Mike Echlin

How to get global coverage for music royalties

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by

mechlin
in ,

After many attempts at understanding the wickedly complex world of music royalties, I think I’ve got the most streamlined solution.

Here’s what the landscape looks like!!

As an independent songwriter and artist, it’s actually easier than if you had a record company since the record company will own your music for the most part.

Here’s a much simpler breakdown:

If you’re registered with DistroKid, BMI, and SoundExchange, you’re well-covered for most royalty scenarios as both a songwriter and a recording artist. However, it’s important to understand the scope of each service to ensure all possible royalty streams are accounted for:

1. DistroKid:

  • Role: Digital Distributor
  • Coverage:
    • Distribution to Digital Platforms: DistroKid distributes your music to streaming services (Spotify, Apple Music, Amazon, etc.) and digital stores, ensuring you receive earnings from sales, streaming, and downloads.
    • Mechanical Royalties: DistroKid collects mechanical royalties from interactive streams and downloads on digital platforms.
  • Limitations:
    • No Collection of Performance Royalties for Songwriters: DistroKid does not collect performance royalties (e.g., radio airplay, live performances).
    • No Collection of Digital Performance Royalties for Non-Interactive Streams: DistroKid does not collect royalties from non-interactive streaming services (this is covered by SoundExchange).

2. BMI (or another Performing Rights Organization, PRO):

  • Role: Performing Rights Organization
  • Coverage:
    • Performance Royalties: BMI collects performance royalties on behalf of songwriters and composers. These royalties are generated when your songs are performed publicly, such as on the radio, TV, in live venues, or via streaming services.
    • Global Reach: BMI has reciprocal agreements with other PROs worldwide, so your performance royalties can be collected from almost any country.
  • Limitations:
    • No Collection of Mechanical Royalties: BMI does not collect mechanical royalties for songwriters (this can be covered by a separate service like Songtrust or your publisher).
    • No Coverage for Recording Artists: BMI only covers songwriters and composers, not recording artists or sound recordings.

3. SoundExchange:

  • Role: Digital Performance Rights Organization
  • Coverage:
    • Digital Performance Royalties: SoundExchange collects digital performance royalties for sound recordings from non-interactive streaming services (like Pandora, SiriusXM, and internet radio).
    • Distribution to Recording Artists and Rights Holders: SoundExchange pays these royalties to recording artists, the owners of the sound recordings, and non-featured performers.
  • Limitations:
    • No Collection of Publishing Royalties: SoundExchange does not handle any royalties related to the composition (lyrics and melody). It only covers the sound recording.
    • No Mechanical Royalties Collection: SoundExchange does not collect mechanical royalties from physical sales, downloads, or interactive streaming services.

Are You Fully Covered?

With DistroKid, BMI, and SoundExchange, you are well-covered for the major royalty streams:

  • Songwriter (Compositions):
  • Performance Royalties: Covered by BMI.
  • Mechanical Royalties: Covered by DistroKid for digital platforms; consider Songtrust or a similar service if you want broader mechanical royalty coverage, especially for physical copies or global mechanical royalties.
  • Sync Royalties: If your music is licensed for TV, film, or commercials, these royalties are typically handled by your publisher or a sync licensing agent. Neither DistroKid, BMI, nor SoundExchange covers this directly.
  • Recording Artist (Sound Recordings):
  • Digital Performance Royalties: Covered by SoundExchange.
  • Streaming and Sales Earnings: Covered by DistroKid for interactive digital platforms.

Potential Gaps:

  1. Mechanical Royalties (Physical Sales): If you’re releasing physical copies of your music (CDs, vinyl), you’ll need to ensure that mechanical royalties are properly licensed and collected. HFA or Songtrust can help with this.
  2. Sync Royalties: If your music is used in sync (TV, film, ads), you may need to work with a music publisher or sync licensing service to ensure you collect these royalties.

Final Thoughts:

For most independent artists and songwriters, being registered with DistroKid, BMI, and SoundExchange covers the primary royalty streams. However, if you’re engaging in activities like physical sales, international distribution, or sync licensing, you may need additional services or agreements to ensure full coverage.