(featured image by Omar Prestwich on Unsplash)
1. Most Musicians aren’t familiar with the music business terminology or concepts they need to be.
2. Most musicians don’t know where to find their song metadata or what to do with it.
3. Most musicians are unaware of what the royalty collection agencies are, and what they collect.
There is a tremendous amount of confusion today about how musicians get music royalties from having their work played, purchased, or streamed online. Most artists tend to think only as far as registering their music with a digital distributor like Cd Baby, TuneCore, or DistroKid, maybe uploading to Bandcamp or SoundCloud, and/or possibly putting content on social media platforms or YouTube. In doing so, they miss out on music royalties they could be getting. It is so easy to be overwhelmed by the drive to go viral, get famous, or land a record deal, that many bands and artists never take the most basic steps to ensure they fully own their music, and get all the possible music royalties that exist. SoundExchange, just as one example, paid out roughly a billion dollars in unclaimed royalties to artists last year who decided to get properly registered to receive them.
Many musicians also incorrectly assume they have to be famous to make money. However, taking practical steps to generate income from your music can be extremely beneficial for artists at any point in their career. Owning your own music and getting paid all relevant music royalties from it is the foundation of finding success in the 21st century, whether just starting out or finding yourself in the midst of a lengthy career.
With all the ways media and media consumption are changing, the use of recorded music for all sorts of content will increasingly be the norm. Musicians who know how to work within this dynamic will be prime candidates to access some of the 28 billion dollars, and growing, available to music copyright holders.
Let’s look at the 3 big things holding musicians back from making all the music royalties they could be:
1. Most Musicians aren’t familiar with the music business terminology or concepts they need to be.
Simply put—most musicians don’t understand the value of knowing certain industry concepts because they don’t understand them in the first place! There’s a lot we could talk about here, but let’s take a few crucial concepts and explain them. This may help you get started.
Photo by Wes Hicks on Unsplash
Artist vs. Songwriter—this can be a bit confusing, but here’s a clear way to understand this: Songwriters write songs or “compositions.” This is the notes-and-lyrics part of the song itself. Artists record “sound recordings,” or masters. Both songwriters and artists are entitled to different royalties. Often, record labels own masters and publishing companies own compositions, both of which dilute the royalties paid to artists and songwriters, respectively. Many artists are also songwriters (which adds to the confusion) because they are entitled to the royalties of both.
Mechanical Royalties are music royalties paid to songwriters whenever their song is recorded, manufactured, distributed, streamed or purchased. Though the root of this term comes from an antiquated concept in the early 20th century, the name and the purpose is the same, even today. In modern times, these are music royalties for songwriters when their work is recorded as a cover, manufactured as physical release, purchased as an mp3, and streamed actively or passively via a platform such Apple Music, Spotify, or Pandora. These payments generally come through a musician’s publisher or publishing company, but artists can also be self-published through the Harry Fox Agency, for example. Regardless, if you are a self-published songwriter, you need to be registered in order to receive these mechanical royalties because the PRO’s, like ASCAP and BMI, do not pay these out!
Performance Royalties are what The Performing Rights Organizations pay out. Songwriters earn performance royalties from the public performance of their composition. This includes music played live, over the radio, in retail establishments, or even digital spins on streaming services like Pandora, Apple Music, and Spotify.
2. Most musicians don’t know where to find their song metadata or what to do with it.
In most cases, musicians don’t realize how important proper management of metadata is for royalty collection agencies to find their music and spins.
Entering your metadata accurately and consistently into a variety of royalty collection agencies is one of the most fundamental steps to getting all of your music royalties. Metadata is how your music is tracked and how your work is discovered by anyone, on any platform. Specifically for our conversation, tracking metadata is one of the ways collection agencies look for your digital spins to calculate your royalties.
Keeping an organized spreadsheet of what metadata is entered on the respective platforms is a great way to keep things updated and consistent: from digital distributor, to PRO, to royalty collection agencies. Your metadata is accessible from your Distributor, PRO and Master Recordings. Once the metadata has been gathered, the required spreadsheets can be found in your established account with the royalty collection agencies. It can be challenging to keep track of all this information and make sure it is the same across the various platforms, but it is essential so that all of your money can be tracked!
3. Most musicians are unaware of what the royalty collection agencies are, and what they collect.
Once artists release their music through a digital distributor like DistroKid, Cd Baby, or Tunecore, and have registered with a PRO, they should focus on registering with the royalty collection agencies.
SoundExchange, Harry Fox Agency, Music Reports, and AARC are the relevant royalty collection agencies you need to be aware of.
SoundExchange collects and distributes performance royalties for digital streaming on behalf of featured artists and master rights owners. This is relevant for musicians who aren’t just a songwriter, but who are also the recording artist, and perhaps even own the masters.
The Harry Fox Agency collects and distributes mechanical royalties for songwriters and publishers. If you are a self-published artist, you need to be signed up here to collect your royalties from mechanical licenses. These royalties are paid to songwriters and publishers when a song is manufactured into a physical copy, or when it is streamed on a variety of online services.
Music Reports also collects and distributes mechanical royalties for songwriters and publishers, however they get reporting from slightly different places. While Harry Fox may get reporting from Spotify and Apple Music, Music Reports gets reporting from all sorts of other streaming services, such as Pandora, Amazon Music Unlimited, Tidal and SoundCloud.
The AARC (Alliance of Artists and Recording Companies) was created after Congress passed the Audio Home Recording Act in 1992 and it is the body that collects and distributes the associated royalties. This act requires manufacturers and importers of audio recording equipment to pay royalties to featured artists, master rights holders, songwriters and publishers.
In conclusion, artists who prioritize learning a few relevant concepts, organize their metadata and register with all the correct collection agencies can greatly increase their chances of making royalties from the plays of their music online—whether as an active selection or a passive spin.
It is also worth mentioning that this can be a lot for a single person or even a whole band to take on! Musicians want to find time to be creative, to write new material and to rehearse. And though many artists now realize in the 21st century that they may not need a record label to produce or distribute their music to the world, there is still a great benefit to an artist working with someone to help them manage and protect their intellectual property, navigate licensing and collect royalties.
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