How To Get Paid Part 1 – Royalty Collecting Societies

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.

PRS

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.

PRS Website

MCPS

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.

MCPS website

PPL/VPL

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:

  1. Join PPL/VPL as a performer
  2. Join PPL/VPL as a rights holder
  3. With your rights holder hat on register your recordings – this is done via the PPL website. Remember to include ISRC codes.
  4. Register the performers on the recordings
  5. 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
  6. As a performer you should check that you are listed on every release you are on, as this can often be missed.

PPL/VPL website

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

Al

I am a player, producer, label boss and staunch supporter of the independent community. In the interests of transparency, should I post any of my own material, my labels are Ambiguous Records and CRC Music. I am also on the board of AIM which is the trade body that looks after all the UK Independent labels. Read More...

9 Comments

  1. This is great as I was trying to find more info on this last week good read, great post thanks

    Nick

  2. Al

    Thanks Nick, glad it was of use. Next week is on selling your music
    Al

  3. Great series this – maybe worth mentioning that PRS and MCPS re-branded as ‘PRS for Music’, just to confuse matters more. From their site:

    Three companies exist under the PRS for Music umbrella:
    Performing Right Society Limited (PRS)
    Mechanical-Copyright Protection Society Limited (MCPS)
    The MCPS-PRS Alliance Limited (the Alliance)

  4. Al

    Thanks William. I’m waiting for the PPLPRSMCPS alliance!
    MCPPPPRSSL perhaps…

  5. Robert Grice

    Hi there

    I co wrote and produced a song “Paradise See The Light” that was successfully released by independent label Turbulence Records back in 2004. They then did a 50/50 license deal with AATW Records in 2006, the publishing was signed on a 10 year deal with Turbulence publishing and was supposed to be collected by a 3rd party publishing company. the publishing royalties stopped in 2008 but my track has been on lots of compilations since and the track was released in Australia a couple of years ago. Turbulence say that AATW which is now owned by Universal records don’t respond to there emails. How do I get my royalties? and can I now collect my own publishing now its has been over 10 years since I signed my original deal?

    Thanks for any advice
    Rob Grice

  6. Thanks for your nice writing. I love to read. As I am professional photographer selling royalty stock images and earning extra coin. I am happy with my work and feel to explore my services.

  7. Hi, thanks for a great article. This stuff can be so confusing especially as the music industry is now so different than it was when all these terms and societies were invented.

    If I’ve written, performed, self-recorded, released and published a track, do I need to, or should I, join both the PPL and PRS to collect all of the due royalties?

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