Sometimes a song bursts forth on its own, fully formed and ready to be shared with the world. These are the moments creators live for — the ones that make all those false starts and long nights feel like they were actually worth it.
Unfortunately, the process of actually getting paid can feel like a grind too. In the following post, we break down why things are that way and what Songtrust is doing to speed things up for you.
But first: a quick refresher on how a handful of key revenue streams work.
Three Major Income Sources For Creators
1. Mechanical royalties are paid whenever a song is sold in a physical form (vinyl, CDs, tapes) or digital file, or streamed via an on-demand service like Apple Music or Spotify. The rate for these plays is set by The Mechanical Licensing Collective (The MLC), a newly formed Mechanical Rights Organization (MRO) that promises a much fairer rate than what was paid in the past.
Learn more about mechanical royalties:
2. Performance royalties are paid whenever a song is played on a radio (broadcast, satellite, or streaming) or television station; performed in a public setting or proper concert venue; or streamed from an on-demand service. These royalties are collected by Performing Rights Organizations (PROs) like ASCAP and BMI in North America and Collective Management Organizations (CMOs) like GEMA and SACEM outside the U.S. They are then distributed on a set schedule to the appropriate songwriters.
Learn more about performance royalties:
3. Micro-sync royalties are earned whenever your song is used in conjunction with a video on major digital platforms like YouTube. They’re typically paid through monetized ads, the rules of which vary depending on the service.
Learn more about micro-sync royalties:
One River, Many Streams
Now that we’ve discussed the common ways creators get paid, it’s time to address why it takes so long to report and distribute earnings. As it turns out, that question hinges more on historical precedents than anything else.
For one, sales reports typically lag three months behind actual sales. Even when a song is streamed instantaneously, it can take months for that play to make its way to the appropriate collection agency.
And while songwriting may be a global endeavor these days — with hit songs making their way across international markets in the blink of an eye — the simple act of collecting royalties is still largely stuck in the last century. In many foreign territories, complicated and confusing requirements govern how those funds are distributed. As a result, many are left uncollected, and the rest can take months (or even years) to find their rightful owners.
It can take up to six months to register your song globally, then as long as a year before you see your first royalty checks. If you have retroactive royalties, you might as well tack on another six months per society.
With 215 countries and territories to track, you can see how all that collecting adds up.
What Songtrust is Doing to Help
While we can’t control many aspects of the music industry, the way songwriters are compensated for their work has shown noticeable signs of progress and improvement in recent years.
The most impactful one was 2018’s Music Modernization Act (MMA) and related copyright reforms put in place throughout North America and Europe. Aside from launching the aforementioned The MLC, the Copyright Royalty Board (CRB) approved a steep late fee for streaming services that unduly lag in their payments to publishers and artists.
While we can’t take credit for the MMA, we strongly supported and lobbied for the bill alongside industry leaders like the Nashville Songwriters Association International (NSAI), Songwriters of North America (SONA), National Music Publishers Association (NMPA), A2IM, BMI, and ASCAP.
As for what we can control, the Songtrust team takes great pride in delivering the fastest, most transparent administration system in the industry.
What’s so great about it? For one thing, we typically inspect and administer clients’ songs on a week-to-week basis. Many traditional publishers send them on a monthly, or even quarterly, schedule.
We also pride ourselves on submitting precise data, and spend a great deal of time making sure your songs are properly inputted and tagged for the specific collection society. And because we license those songs directly, we pay creators directly.
While many publishers send those payments twice a year, we do it quarterly to help keep hard-earned royalties flowing into your bank account. And because we’re part of a far-reaching and robust global network, we can get foreign-generated royalties to you with a much faster turnaround than most U.S. administrators.
If you’re curious about how Songtrust could help you make the most of your work, please reach out to our team at any time.
