What’s The Deal With Unclaimed Royalties?

If the terms unclaimed or black box royalties sound a little ominous, it’s because it is. Unclaimed royalties, also sometimes referred to as black box royalties or black box income, is a blanket term for money that is earned but never paid out to an artist, performer, or songwriter. Finding a way to get these unclaimed royalties before they’re lost forever, in many ways, is like trying to locate a black box at the bottom of the sea – frustrating and overwhelming, if not impossible. 

If you’re a songwriter who hasn’t registered (or properly registered) your songs to collect all of your royalties, chances are you might have money sitting in the black box. Below, we’ll dive into how your money can get lost, how to retrieve it if it’s not too late already, and some useful tips to avoid getting your royalties sent to the black box in the future.

How Do Royalties End Up Unclaimed?

To better understand how unclaimed royalties have become an increasing issue for songwriters and artists, we can look at the current landscape of the music industry. Today, streaming and digital consumption have become the de facto way to listen to music, and when someone streams your song, that one listen generates multiple different kinds of royalties. These royalties are then sent to different pay sources (depending on the royalty type) in different countries (based on where the stream occurred). 

Unclaimed Royalties

Getting every type of royalty for every play into the correct hands can be a long and tedious process that many pay sources aren’t currently equipped to handle—It’s a lot to account for. Because so many individual music streams are occurring globally, and each one generates several different types of income, you can begin to see how these can easily ‘disappear’.

Collecting these royalties also comes down to the songwriter and whether they’ve set up their songs for royalty collection. As a songwriter, follow these practices and you’re much more likely to retrieve your royalties:

  • Ensure that you’re registered and affiliated at the correct collection societies and include all the important metadata that is associated with registering your songs. 
  • If you’re affiliated, but don’t have your songs registered—collection societies won’t be able to match your hard-earned royalties to you. Register your songs as soon as possible.
  • Many of these royalties have a time limit on them until they’re no longer accessible to you (generally 2-3 years). Make sure to double check your registrations and reach out to your publishing administrator or collection society if you notice any discrepancies.

Apart from having your songs registered with your society, you must register them with as much data as you can provide. Oftentimes, getting royalties to songwriters comes down to simple data matching between different societies and organizations, and if your song registration is incomplete or missing information, your chances of a full payout are much less likely.

What is the “Black Box” and How Do I Avoid It?

When pay sources are not able to connect royalties to a songwriter or rights owners, these unclaimed and unallocated royalties sit at the collection societies, ideally, until they can be allocated. However, these royalties could potentially sit there for years or decades before the songwriter corrects their information and these pay sources cannot hold onto this money that long. It can vary based on the collection society, but, generally, these unallocated/unclaimed royalties will sit at the society for a period of usually about 2-3 years. 

You might be asking yourself -- are unclaimed/unallocated royalties the same as these “black box royalties”? Yes, and no. When we talk about unclaimed or unallocated royalties, we’re referring to the royalties that have not been matched to their correct songwriter or publisher, but are still within the timeframe to access these royalties. Once this “wait period” is up, these royalties enter the “black box” and are no longer available for distribution. They are still unclaimed and unallocated, but at this point, they are lost forever and what actually happens to your royalties depends, again, on the society. 

One common way unallocated royalties are managed is by reallocating them to the society’s top earners, based on market share-- this means that your hard earned money could go to any number of millionaires, from Taylor Swift to Drake! While that’s most common, there are other ways your unallocated royalties are distributed, but the takeaway here is this: if you don’t register your songs or yourself correctly, your hard earned royalties could go to creators that never participated in your work at all.

Getting What You’re Owed

So far, finding a way to break into the black box has been a challenge. While a smaller artist doesn't have the pull to call for an audit that might unearth unclaimed earnings, there's always the possibility a major player who does will demand them. However, being active and well-informed in the music business can give you a voice to help unlock unclaimed royalties. 

In 2018, US-based songwriters and music publishers collectively worked to pass the Music Licensing Modernization Act (MMA), which (among many other things) will work to establish a more streamlined and transparent royalty payment system for songwriters in the US. Additionally, the MMA will establish an unclaimed royalties oversight committee to create best practices for when royalties do get black-boxed. Even though you're just one songwriter, having a voice is important and can impact meaningful change.

Songtrust also plays a vital role in “breaking the black box”. While it's up to your collection society to collect every time your song is broadcast, streamed, or performed live, collection societies outside your home territory will only send you the money if your songs have been properly registered with them. However, if your songs aren’t registered, you won't get paid – and money from your music will disappear into the black box.

Some Useful Tips To Avoid The Black Box

Adhering to these tips will help you provide more accurate data for societies and publishers, and increase your chances in retrieving all of your music publishing royalties.

  • Metadata accuracy: If you’re distributing your music on digital platforms, it has an ISRC (International Sound Recording Code). Usually, your ISRCs can be found through your distributor or record label. This code can be your golden ticket to collecting what’s owed to you. Make sure to supply this code when registering your songs anywhere. Oftentimes, this is the main link that gets your royalties to you. 
  • Song Names: Make sure to keep your song names the same 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.
  • Avoid Split Conflicts: Try your best to be on the same page with your co-writers. If there's a split discrepancy (i.e. the song’s writer shares add up to more than 100%), the money your song is generating will usually be inaccessible until the discrepancy is resolved.
  • Keep your catalog updated: Make sure to keep your song catalog updated as much as possible with your publisher and PRO/CMO. 
  • Don’t solely rely on your PRO for Performance Royalties: PROs are meant for collecting performance royalties only, and usually only in the country they’re based in. PROs do have reciprocal agreements with foreign collection societies (they’ll collect performance royalties if your song is streamed outside of your country), but these are data sharing agreements which don’t directly register your songs with foreign societies. By solely relying on these agreements, you’re more likely to lose money to the black box. If you sign up with a publishing administrator, like Songtrust, we’ll directly register your songs with pay sources worldwide and effectively retrieve your performance royalties.

How We Can Help

An organization like Songtrust can make sure mechanical and performance royalties around the world are efficiently collected for you. No matter what, make sure you have a publisher with global reach who can collect both performance and mechanical royalties in your most important territories, and be sure that publisher has direct relationships with collection societies to make sure you get what you deserve. Songtrust also works to be a meaningful and informative resource for songwriters to provide transparency in the industry.

If you’d like to take a deep dive into publishing, check out our Modern Guide to Music Publishing. As always, if you have additional questions, check out our help center for quick answers to FAQs or reach out to our team at contact@songtrust.com

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