This is the first of four posts I’ll be doing about this over the next few weeks. Collectively the posts will look at how to make money from your music. The subject for today, and my thanks to Charlie Phillips, Head of Legal and Commercial Affairs at AIM with this, is…
Royalty Collecting Societies
So what is a royalty collecting society? Broadly, they are the dudes that collect money from broadcast, ‘public performance’ (ie playing recordings to the public in shops, clubs, etc), internet, labels and other uses of your performances, recordings or compositions, to pay you the performer/rights holder/writer money owed to you by said radio, internet and labels for use of your work. There are many societies all over the world so I’m going to concentrate on the UK. These are the ones you MUST know about and while often missed, you have to actually join them if you want to earn from them. It doesn’t happen automatically. And if you don’t look after your rights then someone else might well take what is due to you. For a thorough description you should visit each site and read EVERYTHING! There are links at the bottom of each section.
Probably the most well known collecting society for music in the UK, PRS deals with the collection of royalties generated by certain uses of songs and compositions. This is not limited to who wrote the songs and also includes publishers because a publisher may represent an artist’s songs or compositions. The type of usage for which royalties are collected might include for broadcast on radio (a 3 minute track on Radio 1 might bring you £60), live revenue collected from clubs (playing at your local club might bring £6), or ‘public performance’ royalties generated when a song is played in a public place like a club or restaurant off a CD. For live events, PRS charge venues a % of ticket sales that is then fed back to the owners of the songs.
As I say again though you must register your songs and also the gigs you play at PRS to get paid this money.
MCPS deals with mechanical copyright. This is due when your song (ie the composition – NOT a recording of a song) is reproduced on, for example, a CD. In the UK when a label presses a CD or other physical format they have to apply for a license from MCPS in order for the songwriters to be paid for their works to be reproduced. For smaller labels this is usually done via the AP2 license, and to get one the label has to pay (at time of writing this) 8.5% of PPD to MCPS. That means 8.5% of the dealer price. When a label sends records to a shop it will make back a share of the sale (PPD) and the rest goes to the shop (Retail price minus PPD)
Loads of acronyms and % so what does this mean in real terms? (I have used simplified numbers)
Label X prints 1000 CDs
They are sold at the local shop for £15 but the PPD (what the label gets) is £10
The total potential sales = 1000 (number of CDs) x 10 (PPD) = £10,000
8.5% of 10,000 = £850
So label pays MCPS £850 to be distributed minus their admin fee back to writer(s)/publisher. Remember you’ve got to be a member to get paid.
MCPS also applies to digital releases but in the UK this is deducted at source.
And importantly remember this applies the other way round. So if you want to cover a song written by someone else, you’ll need an MCPS license and to pay to do this.
Probably the most complicated (although it really shouldn’t be) PPL concerns you in two ways – as a performer (those playing on records) and as a rights holder (those who own the actual recording). This means if you release your own music you need to join TWICE, once as a performer, and once as a rights holder/label. PPL licenses recorded music played in public or broadcast on the radio or TV and then distributes the fees to its members. Revenue collected is split 50/50 between rights holder and performer(s). VPL does the same, but for music videos owned by record labels. So for a self-releasing artist this is what you need to do when releasing an album:
- Join PPL/VPL as a performer
- Join PPL/VPL as a rights holder
- With your rights holder hat on register your recordings – this is done via the PPL website. Remember to include ISRC codes.
- Register the performers on the recordings
- Register a product (the album) using the recordings you have already registered and add a UPC/EAN and some other information like your catalogue number
- As a performer you should check that you are listed on every release you are on, as this can often be missed.
Some terms explained
ISRC – is a unique code for every separate recording. These can be assigned automatically by your digital distributor. Otherwise, PPL can assign you the unique 3 digit code and you can make the rest yourself. The important thing to remember is that you only create one ISRC per recording.
e.g. GBXXX1200001 GB(territory) XXX (unique 3 digit code for each rights holder) 12 (year) 00001 (number of recording in that year)
UPC/EAN – is the barcode number. You can get a barcode number from your digital distributor or your CD duplicator
P. denotes the year of the copyright in recording
© denotes that copyright exists in the overall product
PPL – Phonographic Performance Limited
VPL – Visible Panty Line (Just checking you’re still with me. As well as that it also stands for Video Performance Limited)
PRS – Performing Rights Society
MCPS – Mechanical Copyright Protection Society
PPD – Published Price To Dealer
AP2 – License issued by MCPS to make physical product
Catalogue number – Your personal code to catalogue your releases e.g. XXXX009CD (XXXX – stands for the label, 009 – the number of release, CD – the format)
If you want to read more of this sort of thing check out my other articles here
Next week: How To Get Paid Part 2 – Selling Your Music