How do performance royalties work?
What are performance royalties?
In a nutshell – if your publishing copyrights are publicly broadcast then performance royalties are generated. The main income streams are TV, radio and live performances; however, if the general public hear music in a public place, from the local café to the Dentist’s waiting room, then the person who wrote the song is being paid. The key thing with performance royalties is, it’s not how many times it’s played, it’s how many people that hear it that determines the royalties due.
So, a song played on ‘Radio Small-Town’ twenty times in a week will probably not generate the same revenue as one play on Radio 1, because Radio 1 has the larger audience. However, should ‘Radio Small-Town’ suddenly hit the big time, the revenue will increase alongside it, so it’s a moveable feast.
What’s the issue?
The online performance royalty collection process is very scattered, handled by dozens of different societies in dozens of different territories. If your song is streamed on Spotify by a person in the United States, that royalty generated will find its way to the songwriter via an entirely different process than if that exact same song were streamed on the exact same platform, say in Sweden, for example. As a publisher you will receive your royalty data in dozens of different formats from dozens of different parties. Think of it as a Chinese whisper – by the time the songwriters get paid it has been distorted one too many times.
Online streaming platforms do have excellent data when it comes to sound recordings. They receive very structured data informing them of the performer, label or ISRC code for every track. But it can be let down by poor publishing data. Ensuring the publishing revenue for these tracks is matched to the correct composition by the collection societies is a huge task which can lead to imperfect results.
Offline sources such as live venues, television, radio have imperfect data full stop. Societies are reliant on playlists provided by these sources, which are often inaccurate and incomplete. A solution that is thankfully entering this space is called Music Recognition Technology. MRT Companies such as Soundmouse and DJ Monitor scan television/radio/live venues for music, very similar to how you would shazam a song on your phone, and share their results with the collection societies which is used as a reference to pro-rate the royalty pool.
Simplify the process with Curve
Curve can ingest any data from any PRO or Sub-Publisher, normalise it, store the data in a structured way and churn out noticeably clearer royalty statements and usage analytics.
In order to combat the discrepancies of online sources, Curve’s publishing module also stores sound recordings with ISRC codes, which are delivered to societies as part of our CWR delivery tool, ensuring the collection societies have the right data to match royalties linked to sound recordings with your compositions.
Knowing that the correct amount of royalties is being collected from the various income streams is imperative in order to pay artists correctly. Curve platform manages massive volumes of sales data in super quick time: ingesting millions of lines of data & producing statements in minutes and hours versus days and weeks.
Curve clear and concise statements allow total transparency, allowing your composers to know exactly where they stand with performance royalties apportioned according to the stream, with full access to their data for a more in-depth analysis.
Get in touch today to find out how we can help you make paying performance royalties simpler, but with all the accuracy your artists deserve.
