Music and the Law

What You Need to Do to Make Money with Your Recordings

You’ve recorded a song worthy of releasing and want to make money from all your hard work. So, now what?

Historically, major labels and large independent distributors held the key to recording music and worldwide distribution. With the advent of the internet and changes in recording technology, the game has completely changed and anyone with a very modest budget can create a professional quality recording and distribute their music worldwide.

THE BASICS
Music attorneys are commonly hired by artists in search of a pay day and there’s lots to know about how to get paid for your music. When you release music independently, you don’t have a label to be sure you’ve covered all your bases. The good news is that most of what you need to know isn’t rocket science, and some basics can go a long way to make sure your music sales are counted and you’re collecting all your royalties.

Own the Rights or Get a License
First, if you want to release your music on physical formats like CD, vinyl, cassettes, or via Digital Service Providers or “DSPs” like Spotify, Apple Music, or iTunes, you need to have the right to release the recording in the first place. That means you need to have the rights to the sound recording copyright, commonly referred to as the “masters” or “SR” copyright. You also need the rights to the underlying song itself, the composition copyright, also referred to as the “Performing Arts” or “PA” copyright. If you wrote and recorded the song entirely by yourself without using any samples (samples are using someone else’s recording, beat etc. in yours) you’re probably good to go. If the song is a cover, you may be able to obtain a compulsory mechanical license for the PA side (see my previous article on How to Obtain a License to Release a Cover Song”). Once you’re sure you have the necessary rights in place it’s time to find an independent distributor.

Find an Independent Distributor and Give Credit
There are many independent distributors available to musician consumers. Some of the more popular distributors include CD Baby, Distro Kid, and Tune Core. Recently Avid (the company that makes Pro Tools—one of the most popular Digital Area Workstations or DAWS)—also got into the game. Most of these distributors charge a percentage of sales and/or a nominal one-time or monthly fee and take care of distributing your music to all the DSPs you select. There are also bigger distributors, like the Orchard owned by Sony, that work with many independent artists and labels. There’s a wide range of services these individual companies offer, so it’s best to do your research and find a distributor that fits your specific situation. Regardless of who you choose, what’s most important is that the information you give the distributor is accurate and that all songwriters, producers, and featured artists are credited properly so DSPs know who to pay.

Content ID
Each song you release will need an International Standard Recording Code or ISRC code, which is a unique identifier for individual recordings used for sales tracking. Similarly, each album or stand-alone single will also need a Universal Product Code or UPC,` another number used in sales tracking for an entire product.

Most of the consumer-based distributors mentioned above offer ISRC and UPC codes as part of their distribution packages because the DSPs require them to input new content in their systems. However, if you use the numbers issued by your distributor, that company is identified by the code, not yours. So, if you plan on releasing a lot of material, are starting a label, or simply want to have the ability to issue your own codes, you can purchase the ability to generate your own UPC from GS1 and ISRCs from ISRC.com.

Make Sure Your Songs Are Registered
In addition, it’s important to register your release with Nielsen’s Soundscan, which tracks the sales of singles and albums. Registration is free and the only requirement for registration on soundscan.com is that the work has both a UPC and ISRC codes. So, if you want to have even a chance to make it on one of the Billboard sales charts, this step is necessary because that’s where Billboard gets their sales data.

Nielson offers via Broadcast Data Systems or BDS monitoring of Radio, television, and internet airplay of songs, so you’ll need to virtually “encode” your music with BDS to track those areas. Billboard also gets their metrics for charts like the Billboard Hot 100 from BDS. Currently to encode to BDS, they require an email requesting a login, but it’s still free! There are many other tracking systems, another radio notable is Mediabase.

You’ll also want to register your recording with Sound Exchange, which collects and distributes digital performance royalties on behalf of recording artists (for the master side).

If releasing an original composition, another important step is to make sure you’ve registered your song with your performing rights organization, or PRO. PROs collect money on behalf of music publishers and songwriters for public performances. The two big PROs are ASCAP and BMI; there’s also SESAC and a handful of other smaller organizations.

The Mechanical Licensing Collecting or the MLC is a new entity that launched in January 2021, which began administering blanket mechanical licenses with DSPs in the United States to pay songwriters, composers, lyricists, and music publishers. So, you’ll want to be sure to register with the MLC if you’re releasing an original composition as well.

Copyright Registration
Lastly, an important step in protecting your work and making sure you get paid is registering your copyright with the US Copyright office. It’s important to register your copyright, especially if you have to sue someone for copyright infringement. You can only collect statutory damages and attorney’s fees if your copyright is registered with the Copyright office. In other words, you’ll likely be able to get a lot more money in the event someone infringes on your copyright if your copyright is registered when you sue. Registering a copyright also helps establish a record of ownership (i.e., proof) that you’re the rightful copyright owner.

If you’re releasing an original song, you may obtain two copyrights—one for the PA and one for the SR as defined above. If you recorded a cover song, you could still register the copyright for the SR because you created the recording even though you don’t own the copyright to the underlying composition (the song itself).

Final Comments
While we’ve covered a lot, this is not meant to be an all-inclusive checklist of what you need to do to monetize your music, it’s merely a starting point… and, of course, none of the information covered above matters if no one is buying or streaming your music because there will be nothing to collect.

But a word of caution when you go to market your music: do not buy streams, use bots, or any other means to artificially inflate your streams, downloads, or sales because it will more than likely backfire. Distributors and/or DSPs monitor their platforms for irregularities and will typically remove songs from their platforms when artists get caught cheating the system and they don’t get paid. Not knowing who you hired was using these types of tactics is not an excuse. So, be careful who you choose to work with on marketing your music, and if it sounds too good to be true, it probably is!

About Brian Witkin
Brian Witkin runs a boutique entertainment law firm in San Diego. He is also a musician, producer, and CEO of Pacific Records. Brian has spent nearly two decades in the record business and is a Grammy® Voting Member of the Recording Academy. Brian’s father, Joe Witkin, was the original keyboard player of Sha Na Na, who performed at the iconic Woodstock Festival in 1969.

Note: This article is for general informational purposes only and does not establish an attorney-client relationship. The information is deemed reliable but not guaranteed. Every situation is different, and the general information contained in this article may not apply to your specific situation. The author and publisher assume no responsibility for actions taken based upon the contents of this article. Seek the advice of counsel for your specific situation.

©Law Offices of Brian A. Witkin 2022.

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