching for a song, double clicking a button, and listening to music for free. Even though the general population can listen to music for “free” these days, every time you double click a track on Spotify or click play on YouTube, you’re still generating a royalty for the music’s master rights owners and publishing rights owners…it’s just not so blatantly obvious. There’s a complex royalty system going on behind it all, and we’re here to tell you now all the different master-generated royalties and publishing-generated royalties that exist out there.
Master-generated Royalties
Recording Royalties
(from download sales & streams)
WHAT are they?
There’s no formal name for this kind of royalty, though they are mostly called recording royalties. What we’re talking about is the most basic royalty artists and labels get every time your master recording is downloaded (on iTunes, Beatport, etc.) or streamed (on Spotify, Rhapsody, etc.).
WHO collects them?
A distributor collects royalties on behalf of labels directly from stores/streaming platforms, and an artist’s label will collect the recording royalties and distribute them to the artist. If an artist is not with a label, the artist will collect the recording royalties directly from their distributor.
HOW do I know if I’m earning them?
You’re definitely earning recording royalties if your music is actually selling or being streamed on any basic retailer platform – iTunes, Spotify, Amazon, Google Play, Rhapsody, Beatport, the list goes on.
HOW can I collect them?
An artist collects sales and recording royalties from the artist’s distributor or from the label. If you’re on a label though, always stick with the label – never go directly to the distributor. This is basic etiquette that is usually also laid out in distributor-label contracts.
Symphonic Distribution has tailored distribution solutions for both the independent artist and record label. For artists, our distribution options are the best deals in the industry, with 100% of all recording royalties going straight to you and no yearly fees whatsoever. For labels, our distribution options offer unique pricing tailored to your unique business model. Find out more to see how we can help you collect your recording royalties for the best deal in the industry!
YouTube Recording Royalties
WHAT are they?
YouTube has become the world’s largest and most oft-used platform for listening to music. These are the royalties master rights holders (label or performing artist) earn every time their recording is streamed on YouTube within a video. But the only way you can earn them is if your video has an advertisement attached to it; YouTube earns its revenue from its advertising partners, and it shares this revenue with the amazing musicians and music rights owners who help the site generate billions of views and traffic to the site.
It’s very important to clarify that publishing rights owners (publishers & songwriters) also receive money from YouTube, but YouTube sends their portion of the royalty pie to Performance Rights Organizations (PROs) which you’ll read more about below.
The YouTube recording royalties we are talking about here are for master rights holders (labels & performing artists).
YouTube collects these 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 (a.k.a. label or performing artist on a recording), and your recordings are on YouTube, whether on your own channel, your label channel, or any one else’s channel, you have the ability to earn YouTube royalties via Content ID. The more views videos using your music get, the more revenue you generate.
HOW can I collect them?
You can go to YouTube directly to get these royalties, but there is a massively long waiting list and most applications go unanswered. There are certain companies out there that collect YouTube recording royalties on behalf of labels, saving them all the time and energy that goes into this matter. Symphonic is one of them! In order to collect these royalties, Symphonic’s YouTube Monetization & Content ID program allows us to attach an audio fingerprint to your recordings and attach an advertisement to any video using your recordings. We monetize those views for you so that you’re rightfully compensated for usages on YouTube of your recordings.Learn more about how we do this here!
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). Neighboring rights refer to the right to publicly perform, or broadcast, a sound recording. The owners of the sound recording get to collect royalties for these broadcasts. They are called neighboring rights because they are said to be “related to” performance rights in the field of music publishing, or the right to publicly perform a musical composition.
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/broadcasts of music. Except that performance rights refer to the right to publicly perform the musical composition. Neighboring rights refer to the right to publicly perform the sound recording.
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 you are getting radio play in is absolutely essential.
HOW do I know if I’m earning them?
If you’re a record label manager, and your master recordings are being publicly performed and broadcasted on the following media, you – and the artists performing on those recordings – are earning neighboring rights royalties! You’re earning neighboring rights royalties if your music is being played on:
- Pandora (or any internet radio platform)
- BBC Radio Sirius XM (or any satellite radio platform)
- Cable TV music channels
- Terrestrial radio outside of the USA
- Businesses and retailers as background music (I.e. Restaurants, retailers, hotels, etc.)
- Live in clubs / live performance venues
- Various new online medias as digital music technology changes and develops evermore!
Sound recording owners (record labels and performing artists) collect neighboring rights royalties whenever their sound recordings are publicly performed on any of the above media.
