With live performances not even a consideration for most, collecting royalties has never been more essential. The problem is that the lines have gone from blurry to nearly invisible when defining how and when artists should collect certain royalties. With how complex it can be to collect the maximum amount on your own, here is a crash course on collecting music royalties in 2021.
Royalty Components of a Song
Before we start collecting royalties, let us quickly go over how they can be generated from a piece of music. Each recorded piece of music has two different sides: mastered rights and publishing rights.
The master is what you hear on your radio or streaming service. Publishing is the behind-the-scenes work, such as lyrics, composition, melodies, etc. Each side generates royalties, so it is vital to understand this distribution upfront.
Audit Your Current Earnings
Although time-consuming, it can be constructive to start with an annual audit of your earnings. For example, pull up any active agreements you have with a record label or publisher, and then audit your statement for errors. The more familiar you are with the rules, percentages, and agreements that govern your contract, the better you will be at discovering more profitable rates in the future.
One of the first areas to check is to ensure that any producer advances have been returned to your account once the producer account has been squared up. The next low-hanging fruit to target in your audit are royalties that may have resulted from recent deals publishers made with social apps like TikTok and Facebook.
Major labels and publishers will soon collect over $100 million from massive new licensing deals with social media companies, and that number is continually growing. Ensuring that you receive the right-sized piece of this pie should be a top priority.
Audit Your Catalog
Another step on the audit checklist is to ensure that your catalog is entirely up to date with all essential details. These include songs performed, released, written, co-written, mixed, and produced.
For each of these items, confirm your royalty, the registered splits with the performance rights organization you belong to, and your SoundExchange split. Performance rights organizations include the ASCAP, BMI, Global Music Rights (GMR), or SESAC.
Good Splits Royalty Calculator
The founder of Good Folk Management, Jordan Mattinson, has joined with New York digital agency Coalesce to create Good Splits. The free royalty calculator has you select the aggregators you usually use along with the frequency of royalty payments. Once you have selected those two items, you can upload a sales or streaming report. You can then instantly view all payments owed to you.
With SoundExchange handling so many data entries, reviewing all your registered titles for accuracy is essential. The first entries to audit are making sure that the mixer, producer, releasing artist, and featured artists are allocated correctly. SoundExchange pays out equal splits to all featured artists, so be aware of this if you have an alternate deal arranged.
Another two areas to be aware of with SoundExchange are how they handle royalties for remixes, and royalties for mixers and producers. Check to see if SoundExchange is crediting the remixer with the same percentage as the featured artist. And for producers and mixers, all featured artists are required to sign a line of duty (LOD) to be paid your full percentage. Otherwise, you will only receive a pro-rated percentage.
A significant royalty that you could increase payments from in the future are neighboring rights. Unfortunately, this is an area where American performers have historically suffered compared to their international contemporaries. So, what are neighboring rights? They are the right to broadcast or perform a sound recording publicly. Meaning, any time your song is streamed on Pandora or Spotify, you should be collecting neighboring rights.
In an age dominated by streaming services, collecting your neighboring rights is critical. But six countries, all World Trade Organization members, have been denying American performers of the same royalties they pay to their local artists.
Luckily, organizations like SoundExchange have begun advocating for American performers to be paid these royalties. SoundExchange distributes royalties equally, regardless of nationality, under the idea of “national treatment.”
But despite being bound by the Trade-Related Aspects of Intellectual Property (TRIPS), which requires national treatment, the U.K., Canada, France, Austria, Japan, and the Netherlands have all found loopholes to deny Americans proper payment. SoundExchange claims that American artists are losing close to $170 million per year in lost international royalties.
Who Can Claim Neighboring Rights?
The master recording owner and the performance artists are both owed a share of neighboring rights royalties. Typically, the owner of the master and the performers have a 50/50 split of the royalties.
Neighboring Rights Collection Agencies
To ensure that you collect all your neighboring rights royalties, you can register with an organization like Symphonic.
Symphonic also helps artists collect YouTube royalties. One of the most powerful platforms a content creator can profit from is YouTube. However, YouTube is also exceedingly complex when it comes to legalities.
YouTube creates a digital fingerprint called a Content-ID for your music. Any time your music plays on a video, YouTube identifies it using this Content-ID. An ad will be put on the video, and the royalties will be awarded to you. If you work with Symphonic, they will go ahead and upload your music to Content ID, which allows your music to be monetized.
Residual funds are income streams that you may not have been aware of. Perhaps you played the keyboard on a few extra tracks for an album that you were only paid a producer fee. Or maybe you took part in an impromptu performance that ended up going viral. These are just two of the many different types of residual funds that may be available to you.
Luckily, some organizations exist solely to help performers track down these elusive royalties:
- The Film Musicians Secondary Markets Fund has been working since 1972 to collect royalties for using a performer’s music in a film.
- The AFM & SAG-AFTRA Intellectual Property Rights Distribution Fund has a handy unclaimed checks list where you can check to see if a royalty check is waiting for you to collect.
Interested in reading more? Check out our 2021 Royalties Guide.