THE GUIDE TO: COLLECTING MUSIC ROYALTIES 1 “Just because you make Introduction something doesn’t mean it’s has value.” – R. Don’t Skip This Page One of the biggest mysteries and struggles of the music in- dustry is how to get paid music royalties in the United States. We all too often hear about the cliché starving artist criticism (especially from mom), but what about the artist that eats? How do musicians at the top of their game reap what they have sown? You are in the right place my friend. Ever since I’ve begun my research, I have followed the steps and am now successfully earning music royalties from multi- ple sources including Spotify, YouTube, Film Music, and Live Performances! Now it’s your turn, I created this guide so that you can be knowledgable of not only how to collect your roy- alties, but also understand what percentages are fair so that you get paid what you are worth. I want to take a moment to be clear. Following the steps in this guide is not guaranteed money today, so don’t quit your job just yet. These steps, once implemented, just open the pathways for money to stream into your bank account—but you need to turn on the cashflow with your music. The key to a music income is growing your fanbase slowly and steadily, and with the steps below, you will grow your income as you grow your fanbase. Are you ready? 2 2 “Know your craft, know How Music Royalties your industry, know your marketplace.” are Generated – R. One Song, Two Elements To understand how to monetize the music If you are the rights holder for the sound you make, we first need to understand that recording of your music, you may want to a song isn’t just one copyrightable piece of register that work with the US Copyright artwork. It’s two: The recording, and the Office. songwriting. 2. Songwriting Copyright 1. Sound Recording Copyright So let’s continue pretending that you are This is a little hard to understand at first recording your version of Michael Jack- but it makes sense. The copyright of the son’s Thriller. In order to have permission recorded song (AKA the “master record- to use the music and lyrics in the first ing” or “masters”) belongs to the owner of place, you need to obtain permission to the master sound recording. So just re- use the song itself. Even if your intent is to member this: Master=Recording. Master recreate the recording just as I described rights usually belong to either the artist(s), above, there is still intellectual property record label, recording studio (if the artist contained within the lyrics and the melody is unable to pay for recording services), or of the song that is separate from the intel- any other party that financed the record- lectual property contained in the sound re- ing. The reason that Master Rights exist as cording. In order to get permission to use it’s own copyright is because if you record a copyrighted musical composition, you your own version of Michael Jackson’s need to contact the copyright holder and Thriller, recorded in the style of Ska-Punk, obtain Publishing rights. Publishing rights you are creating a different audio recording belong to the owner of the actual musical with different musicians, at a different stu- composition. The publishing side of music dio, recorded at a different time, with differ- refers to the notes, melodies, chords, ent money, etc. Therefore the master itself rhythms, lyrics, and any other piece of is a different piece of intellectual property, original music. So when copywriting a even though the melody and the lyrics of piece of your own music, or requesting per- the song itself remain the same. It’s the lyr- mission to use a piece of music owned by ics and the melody that take us to the next someone else, you need to keep in mind type of copyright: songwriting copyright. both types of copyright, Sound Recording and Songwriting. 4 Music Copyright and Music Publishing On the last page, you learned that a re- There is an excellent guide on Legal corded song has two types of copyright. Zoom® for copyrighting music that I want Here is how you protect your art and how to point you to. Check it out here. the music industry is built to control these copyrights. Registering your music for copyright does not grant you access to a single penny of But before you go spending a bunch of your music royalties. In order to get paid, money at the US Copyright Office, let’s continue reading the rest of this guide. make sure that your song is even eligible for copyright. This is straight from the US So What is a Publisher? Copyright Law: A publisher is simply the person or entity who is in control of the Songwriting Copy- “You can copyright music, copyright lyrics, right. Successful artists have publishing or copyright both. You may copyright a companies who through contract obtain new song or a new version or arrangement control over their musical compositions. In of an existing song. The song must be your exchange, the publisher finds opportuni- original work, meaning that it must have ties for a song to earn income for both the been created by you and must show some artist and the publisher via the terms of minimal amount of creativity. their contract. If you are an independent songwriter and don’t have a publishing You can’t copyright a song title or a chord company, you are in charge of your own progression. If you make an audio record- music publishing and can collect publish- ing of your song, you may copyright in the ing royalties yourself. sound recording in addition to your copy- right in the song itself.” Where Do Record Labels Fit In? As you just learned, Publishers control the So just to be clear, you can’t copyright musical composition. Record Labels on your song ideas, only songs themselves. the other hand have control over the Re- To copyright a song you need to register cording Copyright (the master recording). an account at the US Copyright Office via their online portal: eCO. 5 But you are an indepenednt artist... So we went over a lot of stuff on the last page, but if you are an independent artist, you are in luck. As it turns out, if you are an independent artist, then YOU are the publisher of your music, and YOU are the record label in control of your sound recordings. This is really good news! However... You need to learn a little bit of how a publisher collects music royalties, and the same for record labels if you are indeed going to collect everything yourself. The benefit to this is threefold: 1. You will never need to split you royalty checks with a label or a publishing company 2. You have full control over your music, how you would like it to be used, and how much it is worth 3. You have complete control over the sound of your mu- sic, where it is recorded, and where it is distributed. The benefits far outweigh the cons of learning a little bit more than you intended today. But don’t worry, you should always be learning about the industry and market in which your music exists. Are you ready? Let’s go! vi 3 “Today, every artist is their The Different Types of own record label—act like it.” Music Royalties – R. Mechanical, Performance, Sync, & Print Most people don’t realize there are differ- This applies to all music formats old and ent types of music royalties and that said new such as vinyl, CD, cassette, digital royalties are generated by a variety of dif- downloads, and streaming services. For ex- ferent ways. First, it is important to know ample, record labels pay a mechanical roy- and understand all the different types of alty to a songwriter every time they repro- music royalties. Then we will discuss how duce and sell a CD of their music. different types of music royalties are calcu- lated, and how to negotiate a fair cut for Mechanical Royalties are usually paid out yourself. by your record label if you are signed, or through your music distribution service if 1. Mechanical Royalties you are independent. Mechanical Royalties are generated through physical or digital reproduction and distribution of your copyrighted songs. 8 2. Performance Royalties will also need to purchase master use li- Performance Royalties are generated cense before using copyrighted music with through copyrighted songs being per- a new audiovisual project. So unless your formed, recorded, played or streamed in plan was to re-record a brand new version public. That’s right, even playing a record- of the song you just licensed, you will have ing of a song is considered a performance. to contact the appropriate record label to So you know the music over the intercom purchase a Master Use License in addition at Starbucks? Yup, those are little perform- to the sync license. YouTube is the only ex- ances happening over your head. This isn’t ception to this rule if the copyrighted work limited to coffee shops but also includes exists in YouTube’s content ID. terrestrial radio (AM/FM), television, clubs, restaurants, bars, live concerts, shopping 4. Print Music Royalties malls, music streaming services, internet Print Royalties are not as common for re- radio, and anywhere else the music plays cording artists but are a common form of in public.