Mastering Royalty Splits
Mastering Royalty Splits: Songwriters + Producers
Music Royalties: What Do I Need to Know
Understanding the intricacies of music royalties is a fundamental aspect of the music industry that impacts both seasoned artists and newcomers alike. These royalties represent the financial lifeline that fuels creativity, enabling artists to continue making the music we love. In this blog post, we'll embark on a journey to unravel the mystique surrounding music royalties. We'll delve into the various types of royalties, from the mechanical royalties generated by album sales to the performance royalties streaming platforms like Spotify and radio stations pay out. By understanding these different revenue streams, artists can maximise their earnings and ensure they're fairly compensated for their work.
But music royalties aren't just about the artists themselves. They also encompass the critical contributions of two vital players: the songwriters and the producers. This blog will explore how to navigate the often intricate process of splitting royalties between these creative forces behind the music. We'll examine the conventional norms of sharing royalties, such as the classic 50/50 split, and provide guidance on how to negotiate fair agreements that reflect each contributor's unique role in the songwriting and production process.
Furthermore, we'll introduce you to a suite of modern tools and technologies designed to streamline the royalty management process. Whether you're a solo artist, part of a band, or collaborating across distances, these tools can help you accurately track and distribute earnings. From specialised split sheet apps to blockchain-powered smart contracts, the options are abundant, and we'll break down their pros and cons. By the end of this blog post, you'll have a comprehensive understanding of music royalties, the equitable division of earnings, and the technological aids at your disposal to ensure you receive your rightful share. So, let's dive into the world of music royalties and unlock the tools that empower artists and creators to thrive in this dynamic industry.
Understanding Different Types of Royalties
In Australia, the Australian Performing Rights Association (APRA) plays a pivotal role in collecting and distributing music royalties on behalf of songwriters, composers, and music publishers. APRA ensures that these creators are fairly compensated for their work across various music usage scenarios. These organisations also have reciprocal agreements with similar organisations worldwide, ensuring that Australian music creators are compensated for international use of their music.
Here are the key types of royalties in Australia:
Public Performance Royalties:
APRA primarily collects public performance royalties. This includes royalties generated when music is publicly performed or broadcast. For instance, when songs are played on the radio, TV, in live concerts, nightclubs, or even in cafes, APRA ensures that songwriters and composers receive royalties for these uses. This type of royalty is vital for artists and songwriters as it reflects the widespread public exposure of their work.
Mechanical Royalties:
Mechanical royalties in Australia pertain to the reproduction of music onto various formats like CDs, vinyl, and digital downloads. Record companies and music distributors are typically responsible for paying mechanical royalties to songwriters and publishers for each copy of a recording sold or streamed. APRA AMCOS (Australasian Mechanical Copyright Owners Society) manages mechanical royalties for APRA members.
Synchronization Royalties:
Synchronization royalties are generated when music is synchronised with visual media, such as movies, TV shows, advertisements, and video games. In Australia, these royalties are typically managed by APRA AMCOS, which licenses music for synchronization and ensures that songwriters and composers are compensated for the use of their music in visual content.
Print Royalties:
Print royalties come into play when sheet music or music scores are published and sold. APRA AMCOS administers print royalties on behalf of its members. If you're a songwriter or composer, this royalty type ensures you receive compensation when your music is transcribed and sold as sheet music.
Online Streaming and Digital Royalties:
With the rise of streaming platforms like Spotify, Apple Music, and YouTube, digital royalties have become increasingly important. APRA AMCOS and its global partners collect and distribute digital royalties to songwriters, composers, and publishers when their music is streamed or downloaded online.
Splitting Royalties Between Writers and Producers
Understanding Roles:
To fairly split royalties between writers and producers, it's crucial to first understand the distinct roles of each party. Writers are typically responsible for lyrics, melodies, and song composition, while producers oversee the sound, arrangement, and production of the music. Recognizing these roles helps in determining each party's contribution to the final product.
Traditional Splits and Industry Standards:
The industry standard for splitting royalties between writers and producers often revolves around a 50/50 split. This means that both parties receive an equal share of the royalties generated by the song. However, it's important to note that splits can vary based on the level of contribution. For instance, if one party significantly contributes to both songwriting and production, the split may be adjusted accordingly.
Negotiating Fair Agreements:
Negotiation is a critical step in ensuring fair royalty splits. Here are some tips:
Open Communication: Start with transparent and open communication between all collaborators. Discuss each party's expectations and contributions to the project.
Define Roles: Clearly define the roles of writers and producers in the project. Determine who is responsible for what aspects of the music creation process.
Consider Contributions: Assess the level of creative input each party brings. If one party played a more substantial role in the project, consider adjusting the split to reflect this.
Mediation: If there is disagreement, consider involving a mediator or music attorney to help facilitate the negotiation process and ensure fairness.
Put It in Writing: Formalise the agreement with a written contract or split sheet. This document should detail the agreed-upon royalty split, payment terms, and any other relevant terms.
