17/04/2024
Artist, Managers, Producers, PR, Independent labels, Record Companies, Production etc.
Music information from EF J Hutchison
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How do you make sure you register your work properly and obtain all of the music streaming royalties that are rightfully owed to you? Keep reading. As you study more about the global music rights, you’ll see the distinction over and over again between “artist” and “songwriter.” It’s an important distinction to make because the royalties for “artists” and the royalties for “songwriters” are completely different.
Ok, let’s go.
The reason I’m putting quotes around “artists” and “songwriters” is because so many of us are both. And many of us use these terms interchangeably. And back in the day, when labels started signing artists who also wrote their own songs (which, at the time, was quite unique), they put in clauses in the contract to limit the royalties they’d (legally) have to pay out to their newly signed artists/songwriters. One of these clauses is the infamous controlled composition clause. The major labels have always tried to screw artists out their well deserved music royalties. They look out for their own best interests and use artists’ ignorance (and blind pursuit of fame) to manipulate and deceive. This is part of the reason why so many established artists and songwriters have jumped ship from their major labels (and major publishers) and headed over to independent entities.
To not get into too much history, and really just cut to the chase, before the digital age, royalties were difficult to track, but there were fewer platforms to consume music, so there were far fewer royalty streams to worry about. With physical sales plummeting, people shifting from downloading to streaming, and the rise of digital radio, there are many more royalties out there, but they can be tracked much more easily.
For indie artists without a label or a publisher, you have to know what these royalties are and know where and how to get them.
So let’s break them down.
First some terms you need to understand:
Artist
Artists record sound recordings. Rihanna is an artist. She did not write her song “Diamonds.” So she is not the songwriter. Record labels represent artists. A band is an artist. A rapper is an artist. A singer is an artist. Typically whatever name is on the album is the artist.
Songwriter
Songwriters write the compositions. “Diamonds” was written by four songwriters: Sia Furler, Benjamin Levin, Mikkel S. Eriksen, and Tor Erik Hermansen. Publishing companies represent songwriters. A songwriter collects songwriter royalties.
Sound Recording
Some call this the “master.” It’s the actual recording. The mastered track. Traditionally, labels (because they own the master) collect music royalties for sound recordings. Sound recordings are not to be confused with compositions. Artists record sound recordings.
Composition
This is the song. Not the recording. Traditionally, publishing companies (because they own the composition and represent songwriters) collect music royalties for compositions. Songwriters write compositions.
PRO
Performing Rights Organizations. In the United States, these are ASCAP, BMI, SESAC and Global Music Rights (GMR). In Canada this is SOCAN. In the U.K. it’s PRS. Pretty much every country in the world has its own PRO and they work together to collect royalties from each other’s territories. These performance rights organizations represent songwriters, not artists. These are organizations that collect performance royalties (not mechanical royalties—we’ll get to those in a bit).
PROs make money to pay songwriter royalties and publishing royalties by collecting money from thousands of venues and outlets (radio stations, streaming services, TV stations, department stores, bars, live venues, etc.) that have been required to purchase “blanket licenses” giving these outlets permission to play music in their establishment (or on the air).
The PROs then pool all of this money and divide it among all of their songwriters and publishers based on the frequency and “weight” of each song’s “public performance.” The PROs then pay the publishing companies their 50% and the songwriters their 50%. PROs split “publishing” and “songwriter” royalties equally. 50/50. This is not a deal you negotiate. This is just how they do it for everyone from Taylor Swift down to you and me. 50/50. Any songwriter in the U.S. can sign up for ASCAP or BMI without being invited or having to apply. ASCAP and BMI are both not-for-profit organizations. SESAC and GMR are for-profit and you must be accepted.
