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One of the most vital steps in ensuring you collect all your royalties is affiliating with your home collection society. This allows you to officially register your songs for royalty collection and connect the usage of your songs to you as a songwriter.
However, there are many different pay sources that your local society (e.g., ASCAP, BMI, and SESAC in the U.S.) may not be collecting on your behalf.
To make sure you’re completely covered for global royalty collection, download our Music Royalties Checklist.
When your song is streamed, purchased, publicly performed, or broadcast on radio/TV, royalties owed to you will accrue. Different collection societies and pay sources will hold these royalties until you, or someone you have authorized, collects them.
The amount you’re owed is dependent on a variety of factors, including the type of royalty earned, the country the use occurred in, and the society that is retrieving your money. Here’s an example to help better understand how these organizations are structured:
If your song is streamed on Spotify in Canada, you’ll earn both performance and mechanical royalties. In a perfect world, you’d register with SOCAN (Canada’s PRO), become a publisher affiliate at CMRRA (Canada’s MRO), and call it a day. However, doing both these steps doesn’t mean you’re collecting the royalties you’ve earned in, say, Germany, unless you register directly with GEMA (Germany’s CMO) as well.
While your home society will utilize their reciprocal agreements to collect global royalties from their partners, that’s typically not as effective as direct global registration with a publisher. This means that you should be covered for the use of your song in your home country, but there’s no guarantee that you’re collecting royalties earned elsewhere.
When royalties remain unclaimed because a song isn’t registered with a collection society, this money often goes into limbo because it cannot be matched to a songwriter or publisher for payout. After a period of time — usually 2-3 years, depending on the society — these royalties can no longer sit and wait to be collected by the correct rightsholders.
These missing payments are called unallocated royalties (aka black box royalties) and are redistributed to society members like major publishers. This sum of uncollected royalties is no small amount either; according to a 2019 Billboard report, it may total more than $250 million. Let's find out how to avoid your royalties being a part of it.
U.S. Streaming Mechanical Royalties
When a song is streamed via a Digital Service Provider (DSP), it generates two kinds of publishing royalties: mechanical and performance. PROs in the U.S. only collect performance royalties. On the other hand, MROs collect mechanical royalties generated from streams on DSPs like Spotify, Apple Music, and Amazon Music.
Before 2021, it was nearly impossible for an independent rightsholder to access their streaming mechanical royalties in the U.S. without a publisher or administrator. However, the Music Modernization Act mandated the creation of The Mechanical Licensing Collective (The MLC), a non-profit organization paid for by the DSPs themselves. It helps rightsholders register and collect their streaming mechanical royalties directly.
While The MLC — much like Songtrust — wants independent songwriters to collect the royalties they have earned so they don’t become unallocated, they have a three-year holding period in place for retroactive collection.
YouTube Royalties
When a song is played in a YouTube video, performance and mechanical royalties (sometimes called “micro-sync” royalties) will be generated. Usually, performance royalties are paid out to your domestic collection society and mechanical royalties are paid directly to a publishing administrator.
This is done through YouTube's unique Content ID system, which can detect and claim royalties automatically based on its “fingerprint” technology. This allows them to claim your royalties when anyone uses your music in a video, even if the creator of the video doesn’t register the music usage.
For more information on how YouTube royalties work, check out this article.
International Streaming Mechanical Royalties
Do you have a strong following in Japan? Is Brazil the top country “Where People Listen” on your Spotify artist page? If so, you should be collecting royalties for all those plays. Unfortunately, your home collection society (if it’s not in the country where you’re earning royalties) may not be collecting them on your behalf.
When a song is streamed outside of the U.S. (for example via JioSaavn, YouTube, or Spotify), mechanical royalties still need to be claimed. Local CMOs or MROs will track and collect royalties for these usages, but it’s often difficult or entirely restricted for non-resident rightsholders to affiliate directly with these organizations.
International Performance Royalties
If your music is being streamed outside of your home country, you’re entitled to collect performance royalties and mechanicals. Performance royalties are also generated when a song is played on broadcast or streaming radio, live in concert, in a restaurant, or on a television show. These are collected by pay sources in the local market and can be paid out through reciprocal agreements with your collection society.
These reciprocal agreements are essentially data-sharing agreements that simply send your song registrations from one society to another, with the potential for data-matching issues or delays in the process. Because you’re not directly affiliating with these organizations, you’re less likely to collect all of your international performance royalties if you rely solely on reciprocal agreements. If you directly affiliate with all collection societies where your music is performed, you’re more likely to retrieve your full payout, but affiliating and registering with dozens, or even more, international collection sources is an onerous and pricey task without a publishing administrator.
International Live Performance Royalties
While merchandise and ticket sales constitute the vast majority of concert-related royalties, whenever you (or another performing artist) play your music in a public venue, you earn public performance royalties. In order to collect these royalties, you must submit your setlist to your Performing Rights Organization (PROs) or Collective Management Organization (CMOs). You can use our Collection Society Database to find your society's information if you're unsure where to start. Make sure to do it sooner rather than later since many collection societies require setlist submissions within six months.
As daunting as all of this might sound, you don’t have to go it alone. Working with a music publishing administrator like Songtrust ensures you can efficiently collect royalties and properly register your songs with our global network of collection societies.
Regardless of how you decide to manage your rights, make sure you know the types of royalties your songs are earning, where they are being played, and what organizations are tracking and collecting those royalties, so you have a better idea of where to go to get the money you have earned.
If you have questions about music royalties, music publishing, or Songtrust, be sure to sign up for one of our Music Publishing 101 workshops, check out our Help Center, or reach out directly to our team.
