What type of royalties do collecting societies manage?

When an artist writes a song, they automatically
become a right holder and have a number of rights in relation to it. Since it’s
expensive and impractical for artists, labels and publishers to manage these rights
themselves, most ask a collecting society to administer them. For more about
collecting societies, see our previous blog post.

This article will explain what rights an
artist has in relation to his or her songs, what can be done with them and which
of these rights can be managed by collecting societies.

What rights does my song have?

Every song has two main set of rights as
soon as it is created:

  • Composition rights. This means the rights to
    the actual idea for the composition (that is, the idea for an artist’s song).
    In the past, musicians wrote their songs down on paper and these rights were
    designed with this in mind. Most songs are now written electronically, rather
    than on paper, so this concept has become increasingly difficult for artists to
    understand, even though it is possibly the most important type of right they
    have in relation to their music. Composition rights usually belong to the person
    who wrote the music for the song, and the person who wrote the lyrics for it.
    The composition rights are often partly assigned  to a publisher by the composers. This is so
    that the publisher can help the composers publish their song via a record label,
    or administer the royalties the composer receives when the song is used
    commercially
    .
  • Sound recording rights. The right to the
    sound recording is created when a song is recorded. The person or company that
    has recorded the song usually owns this. Traditionally, the right to the sound
    recording belongs to the record label who helped the musician to record the
    song – that is, the company that paid for it. The distinction between
    composition rights and sound recording rights is becoming weaker, since
    musicians tend to write and record their music on their own computers, and usually
    don’t need someone else to record their music or pay for it to be
    recorded.

Do I own these rights?

If you wrote both the music and the lyrics,
then you own 100% of the composition rights; and if you recorded your song
yourself on your computer, or paid for studio time to record it, you own 100%
of the sound recording rights. If these composition and sound recording rights
belong to you, then you don’t need to license or sell those rights if you don’t
want to.

Whatever people tell you, you must remember
that you can choose whom you want to use those rights and the terms of the
agreement. If a company you want to work with tells you that you have to assign
50% of your rights to a publisher, or that you have to assign certain rights to
a collecting society or something similar, remember that you don’t
have to do it! You own your rights in the same way as you own your instrument: they
are yours and you can choose what you do with them. There are no rules that you
have to follow when you sell or license your own rights – you
only need to follow rules after you’ve signed a licensing agreement.

What type of rights do collecting societies
manage?

As well as managing composition and sound
recording rights, collecting societies manage other rights on behalf of
artists, labels and publishers. These are:

  • Digital rights. These rights relate to music
    being used on the internet. For example, streaming via platforms such as Spotify,
    YouTube and internet radio.
  • TV rights. If a film is shown on TV and the
    film has a right holder’s song in it, the right holder should be able to collect their royalties
    through their local collecting society.
  • Radio rights. Right holders should be paid
    a royalty when their songs are broadcast on the radio.
  • The right to create CD copies.
  • Live events rights. Right holders should be
    paid a royalty each time their songs are played in a concert.
  • Background music rights. Right holders
    should be paid a royalty each time their song is played in a store.

These rights might be given different names
in copyright law and in a collecting society’s agreement,
so make sure you understand what each term means in any agreement you sign.

Traditionally, European collecting
societies made an agreement with artists which meant that the society
administered all these rights as one bundle, and would only agree to work with
artists if they could do this. However, things are changing and artists are starting
to unbundle these rights. In the same way that you don’t have to buy
a mobile phone, landline, fax, cable TV and broadband from the same company,
you don’t have to ask one collecting society to handle all the rights to
your music. Some artists, labels and publishers still find it useful just to
deal with one company, but it generally isn’t the best
way, especially if they want to make money from their music and get it heard.

You should be able to license your music to
the best company for you, depending on the level of service you receive for each
specific music right. You can limit your agreement with your own national
collecting society, asking them to collect for only some rights and not others.
Soundreef can help you do that for background music rights (though we suggest
you stay with your own national collecting society for all the other rights).

Royalties from Soundreef

Soundreef collects royalties for artists,
labels and publishers when their music is used as background music in
stores. We’re also planning to start collecting royalties when our artists’ music
is used for live events. Our efficient and transparent system
uses the latest technology, allowing us to show our artists exactly how much
their music is being played and where, so that they know they’re
getting paid fairly and on time, something that traditional collecting
societies can’t do yet.