Music Streaming Royalties BREAKDOWN
Music Streaming Royalties
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Helpful Links
Performing Rights Organizations:
ASCAP: https://www.ascap.com/
BMI: https://www.bmi.com/
SESAC: https://www.sesac.com/
Mechanical Rights Organizations:
Harry Fox Agency: https://www.harryfox.com/
The Mechanical Licensing Collective: https://www.themlc.com/
SoundExchange: https://www.soundexchange.com/
Music Distributors:
Amuse: https://www.amuse.io
DistroKid: https://distrokid.com/
CD Baby: https://cdbaby.com/
TuneCore: https://www.tunecore.com/
Ditto: https://dittomusic.com/
Music Publishing Administration Companies:
SongTrust: https://www.songtrust.com/
Sentric: https://sentricmusic.com/
Great Article: https://sherrylynnlee.com/2021/03/07/...
Distributor - This is the royalty for owning the master recording. You get this from your distributor i.e. DistroKid TuneCore, Amuse, Ditto. Whoever you use for distribution. Now, how much is that? You’ll often see these graphics on how much Streaming services payout per stream…and the payout is always different because it’s not that cut and dry. Streaming services don’t typically pay per stream. The money made from your music is pooled in one big lump sum and then paid out as a percentage to your distributor for use of your song. It has to be to simplify the process because the rate can change depending on how the listener interacts with your song. In other words, was it an interactive use or non-interactive use of the song? That is, was your song searched then clicked on to play? Was it streamed randomly in a playlist? Was it streamed by a premium or free user? Was it used in a promotion? What country was it played in? To top it off, distributors can even negotiate these rates. So curb that per stream mentality. Feel free to use a music streaming calculator but keep in mind that they’re only giving you an estimate.
The next type of royalties are collected by your Performing Rights Organization or PRO.
PRO - ASCAP, BMI, SESAC - There’s usually a small cost to become a member, but it is necessary! These royalties are collected for the songwriter and publisher. Those you should be YOU. Streaming services pay a blanket licensing fee. Your PRO keeps a small percentage to stay afloat and divvies the difference to the songwriter and publisher in a percentage of the song use. So, make sure you’re a member of a PRO and that your song is registered in your account. The important information to input is the ISRC. it’s a digital code identifying your song. You get that from your distributor. PRO’s can collect interactive and non-interactive streaming royalties on behalf of the songwriter and publisher. Again, these should both be you.
The next type of royalties are often overlooked, and they are Mechanical Royalties. As put my SongTrust: Mechanical Royalties are earned through the reproduction of copyrighted works in digital and physical formats. Songwriters/Publisher are paid mechanical royalties per song sold, downloaded, and streamed via "on-demand" streaming service That is, an interactive use. Spotify Apple Music…a streaming service where your song can be searched clicked on and played. Not a service like iHeart Radio, Pandora or InTune
So, in short, you’re due a mechanical royalties whether you’ve sold a vinyl, tape, download, or you’ve been streamed. There used to be only one company that handled all of this. Harry Fox! Now the workload has been split into two agencies that handle mechanical royalties: Harry Fox ($100 membership fee) which collects royalties for the physical media (Cassette Tapes, Vinyl, CDs), and the Mechanical License Collective (FREE) collects for digital mechanical royalties. Those streams/downloaded on Interactive Use services. While they do work in conjunction with one another, you still need separate accounts for each agency. The last type of royalties are collected by SoundExchange. These are non-interactive digital performance royalties and are collected when your song appears on Pandora, iHeart Radio, Satellite Radio, Satellite TV, and cable music stations like Music Choice or Muzak. (Show Music Choice Screen Shot) They are paid on the sound recording to the owner of the masters or copyright holder. Again, this is YOU! Even the featured artist gets in on these which is rare. In the past, just because you sang a song didn’t mean you were doing royalties. You had to be the writer, publisher, or own the master. SoundExchange is the only company in the US that can collect these royalties which sounds scary. But they are very upfront and transparent with what they do and don’t do. AND Registration on free!
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