ASCAP
American Society of Composers, Authors and Publishers represents 700,000 members (songwriters and publishers) and over 10 million compositions. ASCAP is owned and run by its songwriter and publisher members, with a board elected by, and from, its membership. They have paid out over a billion dollars in 2018. They represent songwriters like Katy Perry, Dr. Dre, Marc Anthony, Chris Stapleton, Ne-Yo, Trisha Yearwood, Brandi Carlile, Lauryn Hill, Jimi Hendrix, Bill Withers, Carly Simon, Quincy Jones, Marvin Gaye, Stevie Wonder, Duke Ellington, annnnnd Ari Herstand.
BMI
Broadcast Music, Inc. represents over 800,000 members (songwriters and publishers) and over 10.5 million compositions. They represent song-writers like Taylor Swift, Lil Wayne, Mariah Carey, John Legend, Lady Gaga, Eminem, (members of) Maroon 5, Michael Jackson, Linkin Park, Sam Cooke, Willie Nelson, Loretta Lynn, Dolly Parton, Fats Domino, Rihanna, John Williams and Danny Elfman.
SESAC
SESAC is not an acronym. Really. It represents over 30,000 members (songwriters and publishers) and over 400,000 compositions. They represent songwriters like Bob Dylan, Neil Diamond, Rush, Zac Brown, Hillary Scott of Lady Antebellum, the Avett Brothers, Shirley Caesar, Paul Shaffer and one-half of Thompson Square.
GMR
Global Music Rights (GMR) was founded in 2013 by industry legend Irving Azoff. Like SESAC, it’s invite-only and for-profit. GMR pretty much exclusively represents superstars like Bruno Mars, Bruce Springsteen, Drake, Don Henley, Glenn Frey and Joe Walsh (the Eagles), John Mayer, John Lennon, Smokey Robinson, Jon Bon Jovi, Prince, Slash, Leon Bridges, Ari Levine and Pharrell. They pride themselves on getting the most amount of money for their very few clients. They have licensed over 33,000 songs with about 100 writers and 200 publishers on their roster.
You (as a songwriter) can’t sign up to multiple performance rights organizations. Only sign up for one PRO. You have to make distinctions and put ASCAP vs BMI for example, and choose which works for you.
Performance Rights Organizations in your country. Pick one and sign up.
**It’s important to note that if you go for an ASCAP membership as a songwriter, you also need to register a “vanity publishing company.” That means, just make up a name (mine is Proud Honeybee Music) and register your publishing company with ASCAP. You must do this to get paid all of your music royalties. If you don’t have your vanity publishing company registered as a corporation (like an LLC), or have a bank account under its name, make sure to tell ASCAP you are “doing business as” the vanity publishing company so they can write the checks appropriately. You can also sign up for direct deposit which expedites this entire process. ASCAP pays out 50% of the total money to the songwriter and 50% to the publisher. If you don’t register a publishing company, you will only get half of your money.
If you are an unaffiliated songwriter with BMI, you don’t need to register a vanity publishing company. BMI will pay you 100% of the money.
HOWEVER, if you sign up for an admin publishing company (like Songtrust, Sentric, CD Baby Pro, or TuneCore Publishing), they will collect your publishing money from your PRO, take their commission (15-20%), and pay you out the rest. So, you don’t need to register a vanity publishing company (if you’re with ASCAP) or register it as an LLC or open a bank account. This is a far easier option.
+Songwriters! Registering with ASCAP or BMI is Not Enough For You To Get Paid
I recommend you make sure all of your songs are registered with your local PRO and that you work with an admin publishing company. If you distribute through CD Baby, use CD Baby Pro. If you don’t, use Songtrust, Sentric or TuneCore Publishing. If you haven’t registered with a PRO yet, signup for an admin publishing company FIRST – they will then register your songs with a PRO (save some time and steps!).
Digital Distribution Company
Some people call them digital aggregators. These companies are how you get your music into Spotify, Apple Music, Amazon, YouTube Music, Deezer, Tidal and 80+ other digital stores and streaming services around the world. I reviewed them in this piece.
