Three Ways To Earn Sound Recording Performance Royalties in the U.S.

Jun 28, 2017

The following is a guest post from Benom Plumb. He is the Assistant Professor of Music Industry Studies at the University of Colorado Denver and former music publisher. He is not an attorney.

By now we all know that U.S. recording artists don’t get paid for the use of their music on the radio. Well, most of us anyway.

U.S. sound recordings earn $0 in performance royalties when performed on U.S. terrestrial broadcast radio and broadcast television. ZERO.

Only China, Iran, North Korea and Rwanda share this policy. The rest of the developed world recognizes the royalty. But it’s very difficult, if not impossible, for U.S. recording artists and labels to collect broadcast royalties from these other countries.

Since the U.S. won’t pay artists from other countries these royalties earned in the U.S., those countries won’t pay U.S. artists the same royalties earned in their country.

That’s unfortunate, since international royalties can often earn more than domestic royalties.

Fortunately, there are loopholes and other ways to get around this to potentially collect extra thousands of dollars on your work.

Record In Another Country

If you have the means, you may want to consider recording your music in a country that pays the sound recording royalty. This includes Canada, the UK, or virtually any country that’s a signatory to the Rome Convention

If a U.S. artist records their album in the UK, the UK royalty society PPL will recognize that the recordings qualify for the royalty and will pay the U.S. artist/label royalties (both digital and terrestrial).

Recording music outside of the U.S. may not be possible for everyone, but it can mean a whole new (and potentially lucrative) stream of royalty revenue outside of the United States.

Establish Residence In Another Country

Another loophole outside of recording in a qualifying territory is establishing residence in one. Obviously this is more difficult. But if you can pull it off, even if the recordings were completed in the U.S., some countries will pay the royalty if you have an address in their country.

Of course, other countries will not pay it to U.S. citizens regardless, simply because U.S. law doesn’t recognize it and the U.S. is not a signatory to the Rome Convention. Nevertheless, countries in the Eurozone (including the UK post-Brexit) will be accommodating to U.S. artists and labels.

Work With a Label That Has Direct Deals

Some record companies have bypassed the legislative issue by cutting their own direct deals for AM/FM radio royalties. Big Machine Label Group and Warner Music Group are notable mentions in recent years to blaze this trail with Clear Channel.

That means whenever BMLG or WMG sound recordings are performed on radio stations under the Clear Channel umbrella, they actually do generate the royalty in the U.S.

However, the full details of these direct licensing deals are under Nondisclosure Agreements, so our knowledge of them is very limited.

So whether you’re an artist, copyright owner or investor, it would be wise to research and consider ways to legally get paid this elusive royalty stream in the United States. It could mean the difference in leaving hundreds of thousands of royalty dollars on the table not otherwise available to U.S. citizens.