Music Royalties can be Divided into Several Categories

– Performance Royalties:  Earned when a song is played publicly, such as on the radio, in live venues, or through streaming services.

Organizations like ASCAP, BMI, or SESAC typically collect these on behalf of songwriters and publishers.

– Mechanical Royalties:  Generated from the reproduction of music, such as when CDs, vinyl, or digital downloads are sold.

These royalties are paid to songwriters and publishers whenever their music is reproduced.

– Sync Licensing Fees:  Paid when music is used in films, TV shows, commercials, or video games.

These fees are negotiated based on the use of the song and are typically paid upfront.

2. Distribution Process

When you distribute your music through a digital platform (like Spotify, Apple Music, etc.), here’s how the royalty process generally works:

– Upload:  You upload your music to a distribution service (like DistroKid, TuneCore, or CD Baby,Big Masterz Distribution), which then delivers your music to various streaming platforms.

– Sales and Streams:  Each time your music is streamed or downloaded, the platform collects revenue generated from users (through subscriptions, ads, or purchases).

3. Royalty Collection

– Revenue Splits:  The streaming platform keeps a percentage of the revenue (often around 30%), while the remainder is allocated to the rights holders (artists, songwriters, and publishers).

– Payment Distribution:  After the revenue is collected, the distribution service calculates the royalties owed to you based on the streams or sales your music has generated.

They then distribute the earnings to you, usually on a monthly or quarterly basis.

4. Reporting

– Most distribution services provide a dashboard where you can track your streams, downloads, and earned royalties.

This transparency helps you understand how your music is performing and where your revenue is coming from.

5. Important Considerations

– Registering with a PRO: To collect performance royalties, it’s crucial to register with a Performance Rights Organization (PRO) to ensure you receive payment when your music is played publicly.

– Publishing Rights: If you are the songwriter and publisher of your music, you may earn additional royalties from your mechanical and performance rights.

– Territorial Differences: Royalties can vary by region due to different laws and agreements regarding music rights.

-Conclusion

Understanding music royalties is vital for maximizing your income as an artist.

By leveraging distribution services, registering with PROs, and managing your publishing rights, you can ensure you receive the appropriate compensation for your work.