HFA
Harry Fox Agency. Prior to 2021, many digital service providers (DSPs) engaged Harry Fox Agency (HFA) to help them administer the mechanical licenses needed for the songs that were available on their streaming platforms. In 2021, the Mechanical Licensing Collective (The MLC) legally became the sole organization responsible for administering a new blanket license that covered those uses on interactive streaming and download services (i.e., now The MLC collects 100% of mechanical royalties, aka streaming royalties, from U.S. streams). HFA remains a privately owned company involved in different types of music licensing activities, including the administration of physical product and permanent download licensing and royalty services.
The MLC
In early 2021, the Mechanical Licensing Collective formed. This was setup by the US government to collect mechanical royalties from streaming services in the US. The MLC is the only organization in the US that collects mechanical royalties. The only way you can get these is if either you or your publisher is signed up with the MLC. You can register (and check on your songs) at themlc.com.
Admin Publishing Companies
“Admin” stands for “administration.” All publishing companies have an admin department. They also have a sync licensing department, an A&R department and many other departments. Admin publishing companies have started popping up over the past few years to help unrepped songwriters (like you and me) collect all their music royalties from around the world.
Again, companies like Songtrust, Sentric, CD Baby, TuneCore and Audiam are some admin publishing companies who will do this. These companies will accept anyone and everyone. If you have a bit more clout, you should look into more exclusive companies like Kobalt, PEN, Riptide and Secret Road. These companies operate like normal publishers, but work on an admin (commission only) basis. They do not retain ownership – like traditional publishing companies.
+Songtrust vs. Sentric vs. CD Baby Pro Publishing vs. Tunecore Publishing
Sync Licensing
“Sync” stands for “synchronization.” A sync license is needed to sync music to picture. TV shows, movies, commercials, video games, all need a sync license to legally put a song alongside their picture. Technically, so does YouTube, Facebook and Instagram. YouTube, Facebook and Instagram officially struck deals with all the major (and most of the indie) publishers to officially allow cover videos on their platforms. That’s why for a while, Facebook was ripping down cover videos.
Back in the day, believe it or not, YouTube did it too—per the publishers’ request. But now that the platforms are licensed, publishers (and songwriters) can earn from cover videos on the platforms. YouTube was the first, with their Content ID technology, to be able to track and monetize songs uploaded by users on their platform. For verified partners, they will even split cover song earnings with the publishers and the creators of the videos. I'm
If you want to start earning from your Facebook videos, sign up for Facebook for Creators. As of mid-2019, Facebook required creators to have at least 10,000 Page Likes, at least 30,000 one-minute views in the past 60 days, a Page in good standing, and to be based in a country that is supported by Facebook monetization.
Sync Licensing Company / Agent
Sync licensing companies, sometimes referred to as sync agents, work to get your music placed in TV shows, movies, trailers, commercials and video games.
Sync licensing companies, oftentimes referred to as sync agents, typically only represent artists who are also the sole songwriters. Sync agents are one-stop shops for music supervisors. They want to make it as easy as possible for the ad agency or TV show to use the song. Licensing companies can clear the songs immediately for the music supervisors. So if you cowrite with anyone, first make sure they are not signed to a publishing company (if they are, it makes things very difficult and will almost certainly prevent a sync agent from working with you or repping that song). And make sure you get in writing (email is fine), that you have full rights to the song to license without getting permission from your cowriters.
WORD TO THE WISE: Never pay a sync agent money up front to go pitch you. If they believe in your music, they will pitch you and work solely on commission. Commissions are typically between 25% and 50% of the up-front fee. Some will take a commission of your backend PRO royalties and some will not.
If you want to learn how to get your music synced and get a full list of reputable sync agencies, join Ari’s Take Academy’s course: Advanced Sync Strategies for Film, TV Shows and Video Games
Also, there are music licensing companies and libraries (like Triple Scoop Music, Audiosocket and Musicbed) that specialize in issuing inexpensive sync licenses for wedding photographers, corporations (for in house training videos) and indie filmmakers. This can help you bring in some extra dough. These kinds of companies are definitely worth looking into. They don’t work to get you the $200,000 Verizon commercial spot, they’re soliciting wedding photographers to pay $60 to license your song in their personal use wedding video. But these can add up. There are a bunch of these music licensing companies and libraries out there.
