Virginie Berger, a music and tech industry veteran, specializes in rights management, digital transformation, and music business innovation. With over 20 years of experience as SVP Global Publishing at Downtown Music-Songtrust, Armonia, Myspace, and Microsoft, she has driven revenue, built partnerships, and championed artists' rights. A curator, professor, and artist advocate, she excels in music rights innovation and monetization.She is currently an international advisor, helping companies enhance brand awareness, cultivate partnerships, and pioneer rights innovation. Additionally, she is relaunching her media platform, Don't Believe the Hype, dedicated to music business, innovation, and international expertise.
Music royalties are a crucial aspect of the music industry, frequently associated with disputes between artists, songwriters, and labels. As a creator, understanding music royalties is essential before embarking on music production with collaborators to prevent future issues.
Music royalties play a significant role as a major source of income for songwriters, composers, performers, and music publishers. These royalties are payments provided to musicians in exchange for the usage of their musical compositions, whether through online music services, radio airplay, TV advertising, or live performances.
Sound recording copyright protects audio recordings, such as songs and albums, granting the owner exclusive rights to reproduce, distribute, and publicly perform the sound recording. Typically, record companies control sound recording copyrights, although independent musicians or producers may also own them.
Songwriting copyright safeguards the rights of composers and songwriters, granting them sole ownership of their musical creations. They have the freedom to copy, share, perform, and broadcast their tunes. Songwriting copyright also empowers them to license their songs for use in various media, including movies and TV shows.
Music royalties can be generated through various channels like streaming services, radio airplay, TV advertising, and live performances. The songwriter, composer, publisher, or performer typically receives royalties based on their individual contracts. Several factors, such as the number of plays, song duration, and popularity, influence the amount of royalties paid. Performance rights organizations (PRO in the US, CMOs in Europe and other countries) play a key role in collecting and distributing royalties to the relevant rightholders.
There are several types of royalties that musicians and music industry professionals should be aware of:
Songwriters receive royalties for creating music, including mechanical and live performance royalties. Music rights organizations or royalty collection companies typically pay songwriters. Publishers, on the other hand, earn royalties for licensing music for various uses, like in TV, cinema, or advertisements. Publishers may also receive mechanical royalties from music replication and share revenue with songwriters.
Collecting music royalties from digital services involves licensing agreements, usage monitoring, and payment processing:
While the process may seem straightforward, digital music royalties face challenges like complex ownership and distribution, a lack of transparency, varying royalty rates, piracy, and limited revenue sharing. These challenges can result in disputes over royalties, delayed payments, and reduced incomes for artists and rights holders.
To maximize music royalties, musicians and rights holders can take specific steps:
In the US, registering your work with the U.S. Copyright Office provides a public record and is crucial for filing a lawsuit for copyright infringement.
In the EU, copyright is automatic upon creation of the work. While there’s no formal copyright registration, maintaining records of your work and the date they were created is recommended.
Musicians should register their works with rights organisations societies to ensure accurate monitoring and payment for public performances. This requires providing basic information about the music, composers, publishers, and genre.
– US artists should register with a Performing Rights Organization (PRO) such as ASCAP, BMI, or SESAC to manage their performance rights. These organizations license, collect, and distribute royalties for public performances of their members’ works.
– Mechanical rights are managed by The Mechanical Licensing Collective (MLC). US artists need to register with The MLC, which collects and distributes mechanical royalties from digital service providers.
– For digital performance royalties for sound recordings, US artists should register with SoundExchange, which collects and distributes these royalties when their sound recordings are used on digital platforms.
EU artists typically register with a Collective Management Organization (CMO), such as PRS for Music in the UK or SACEM in France. These organizations manage both performance and mechanical rights and collect royalties on behalf of their members.
You should consider affiliating with your local rights organizations for several compelling reasons, including effective communication channels but also subsidies, pension benefits, tax advantages and more. However, the decision may also depend on the current state of your rights organization in your country or whether your royalties predominantly come from online sources. In most cases, establishing a direct affiliation with your local organization is the optimal approach to ensuring seamless affiliation.
Affiliating with a rights management society (CMO / PRO) is a serious commitment, both for the rights organization society and the rights holder member. It is essential to fully understand the implications of this affiliation. Several important steps come into play to ensure a smooth and comprehensive process:
When it comes to affiliating with a rights management society, it is essential to exercise caution and take control of the process. Avoid signing up through third-party intermediaries who offer to do it for you. Instead, visit the official website of your local rights management society, carefully read the conditions, and don’t hesitate to ask questions before proceeding with the affiliation.
Signing up through third-party services might seem convenient, but it can lead to complications and potential misunderstandings. By directly engaging with your rights management society, you ensure that you have a clear understanding of the terms and conditions of affiliation. This empowers you to make informed decisions about your rights and royalties.
For most independent musicians, especially those in Europe, hiring a publishing administrator may not be necessary. This is because rights organizations, both in the US and globally, have the capability to collect all royalties on behalf of the rights holder, both in their territory and worldwide. While the idea of having an additional layer of protection might seem appealing, it often means paying for services that your rights organization is already providing. To ensure the best outcome for your royalties, it’s crucial to maintain a direct relationship with your rights organization. Make sure your membership is properly set up, and keep them informed about any live performances or commercial use of your music.
In the majority of cases, involving a middleman such as a publishing administrator is unnecessary and may actually reduce your earnings. By being proactive and well-informed about your rights and royalties, you can effectively safeguard your creative work and income.
However, there are scenarios where hiring a publishing administrator could be worth considering. For instance, if you are a publisher with an extensive catalog of songs that becomes difficult to manage on your own, a publishing administrator can provide valuable support for registering with rights organizations. Additionally, if you collect a significant amount of royalties internationally or have not set up a publishing company to collect your publisher share, working with companies like Kobalt or Muserk could be beneficial.
Ultimately, hiring a publishing administrator will not circumvent rights organizations or alter the payment schedule. Instead, it simply adds another layer between your royalties, the payment sources, and the rights organizations. While the administrator may handle certain administrative tasks, the fundamental process of collecting and distributing royalties remains unchanged. Therefore, it is essential to carefully consider whether involving a publishing administrator is necessary for your specific situation and if the benefits they offer outweigh the potential complexities it may introduce to your royalty management.
Published: 24 Aug 2023
Byta’s goal is to provide artists and their teams with the tools and knowledge to move their careers forward. The Byta platform enables everyone to send and receive digital audio in a clean, simple and secure way. Built for everyone working with music today. Streams or downloads arrive in the format that your collaborators need, metadata keeps everything organized and files are always secure.
