The music industry is a big place, and it’s a big money industry. Between 2019 and 2020 alone, the size of the global music market increased nearly 7%, with total revenues over 21 billion dollars. Performance Rights Organizations (PROs), like ASCAP, licensed over 16 million songs and collected more than 1 billion dollars in 2020 - and that’s only one type of rights musicians can earn!
You probably know that if you want a career as a musician, you need to put collecting your piece of all of this revenue among your top priorities. But do you know all the types of royalties you can collect, and how to make sure you’re covered for your music’s revenue generation and collection? Follow these four simple steps: select a distributor, affiliate with a PRO or CMO, sign up with a publishing administrator like Songtrust, and join an organization that collects neighbouring rights and/or digital performance royalties for your sound recordings.
Remember that there are two halves of a song - the recording and the composition (underlying lyrics, beat, and melody). Both the recording and the composition earn separate and distinct royalties when a song is either distributed or played publicly. As an artist, songwriter, or composer, you are entitled to these royalties, but collecting them individually from every organization that uses your music would be a full-time job. But following the below steps will enable you to generate and collect global royalties for your music.
Step 1: Select a music distributor for recording revenue
A digital music distributor, at its core, enables you to place your music on digital streaming platforms, such as Spotify and Apple Music, in addition to direct download platforms like iTunes. Some distributors are simply a pipeline, taking a small fee or commission on sales to make your songs available around the world. CDBaby and Distrokid are two examples of distributors that are accessible to all music creators. Other full-service distributors may also sell your physical music and merch products, provide creative or manufacturing services, or help with promotion to press and radio.
Step 2: Affiliate yourself with a collection society for performance royalties
Performance Rights Organization, or PROs, are societies that collect royalties on behalf of songwriters and music publishers when their music is publicly broadcast (such as on the radio) or performed (such as live in concert). ASCAP and BMI are the major U.S. PROs, each representing and collecting on behalf of hundreds of thousands of songwriters, composers, and music publishers. Similarly, Collective Management Organizations, or CMOs, are organizations that track and collect both performance and mechanical royalties on behalf of copyright owners globally. Mechanical royalties are earned when a song is physically (e.g. an LP) or digitally (e.g. a song stream) reproduced. Examples of CMOs across the world include SUISA, for Swiss songwriters, composers, and music publishers; PRS, for UK songwriters, composers, and music publishers; and GEMA, for German songwriters, composers, and music publishers. Registering with a PRO or CMO is the first step that songwriters need to take to collect their global publishing royalties. When you join a PRO or CMO, you will be assigned an IPI, a unique identifier used at global royalty sources to identify your works.
For a deeper dive into performance royalties, check out this article.
Step 3: Associate with a publisher to collect all your global publishing royalties
Publishing administrators and music publishers collect and track performance, mechanical, and micro-sync royalties on behalf of their songwriter clients. Publishing administrators, like Songtrust, handle song registrations and collect performance and mechanical royalties for songwriters around the world. Associating with a publishing administrator, like Songtrust, allows artists to maintain 100% ownership of their songs, while ensuring their royalties are collected.
Traditional publishers also collect performance, mechanical, and micro-sync royalties for their clients, but they require that a songwriter relinquish control of part or all of their song(s), generally in exchange for an up-front monetary advance and creative services like sync pitching, A&R, and pitching songs to performing artists.
A publishing administrator like Songtrust or a traditional publisher will enable you to collect your publishing royalties around the world. While you could technically affiliate directly with all the pay sources in all the countries where your songs are used, that would take hours of daily work that you could use creating.
Step 4: Make Sure You Are Collecting on Neighbouring Rights or Digital Performance Royalties
A source of royalties that is often overlooked is neighbouring rights, similar to digital performance royalties in the U.S. These are similar to performance royalties, but they are paid to recording owners and performing artists (everyone listed on the official recording credits, not only the primary artist) when songs are broadcast on terrestrial or streaming radio, or in clubs or venues.
In the U.S. terrestrial radio broadcast does not earn a royalty on the sound recording, whereas elsewhere in the world, these “neighbouring rights royalties” are earned. Streaming and satellite radio earns sound recording royalties around the world. In the U.S., SoundExchange is responsible for collecting digital performance royalties, whereas outside of the U.S., many regional organizations handle neighbouring rights administration.
To ensure that you can collect all of your neighbouring rights and digital performance royalties, you must confirm that the agency you select has global reach and partnerships with organizations in other countries. Make sure you know before you sign where they’ll be able to register and collect for you on these rights.
A more detailed guide to neighbouring rights and digital performance royalties can be found here.
Four Steps to Global Royalties
The bottom line is that registering your music with a PRO or CMO alone is not enough to generate royalties and collect all the revenue your music earns. Once you work with a music distributor to make your songs available online and start releasing music, every stream, every download, and every view earns royalties for both the sound recording owner and the composition (publishing) owner. And if you are a self-released artist, all of these types of royalties are your responsibility to manage and collect, directly or with your partners.
As a publishing administrator, Songtrust ensures that you are collecting all your performing, mechanical, and micro-sync royalties all over the world - we cover 98% of the global music market for collections. For a one-time-only registration fee and a small commission on our collections, you can keep 100% ownership of your copyrights and maintain creative control, while ensuring that you are collecting all the revenue you earn from your music publishing.
Download our free Royalty Checklist for on-the-go information about what steps you need to take to collect all of your global royalties.