Songwriters have a lot on their plate. So many services are selling, streaming and using your music, generating different types of royalties that get sent to a bunch of societies like ASCAP, BMI, SESAC and HFA. It’s a lot to keep track of before you get to the fun part – actually making some music! Outside the US, it gets even more complicated, but international markets can be a major source of revenue. Don’t worry, we’ve got your back.
With annual revenue in the billions, the American music market is already overwhelming. Getting your piece of this massive pie requires proper society affiliations, song registrations, and royalty collection. But the US only accounts for about one quarter of the global music industry. That means that for every dollar made in the US, musicians are making three dollars elsewhere.
Sometimes artists generate significant royalties overseas, but have no idea what they’re owed – or that they’re owed anything at all – until someone collects it on their behalf.
If you’re registered with ASCAP, BMI or SESAC you might have seen international earnings on your royalty statement before. So, you’re probably wondering, “I already collect international royalties, right?” You might have gotten some, but there are probably more. Let’s see why.
Your local PRO has entered into reciprocal agreements with similar societies throughout the world. Basically, these agreements say, “Hey, when I collect royalties for your writers, I’ll pay you. And you’ll do the same.” These work well in theory, but in practice, not so much.
Your PRO represents your performance right and transfers it to the appropriate society in each country. So, when your song is broadcasted, streamed or performed live, that society should collect on your behalf and pay your PRO, which will then pay you. The problem is that the foreign PRO will only know where to send the money if your songs have been properly registered with them. The only way to ensure this happens is to establish a direct relationship with each society – a challenge for even the biggest of publishers. And even if your songs are somehow properly registered, if your publisher doesn’t have a direct relationship you probably won’t get paid for up to three years and your royalties will be subject to several rounds of fees along the way.
But what about mechanical royalties? These are generated from physical and digital sales, interactive streams and more. In the US, HFA usually collects mechanicals from record labels and in order to get paid, you’ll need an affiliated publisher. This works a bit differently outside the US. The burden of paying mechanical royalties generally falls on the distributor or retailer (like iTunes). So, when someone buys your CD or downloads your songs abroad, these companies must pay the relevant society. But if you aren’t affiliated in that country, you aren’t going to get paid. Instead, after a certain period of time those royalties will be redistributed to local publishers as black box royalties.
If your music is having any success outside the US, you need a publisher with a global reach. Before signing with a publisher, make sure it can collect both performance and mechanical royalties in your biggest territories. Your publisher should have established direct relationships with collection societies or at least have a sub-publisher because relying on reciprocal relationships simply won’t cut it.