Do Internet Radio Stations Pay Royalties


Hi. If you are an artist songwriter or music producer you need to read this article I wrote. Because I reveal if you should get internet radio royalties.

Yes, Internet radio stations do pay royalties. Twice. We have two kinds of fees: A) Publisher royalties and B) recording artist royalties AKA “mechanical duplication royalties.” 

How Are Internet Royalties Collected?

Royalties, in general, are collected by the PRO (performance rights organizations) of each country. In the US, the most popular PRO’s are ASCAP, BMI, and SESAC. 

How are Mechanical duplication Royalties collected?

Mechanical royalties are created when music is sold in a physical form or downloaded as a permanent digital download. Mechanical royalties are paid to SoundExchange. A company created via an act of Congres. This company is the sole nexus for the collection of mechanical duplication royalties for internet broadcast radio stations.

How Much Do Songwriters Get Paid for Radio Play?

In the US, large radio stations pay about $0.12 (12 cents) per radio play, and college stations pay about half of that. 

From the 12 cents, half of the money goes to the songwriter(s), and the other half goes to the publisher, the artist themselves get paid only if they helped to write the song.

Furthermore, if the artist owns their own publishing company and also writes their own songs, they will earn a full $0.12 each time their songs are played on a major radio station. 

PS Songwriters and publishers and not artists/performers get paid from “radio royalties.” That is because the ones that write the songs are not the ones performing them. Thus music artists don’t receive public performance royalties.

Have a look at this article I wrote How Much Do Artists Make on the Radio in 2020? the Truth! <- Psst Click here 🙂

Artist Do Get Digital Performance Royalties (Internet Radio and Streaming Services)

This is where it might become a bit confusing. The way copyright regulation stands, songs that are played on the radio (FM/AM) pay public performance royalties only to songwriters and publishers and not to the performer/artist.

However, both artists and songwriters receive digital performance royalties from internet radio and streaming services such as Spotify, Tidal or Pandora.

Lastly, the amount per play for digital performance royalties is not set at a fixed rate. Instead, each streaming service has its own payment rate, which dramatically varies from service to service. But wouldn’t it be better if there was a fixed rate set for all.

How Do Radio Stations Make Money?

1) From Advertisements. The most significant revenue-driven stream for radio stations is advertising. This is true for both Internet radio stations and on-air radio stations. 

2) From other modern income sources. Because of the rise of streaming services, Internet and on-air radio stations struggled to make a profit from traditional ad sales. That’s why they’ve incorporated other income models such as affiliate programs, participating in advertising networks, or selling graphic advertisements on the radio’s website.

3) From Special events. It’s not uncommon for radio stations to hold special events. These events that are often sponsored are crafted to attract new listeners, sell merchandise, and derive money from ticket sales. 

Common special event themes may include gala dinners, cruisers, VIP parties, and more.

2020 Q1 Internet Radio Report

In the first quarter of 2020, SoundExchange paid $224 million to 29,102 collectors. SoundExchange also reported 9,507 registrations in Q1 2020. 

Make Sure to Insert All the Metadata to Collect Your Internet Royalties

Engagement familiar with metadata helps search and find audio tracks easily and also helps with royalty reporting. In other words, proper and complete metadata ensures that each act receives proper compensation. SoundExchange requires the following data:

  • Composer
  • Duration
  • Country of Recording/Fixation
  • Copyright Owner Country of Nationality
  • Non-U.S. Territories of Collection Rights
  • Country/Countries of First Release/Publication

When registering at SoundExchange, if you are an artist and you own the master recordings, you want to register as a performer and a sound recording copyright owner. This is important because it ensures that you will receive all the royalties you are entitled to.

BONUS SECTION:

You Want to Collect These Three Royalties

When a distributor is used for the placement of a song to online platforms such as Apple Music, Tidal, or Spotify, three royalties will be collected:

  1. Mechanical royalties
  2. Artist/manager royalties
  3. Performance royalties

And If you want to receive these three types of royalties, you will need to work with the following three services:

  1. PRO (Performance right organization
  2. A distributor
  3. A publishing administrator

Performance rights organizations collect performance royalties. These royalties are driven from radio play, restaurants, film TV placements, bars, and live venues. Corporate organizations in the years include BMI and ASCAP.

Distributors such as CDbaby or TuneCore help music professionals to submit the tracks to online streaming platforms. Then the collective royalties for the artists.

Publishing Administrators

Music publishing administrators are responsible for registering, administrating, and licensing compositions. They are also responsible for correcting publishing royalties for the songwriters they represent.

The role of the publishing administrator it’s much more than simply collecting royalties. A composition can have more than 100 groups of revenue streams. Publishing administrators help you not only manage those streams but also monetize track and collect your income.

Thank you for stopping by 🙂

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