While there are multiple steps to ensuring you are covered for royalty collection, one of the most vital is for songwriters is to affiliate with their home collection society. This allows you to officially register your songs for royalty collection. However, there are many different income sources that your collection society does not collect on your behalf -- which means only being with a society like ASCAP or BMI (in the US) isn’t enough.
To make sure you’ve checked all the boxes to be covered for royalty collection, download our royalty checklist.
When your song is streamed, purchased, publicly performed, broadcast and more, royalties (money owed to you) will accrue. Different collection societies, based on where your song is listened to, 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 that the use occurred in, and which society is retrieving your money.
First, what is a collection society?
To understand collection societies better, we can break them down into the following:
- Collective Management Organizations (CMOs)
- Performing Rights organizations (PROs)
- Mechanical Rights organizations (MROs)
Each of these entities is in charge of tracking and collecting publishing royalties, and also collect different royalty types. These include:
- CMOs: Performance and Mechanical Royalties
- PROs: Performance Royalties
- MROs: Mechanical Royalties
To make things even more complex, each country and territory can have one or more of each kind of organization, and sometimes they can be combined as one.
and many, many more...
Here’s an example to help understand:
If your song gets streamed on Spotify in Canada, you’ll earn both performance and mechanical royalties. To collect these, in a perfect world, you’d register with SOCAN (the Canadian PRO) and become a publisher affiliate at CMRRA (the Canadian MRO), and be done. However, doing both these steps doesn’t mean that you’re collecting the royalties you’re earning say in Germany, unless you also register with GEMA (the CMO in Germany) as well.
While your home society is meant to register and collect your royalties from other societies in other countries, not all of these organizations are built to scale. This means that you could be totally covered for the use of your song in your home country or territory, but aren’t guaranteed that you’re collecting outside of that area. See how this can easily get confusing?
Because of these complexities, sometimes this money goes into limbo, essentially royalty purgatory, because they cannot be matched to a songwriter or publisher for payout. After a period of time - usually 2-3 years or more, depending on the society - these royalties can no longer sit and wait to be collected by the rights-holders. These missing payments are called black box royalties. In 2015, Berklee reported “that anywhere from 20-50 percent of music royalty payments do not make it to their rightful owners''. Don’t be part of that percentage -- Let's find out what royalties you might be missing out on.
US Mechanical Streaming Royalties
When a song is streamed on a service like Spotify, it generates two kinds of publishing royalties: Mechanical and Performance. PROs in the US (ASCAP, BMI, and SESAC) only collect performance royalties, not mechanicals. These mechanical royalties are often missed because they are only paid out to publishers by MROs such as the Harry Fox Agency (HFA) or Music Reports (MRI)—meaning if you don’t have a music publishing company or an administrator, you’re unable to claim these. These mechanical agencies collect royalties for you from music services such as Spotify, Apple Music, and Amazon Music for streams generated in the United States.
When a song is played on a video in YouTube, performance and mechanical (sometimes called ‘micro-sync’) royalties will be generated. Usually, performance royalties are paid out to your domestic PRO/CMO. YouTube pays out mechanical royalties directly to a publishing administrator. This is done through YouTube's unique ContentID system, which can detect and claim royalties automatically based on a fingerprinting system. This allows them to claim your royalties if someone puts your music in a video.
Keep in mind, these payments are only for streams generated in the US. Payments for plays outside of the US are sent to CMOs in each country and can also be collected by a publishing administrator. At Songtrust, our YouTube monitor searches YouTube for videos that it thinks are using your music, including live and cover versions (which Content ID might not always find and claim automatically). For more information on how royalties work on YouTube, check out our article on this topic.
International Mechanical Streaming Royalties
Do you have a strong following in Japan? Is Brazil the top Country on ‘Where People Listen’ on your Spotify artist page? If so, you should be collecting royalties for these plays, but your home collection society (if it differs from the country where your following is) may not be collecting those royalties on your behalf. When a song is streamed outside of the US (JioSaavn, Youtube, Spotify), mechanical royalties still need to be claimed. These are collected by entities outside of the US that operate much like the Harry Fox Agency or Music Reports. However, this depends on the requirements set forth by the society and there may be restrictions in affiliating with those countries’ MROs for non-residents. If you’re unsure whether you’re setup to collect these royalties, reach out to our team and we’ll help you get sorted.
International Performance Royalties
Collecting on streaming royalties doesn’t end when you’re successfully getting all of your mechanicals and you’re affiliated with a collection society. If you’re getting streams outside of your home country, you’re entitled to collect performance royalties for these as well. When a song is streamed, played on the radio, or broadcast outside of the US, performance royalties are generated. These are collected by collection societies and can be paid out through reciprocal agreements with your US PRO (if you live or are affiliated in the US).
However, these reciprocal agreements are essentially data sharing agreements that send your song registrations from one society to another in order to collect your international performance royalties. Because you’re not directly affiliating with these organizations, you’re less likely to collect all of your international performance royalties. If you directly affiliate with these collection societies, you’re more likely to retrieve your full payout -- but doing this independently can be difficult and sometimes impossible without a publisher.
Live Performance Royalties
Have you been on tour recently? Merchandise and ticket sales aren’t the only way to make money while on the road for live concerts. Anytime you play your music in a public venue, you can collect public performance royalties. However, in order to get these royalties, you must submit your setlist to the society of the country you played your songs in. Make sure to do it sooner than later, because some collection societies are adamant that you submit a setlist within 6 months. With Songtrust already? Submit a setlist using our setlist tool in order to collect those public performance royalties.
All this might seem terribly daunting, especially when you want to just focus on creating music. But you don’t have to go it alone. Using a music publishing administrator like Songtrust, which maintains strong relationships with collection societies globally, ensures you can efficiently collect these royalties and that you’re properly registered worldwide. So whether you decide to do it alone or use a publishing administrator, make sure you know the types of royalties your song can earn, where they are being played, and who is in charge of tracking their usage, so you have a better idea of where to go to get the money you deserve.
Interested in seeing how much you could receive for your song by signing up with Songtrust? Check out our estimator tool.
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We created this guide to answer a simple question: How do songwriters support themselves?
The answer is not as simple as we’d like, but our goal is to make it as clear, transparent and understandable as we possibly can.
Songtrust is more than just a rights management platform and publishing administrator - we’re a team of experts in the music community who strive to educate, support, and provide thought leadership to creators, representatives, and businesses across the music industry.
Our hope is that you’ll finish this guide with an better understanding of the business behind songwriting and have actionable resources to help you be successful.