Pure-Horse have suddenly become Spotify darlings. Word of The Song has spread around music industry A&R circles with such fervent hearsay that the bands’ email account is being pestered hourly and their social media accounts’ DMs are being slud into left, right and centre. Being the most fastidious of the bunch, the bass player notices something pretty eye opening when they check their Spotify for Artists profile over a breakfast of aggressively dull unsweetened granola. They immediately alert the rest of their comrades via the band’s group WhatsApp…
Bass: “Question. Who has eight thumbs and a million streams on Spotify?”
Guitar: “Is this an octopus joke?”
Bass: “Look. At. Our. Spotify. Profile. Immediately.”
Singer: “I thought we’d banned you from clapbacking for 12 months?”
Guitar: “NO WAY.”
Bass: “Way.”
Singer: “NO WAY.”
Bass: “Way.”
Singer: “How?! We were on 10% of that the last time I checked a few days ago?”
Bass: “Turns out we’ve been added to 32 editorial playlists in the last 24 hours including Hot New Bands, Grime Shutdown, The Most Beautiful Songs In The World, Fresh Folk, The Punk List, Trance Mission and loads more.”
Bass: “Blimey they really can’t figure out what genre The Song is, can they?”
Bass: “This is nuts.”
Bass: “Good job we’ve got The Song registered with Sentric Music so we can be safe in the knowledge all the publishing income from these streams is being efficiently collected, isn’t it guys?”
Singer: “[applause emoji]”
Guitar: “[that raised hands emoji that I don’t really understand why it means what people use it for]”
(forty five minutes later)
Drummer: “Did I leave my iPhone charger at one of yours?”
So when do they get paid? – Approximately 9 to 18 months.
When someone streams your music today it’ll take approximately nine months (three distributions) for you to receive that publishing streaming income. If you’ve never collected publishing streaming income before and begin the process of back-claiming it, then those royalties can take up to eighteen months to come through, so it’s massively beneficial to all involved to register your copyrights with your publisher (hopefully Sentric Music) before they’re released as to not have to rely on this slow backdating process. Again, these timelines aren’t a ‘Sentric’ thing, they’re a ‘publishing’ thing. If there’s money to be collected, we’ll be collecting it for you as quickly as anyone else could in the music industry (if not quicker in quite a few areas).
Publishing Royalties from Streaming.
You’ll be glad to hear that both performance and mechanical royalties are generated when your music is streamed. Basically, if you’re getting decent streaming numbers across any of the big platforms (Spotify, Apple Music, YouTube, Amazon Prime etc) then being on top of your digital publishing income is key, because if you don’t collect it efficiently and properly then you could be missing out on rather good money.
For the ease of understanding, throughout this section we’re going to assume that 1,000,000 streams on Spotify generates a total of £5,000 in royalties, which is approximately right at the time of writing this (taken as an average of the years of distributions we’ve had at Sentric). There are obviously loads of ‘what ifs and maybes’ here including the territory it was streamed in, if the streams came from free or premium accounts and other voodoo and witchcraft that’s forever to be kept hidden thanks to NDAs.
You would generally expect around 80% of the income generated to go to the master rights owner to be distributed to you by your record label or digital distributor. I’m not going to go into the reason why the master rights gets so much more than the publishing rights here as it’s a bit of a minefield, but it’s essentially a hangover from the music industry’s previous practices where, in theory, the record labels had a much bigger overhead in breaking artists than publishers did.
Now, the remaining 20% which is the publishing income is then split again into a performance royalty and a mechanical royalty. Usually this is split 50/50 so it’d look like this for 1,000,000 streams:
- £4,000 – Master Rights Income
- £500 – Publishing Digital Performance Income
- £500 – Publishing Digital Mechanical Income
I say ‘usually’ because of another wonderful quirk of the music publishing industry. Depending on the territory those streams happened in and the local PRO, they might be split 65/35 rather than 50/50. BUT, as this is all about simplifying things let’s stick with the 50/50 split because that’s what PROs in the UK, US and Canada do.
So, let’s say those million streams happened in ten different European countries, miraculously as a dead even split (so therefore 100k streams per country). That means each country’s publishing income breakdown would be:
- 10 x £50 – Publishing Digital Performance Income
- 10 x £50 – Publishing Digital Mechanical Income
So now we’re essentially talking about a micropayment (a stream) broken down into a further micropayment (20% for the publishing income) which is then split in half (one for performance, one for mechanical) and then that’s split into ten further micropayments (as it’s spread across ten different territories).
That sentence alone should hopefully show you just how many gaps there are for this income to get lost in. Mind bending at times, isn’t it?
Several years ago at Sentric we realised that the distribution of these royalties from PROs around the world were, frankly, not great and we identified that our songwriters were missing out on income they deserved for their hard work. Therefore we decided to take away the rights from the local PROs to collect the digital income on our behalf, and instead put them with a rather forward thinking company called AMRA.
AMRA directly licenses our songwriters’ digital mechanical rights, (and in some territories, the performance rights as well), to all the major online stores in well over 100 territories worldwide (excluding the US where Sentric collects directly via the local societies including ASCAP, BMI, SESAC and Harry Fox). Therefore that means Sentric now collects that income like so:
- 10 x £50 – Publishing Digital Performance Income from each individual PRO that Sentric are members of and have directly registered your copyrights with.
- 1 x £500 – Publishing Digital Mechanical Income via AMRA.
Now, the great thing here is that the income we receive from the PROs and from AMRA should match up with it being a 50/50 split. So say if from AMRA we receive £50 in digital mechanical royalties from your music being streamed in the UK, but we only receive £36 in digital performance royalties from the PRS, it allows us to go to the PRS and say; “Oi, now then, you clearly have underpaid our songwriter £14 and we have the data from AMRA to prove it”.
Simply put, since we started collecting digital royalties via this model, we’ve seen roughly a 400% increase in digital publishing royalties paid out to our songwriters. Lovely.
In the example above, if you weren’t using Sentric and, say, were just a member of your local PRO (ergo the PRS if you’re reading this in the UK), then you’d be relying on nine other PROs around Europe (who your copyrights aren’t registered with) figuring out who you are and with what PRO you are affiliated with. Then all of them would have to pay the PRS your performance income share (after taking a cut) who would then distribute it to you (after taking a cut themselves too). A process that *can* happen, in theory, and if it did, could take years for the money to find its way into your bank account. And also, if you’re not a member of the MCPS then you can essentially kiss goodbye to that mechanical income share.
See. I told you it was confusing.
NEXT: Month 5 – The Song Is Placed On In-Store High Street Playlists.