Music Download & Streaming Royalties: Are You Getting Your Fair Share?

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You write a great song. You go into the studio and nail a solid recording of that song. Once you have the mastered version, you upload the audio file on TuneCore.com, enter your release information, and send that song off to digital music stores around the world so your fans can start buying your single.

Your Digital Download Royalties

When your single goes live, your Mom shows her support and downloads your single from iTunes U.S. for $0.99.

Now you’ve got some money coming your way!

Here’s how the money works:

Your Mom pays $0.99 to iTunes for the song.  iTunes takes 30%, so the revenue earned from this download is $0.70.  Of this $0.70, $0.091 (just about a dime) is owed to the Songwriter/Publisher for the digital download mechanical royalty.  The rest, $0.609, is the master recording royalty, owed to the owner of the recording (the artist or the artist’s label).

In the U.S., the digital store (iTunes U.S. in this scenario) sends all $0.70 to TuneCore, and we give all of that money to the artist (you!). Then it’s up to the artist to give the Songwriter/Publisher their share, $0.091.

Since you own the master recording AND you’re the songwriter/publisher, every penny of that $0.70 is yours.

Makes sense, right? Well, things work a little differently outside of the U.S. and Mexico.

Getting Your Royalties from Downloads Outside the U.S and Mexico

A friend from your days studying abroad downloads your single from iTunes Germany for 0,99 €.

Once again, the revenue earned is 0,70 €, because iTunes takes 30%.  But this time, not all 0,70 € comes back to the TuneCore Artist. What happens to the songwriter/publisher share is different.

iTunes pays  8-10% of the single’s retail value to the local collection society GEMA.  The society splits this money between the download Mechanical Royalty and download Performance Royalty.

As far as the master recording royalty goes, iTunes sends that 0,60 € to TuneCore, and then that money goes right into your TuneCore account.

So now you’ve got your master recording royalty, but you’re still missing the songwriter/publisher share, which is with the local collection society in Germany.  But that’s your money, not theirs!

This is where publishing administration comes in. It’s extremely difficult and very costly for an artist to try to get that 10% from a foreign rights organization without publishing administration.  We started TuneCore Music Publishing Administration to make this whole process a lot less painful. We can collect and deliver the songwriter royalties owed to artists.

Because TuneCore receives your distribution royalties, we have a built-in audit trail that lets us make sure you’re receiving the correct amount of mechanicals owed for downloads of your music outside the U.S.

Worldwide Interactive Streaming Royalties

It’s likely that you chose to distribute your single to streaming services in addition to download services.  The royalties work a little differently here.

Let’s start out by looking at what you earn when your neighbor streams your single on an Interactive (you can select the songs you want to hear) streaming service like Spotify, Rhapsody or Rdio.

As a TuneCore distribution customer, you earn a master recording royalty every time your music is streamed—this royalty is based on a percentage of the streaming service’s revenue, and we put it directly into your TuneCore Account.

But that’s not the only royalty generated from an interactive stream; money is owed to the songwriter/publisher. Every stream of your song generates a mechanical royalty of $0.005, as well as a performance royalty, based on a one-to-one negotiation between the local society and the store.

Here’s the problem: Songwriters/Publishers can’t get their owed streaming royalties directly from the streaming services.

Here’s the solution: TuneCore Publishing Administration can get you these additional royalties that don’t come through with distribution.  And when it comes to your mechanical royalties from interactive streams worldwide, we can once again use that built-in audit trail to make sure you’re get exactly what you’re owed.

No matter what country your music was streamed in, the royalties from interactive streams work exactly the same.

Worldwide Non-Interactive Streaming Royalties

Now let’s look at what happens when your song is streamed on a Non-Interactive (users can’t choose their songs) streaming service like Pandora, anywhere in the world.

When your song is streamed on Pandora, the songwriter/publisher earns a performance royalty, based on a one-to-one negotiation between the local society and the streaming service.

By now it probably won’t surprise you that this songwriter royalty doesn’t automatically arrive in the mail or in your TuneCore account through distribution.  It will, however, arrive in your mail or TuneCore account if you’re a TuneCore Publishing Administration customer.

But Wait – There Are More Royalties to Collect

In addition to digital download mechanicals, streaming mechanicals, and streaming performances royalties, TuneCore Publishing Administration also licenses and collects a whole slew of other types of royalties. You can get a full list here.

We electronically register your compositions with the performance societies around the world to assure they all have the correct information in place so you receive your performance royalties for all types of performances (interactive streams, non-interactive streams, radio, television, etc).

As a TuneCore distribution customer you’ll receive all the master owner royalties from the sales and streams of your music, and you’ll keep all of your rights.

But without our Music Publishing Administration Service, you’re missing out on receiving all of the money you earn as a songwriter/publisher whenever your fans around the world download and stream your music.

And in our opinion, that’s not cool.

Any songwriter can be a TuneCore Music Publishing Administration customer, even if you don’t use TuneCore for your music distribution. We won’t take offense. But, using TuneCore for both publishing and distribution will let us collect ALL your worldwide royalties when your music is downloaded and streamed, and it all goes into a single account. Now that’s cool.

Learn more about TuneCore Music Publishing Administration.

(Click here to view the full, large version of the infographic below)

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Confused on any publishing terms above? Check out our glossary.