The important thing to realize is that just because your recordings are selling well in any given territory does not mean you are earning neighboring rights royalties. Neighboring rights royalties are earned when your master recordings are publicly performed and broadcasted, not sold. With that said, if there is a large rise in sales in any particular territory, this might be an indicator that radio play has occurred, so any neighboring rights administrator should take note of significant increases in sales!
HOW can I collect them?
If you’re a performing artist and know your recordings are getting radio airplay, talk to your record label that released your EP/LP/album. See if the label is already collecting these royalties for you… or if they themselves need to get on board with this so that you and your label can collect these royalties!
The aim of Symphonic’s Neighboring Rights Administration service is to help our eligible distributed label partners – who are the master rights controllers of their distributed music with us, and who have proven to have radio airplay – collect their neighboring rights royalties. With a few clicks of a button, our labels give us their recording data that we then export simultaneously to key neighboring rights collection societies in the world. As easy as that, their recordings are registered and their royalties are collected! Partner Today and Start Collecting your Neighboring Rights royalties!
Publishing Generated Royalties
Performance Royalties
WHAT are they?
Performance Royalties are earned when a song is broadcasted or performed publicly in some way.
WHO collects them?
Performance Rights Organizations (PROs). Each major world territory has a PRO.
HOW do I know if I’m earning performance royalties?
You are earning performance royalties when your songs are being broadcasted 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 Played in clubs (whether by you as a performer on your tour, by a well-known DJ in a club in Sweden, or by 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 Broadcasted on TV (whether on an episode of a TV show, on 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 these royalties?
In order to collect the maximum performance royalties you deserve from the PROs, you’d need to affiliate yourself as a writer and register your compositions with every single PRO in the territories you’re generating performance royalties. But to help save writers the time, energy, and money involved with all this, Symphonic Distribution has established a worldwide Publsihing Administration service. On behalf of our writer clients, we register your compositions with PROs in over 60 key territories around the world. So rather than traversing through the nightmare of foreign exchange currencies, legal work, paperwork, and sign-up fees, check out how easy it is to collect performance royalties with Symphonic Publishing Administration!
Mechanical Royalties
WHAT are they?
Mechanical royalties are earned per-unit when a song is sold on a “mechanically reproduced” physical medium (think vinyl, physical CDs), and nowadays, this includes digital downloads and internet streaming as well. “Mechanical” can sound like a confusing word to us in the digital age. The word “mechanical” stems from the fact that back in the early days of the music industry, compositions were physically, or mechanically, manufactured and reproduced onto physical products for public consumption.
WHO collects them?
Mechanical royalties are collected from mechanical collection societies. Each major world territory has a mechanical collection society.
HOW do I know if I’m earning mechanical royalties?
You’re earning mechanical royalties when your song is:
- Manufactured and sold on physical CD/vinyl products
- Reproduced into ringtones and sold as a ringtone
- Streamed through interactive streaming services (on Spotify, Rdio, Beats, etc.)
- Sold in digital retailers for digital downloads (on iTunes, Beatport, Amazon, etc.) outside of the USA.
**This is the key fact here. In the USA, the mechanical royalty share goes straight from iTunes to the distributor to the label. But in countries outside of the USA, your mechanical royalty is getting picked up from iTunes and thrown elsewhere.
If you are distributing your music to stores and streaming platforms worldwide using a digital music distributor like Symphonic Distribution, and if you are seeing sales and streams result, then you are definitely earning mechanical royalties.
HOW can I collect these royalties?
Mechanical collection societies make it unreasonably difficult for independent songwriters who are not signed with a publisher to collect their mechanical royalties. Many of these agencies, including the Harry Fox Agency in the USA, don’t let unsigned songwriters collect their mechanical royalties. Yep. And again, in order to collect the maximum mechanical royalties you deserve from these agencies, you’d need to affiliate yourself as a writer and register your compositions with every single mechanical collection agency in the territories you’re generating high download sales and streams. But to give our writers a voice to the picky mechanical collection agencies, Symphonic represents our writers’ compositions to mechanical collection agencies worldwide. On behalf of our writer clients, we register your compositions with all these agencies. Check out how easy it is to collect mechanical royalties with Symphonic Publishing Administration!
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/she has a Top 40 Radio Hit – think little 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 through on your guitar.
As you can see, the royalty landscape in the music energy is one rich with possibility. You just have to know where to go. At Symphonic, we’re committed to directing our labels and artists in the right direction, maximizing their royalties, and maximizing their opportunities.
By Kaitlyn Raterman
Managing Director of Licensing & Publishing of Symphonic Distribution
This article originally appeared at Symphonic Distribution – republished with permission.