While publishing is a vital piece to a creator’s career, it can also be tricky to understand all the nuances that come with it. We’ve talked about the two halves of a song, the difference between royalties earned, and shared our glossary on common music publishing terms, but another important part of publishing is understanding how royalties are broken down at the collection level. Traditionally, royalties from collection societies are separated between a 'writer's share' and 'publisher's share'. Performance royalties are split into two equal halves: writer’s share (50%) and publisher’s share (50%). These are two separate revenue streams that collection societies keep separate and account for separately. Let’s break it down a bit more.
What is the writer’s share?
Performance royalties are generated by public performances of the composition (i.e. digital on-demand streaming, live concerts, terrestrial radio). A specific share of performance royalties is allocated to each writer of a given original composition, based on the writer’s ownership (out of 100%). The writer ownership is determined by a split sheet, and/or a contractual agreement between the writers and publishers of a song. Once a writer registers their song title, and their ownership, each given society will allocate a writer’s share of performance royalties based on that registration.
How is it collected?
As a writer, you are directly affiliated with only one collection society. Usually, a writer’s collection society affiliations are non-exclusive agreements, meaning they can only be a member of a single society at one time. This one collection society represents you and pays your writers share to you directly. Normally this collection society is located in the same country/territory as you, but not always (We recommend choosing the society where your music is used most).
Each writer ownership of a composition is documented as a percentage of 100%. If you own 50% of the composition’s writer’s share, you collect 50% of all writer’s shares directly from your collection society. Based on the registration details provided to that and other collection societies, the remaining 50% is allocated to each co-writer.
Here’s an example to help explain: If you are affiliated with ASCAP, and your music is used in another territory outside of the US, the society in that territory will pay your writer's share (and publisher's share, if you do not have a publisher), to your home society, i.e ASCAP. If ASCAP does receive both the writer and publisher's shares, they will split them up themselves. If you have a publisher who registered the song at a society outside your home territory, that publisher will receive the publisher's share directly (and then pay it out to your based on your agreement with them). Therefore, a writer always receives their entire writer’s share of performance royalties directly from their society.*
*But in order to receive payment from all territories, you need a publisher to register your compositions at the collection societies in all territories. Other societies will then send your generated writer’s share to your affiliated society for you.
What is the publisher’s share?
Complementary to a writer’s registration of a song is a publisher’s registration. Entities can become members of collection societies, such as BMI, similarly to songwriters. Any affiliated entity can register a publisher’s ownership of a song at a given society. Some societies even allow writers to take the capacity of a publisher and claim a publisher’s share, even if they don’t have an affiliated entity at their society, but it’s important to note that that’s not always the case. Congruently, a writer can affiliate their own LLC, or given entity, at their society, in order to act as their own publisher and collect publisher royalties.
The publisher’s share is made up of both performance and mechanical royalties. According to a split sheet and/or contractual agreement between songwriters and publishers, each publisher claims a percentage out of 100% for each composition. In the US, this publisher’s share is included with each publisher’s song registration. It is how both collection societies and mechanical agencies determine the amount of royalties to allocate to each publishing company or entity.
The publishers are allocated their share of the 50% of performance royalties from collection societies, as well as the 100% of publisher’s mechanical royalties. These mechanical royalty sources include Harry Fox, MediaNet, and Music Reports in the US, where globally some societies collect both the performance and mechanical royalties in one society. In addition to mechanical agencies, and unique to the US, labels will sometimes pay publishers directly their mechanical royalties from sales and downloads.
What does this mean for me as a creator?
Understanding how your ownership is broken down and collected by societies around the world is vital to you as a business person. If you’re still a bit confused, you’re probably not the only one. If you need more clarification, register for one of our monthly Music Publishing 101 virtual workshops, here.
As a publishing administrator, Songtrust represents and collects the 50% of publisher performance royalties and 100% of mechanical royalties on the composition from all societies directly. This is income you miss out on if you don't have a publisher to do this legwork for you. Want to make sure you’re fully covered and collecting all the royalties you’re earning globally? Register with us today.
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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.