As a music creator, understanding how royalties are divided is crucial to your career. The world of publishing can be complex, but it’s important to decode the details to ensure you’re receiving the compensation you deserve. In this article, we’ll break down the breakdown of music royalties, specifically focusing on the writer’s share and the publisher’s share. By understanding these concepts, you’ll have a clearer picture of how your ownership is divided and collected by societies around the world.

Introduction to Music Royalties:

Music royalties are the income generated from the usage of a song. They can be divided into two main categories: performance royalties and mechanical royalties. Performance royalties are generated when a song is performed or broadcasted publicly, while mechanical royalties are earned from the reproduction and distribution of a song. It’s important to note that the breakdown of royalties may vary depending on the country or territory, so it’s always best to check with your local society for specific details.

The Breakdown: Writer’s Share vs Publisher’s Share

When it comes to performance royalties, the income is typically divided into two equal halves: the writer’s share and the publisher’s share. The writer’s share is the portion of performance royalties paid directly to the songwriter(s), regardless of whether they have an outside publisher or not. On the other hand, the publisher’s share is the portion of performance or mechanical royalties allocated to the publisher, publishing administrator, or the songwriter(s) themselves if they have a personal publishing entity.

To better understand this breakdown, let’s take a closer look at each share individually.

Writer’s Share:

The writer’s share is a direct payment to the songwriter(s) and is determined by a legally binding document called a split sheet agreement. This agreement outlines the ownership shares of each writer involved in the composition. It’s important to have a written agreement in place to avoid any conflicts or disputes in the future.

For example, if you collaborated with a four-person rock band and divided the ownership shares evenly on a split sheet, your writer’s share would be 25% of half of the performance royalty pie. This means you would receive a percentage of the total performance royalties earned for the song.

Publisher’s Share:

The publisher’s share, as mentioned earlier, is the portion of performance or mechanical royalties paid to the publisher or publishing entity. The publisher is responsible for administering the song’s rights, collecting royalties, and ensuring proper licensing and usage of the composition.

In the case of the four-person band example, you would also collect 25% of the publisher’s share of your performance royalties and 25% of the publisher’s share of your mechanical royalties. This means that in addition to the writer’s share, you would receive a percentage of the royalties earned by the publisher.

Collecting Royalties: How Does It Work?

Now that we understand the breakdown of royalties, let’s explore how these shares are collected. This process involves working with collection societies, such as Performing Rights Organizations (PROs) or Collective Management Organizations (CMOs), to ensure that you receive your rightful earnings.

Depending on which collection society you are affiliated with, these PROs or CMOs collect the writer’s share of performance royalties once your song is registered. These societies are typically located in your home country and will pay the writer’s share directly to you.

It’s important to note that your PRO or CMO will also collaborate with other societies around the world to retrieve your writer’s share. For instance, if you are affiliated with SAMRO in South Africa and your music is used in Germany, the collection society in Germany (GEMA) will pay your writer’s share to ASCAP, who will then pass the money onto you after deducting any agreed-upon fees.

The Role of Split Sheet Agreements:

To ensure a fair and transparent distribution of royalties, it’s crucial to have a split sheet agreement in place. A split sheet agreement is a legally binding document that outlines the ownership shares of each writer involved in the composition. It serves as proof of ownership and helps avoid conflicts or disputes over royalties.

Verbal agreements are not recommended, as they are more tenuous and may not hold up in court. It’s important to have a written agreement that clearly states the percentage of ownership for each writer. This document is especially important when multiple writers are involved in a composition.

To simplify the process and protect your rights, it’s advisable to use a split sheet agreement template provided by reputable organizations like Songtrust. These templates ensure that all relevant information is included and provide a solid foundation for a fair distribution of royalties.

Impact on Receiving Your Shares:

Receiving your rightful shares of royalties can sometimes be challenging due to conflicting claims and credit errors. These issues can arise from incorrect song registrations or multiple registrations of the same recording. To avoid such roadblocks, it’s important to pay attention to the following details:

Accurate Song Registration:

1. Ensure that all your songs are registered correctly with the appropriate collection societies. Double-check the information provided, including song titles, songwriter names, and ownership splits.
2. Avoiding Duplicate Registrations: Be cautious not to register the same recording multiple times. This can lead to confusion and may result in incorrect royalty allocations.
3. Collaboration and Split Sheet Agreements: Whenever you collaborate with other songwriters, use split sheet agreements to clearly define ownership shares. This will help prevent conflicts and ensure that each collaborator receives their fair share of royalties.
4. By paying attention to these details, you can minimize the chances of encountering issues when it comes to receiving your rightful shares of royalties.

Conclusion:

In conclusion, understanding the breakdown of music royalties is essential for every music creator. The division of royalties into the writer’s share and the publisher’s share allows for a fair distribution of earnings. By having a split sheet agreement in place and working with collection societies, you can ensure that you receive your rightful shares of performance and mechanical royalties.

Taking the time to understand the intricacies of royalty collection and avoiding common pitfalls can help you maximize your earnings as a music creator. By partnering with a reputable music publishing company and utilizing their resources, you can navigate the complex world of music royalties with confidence.

Remember, your music is valuable, and it’s important to protect your rights and receive fair compensation for your creative work.