International royalty collection

Posted on 03 Oct 2013 |

Hannah Boothby, Soundreef

If you’re an artist, record label or publisher who produces good music, you’ll probably be popular in more than one country. But when your music is played in other countries, how do you collect your royalties? Your national collecting society has probably made arrangements to do this, but are these actually fair?

What is a collecting society?

Collecting royalties and arranging for music to be licensed involves a lot of administration and specialist knowledge - in any country. For this reason, record labels, artists and publishers ask collecting societies to organise this for them. For more about collecting societies, see our previous blog post.

What are the different types of royalties?

When an artist writes a song, they automatically have certain rights in relation to it, but the royalties they get paid when the music is played can depend on, for example, who paid for the recording, and whether the song is played on TV or as background music for a shop. For more about different types of royalties, see our previous blog post.

How does a collecting society split royalties?

People who want to use music for commercial reasons - such as on the internet, as background music for shops or in other public spaces, or on the radio - pay collecting societies a licence fee, so that artists will be paid when their music is played. But how do collecting societies work out how much of the license fee should be paid to each artist, record label or publisher? Rather than using new technology to work out exactly how much a song has been played, they tend to use methods such as sampling, which results in the most famous bands getting overpaid while mid-size artists - even if they are quite well known - can end up with nothing! Have a look at our previous blog post to find out more about how this works.

How are my royalties collected when my music is played in another country?

National collecting societies such as PRS, BMI and SIAE only administer rights in their own country, so if your music is played abroad, they need to ask someone else (a collecting society in another country) to collect license fees, measure how much your music is being played and work out how much you should be paid. Once this has been worked out, the royalties the foreign collecting society has allocated to you are paid to your own national collecting society, which then pays the money to you. But given that your own collecting society’s calculation of what you should be paid can be inaccurate, what happens when the money goes through another set of calculations on top of that?

What happens to my foreign royalties before they get to me?

Collecting soceites in other countries use the same kind of sampling methods your own collecting society uses in your own country. These tend to result in artists being underpaid - and often not paid at all - unless they are megastars (for an explanation of sampling, see our previous blog post). However, if you’re lucky and your song is in the sample, the foreign collecting society will use a formula to determine how much you should be paid, though you might still not be paid anything at all, since the formula might wipe out your share. The foreign collecting society then deducts a fee to cover its administration costs, then passes the royalties on to your own national collecting society.

Your own national collecting society receives the money, and does its own calculations and administration, then deducts a fee for this from your royalties. Finally, they pay you for the use of your song - if there is actually any money left to pay you by then!

Why is Soundreef different?

We collect royalties in exactly the same way everywhere - using internet tools and technology that mean artists, record labels and publishers get paid fairly and don’t have to pay extra administration fees.

Our technology allows us to track every time one of our artists’ songs is played - even when this is on in-store radio - and pay them for it. You can check where and when your music has been played, and when you’ll next be paid, 24 hours a day via the Soundreef website, just as you’d check your balance with an online bank. For more about Soundreef and what we do, see our previous blog post.

Why can’t my national collecting society distribute royalties more fairly?

Collecting societies’ methods aren’t intentionally unfair - they’re just out of date. They were created at a time when tracking exactly what was played and where it was played was impossible, so sampling was a reasonable way to work out what to pay right holders. But times have changed, and technology that makes this system obsolete is widely and cheaply available. Ask them why they don’t use it!

Collecting societies aren’t paying you the money you deserve for certain types of royalties. They need to change their rules, and make sure they look for new and alternative ways of tracking which music is played. Make the most of your music: to get the international royalties you’re due, register with Soundreef at http://registration.soundreef.com/, or find out more at http://www.soundreef.com/en/faq.