All the world’s a stage, but COVID-19 has robbed entertainers of the chance to perform on the majority of them. From super-stars to fledgling performers, LGBTQ and ally artists are trying to figure out how to deal with all the lost income.
Live performance is big business, $30 billion dollars globally, and it has grounded to a screeching halt. For entertainers, the internet has become the primary performance platform and income producer for the foreseeable future.
Digital service providers like Spotify and iTunes rely on musical content to attract traffic, which attracts advertising dollars from companies promoting products and services. Conversely, each time a song is streamed or downloaded digitally, they’re legally obligated to pay a royalty to the music’s rightsholder.
Sony earned more than $1 billion in the first quarter of 2020 on digital music, a portion of which belongs to the artists and rightsholders of the music. In the past, artists, composers, music publishers and other rights holders were not paid for content, but 2018’s Music Modernization Act changed that.
It added income from digital streaming and downloads to traditional royalty streams such as terrestrial radio airplay, live performance, “elevator” music and jukebox plays. Performing rights organizations collect performance royalties and identify the rightsholders through a process called audio fingerprinting, a system of codes and registration numbers linked to the songs.
Every day over 40,000 songs are added to an existing global catalogue. If the audio fingerprinting information is incorrect or incomplete, digital service providers cannot identify rightsholders and pay royalties. The “orphaned” revenue, known as black box royalties, is held in special accounts in the hopes of finding the owners.
According to the collection organization Songtrust, current black box royalties total a growing $250 million globally. Some collection agencies attempt to find the rightsholders, but most give up after a few feeble attempts because trillions of bytes of data must be reviewed to identify content owners.
There are a number of ways to earn royalties and licenses are issued for the different uses, including for songs used by drag and other performers who lip sync on social media. A sync license must be issued for each song that’s performed, entitling the rightsholder to a negotiated fee whenever the video is played.
It isn’t enough for a performer to share disclaimers that they don’t own the rights to the music. Social media platforms will still block or remove the videos, something that’s enforced by record companies. They simply see that the drag performer did not write or record the vocal. Without a license, they’re infringing on the copyright and the rightsholder is not being paid for the use of their intellectual property.
So, how can rightsholders collect royalties? Strict adherence to the digital fingerprinting process.
Artists must secure the right codes and registration numbers, assigning and embedding them in their songs while working with a collection management organization. This creates a path for royalties to flow from digital service providers to collection management organizations before distribution to performers, composers, music publishers, record companies, producers or other entities owning and controlling the copyrights. The system is based on a rather old and convoluted process that was used to collect radio airplay and live performance royalties.
For sound or master recordings you must register your master with the Library of Congress, using the assigned number each time you upload a song to any digital service provider. This allows royalties to be paid to featured artists, master owners and non-featured performers. A well-respected performance rights organization known as Sound Exchange collects and pays out this type of revenue.
Artists must also secure an ISRC code for their sound recordings, the equivalent to UPC codes for physical products. The code is embedded into the actual master recording and scanned each time the song is played, streamed or downloaded. The embedding process is usually done in the studio.
ISRC codes are acquired by visiting ISRC.org and signing up. If artists work through a music distributor, they will assign and embed the codes on their behalf.
The actual composition, the song, music and lyrics, requires a different code. An ISWC code establishes ownership of its copyright, ensuring that all composers are paid a performance royalty each time a song is streamed or downloaded.
When artists sign up with a performance rights organization, like ASCAP, BMI or SESAC, they will assign ISWC codes for you. You can secure ISWC codes through ASCAP without being a member, but it is very difficult if not impossible to collect performance royalties on your own. Thousands of sites must be monitored.
Sound recording copyright registration numbers, ISRC codes, ISWC codes and a membership in a performance rights agency will keep you on track to receive royalties you have earned globally. Simply put, it’s all about making sure you take an active role in establishing ownership of your intellectual properties.
The process is tedious and sometimes confusing, but it is the only way you will be paid for the use of your music. Don’t contribute to the ever-growing black box royalty account. Claim what is yours and enjoy the fruits of your labor.
Be prepared and positioned to earn. Be ready for success with all its perks, problems and responsibilities. If you need help, reach out to an industry expert; entertainment business coaches, music publishers, client service reps at the performing rights agencies, or artist managers can help. Get the information you need and start earning.
Camille Barbone is a coach and consultant with 25+ years of entertainment business experience. She has worked for major companies including Sony, Universal, Warner Chappell and others and has developed and managed high-profile artists such as Madonna, produced major concerts and provided music for major motion pictures.
Her coaching practice provides guidance and structure to individuals and companies aspiring to success in the entertainment industry. For more information, visit CamilleBarbone.com or email Office@CamilleBarbone.com.
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