What are Royalties and who collects them?

Royalties is the money you earn every time there is an interaction with your song. Every time your music is streamed, duplicated, purchased, downloaded or covered, for example, there are royalties, or Tunedough, to be earned. To be eligible to collect royalties you need to own the copyright to the composition and or the recording.

Let’s break that down…

Did you write the song?

If you did then you own what’s called the Composition Copyright!

Did you record the song?

If you did then you own what’s called the Sound Recording Copyright or “master.”

There are then TWO copyrights associated with every ONE song: the composition and the sound recording copyright. 

For example, if you are an independent artist and you wrote 100% of the song and you own the recording (meaning you paid for it and are not in a contract sharing any share of the song) you are going to be collecting royalties on the composition and other royalties on the sound recording.

What you collect when you own the composition copyright

There are two types of royalties to collect on the composition: Public Performance Royalties (collected by PROS like BMI, ASCAP, SESAC and GMR in the USA) and Mechanical Royalties (collected by The MLC and music publishing admin companies like Songtrust or through services like CDBaby Pro) 

Public performance royalties are distributed to writers and publishers. Mechanical royalties are distributed to publishers.

IMPORTANT NOTE: When you own the composition copyright, aka when you wrote the song and it’s 100% yours, you collect a writer’s share AND a publisher’s share.

REMEMBER: If you do NOT have a publishing deal, YOU are your own publisher, this is very important to remember when collecting your royalties.

What you collect when you own the sound recording copyright

There are two types of royalties to collect when you own the sound recording copyright: Master Recording Revenue and Digital Performance Royalties. These royalties are collected on covers and originals since it only has to do with collecting royalties on the sound recording, not the composition. 

Master recording revenue is collected and distributed by Digital Distributors like Tunecoure, CDBaby, Distrokid etc.

This is usually the first place artists know to go and upload their music to to collect royalties since this is where you go to upload your music for release on interactive streaming platforms like Spotify, Amazon and iTunes. If the song(s) you are releasing is an original and not a cover, digital distributors often offer additional services to collect your publishing. This is a personal preference whether you bundle those services or keep them separate, depending how doing business is best for you.

The second type of royalties to collect on your sound recording copyright, or master, are digital performance royalties.

If you live in the US these are collected by Soundexchange and include what is also called neighbouring rights. Soundexchange is like a PRO but for the sound recording side of collecting royalties (like BMI is a PRO on  the composition side of things). Make sure when you sign up for Soundexchange that you sign up as a performer AND rights owner, globally. If you’ve been with Soundexchange awhile make sure you sign back in and make sure you are signed up for their global collection services and as a performer and rights owner.

Make sure after your songs are uploaded and registered with these platforms that you set up your direct deposit aka ways to get paid, so you can receive the royalties coming your way.

Make sure to also take the time to copyright your music with The Library of Congress to ensure your work is protected.

Learn more about how to walk through all of these steps in our self-guided Tunedough course.

About tunedough®

Tunedough® is an online, self guided course that assists artists with the often confusing process of song registration. Founded by singer/songwriter Sarah Clanton and ex Creative Coordinator of Apple Inc., Patryk Larney, Tunedough® aims to empower songwriters and performers across the globe.