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"Where are my music royalties coming from and how do I collect all of them?"

Date Published: January 6, 2024

By the end of this post you will know exactly where your music royalties come from and how to collect them on a global scale.

With all the talk about new royalty models lately I want to send a reminder about where exactly your music royalties come from.

I’m sure you’ve heard terms like “mechanicals”, “publisher’s share” or “digital performance royalties” before. If you’re a little confused about where these terms fit into your bank account, just keep reading and I will demystify these terms and others. The goal of this post is to give you a full view of where your music royalties come from and how to collect all of them. 

Music industry royalties get pretty complicated so I encourage you write down definitions and take notes as you go. 

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Each song you release has 2 copyrights:

  1. Master Recording
  2. Underlying Composition

The underlying composition is also known as Publishing. These two terms are used interchangeably to describe the same music royalties

There can be several different master recordings of the same underlying composition, but only one underlying composition.

For example, there can be 20 covers of “Tennessee Whiskey” recorded and owned by different artists but the underlying composition will always be the music notation, melodies and lyrics of the very first original recording of the song as written by the people who wrote it initially.

Those 20 artists would own their respective master recordings, but the underlying composition will always be owned by the original writers unless sold some someone else.

When a stream is counted, it generates several different royalty types for both copyrights

The master gives copyright owners Recording Revenue and also Digital Performance Royalties.

If you release independently through a distributor like DistroKid or TuneCore, the recording revenue is deposited directly to your account and can be accessed through your account dashboard when you login.

If you are signed to a label, you need to ask them where exactly your master recording revenue is going and review your contract with a lawyer.

If you want to collect your digital performance royalties you need to sign up with SoundExchange and give them an updated spreadsheet of your whole catalog with all their release information and metadata.

The underlying composition (Publishing) gets a little more complicated so stay with me here!

This copyright generates Performance Royalties plus Mechanicals.

Don’t confuse these performance royalties with the digital performance royalties from the master as mentioned earlier, these are very different.

Performance royalties are divided between the Writer's Share and the Publisher's Share.

Mechanicals only generate for the publisher’s share, so the publisher’s share is performance PLUS mechanicals while the writer’s share is only performance.

Does that make sense?

This is why it’s advisable to try and keep most if not all of the ownership of your underlying composition.

In order to funnel all this into your bank account, there are yet again several piles of paperwork and registrations you need to complete.

For the writer’s share portion of performance royalties you can sign up with your country’s Performance Rights Organization (PRO). For the USA you can look into Broadcast Music, Inc. (BMI) or American Society of Composers, Authors and Publishers (ASCAP).

You can only be affiliated with one at a time and it’s difficult to switch so it’s definitely recommended to research before you choose.

They all essentially do the same thing so it really comes down to preference, but BMI recently made a change from a non-profit organization to a for-profit business. Nobody really knows how this will affect copyright owners yet but it’s just something to keep in mind as you research.

Anyway, PROs only collect the writer’s share.

The publisher’s share (including mechanical rights) is collected on behalf of copyright owners by Publishing Administrators.

SongTrust and Sentric Music are 2 popular choices.

Other options that are also distributors include CDbaby, TuneCore and BeatStars.

Again, they all pretty much do the same thing and you only need one.

I should mention that all of them will probably take about 15% of whatever they collect but I can assure you, the insane amount of work they are doing to find and collect your money on a global scale would be a frighteningly painful endeavor to carry out yourself.

You would essentially have to register each one of your songs individually with every single country in the world that reports music royalties.

If you did that yourself, that would be all you did all day. You would have zero room for creativity or anything else.

You're in the music business and there's a cost to doing it. 15% of publisher's share is a small price for the work it pays for!

Once you have all this setup you can generally have it all direct deposited right into your bank account.

So there it all is! Copyright law has evolved into a behemoth of a headache but if you want to get paid from your music, you should really study and understand all this.

Also knowing how it all works gives you an advantage when negotiating contracts with labels because they WILL try to take all of your shit if your business acumen isn’t all that.

Save this page so you can come back to it when needed. Print it out, get it tattooed on your torso or paint it on your wall.

But also always consult with a lawyer when navigating contracts!

Okay, I’ll let you go now with a small bit of info that you might find interesting…

When you buy beats from Charlie Hayz, you are not required to split any of the master recording royalties like most other producers. You keep 100%!

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