Note: This article focuses on how composition royalties are split in most countries, but many societies in Europe break down writer and publisher share differently. If you’re unsure, check with your society directly.
While publishing is a vital piece of every creator’s career, it can be tricky to master all the minute details that come with it. We’ve already talked about the two halves of a song and commonly-used terms, but another crucial part of publishing is how mechanical and performance royalties are broken down at the collection level.
Performance royalties are typically split into two equal halves: a “writer share” (50%) and a “publisher share” (50%). Performing Rights Organizations (PROs) and Collective Management Organizations (CMOs) collect and account for each of these revenue sources separately.
Mechanical royalties only generate a publisher’s share. They are either collected by your CMO or a Mechanical Rights Organization (MRO) like The Mechanical Licensing Collective (The MLC). To learn more about collection societies, check out this blog post.
Let’s take a look at the shares of performance royalties.
What is the writer share?
Performance royalties are generated by “public performances” of a composition (e.g. digital on-demand streams, live concerts, terrestrial radio airplay). Royalty shares are allocated to each writer of an original composition based on their ownership*.
This is determined by a split sheet agreement between the writers of a song. For example, if you’re playing in a four-person rock group and each member contributed to a song equally, the ownership split is often 25/25/25/25.
Once a writer registers their song title and ownership, each society will collect your writer share of performance royalties based on that registration. In the above example, your writer share as a member is 25% of half of the performance royalty pie. (The other half of the 25% is your publisher share.)
*Some societies (BMI, for instance) record these shares at a 200% level in their system, meaning your writer share would equal 100% and the publisher share also 100%. We work on a typical 100% scale (50/50 split) here at Songtrust.
How is the writer share collected?
As a writer, you’ll need to affiliate with a Performing Rights Organization (PRO) or Collective Management Organization (CMO). These societies are in charge of licensing, tracking, and paying out performance royalties to songwriters and music publishers.
Having multiple affiliations can cause issues with your royalty payments (and in some cases is forbidden), so make sure to explore all your options and choose one wisely. This collection society — typically located in your home country — will pay your writer share directly to you.
It will also work with other societies based outside their country to retrieve your global collections. For example, if you own 25% of the composition, you collect 25% of all writer share directly from your collection society for worldwide and domestic use. Based on the registration details provided to your PRO and other collection societies, the remainder will be collected and allocated to your co-writers.
Here’s another example to help explain: If you are affiliated with ASCAP in the U.S., and your music is used in another territory, 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. Once ASCAP receives the share(s), they will split it up themselves and pay out writer and publisher shares - after taking an additional royalty cut.
If you have a publisher who registered a song at a society outside your home territory, that publisher will receive the publisher share directly from the foreign society and pay it out to you based on your agreement with them.
In other words, a writer typically receives their entire writer share of performance royalties directly from their society. However, in order to receive payment from all territories, you need a publishing administrator like Songtrust to register your compositions directly with global collection societies. This is because collection societies often require you to be a citizen of their country to join. Instead, other societies will send your writer share to your affiliated society for you.
What is the publisher share?
When you finish a song, you and any co-writers automatically become its publisher. This doesn’t mean you’ll be able to collect this share easily. You have three options: signing with a publisher, creating your own publishing entity, or remaining an independent songwriter. Let’s review each below.
Signing with a publisher
Much like songwriters, publishers and publishing administrators can become members of collection societies like ASCAP. The difference is that publishers can collect two kinds of royalties — mechanical and performance. Another important distinction is that publishing entities can affiliate with multiple societies. This allows publishers to work with songwriters who are affiliated with any PRO or CMO around the world and collect directly from those territories.
Creating your own publishing entity
A writer can affiliate a publishing entity with their society in order to act as their own publisher and collect the publisher share (this generally incurs an additional fee). However, for a publisher to collect their mechanical and performance royalties directly, they’ll need to register at the appropriate global societies. This can be a long and tedious process, because each country or territory may have one or more collection societies.
Remaining an independent songwriter
Some societies allow writers to claim a publisher’s share even if they don’t have a publishing deal, but that’s not always the case. Either way, you’re missing out on your mechanical royalties if you are affiliated only with a PRO.
How is publisher share collected?
Each publisher claims a percentage for each composition according to a split sheet and/or contractual agreement between songwriters and publishers. It is how both collection societies and mechanical rights organizations determine the amount of royalties to allocate to each songwriter and their publisher.
Usually, a publisher will claim the same amount as the writer share. Using the example above (25/25/25/25 split), your 25% share on the song will be mirrored on the publisher’s side. That means you’ll be collecting 25% of the publisher share of performance royalties.
Publishers are allocated 50% of performance royalties from collection societies, and 100% of mechanical royalties. Mechanical royalty sources include the Harry Fox Agency (HFA), The Mechanical Licensing Collective (The MLC), and Music Reports (MRI) in the U.S. Some global societies collect both performance and mechanical royalties. These are known as Collective Management Organizations, or CMOs.
In addition to mechanical rights organizations, U.S. record labels will often pay publishers directly for mechanical royalties earned by physical and download sales.
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 your business interests. If you’re still a bit confused — you’re probably not the only one — please consider registering for one of our monthly Music Publishing 101 Sessions.
As a publishing administrator, Songtrust represents and collects the 50% (remember, it’s split evenly between writer and publisher) of publisher performance royalties and 100% of mechanical royalties on the composition from global sources in exchange for a small administrative fee. You, the creator, will keep the entirety of your writer share and maintain 100% of your copyright ownership. This is income you can miss out on if you don't have a publisher do the legwork for you.