We are going to talk about who collects royalties to then be paid to you and what steps you have to follow for your to get paid the all royalties you deserve.
Who gets music royalties?
Remember there are always two types of royalties. One is the composition copyright and the other one is the sound recording.
The songwriter will get paid the composition royalties and the master owner will get paid the sound recording, if you owe both you’ll get paid both.this two type of royalties are handled by different organizations which will talked about later.
You’ll get royalties when your song is streamed, played on the radio, performed live, or covered by another artist.
Here are the 4 steps, we’re going to go through them individually:
Step 1 is selecting a music distributor which is necessary even just to put your music on streaming platforms. Some of the most popular distributors are CD Baby, Distrokid and Ditto.
There are many more, some of them only charge a flat yearly fee, but some of them take commission but you get access to amazing analytics tools that will help you find your audience.
Some of this distributors have options for publishing administrator services so you might not have to deal with step 4.
For step 2 you’re going to need to register in a performance rights organization, this type of societies collect royalties on behalf of the songwriters and music publishers when their music is publicly broadcast or performed. (Ex: terrestrial radio, concert venues, restaurant, etc)
The two biggest organizations in the U.S. are BMI and ASCAP, if you’re from abroad there are tons of other organizations in non-U.S. local societies.
BMI is free to join unless you join as a publisher and ASCAP has a fee of $50 for songwriters, if you register as a publisher is a bit more.
Step 3 is where we register to get our royalties for the sound recording of our song, which are different form the composition royalties handled by the performance rights organizations.
In the U.S. is completely free to do this through SoundExchange. which is an organization established by the copyright royalty board.
Sound exchange gets royalties from non-interactive webmasters (like Pandora), satellite radio, and satellite/cable TV. They also offer international royalty collection!
In step 4 when you associate with a publishing administration this is so they collect and track performance, mechanical and even micro-sync royalties. A music publisher is also supposed to promote your compositions so that they’re used commercially.
Music publishers even though they don’t take any ownership of the song, they do get a big percentage of your royalties that varies between 10%-25% or more depending on the deal.
A lot of independent artists start register themselves as the publisher, this can be easily done by registering as a publisher in a performance rights organization.
Just remember you’ll have to take on the role of the publisher by promoting your music and making the most of your royalty cashflows.
Depending on your own situation you can determine if some of this steps are necessary or not. For example if you just started having your music in streaming services and radio or television features are still way in the future you might opt to register on SoundExchange later.