Music Royalty Cheat Sheet (U.S.) – Follow the money!
Performing Rights Organizations (PROs): Collects and distributes performance royalties to songwriters, composers and publishers for public and broadcast performances.
In the U.S. the three major PROs are: BMI, ASCAP, SESAC.
Public/Broadcast Performances: Radio, Commercials, Video Games, Films, TV, Live Venues, Internet Services, Streaming such as Pandora, Spotify, etc.
Performance Rights Organizations do not track:? Mechanical Fees, Sampling Royalties, Synchronization Royalties (Sync Fees), Sheet Music Royalties
The Mechanical Licensing Collective (The MLC): Collects and distributes mechanical royalties to songwriters, composers, and music publishers. The MLC is the only provider of blanket mechanical licenses to Digital Service Providers (DSPs) in the U.S.
Mechanical Royalties: Royalties generated each time a musical composition is reproduced, whether physically or digitally via on-demand interactive streaming or download-to-own services (iTunes, Amazon Music).
Digital Service Provider (DSP) an online store (iTunes, Amazon Music), or streaming service (Spotify, Apple Music, Tidal, YouTube Music), that features digital albums and singles.
SoundExchange: Collects and distributes digital performance royalties for sound recordings only. It pays featured artists, non-featured artists and master rights owners for non-interactive streaming (Spotify, Apple Music, Tidal, YouTube Music). SoundExchange does not collect royalties for terrestrial (over the air) radio.
Master Rights (Recording Rights, Master Lease): Royalties generated by the Sound Recording.
45% gets paid to the featured artist or artists (the parties advertised as the artist for that track)
5% gets paid to non-featured artists through organizations like the American Federation of Musicians (AFM) and SAG-AFTRA
50% gets paid to the owner of the recording
What is the difference between MLC and the Harry Fox Agency (HFA)?
The MLC is the only provider of blanket mechanical licensing to Digital Service Providers (DSPs).
The HFA grants individual mechanical licenses. It administers licenses of non-digital phonorecord deliveries, and certain digital transmissions outside the blanket license furnished by the MLC. https://exploration.io/what-is-the-harry-fox-agency/
A blanket mechanical license is a license issued by a collection society or entity. This allows a user to play or perform all compositions controlled by all publishers represented by that specific society/entity. In some instances, these licenses cover music from several different artists.
An individual mechanical license can be granted by a music rights holder, mechanical rights organization, publisher, or administrator on a case-by-case basis.
Sync License: An agreement (usually with a fee) between the owner (licensor) of a sound recording and a music user (licensee) to use the recording in a media project (film, TV show, commercial, Podcast, etc.).
Digital Revenue Share Companies: Identify, collect and distributes advertising and subscription revenue generated by videos uploaded to YouTube, Facebook, Instagram, etc. This is distributed to the copyright owner minus a fee. Some examples are Identifyy, AdRev
Neighboring Rights: Public performance royalties of a sound recording owed to the master recording owner(s) and performer(s). Independent artists/musicians can claim 100% of the royalties if they are the master owners as well as performing music artists.
Many societies throughout the world collect neighboring rights royalties including SoundExchange for the U.S. There are companies, in the U.S., that are affiliated with CMOs (Collective Management Organizations) worldwide that can collect your neighboring rights outside the US. Examples are: Rident Royalties, Symphonic, CCS Rights Management.
Soundmouse: U.S. PROs (Performing Rights Organizations) use Soundmouse’s fingerprint technology to match PRO registrations with music used on radio, TV commercials and TV programming to ensure accurate royalty payments. Contact: email@example.com to get your catalog uploaded. To be covered internationally sign up with BMAT.
Some good sources of information: