Artists Don't Always Collect the Royalties They're Owed: What Journalists Should Know

If a service is provided, it is naturally expected for the provider to be fully compensated for their work. However, in the complex world of music royalties this expectation is often unmet for the industry's songwriting professionals, including some of its most successful artists. Despite their significant contributions, these creators frequently face challenges in receiving fair payment for their work.

Difficulty in Claiming Rights

The labyrinthine nature of music royalties stems from multiple factors including outdated laws, intricate licensing agreements, and the rise of digital streaming platforms. These elements can make it exceedingly difficult for songwriters to track and claim their rightful earnings. Often, the distribution of royalties involves numerous intermediaries, each taking a cut and further complicating the process.

For instance, when a song is streamed on a platform like Spotify, the revenue generated is split among various parties: the streaming service, the record label, the publisher, and, finally, the songwriter. By the time the money trickles down to the songwriter, it is often significantly reduced. This system, while benefiting larger entities, leaves the actual creators with only a fraction of what they deserve.

Moreover, the transition from physical sales to streaming has drastically altered present revenue. While streaming provides broader access and potentially higher visibility, it also results in lower per-stream payments. Consequently, songwriters must achieve millions of streams to see substantial earnings, a feat that is not always achievable, even for popular artists.

NOIs – Notice of Intention

A Notice of Intention (NOI) is essential for securing a compulsory license to stream music, as mandated by section 115(b) of title 17 of the United States Code. Digital providers must obtain this license from the publisher of the work, and if the publisher cannot be located, they can file NOIs in bulk. The issuance of tens of millions of NOIs highlights a significant problem: many royalties are not reaching their rightful owners due to an industry-wide unawareness. For example, Sound Royalties has uncovered over $19 million in unclaimed royalties for music professionals, including performers, songwriters, and producers.

Adding to the complexity, songwriters must register new songs with the U.S. Copyright Office, a process that averages 10 months in length but can take up to two years. This delay further complicates royalty collection, leaving many songwriters uncompensated. This convoluted system calls for greater transparency and efficiency in royalty distribution. Services that help recover these lost royalties are crucial to ensuring that creators receive their rightful payments.

What Can Be Done About It?

Digital distributors like CD Baby and TuneCore now offer publishing administration services. Artists must check if their distributor provides this option. For instance, Audium helps collect and distribute mechanical royalties, establish direct licenses, and audit unauthorized uses of music. Songtrust is another comprehensive service for global royalty collection and administration, collecting from foreign PROs and paying artists directly with fewer fees. Registering with a PRO like ASCAP, BMI, or SESAC is essential for collecting public performance royalties. Performing artists should also sign up with SoundExchange for sound recording royalties from digital platforms. To ensure royalties are received, music should be registered with the copyright office, especially if the artist produces work independently or is based outside the U.S. Additionally, an ISRC code should be obtained,  Necessary for royalty tracking, it uses resources like the ISRC guide from the MusicBiz association.

Reporting On Artists Collecting Royalties

Journalists can report on the challenges artists face in collecting royalties by highlighting the complexity of the current royalty distribution system and the impact on songwriters, even those who are successful. They can explore the outdated laws, intricate licensing agreements, and the influence of digital streaming platforms that make it difficult for artists to track and claim their earnings. By covering these points, journalists provide a comprehensive overview of the challenges and solutions in the music royalty landscape, shedding light on the plight of songwriters and the efforts to ensure they receive fair compensation for their work.