Am I Owed Music Royalties?
Music rights and royalties are complex systems, but collecting everything you’ve earned is entirely within your reach as a songwriter.
If you own the rights to a piece of music, you should be earning royalties each time it is played, performed, or used. It’s a simple concept, but the complexity of rights ownership and the many roles that go into creating a piece of music make it incredibly difficult for songwriters to ensure they’re being paid for all the royalties they are due.
Unclaimed music royalties are money on the table, especially considering royalties are one of the most reliable revenue sources for independent recording artists, songwriters, and composers. In this article, we’ll look at the four primary types of music rights, determine who owns royalties on each of them, and dig into how to collect all the music royalties you are owed.
Want to brush up on the fundamentals? Check out Music Royalties: The Ultimate Guide
How to answer the #1 question: Am I owed music royalties?
Understanding the many different types of royalties that are available is the first step to determining what kinds of royalties you’re owed, how much they might be worth, how you can go about collecting them.
Mechanical royalties
It used to be the case that mechanical rights covered the creation of physical music formats, like vinyl records and CDs. But since music has become a decidedly digital industry and streaming has become the norm, mechanical rights now includes both physical pressings or printings, and each time someone listens to a song on-demand. When a listener logs into Spotify and actively presses play on your song, you’re earning mechanical royalties. That’s called an interactive stream. But when the Spotify algorithm automatically serves up recommendations based on a song or album, that’s considered a non-interactive stream.
Mechanical rights also covers downloads through music platforms like iTunes and Beatport. Everytime a master is downloaded, its rightful owner or owners earn royalties. Between download-focused music retailers and the plethora of streaming platforms out there, not to mention CD and vinyl loyalists, it’s safe to say that most recording artists putting their music out into the world are owed this type of royalty.
Music distributors are typically the first link in the chain of processing streaming royalties. Distributors collect royalties from retailers and platforms like Spotify, iTunes, Beatport, Amazon, Rhapsody, Google Play, etc. When appropriate, they then distribute those earnings either directly to independent songwriters or to the recording labels they are signed to. Songwriters under contract can usually expect to collect their royalties from their recording label, not directly from the distributor.
Streaming royalties
When a streaming service like Spotify licenses a master recording to make that track available in its content library, the owner of that recording is owed streaming royalties. The tricky element with streaming rights is that there can be multiple owners of a single master, including the songwriter, recording artist, and record label, for example. Streaming services typically distribute their revenue among all the registered rights holders represented in their content library based on a complex calculation that incorporates many factors, like how often the track was played, who listened to it (paid subscribers vs. free users), etc.
Just like mechanical royalties, streaming royalties are passed from retailers and platforms to digital distributors and finally onto the songwriter through their label.
Performance royalties
Each time a piece of music is played aloud for the public, the rights owners earn performance royalties. Performing Rights Organizations, commonly referred to as PROs, usually negotiate the rates that apply to performance royalties, and the amounts can shift depending on the type of broadcast or performance in question. PROs also collect performance royalties, so it’s important for songwriters to register themselves as owners of each composition with regional PROs.
These are some examples of situations in which songwriters can earn performance royalties:
Terrestrial radio: when a DJ plays a song on traditional AM/FM stations
Satellite radio: platforms like Sirius XM Radio, BBC Radio, etc.
Internet radio: platforms like Pandora, etc.
Video: including shows, movies, live clips, advertisements, etc.
Physical businesses: the background music playing in stores, restaurants, etc.
Music venues and nightclubs: regardless of whether it’s a DJ or a pre-set playlist.
It’s important to understand that public performance rights apply to every performance of the music composition, not to the master or the unique sound recording. So if a cover band plays a song in a bar full of fans on a Tuesday night, the original songwriter should technically earn public performance royalties.
Neighboring rights royalties
The specifics surrounding neighboring rights vary widely around the world, but we’ll touch on them briefly. This category of royalties is similar to public performance rights, but it applies specifically to each time the unique sound recording is broadcast or played over internet radio, satellite radio, cable music television, or terrestrial radio outside of the US. The owner of the master recording (which in most cases is the record label) earns neighboring royalties each time the sound recording is played or performed publicly via any of these channels. Typically, there are dedicated collection societies that distribute neighboring royalties to the registered owners of a master.
Sync royalties
Although it seems like performance royalties cover every instance of music licensing under the sun, there are specific cases in which sync rights kick in as well. When your music is matched, or synchronized, to a specific piece of video, you’re owed a sync royalty or sync fee. When that video is performed publicly, like on TV, then you are also owed a performance royalty.
The songs Natalie Portman listens to using those trademark headphones in the movie Garden State? Sync rights. When Garden State was syndicated and started playing on television networks? Performance rights. Put simply, whenever a song is used along with a specific piece of content, that song’s owners (composer, artist, etc.) are owed sync royalties.
Social royalties
As social media platforms grow in popularity, it’s increasingly common that rights owners can earn royalties from companies like YouTube and Facebook (which also owns Instagram). Anytime a content creator or social media platform user selects your music to post along with their content, you’re technically owed royalties.
Individual tech companies deal with this in different ways. YouTube launched Content ID to allow copyright owners or administration companies to claim their percentage of ownership or issue takedown notices when content creators use their music. Facebook offers a similar option for Facebook videos and Instagram stories.
How to find unclaimed music royalties
With so many different types of royalties and complex cases that determine when each one kicks in, it can be tough for independent songwriters to ensure they’re not overlooking unclaimed music royalties. The systems in place to get money to everyone who deserves it are robust, but the sheer volume of music being created, sold, and played means sometimes things get missed.
That’s why Trqk serves the music creator economy — we’re a team of musicians and music execs dedicated to delivering transparency and fairness. We use a combination of data science, business intelligence, and our audio content recognition system to show you the performance royalties you are owed. Get in touch today to learn more about how we can help you identify the opportunities and trends that will help grow your revenue and get your music the attention it deserves.