SoundExchange
A lot of people confuse SoundExchange with PROs because technically SoundExchange is a performing rights organization. But I’m not including them in the “PRO” classification out of clarity (and when most in the biz discuss PROs, they are just referring to the aforementioned ASCAP, BMI, SESAC, SOCAN).
SoundExchange represents artists and labels whereas (the other) PROs represent songwriters and publishers. Unlike the four PROs in America, SoundExchange is the only organization in America that collects performance royalties for “noninteractive” digital sound recordings (not compositions). “Noninteractive” means you can’t choose your song. So, SiriusXM radio is noninteractive, whereas Apple Music and Spotify are “interactive.” Beats1 (within Apple Music) is digital radio (noninteractive). Part of Pandora is still noninteractive as well.
SoundExchange has agreements with twenty foreign collection agencies. When your music is played in their territory, they pay SoundExchange, and SoundExchange pays you. Like the PROs, SoundExchange issues blanket licenses to digital radio (noninteractive) platforms (like Pandora and SiriusXM) which gives these outlets the ability to play any song they represent. Like the PROs, the outlets pay an annual fee for the blanket license. But, SoundExchange collects only digital royalties. The PROs collect digital, terrestrial (AM and FM radio) and live royalties.The way the copyright law is currently written in the United States, AM/FM radio has to pay only composition performance royalties and not sound-recording royalties. Makes no sense.
The U.S. Copyright Office has recommended that this law be changed, but only Congress can do that, and the few times it has tried, the proposal was defeated, largely as the result of heavy lobbying by Big Radio.
So, again, SoundExchange = digital sound-recording royalties for noninteractive plays in the U.S.
And to complicate matters even more, not all digital radio services work with SoundExchange (but 2,500 do). Some opt out (Spotify noninteractive radio has opted out) and they just negotiate rates directly with each label/distributor.
How To Sign Up For SoundExchange or Your Country’s Neighbouring Rights Organization
If you are a U.S.-based artist, go to SoundExchange.com. If you are both the performer (artist) and the owner of the sound recording (meaning you don’t have a record label), simply select “Both” on the second page of the registration when it asks you to select: Performer, Sound Recording Copyright Owner or Both. It’s a long process and you have to submit a full catalog list. When I did this, I had to email in a complicated Excel doc with lots of info. Plan a weekend to do all of this. It’s time-consuming, but worth it.
—> If you are NOT in the United States you do NOT need to sign up for SoundExchange. Signup for your country’s “Neighbouring Rights Organization” – see below
Fun fact: I encouraged Ari’s Take reader and children’s musician Andy Mason to sign up for SoundExchange, and the first check he got was for $14,000! Apparently, Pandora had his songs included on all the most popular children’s music radio stations and he had no idea. Boom! SoundExchange will hold your back royalties for three years, so register now if you haven’t already. And if you have registered (maybe you did years ago), make sure you have also registered as the Sound Recording Copyright Owner (they previously called it “Rights Owner”). Because the “Both” option is very new, you may have missed it and are only receiving 45% of your total money.
Why 45% and not 50%? Session musicians can get some of this money too! If you are a session musician, 5% of the total money earned for each song has been reserved for you. Contact the AFM (the musician’s union) to grab this moola.
SoundExchange’s breakdown for payment: 45% to featured artist, 50% to the sound recording owner (label—or you if you self-released), and 5% to session musicians or, as they put it, “non-featured artists.”
Whether you have session musicians or not on your record, SoundExchange withholds 5% of all royalties from everyone for them. If you live outside the United States, you do not need to sign up for SoundExchange. You should register with your country’s neighbouring rights organization.
