As seen in
Guitar Girl Magazine Issue 23 – Fall 2023
Dear Alexx,
How do royalties/licensing/payment from streaming services (like Pandora, Apple Music, or Spotify) work for an independent artist vs. an artist represented by a major record label?
~Beni Konicoff, Pompano Beach, FL
Dear Ben,
This is a great question. For time’s sake, I’ll focus more on the collection side of this topic just because it’s pretty wide-ranging. Actually, labels and indie artists go through many of the same channels regarding the collection process. The difference is a label handles its own distribution, publishing, and sales in-house, whereas an indie artist likely uses a distributor like CD Baby, TuneCore, or DistroKid to handle their administration and make their music available via streaming platforms and media retailers.
Both indies and majors work with performance rights organizations (PROs) like ASCAP, BMI, or SESAC to collect any artist royalties (from live performances or song placements). These PROs determine what an artist earns domestically and internationally, and they usually handle terrestrial and satellite radio, cable TV, and network TV.
Sound Exchange is another PRO that “handles digital performance rights attached to sound recordings.” Quick tip: As a songwriter and artist, you’ll need a PRO like ASCAP, BMI, or SESAC in addition to Sound Exchange if you want to maximize your royalty collection.
If you’re an indie artist, I’d suggest setting up your own publishing company with a PRO. If you don’t, any of your licensing royalties could be considered unallocated.
Definitely register your songs with one of the aforementioned PROs to ensure proper payment and protection of your copyrighted works.