What’s The Deal With Unallocated Royalties?

Unallocated royalties are royalties that are generated by song usage, but never paid out to a specific artist, performer, or songwriter due to missing information. If you haven’t properly registered your songs, chances are you may be missing out on royalties of your own — leaving them unclaimed and bound for the “black box” money that major publishers split during redistribution. 

In the following post, we dive into how your money can get misdirected and how to put it on the right path before it’s too late.

Unclaimed Royalties

Why Is It Becoming a Bigger Problem? 

When someone streams your song, that one listen generates several different types of royalties and sends them to various pay sources (depending on the royalty type) and countries (based on where the stream occurred). 

Getting all these royalties into the right hands can be a complex process many pay sources aren’t equipped to handle. With so many individual streams occurring globally, and each one generating several kinds of income destined for a different collection source, it’s easy to understand how they can “disappear.”

Collecting these royalties comes down to the songwriter — namely, whether they’ve set their songs up for royalty collection. Be sure to follow these familiar practices to increase the odds of retrieving what your songs have earned:

  • Make sure you’re registered at the correct collection societies and each affiliation includes all the metadata that’s associated with your songs. 
  • If you’re affiliated but don’t have your songs registered, collection societies won’t be able to send you your hard-earned royalties. Register your songs as soon as possible.
  • Many royalties have a time limit on them. Once that elapses —  in two or three years, typically — they’re no longer accessible to you. Make sure to double-check your registrations and reach out to your publishing administrator or collection society if you notice any discrepancies.
  • Register your songs with as much data as possible. Oftentimes, sending royalties to songwriters comes down to simple matches between different societies and organizations. If your song registration is incomplete or missing information, your chances of a full payout are much less likely.

What’s the Difference Between Unclaimed and Unallocated (or “Black Box”) Royalties?

Unclaimed (or “unmatched”) royalties have not been matched to the right songwriter or publisher, but can still be accessed within a limited timeframe, if the writer or their publisher registers the songs so that they can be matched to the usage data. Once this wait period is up, they become “unallocated royalties” and are no longer available for distribution. What actually happens to your royalties from this point on depends on the society. 

One common way unallocated royalties are distributed is by reallocating them to a society’s top earners. This could deflect your hard-earned money to a millionaire — anyone from Taylor Swift to Drake - creators that never participated in your work in the first place. 

Getting What You’ve Earned

In 2018, U.S.-based songwriters and publishers passed the Music Licensing Modernization Act (MMA). One of its many provisions was a transparent, streamlined royalty payment system for stateside songwriters. The MMA also established an unclaimed royalties oversight committee to create best practices for when royalties get set aside for other artists.

Songtrust plays a vital role in “breaking the black box” by ensuring that our clients receive all of the royalties they earned and distributing all of the revenue we receive accordingly. We keep only our administration fee when distributing any unallocated royalties we receive to our clients.

While it’s up to your collection society to collect every time your song is broadcast, streamed, or performed live, societies outside your home territory will only send you money if your songs were properly registered with them. If not, you won't get paid; money earned from your music will, essentially, disappear.

Five Ways To Retrieve All Your Royalties 

  1. Metadata Accuracy: Music distributed on digital platforms will have an ISRC (International Sound Recording Code). Make sure to supply it whenever you register songs; it may be your golden ticket to collecting everything that’s owed to you. 
  2. Song Names: Make sure to keep the same titles everywhere you register. For example, if your song has a feature in it and it’s called “Song ft. Artist”, make sure to register it everywhere as “Song ft. Artist” and not just “Song” in some places. When entering a song with alternative titles in your Songtrust account, add in every alternate title that exists.
  3. Split Conflicts: Try to be on the same page as your co-writers. If there's a split discrepancy and multiple share pictures have been registered, any money your song is generating will be inaccessible until it is resolved.
  4. Catalog Updates: Keep your publisher and PRO/CMO updated as you write and release new songs.
  5. Performance Royalties: PROs focus on collecting performance royalties in the country they’re based in. While they often have reciprocal agreements with foreign collection societies, these are data-sharing agreements that don’t directly register your songs with foreign societies. By solely relying on these agreements, you’re more likely to lose money due to missing information. If you sign up with a publishing administrator like Songtrust, we’ll directly register your songs with pay sources worldwide and retrieve your performance royalties.

How We Can Help

Songtrust makes sure global mechanical and performance royalties are efficiently collected for you. We also strive to be a meaningful and informative resource for songwriters — a welcome source of transparency in an industry that can feel impenetrable at times. 

Check out our Modern Guide to Music Publishing here. If you have any additional questions, please reach out to our client services team at contact@songtrust.com or search the FAQ page in our help center.

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