The first thing that most young songwriters in the US hear is “you need to sign up for ASCAP or BMI to make sure you get your songwriter royalties.”
I have to hand it to ASCAP and BMI’s PR departments. They do a great job of making themselves known. So much so, that most songwriters (and managers …gasp!) think this is all you need to do to get your songwriter money.
But guess what? It’s not! And actually most of the songwriter money you make from Spotify and Apple Music (etc) streams do NOT come from ASCAP or BMI (or SESAC or SOCAN or PRS).
Ok, lemme break this down in plain musician language.
“Songwriters” write compositions (songs). “Artists” make recordings OF compositions. When Julia Michaels co-wrote “Sorry” that Justin Bieber recorded, Julia Michales was the Songwriter NOT the Artist (of that recording – Bieber was the Artist). Julia’s publishing company collects the royalties for her, the Songwriter, and Bieber’s label collects royalties for him, the Artist. (Bieber was also a co-writer so his publishing company also collected royalties for him the Songwriter).
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Publishers represent Songwriters. Not Artists. Record labels represent Artists. Not Songwriters. I know you may be both (Bieber and Michaels are both) and that these terms seem the same but they’re not. And there are TOTALLY different royalties for “songwriters” and “artists.” So you need to differentiate. Get it? Got it. Good!
Do you need a publishing company to collect your songwriter royalties? Read on…
Performance Royalties
ASCAP, BMI, SESAC, SOCAN, PRS are all Performing Rights Organizations (or PRO for short). These PROs collect performance royalties for songwriters and publishers.
A performance royalty is earned anytime your song is “publicly performed.” “Publicly performed” is a loose term, but basically means anytime your song is played in public. Like on the speakers at Starbucks. On TV – TV shows, commercials, etc. On the radio – whether it’s the radio in your car or Pandora or Sirius/XM. When your song is performed live in a venue (yes even by you). And technically the PROs collect a little bit from YouTube and the streaming services. But it’s VERY little. And they only recently started doing this. Honestly, if you haven’t been getting a gazillion views/streams you didn’t get ANY money from your PRO for these. I know from my statements.
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But, that’s not to say there is no songwriter money for streams. Because there is!
The majority of the songwriter money that comes from Spotify, Apple Music, iTunes and all other streaming/download services are called mechanical royalties.
Mechanical Royalties
Mechanical royalties are NOT performance royalties. ASCAP, BMI, etc do NOT collect mechanical royalties. You may have heard that 9.1 cents is earned per download or sale. And that’s true (for now – it’s going up!). So when you sell a song on iTunes, 9.1 cents is owed to the songwriter/publisher of that song. This is a mechanical royalty.
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When you want to release a cover song, you have to get a mechanical license and pay the publisher/songwriter those mechanical royalties from US downloads. Only US downloads, because iTunes nearly everywhere outside the US, pays collection agencies directly.
But what about streams? And what about your own mechanical royalties? On songs you write and release.
Spotify, Apple Music, Google, Amazon, etc etc pay these mechanical royalties directly to publishers (via collections agencies). NOT PROs. I repeat. Streaming services do NOT pay mechanical royalties to ASCAP, BMI, SESAC, SOCAN or any other PRO. Capiche??
So how do you get these damn mechanical royalties?
You need a publisher, admin publishing company or royalty collections company to collect these for you. Yes, technically, the DSP (Digital Service Provider – the streaming service) is required to pay you even if you don’t have a publisher, but the thing is, most don’t know how to FIND you. Hence all the lawsuits against Spotify and Apple.
So make it easy for em. Work with a company who they know. If you distribute with CD Baby, you can opt in to use CD Baby Pro Publishing (however, they will NOT collect your songwriter royalties for songs you write but are distributed by anyone other than CD Baby distribution – like if another artist records your song and releases it themselves). If you use other distributors, other companies you can use to collect your mechanical royalties include SongTrust, Kobalt, Tunecore Publishing and Sentric Music Publishing. These companies help you collect your mechanical royalties but don’t own your copyrights and have fairly short terms (for a small commission of 10-20% or so).
Worth mentioning that TuneRegistry is a new company that was created to get your songs registered most places for a fee. They don’t take a commission, so they don’t really put much effort into tracking down your royalties, they just get your songs registered and hope that the appropriate organizations pay you correctly (but you are required to register yourself with all the organizations they collect from – which is a major headache and NOT recommended). TuneRegistry takes a lot more effort and hands on work by you, but they serve a purpose for those that have the time, energy and understanding of how all this works and want to manage it themselves (and keep all their royalties).
But, you do not need to use them. Let me repeat, you do NOT need to use TuneRegistry (I got some questions about this). I just listed them as an alternative to an admin publishing company. To be honest, I can’t recommend them because of the headaches they cause in making you register with all these orgs. But some people like headaches. So… go for it! I recommend giving up 15% to a full-fledged admin publishing company and saving yourself the headache.
It’s also worth mentioning, that if you’re in the UK, PRS will collect your performance royalties and MCPS will collect your mechanical royalties. We don’t have an equivalent organization like MCPS in the States that collects ALL our mechanical royalties. You lucky Brits!
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But above all, most importantly, YOU have to figure out how to collect the songwriter royalties for the songs you write (and co-write). It is not the artist’s responsibility. Not the label’s responsibility. Not the other artist’s manager. YOUR responsibility. If you want your money, YOU register it with the PRO and admin publishing company or mechanical royalty collections company.
If this excites you and you want to learn more and go even deeper, chapter 13 in my book is about allllll the different kinds of royalties that are out there for Artists and Songwriters.
