There are literally millions of dollars in unclaimed music royalties waiting to be collected.
And most of the artists owed these sums don’t even know they have money waiting for them. Some aren’t receiving any money at all. Others are only getting a fraction of what they’re due.
Are you one of them? Read on to learn how to find out, and what you can do about it.
At the heart of the matter is the difference between sound recording copyrights and composition copyrights. Digital services pay (or in some cases, don’t pay) in different ways for both.
If you recorded a song and that song is streaming on Spotify, chances are you’re getting paid your sound recording copyrights. That’s because Spotify licensed your music from either your label or your digital distributor. The service knows who to pay for each use, and the label/distributor knows where to send the resulting check.
But if you wrote the song and hold a composition royalty, Spotify and others are sometimes less clear on who to pay. For public performance royalties, it's easy. Established PROs like ASCAP and SESAC collect and distribute those royalties.
But for mechanical royalties it's harder. Most PROs don’t collect or distribute mechanical royalties. (SESAC is the notable exception, having acquired Harry Fox Agency for this purpose.)
Spotify pays mechanical royalties to the publishers listed on each song played. Only not all songs have that information included. (After all, the label/distributor provided those songs to Spotify, not the publisher). So when Spotify doesn’t know who to pay, it holds the money in a “black box” until it finds out. In other words… it just sits there.
In the DIY space, that’s a particular problem. It’s easy for Spotify to pay the DIY distributors like CD Baby for the sound recording. But it’s harder to find where to send the mechanical royalty payment for DIY artists.
Former Tunecore CEO Jeff Price outlined the problem songwriters face in more detail in this recent essay. The good news is... there are solutions to these problems.
Royalty Collection Checklist
To ensure you're collecting the royalties you're owed, follow these simple steps:
Sign up for an admin publishing service
- Digital distributors like CD Baby and TuneCore have added publishing administration to their list of services. Check to see if your distributor offers this service.
- Audium collects and distributes mechanical royalties. They not only establish direct licenses, but also police and audit services who may be using your music without permission.
- Songtrust is a one-stop-shop for global royalty collection and administration. They collect from foreign PROs and distribute to you directly. That means they collect the money faster, pay you faster, and charge less in fees.
Register with a PRO: ASCAP, BMI, and SESAC exist solely to collect and distribute public performance royalties. Signing up is easy, and gets you paid. And if you’re also a performing artist, be sure to register with SoundExchange as well. SoundExchange collects and distributes sound recordings royalties from digital platforms.
Get a copyright: Register your music with the copyright office. Music not registered with the copyright office is not due royalties. If you’re not working with a label, it’s on you to get it done. This is particularly necessary for artists based outside of the U.S.
Know the code: Make sure you register for an ISRC code. If you’re not working with a label, you have to do so yourself. Here’s a handy ISRC guide from the MusicBiz association.
Finally, Spotify has settled several lawsuits it faced for not paying out those songwriter royalties. As a result, Spotify will establish an online portal where songwriters can claim their songs. When it goes live, be sure to register and collect any past royalties owed you, as well as ensure future payments.
Once you've taken these steps, contact Royalty Exchange to do more with the royalties you're now collecting. We can help you collect years worth of royalties in advance to fund your next project, make a major purchase, or otherwise take control of your career.