When you combine a beat and vocal recording together they make a new song recording the Song. A song is composed of a mix of sounds which is split into 2 categories the Composition and Sound Recording. From those 2 categories you can see you can earn twice as much from the same amount of work and you can collect these types of royalties in most countries worldwide. Both Composition and Sound Recording are within your copyrights.
|Song||Composition||Sound Recording||Royalty Collection|
|Synchronization Rights||When played in a film||Licensed for TV, Film, Video Games, etc.||Publisher|
|Reproduction Rights||Sold, Streamed, Printed or Downloaded||Sold, Streamed or Downloaded||Record Label|
|Performance Rights||Played on Radio||Played in public shows, restaurants, etc.||Songwriters, Musicians, Singers|
You must first create a composition that includes melodies, lyrics or notes that are written down or recorded. Think of compositions as something that can be printed such as the musical notes on a sheet of paper. With a composition you can earn income from Synchronization (played on a film), Mechanical Royalties (sold, downloaded or streamed) and Performance Royalties (radio air-play). Publishers usually require the administration or ownership of the composition copyright of your Song to more easily manage licensing deals on your behalf.
The sound recording is the performance of the underlying composition (what your hear during playback export of composition from a DAW). Record labels usually own the copyrights to exploit to the market and pay all contributors their royalty share.
Who can collect Music Royalties?
In the United States of America, any person who contributes on a song is songwriter such as a composer, lyricist, performers (Artists), producer, instrumentalist, drummer, etc. And each one of these writers is entitled to collecting a writers share of earnings from the song. The percentage you own as a songwriter is the same you own as the publishers share. Which is equals to the percentage of how much you will earn on that song. An Artist can have a distributor and publisher collecting worldwide royalties on their behalf. Royalties are paid once a certain threshold is reached, quarterly or semi-annually depending on the type of deal you have. Performance Rights Organizations collect and pay royalties to Artists and Publishers for performances. SoundExchange collects royalties from Pandora, Spotify and more then paid to you.
How to keep track of your Music Royalties?
To keep track of your music royalties you will need to keep a detailed record of where you send your Songs to, whether its a distributor, publisher, administrator, representative or 3rd party. You will need to register your releases and ISRC with Soundscan for music trafficking purposes. Here are a few types of Codes you will need for your public releases.
You will need to have an International Standard Recording Code for each song to track unique sound recordings or music videos. This can be provided to you by a mastering engineer, producer or distributor. Once you have your song distributed you need to register your album and songs with Soundscan to be eligible for the Billboard Charts.
You will need a Universal Product Code for your release whether it is a single, EP or album. It is used for tracking items in stores.
International Standard Musical Work Code is a unique identifier for music. It is mainly used by performance rights organizations and publishers for collection of music royalties.
European Article Number is a global trade to identify product type from manufacturer.
What are the Music Royalty Types?
You can earn music royalties from the same song such as streaming, mechanical, downloads, ringtones, publishing and neighboring rights. There are many steps you need to take to collect your music royalties. You need to first have a distributor or a label that will put your song on iTunes, YouTube, Spotify, Pandora, etc. Yes you can upload your own music to YouTube, Reverbnation or Souncloud but wont be able to earn streaming royalties without a distributor by having your song on the proper platforms that will pay you for your hard work. You will also need to register with Sound
Each streaming platform gives you different earning capacity per play. A streaming royalty only counts after your music has been streamed for at least 30 seconds.
When your song is downloaded or reproduced on physical media such as CD or USB, you have the right to collect a mechanical royalty which the rate is regulated by the Harry Fox Agency. Which is currently $0.091 cents and for songs over 5 minutes it is $1.75 per minute after. For Ringtones it is $0.24. There are more mechanical royalties you can earn such as subscription and bundled subscriptions.
Performance royalties are earned whenever your song is played in public, such as, radio, restaurants, bars, events, shows, and streaming platforms like YouTube. You must be registered with a Performance Rights Organization to collect performance royalties in your country.
Neighboring rights Payed to Artists and Master Recording owners or labels when songs are performed on broadcast radio and television.