Rights Management Tips

The music industry means that every individual has rights to productions that they create. The rights and ownership that you have over a production means that you can further monetize and exploit your material in many areas. As with everything in the music industry, there are a lot of complexities but we’ll attempt to highlight some of the important factors that you can take advantage of while continuing to educate. Here are a few rights management tips.

I’ll begin with Publishing.

In the music industry, publishing refers to the ownership, control and commercial exploitation of musical compositions. It further refers to the collection of all royalties ensuing from the usage of musical compositions. As a couple of examples, if your song is publicly played by a band in a concert and/or used in a commercial or movie, you will be making publishing income but only if you are registered with a PRO or a performing rights organization.

A PRO is a business for songwriters, composers and publishers focused on collecting their performance royalties. There are three main PRO’s in the USA, ASCAP, BMI, and SESAC. There is a fourth PRO currently developing and most major territories of the world have a local PRO in their region. Every individual has the ability to sign up with a PRO in their selective region. By doing so you can setup your own publishing company that will allow you to own certain music and potentially own music of others as well. Signing up to every single PRO in the world is possible but very costly and would require you to potentially have residency in every territory.

In Publishing there are Publishers and there are Publishing Administrators which is what Symphonic is. The differences are that a publisher typically takes ownership of a percentage of compositions and exploits compositions by seeking out licensing and placement opportunities for the compositions, in addition to seeking out co-writing opportunities for their songwriters. As a publishing administrator, my parent company, Symphonic Distribution assumes no ownership of your compositions whatsoever but rather simply charge a fee to register your music not just in your region but in 60+ countries through various PRO’s. Doing so directly may cost you upwards of 7,000 dollars. I do have to state though that if you wanted to, you could potentially have BMI, ASCAP, and/or SESAC collect for the worldwide region but this potentially means that an additional percentage of royalties will be taken out of your payments and retained by these PRO’s rather than using an administrator like us which keeps registrations to each PRO specifically.

If you are an artist, what does this have to do with you? Let’s assume you’ve completed a track. You recorded it, mastered it and you distributed it to music retailers and streaming providers. Here’s what you need to know: If you haven’t registered yourself as a songwriter with a Performance Rights Organization (PRO), and if you don’t have a publisher or a publishing administrator to collect royalties and the publisher’s share of your royalties, you’re missing out on money. It comes into play especially for independent artists who are doing well overseas (outside of the U.S.) due to some international copyright law differences.

So how do you know if you have royalties sitting around?

You are earning performance royalties when your songs are being broadcasted and publicly performed in some way. This includes if your song is:

– played on terrestrial radio (think of a traditional FM radio station)
– played on internet radio
– played on online streaming services like Spotify, Pandora, etc.
– played in clubs and performed live in venues (whether by you as a performer, by a DJ in a club in Sweden, or a cover band in a pub in Nashville)
– played in businesses (retail stores, restaurants, hotels, etc.) as background music
– played on TV (an episode of a show, on a sports channel, in an advertisement, etc.)

Income in these categories fall under Performance royalties. In addition to Performance, there are also mechanical royalties.

If your music is
– manufactured and sold on physical CD/vinyl products
– manufactured digitally and sold in digital retailers (iTunes, Beatport, etc.) outside of the U.S. **
– manufactured digitally and streamed through interactive streaming services (Spotify, Rdio, Beats, etc.)

Then you may have mechanical royalties.

**There’s one vital, mind-numbing trick here: In the U.S., the mechanical royalty portion, precisely 9.1 cents, is lumped into the total sum delivered from the retailer (iTunes, Beatport, etc.) to your distributor, record label, etc. But outside of the U.S., the mechanical royalty is instead allocated from the retailer (iTunes, Beatport etc.) to mechanical royalty collection societies in each territory. Therefore, if you are having high digital download sales or interactive streams in any territory outside of the USA, you have had a chunk of mechanical royalties sitting in mechanical collection societies in your top-selling territories. If you’re not registered as a songwriter with the societies, they haven’t gone to you for you to claim them because the societies don’t know who you are, and they don’t have your songwriter registration on hand. Even if you’re registered with a PRO like ASCAP or BMI, it doesn’t matter. PROs only collect performance royalties, NOT mechanical royalties.

Creating a song is sort of like real estate. It’s your property and you can make revenue in ways aside of just downloads and streams. Our advice to you is to be proactive and register with a PRO and register your music. Either that or sign up with a publisher or administrator that can help you get the work done and ensure that your property, or your musical rights are registered so that in the event you have success you can receive royalties for years to come. It may not be a lot at first but if you specifically have a large catalogue of music, it’s something I highly recommend.

Lastly, PRO’s don’t really reach out to you which has always been a bit of the frustrating part. It’s up to you to get your income. There is a lot more detail regarding Publishing but here’s a quick link to some guides you can get to help you.

The next area that I feel is vital are Neighboring Rights.

Neighboring rights refer to the right to publicly perform, or broadcast, a sound recording. Sound recording owners (record labels and performing artists) collect neighboring rights royalties whenever their sound recordings are publicly performed on satellite radio (such as Sirius XM), internet radio (such as Pandora, BBC), cable TV music channels, TV outside of the USA, terrestrial radio outside of the USA, and much more.

Neighboring rights royalties are collected by neighboring rights collection societies. In order to collect the neighboring rights royalties you are owed, registering your individual master recordings directly with each collection society in the territories you are getting radio play in is absolutely essential.

