Up until a few years ago there weren’t many options for independent songwriters to collect mechanical royalties. Performance royalties were (relatively) easy to get. Simply sign up (and register all your songs) with a PRO like ASCAP, BMI or SOCAN (in Canada). But mechanical royalties are tougher. What are mechanical royalties you ask? You’ve heard that 9.1 cents is owed to the publisher/songwriter for every download or sale for the mechanical royalty, but what about streams? And International mechanical royalties are handled differently altogether.
Mechanical Royalty breakdown in the US for subscription streaming services
In America, the Harry Fox Agency handles the reporting, collection and payments of mechanical royalties to publishers. Traditionally, publishing companies worked with international collection agencies to collect mechanical royalties. Mechanicals are built into the digital download sale in the US, Mexico, Canada, India and Pakistan.
But everywhere else, they’re not.
And with all the new independent artists hitting digital stores over the past 10 years (many of them charting) there has been quite a large batch of mechanical royalties that have amassed with no one able to claim them. So, they’ve been sitting in foreign collections agencies’ accounts waiting for the proper publisher to come aknockin’. But after enough time, those royalties typically get thrown back into the pot and distributed to the major publishers that know how to collect.
That’s why the publishing administration company Songtrust launched in 2011 by Justin Kalifowitzof Downtown Music Publishing. TuneCore Publishing followed shortly thereafter, spearheaded byJamie Purpora formerly of Bug Music Publishing (now BMG). (Purpora left Tunecore Publishing this past December) And in early 2013, CD Baby teamed up with Songtrust to launch its own publishing division: CD Baby Pro.
Both services have pros and cons and I outlined them in my full report on Ari’s Take (which I try to continue to update as features and numbers change).
These companies will track down all mechanical (and performance) royalties from around the globe and pay their songwriters – keeping a small commission. These are just admin pub deals and they do not maintain any ownership over the compositions.
CD Baby just announced that they now have 54,000 writers signed up to their “Pro” service with over 246,000 compositions registered. They administer these compositions in 92 countries. This is separate from their distribution service. Writers who sign up for CD Baby’s digital distribution service get the option to “upgrade” to the Pro service for an additional $30. CD Baby will then register the songs with a PRO (ASCAP, BMI or SOCAN) and start collecting international mechanical royalties. CD Baby takes 15% commission for all publishing royalties (mechanical and performance). CD Baby allows bands to add additional songwriters to the catalog for $10 each. CD Baby Pro is only offered to residents of US and Canada.
CD Baby’s new Director of Music Publishing, Rob Filomena, explained to me over the phone why it’s better to have CD Baby collect international performance royalties (when ASCAP and BMI already do it and take a lower commission), he said that it’s all about the speed, “with the PROs that money could show up 2 years later… we’re seeing foreign performance (royalties) get paid within 6 months.”
The new TuneCore Chief Creative Officer, Joe Cuello (who took over for Purpora) said in statement to Digital Music News that TuneCore Publishing now has 22,000 songwriters with over 286,000 compositions. They administer these compositions in 60 countries. Songwriters can signup for TuneCore Publishing (without having to distribute through TuneCore Publishing) for $75. TuneCore keeps 10% of all publishing royalties collected. Unlike CD Baby, TuneCore Publishing is open to any songwriter in the world.
TuneCore Publishing started working with InDmusic to collect YouTube composition royalties – over a year after they launched their publishing program and forced an opt in for all current clients. This came with a bit of an uproar as many of these songwriters were already working with outside Digital Rights Management companies to collect YouTube revenue.
CD Baby uses Rumblefish to manage their YouTube monetization. And unlike TuneCore Publishing, it’s opt-in (not mandatory).
Neither TuneCore Publishing nor CD Baby Pro take any ownership of publishing rights, howeverTuneCore Publishing requires exclusivity when it comes to synch licensing – meaning, if you work with them you cannot also work with another synch licensing company. CD Baby Pro songwriters can opt into the (non-exclusive) synch-licensing program (carried out by Rumblefish). Both companies claim they are actively pitching their catalog for film, TV and commercial placements.
**A previous version of this article incorrectly stated that Music Reports Inc. handled reporting, collection and payments of mechanical royalties. They just handle payments and licenses.
by Ari Herstand