Legal Agreements (Split Sheets):
A split sheet is a legal document that outlines the agreed-upon percentage splits for songwriting and production credits. It's crucial to use split sheets to formalise the arrangement, as it serves as evidence of the agreed-upon terms. Include the song's title, each collaborator's name, their respective contributions, and the royalty percentages they will receive.
Adjustments Over Time:
Keep in mind that creative dynamics can change over time. If a producer initially had a smaller role but later contributes significantly to a project's success, it may be fair to adjust the royalty split. Regularly review and update agreements as needed to reflect changing circumstances.
Fairness and Future Collaborations:
Fairness is key in maintaining healthy working relationships. Collaborators who feel fairly compensated are more likely to work together again in the future. Building a reputation for fairness can also attract new collaborators and enhance your career in the music industry.
Negotiating and reaching fair royalty agreements between writers and producers is a crucial aspect of the music-making process. Open and honest communication, clear roles and expectations, and well-documented agreements ensure that everyone involved feels valued and compensated appropriately for their contributions. Collaborators should view the negotiation process as an opportunity to build trust and establish long-lasting partnerships in the music industry.
Tools to Facilitate Royalty Splitting
Split Sheets Apps:
Splitify: Splitify is a user-friendly mobile app designed to simplify the process of creating and managing split sheets. It allows collaborators to input their contributions and automatically calculates the royalty splits based on the agreed-upon percentages. Users can easily export and share split sheets with all parties involved, ensuring transparency and accuracy in royalty distribution.
Royalty Tracking Software:
TuneRegistry: TuneRegistry is a comprehensive platform that not only helps you register your music with performing rights organizations (PROs) like APRA but also tracks your royalties across different revenue streams. It provides valuable insights into where your music is being played and how much you're earning, making it easier to allocate royalties to writers, producers, and other collaborators accurately.
Blockchain and Smart Contracts:
Blockchain technology, combined with smart contracts, offers a secure and transparent way to manage royalty splits. Smart contracts automatically execute royalty payments based on predefined rules and agreements. While various blockchain-based platforms exist, it's important to ensure that your collaborators are comfortable with and understand this technology before implementing it.
Royalty Calculators:
Routenote Royalty Calculator: Routenote offers a handy online royalty calculator that estimates your potential earnings from streaming platforms and digital sales. While not a management tool, it can help you get a ballpark figure of what to expect from your music. This information can be useful when discussing and negotiating royalty splits with collaborators.
Session Studio App:
Session Studio: Session Studio is an innovative app designed to streamline the entire music production process, from initial song creation to royalty distribution. It allows collaborators to:
Manage Song Data: Store and organise song lyrics, chords, and notes.
Track Collaborators: Maintain a database of all contributors to a project, including writers, producers, and musicians.
Handle Music Rights: Seamlessly document music rights and royalty splits within the app.
Automatic Royalty Calculations: The app can calculate and allocate royalties based on the agreed-upon splits, ensuring that each collaborator receives their fair share.
Legal Agreements: Generate split sheets and other legal agreements directly from the app.
Rick Beato recently interviewed Niclas Molinder who with Max Martin and Björn Ulvaeus are helping music creators with their innovative app Session Studio.
Session Studio simplifies the process of tracking and managing music rights, making it an invaluable tool for both emerging and established musicians, as well as producers and songwriters. Its integration of royalty calculations adds an extra layer of convenience to the collaboration process, ensuring that everyone involved is compensated fairly and accurately.
Final Word
Understanding the world of music royalties, equitable distribution between writers and producers, and the tools available for efficient management are all essential aspects of a successful music career. Here's a recap of our key takeaways:
Music royalties encompass various revenue streams, including public performance, mechanical, synchronization, print, and digital royalties, which are vital for songwriters, composers, and music publishers.
It's important to understand the roles of writers and producers, with industry standards often favoring a 50/50 split.
Negotiating fair agreements involves open communication, role definition, consideration of contributions, legal documentation, and flexibility over time.
Several tools and platforms, such as Splitify, TuneRegistry, blockchain technology, royalty calculators, and the new Session Studio app, offer efficient ways to manage royalties and streamline the collaboration process.
By grasping these fundamental principles and embracing the available tools, artists, songwriters, and producers can navigate the music industry with confidence and ensure that creative efforts are not only recognised but also compensated fairly. The world of music royalties may be complex, but with the right knowledge and tools at your disposal, you can make informed decisions that contribute to your long-term success in the dynamic and exciting music industry.
About the Author
Mark Fogliano is an experienced Music Producer, Songwriter, Composer ,Pianist for the Adelaide / Melbourne based music production company Eleven:11 Music Productions.
Eleven:11 Music Productions fulfils a range of musical needs - from song development, artist development, arranging, orchestration and music programming, to vocal and song production, recording, post-production, audio mixing and project management.