Worth noting: The neighboring rights law differs internationally. Basically, in almost all territories outside of the USA, neighboring rights are recognized by law. But neighboring rights are not technically recognized by law in the USA, for certain reasons too long and complex to explain here. However, in the USA, the society called Sound Exchange collects “digital performance royalties,” or more specifically, “statutory royalties from satellite radio (such as Sirius XM), internet radio, cable TV music channels, and similar platforms for streaming sound recordings.” Technically, this is not recognized as “neighboring rights.” But it’s so similar that I simply umbrella it all into one worldwide service through Symphonic: Neighboring Rights Administration.

The concept of neighboring rights is similar to that of performance rights in the field of music publishing, because both kinds of royalties are earned through public performances/broadcasts of music. Except that performance rights refer to the right to publicly perform a musical composition. Neighboring rights refer to the right to publicly perform a sound recording.

Neighboring rights and publishing are two completely separate businesses.

Neighboring rights have to do with sound recordings. Record labels and performing artists own the rights to sound recordings. Therefore, record labels and performing artists collect neighboring rights royalties.

Publishing rights have to do with musical compositions. Publishers and composers/songwriters own the rights to compositions. Therefore, composers/songwriters (and publishers/publishing administrators if the composer is signed with a publisher/publishing administrator) collect any publishing-related royalties (performance royalties, mechanical royalties, etc.).

A neighboring right is to a sound recording … what a performing right is to a musical composition.
Neighboring rights are to performing artists/record labels … what performing rights are to songwriters/composers/publishers.
Neighboring rights collection societies are to neighboring rights … what Performing Rights Organizations (PROs) are to performing rights.

If a band covers your song that = performance and if a band plays your sound recording entirely that = neighboring rights.

There are two companies of note that can help individuals and songwriters receive neighboring rights income if you reside in the regions where they operate.

Sound Exchange collects “digital performance royalties,” or more specifically, “statutory royalties from satellite radio (such as Sirius XM), internet radio, cable TV music channels, and similar platforms for streaming sound recordings.” They collect these royalties for performances and broadcasts in the USA and can potentially collect internationally.
While Sound Exchange has reciprocal agreements with foreign societies, in reality, they do not work most of the time. For example: In the UK’s neighboring rights society, PPL, if recordings are not registered directly with the society (which Sound Exchange currently does not), the radio airplay cannot be matched and the royalties from that airplay cannot be allocated to you.

So, you have Neighboring Rights income if you are a master rights owner and if your master recordings are:

– Being played on Pandora
– Being played on BBC (any BBC radio station)
– Being played on Sirius XM
– Being played on cable TV music channels
– Being played on terrestrial radio outside of the USA
– Being played in businesses as background music (like restaurants, retailers, hotels, etc.)
– Being played in clubs / live performance venues
– Being played on any internet radio platform
– Being played on any satellite radio platform
– Being played on various new online medias

Ensuring you have your music registered through Performing Rights Organizations and/or a Neighboring Rights Society will potentially provide you additional income and protection over your music. This is especially important if we’re talking about an exciting aspect of the industry, Sync Licensing.

So what is sync licensing and in particular, sync?
‘Sync’ is short for ‘synchronization.’ When you’re talking about synchronization licensing in the music business, synchronization refers to the act of synchronizing a piece of music with any form of visual media—movies, TV episodes, commercials, video games, etc. Licensing refers to the act of getting the rights to use the music. Music supervisors on film, TV, commercial, gaming and trailer projects must ask the rights holders of song(s) for permission to use the music in their projects. They have to get permission from all owners of a song: 1) The Master (or sound recording) owners, and 2) The “publishing” owners, which refers to the owners of the underlying musical composition. The music supervisors will ultimately need to obtain two licenses to use the song in their visual media project: 1) A “Master Use License” to use the master recording in coordination with the visual media, and 2) A “Synchronization License” to use the underlying musical composition in coordination with the visual media.

In terms of how Symphonic works in this field, we have relationships with music supervisors, advertising agencies, film companies, and tv networks all of which receive consistent notices of songs that are represented by our brand. We’ve been fortunate to earn clients thousands of dollars and placements across HBO, ABC, Fox, and other major USA and International networks.

If you are unsure about what a music supervisor is, basically, a music supervisor is a professional hired by a film director, TV network, video game, TV production company and the like. Music supervisors are hired to manage the creative selection of music and the licensing of all the songs placed in their visual media projects. Music supervisors work hand in hand with the film/TV/trailer/commercial/video game directors. Though music supervisors are in charge of seeking out the music for a project, it is ultimately up to the film director or the head of the project which songs actually get used.

Once you get picked up for a placement, you may have an advance, and backend royalties. Typically advances are paid out directly but backend royalties would then be paid out to the societies you are registered (a further reasoning why if you are interested in getting your material to be on commercials and/or films, it is key that you have your songs registered).

One of the most important things that someone has to now realize about Sync Licensing is that you need to ensure each and every sample is fully cleared. If you have any samples that aren’t or that you are unaware of, it could potentially create a lot of legal problems. Further, It’s recommended that you have instrumentals of your songs and are as available as possible. Make yourself available, reliable, and check your email and phone frequently. That’s not exactly rocket science but deals can be lost if you as an artist or record label are not around for approval of a particular work.

Our service works as one stop thus we have the clearance to approve or deny which ends up saving a lot of paperwork. Often times we go for deals that we feel will be beneficial for the label or artist that’s related and we’ve seen great success that further increases downloads, streams, ugc, and rights related revenue.

In case you were wondering, placements will differ based on the popularity of the artist. Someone like Skrillex can potentially make upwards of 200,000 dollars for a film trailer while a new artist may make anywhere from 5,000 to 30,000. It all varies on how prominently the song will be featured in a scene, film, trailer, etc., but regardless, this represents an area of the industry that has helped to make many artists and turn them into household names.

Hopefully by now you realize the importance of registering your songs in societies and realize how close it is to Sync Licensing and additional opportunities. Hope this helps!