Maximizing Royalties for Indie Artists

Maximizing Royalties for Indie Artists.

Indie artists and publishers mostly have their public performance rights represented by a ‘Performing Rights Society (PRS)’. In exchange of an annual fee, these societies administrate, police income and issue licenses for the public usage of your repertoire after it has been signed up with them.

PRS’ pay out royalties directly to the publisher, the writer, or another copyright owner. To make sure that publishers do not get full control over the artist’s money, the PRS’ separate these payments. This also ensures that publishers do not get too much power over indie artists. Payments are typically made at the end of each quarter, about a year after the royalties were originally collected. I have written about this in detail in my blog Benefits of Licensing Indie Music. It is advisable for indie artists to sign up with a PRS directly, along with being affiliated with a publisher that is signed up with one. This is very helpful in maximizing income from public performance royalty. Proactively register your repertoire with the PRS and make sure that the publisher has done the same too. While it is the publisher’s responsibility to keep track of dates of pay-outs, you should also have a list of broadcasts in which your music has been made public. This is going to help when you want to check whether all of these have been accounted for. If not, inform your publisher and PRS. It is your money, for others it is just another responsibility.

Digital Performance

While we have been discussing about royalty payments to writers and publishers for public performances of their compositions, it is noteworthy that for a long time, there has not been any payment for performing artists and record labels for public use of their works in the USA.

However, with the introduction of ‘Digital Performance Right in Sound Recordings’ in 1995, featured performing artists and record labels became entitled to royalty payments for digital transmissions of their ‘master’ sound recordings. The digital transmissions include satellite radio services, non-interactive streaming services, and non-interactive webcasts. SoundExchange is the biggest PRS in the USA. It focuses on the collection of these funds and pays out 50% of the revenues to the copyright owner, which is mostly the label, 45% to the featured performing artist and the remaining 5% to non-featured artists, like backup singers. Indie artists should sign-up to SoundExchange, as a feature artist or master owner, in order to maximize this revenue stream. SoundExchange has recently switched to monthly pay-out schedule, to enable monthly cash-flow for the artists. You may also consider signing on to IPRDF as a non-featured artist. Both of these are free to sign up to.

Public Performance

Performing artists and master owners have been paid for public performances of their music for a long time, in a lot of countries around the globe. Over 80 countries entitle the master owners to these payments through acknowledgement and enforcement of the Neighbouring Rights Laws. However, the USA is still the exception here, that pays performers and master owners only for digital transmissions.

Do not underestimate the income generated from neighbouring rights as it can constitute more than a quarter of successful artists’ royalty income. The diminishing record sale revenues have made this an increasingly important income stream. It has been a pillar for performing artists who do not write but only record, in the countries that enforce neighbouring rights.

The royalties resulting from neighbouring rights are also collected by PRS’, just like the other public performance royalties. Most of the famous international PRS’ that collect your neighbouring rights royalties, are non-profit organizations which are either free to join or charge a small membership fee. Most of the famous artists are connected with these PRS’.

Your entitlement to public performance payments as a performer or master owner are dependent upon a country’s legislation, however, the broad general rule is that you are entitled if the country where you recorded the song enforces neighbouring rights. You are also entitled when the country of residence of the master owner enforces neighbouring rights.

Tip: it would be smart to record records in countries which enforce these laws.

I am going to write more about licensing and royalties in my next blog. Please share your experiences in the comments section and I will add them in my future blogs.

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