How to Claim Your Royalties on Spotify

Spotify has become an essential tool for artists worldwide; it is the most used streaming platform, boasting over 365 million active monthly users. Currently, it has more than 7 million registered artists, allowing them greater visibility and the opportunity to monetize their music effectively.

But how do you claim royalties? This process can be a bit confusing if you’re not familiar with the necessary steps, and it is crucial for any artist or producer to ensure they receive proper compensation for their work.

In this article, we’ll explain how to claim your royalties on Spotify, the steps you need to follow, and why it can be beneficial to create a business in the United States to manage your income.

Steps to Claim Your Royalties on Spotify

Distribute Your Music Through a Distributor

To make your music available on Spotify and other streaming platforms, you first need a digital distributor or aggregator. These companies act as intermediaries between you and the streaming platforms. Some of the most popular aggregators include:

• TuneCore
• CD Baby
• DistroKid
• Symphonic Distribution

When you upload your music through an aggregator, they will distribute your songs to Spotify and other platforms and collect the royalties generated.

Register Your Songs with a Rights Management Society

It’s crucial to register your songs with a rights management society to ensure you receive all the royalties you’re entitled to. Some of the most well-known societies include:

• ASCAP (American Society of Composers, Authors, and Publishers)
• BMI (Broadcast Music, Inc.)
• SESAC (Society of European Stage Authors and Composers)

These societies collect and distribute royalties for the public performance of your songs.

Ensure Your Metadata is Correct

Metadata is the information that accompanies your music, such as the artist name, song title, composers, and producers. It’s crucial that this data is correct and complete, as any errors can affect the calculation and distribution of your royalties.

Claim Your Streaming Royalties

Once your music is on Spotify and your metadata is correctly registered, you can claim your streaming royalties. This is done through the dashboard of your digital distributor. Each aggregator has its own system for reporting and paying royalties, so it’s important to familiarize yourself with the tools your provider offers.

Monitor Your Income

It’s essential to regularly monitor your income to ensure you’re receiving the correct payment for your streams. Most digital aggregators provide detailed reports that allow you to see how many times your music has been played and how much you’ve earned.

Benefits of Creating a Business in the United States to Manage Your Royalties

Tax Advantages

Creating a business in the United States can offer numerous tax benefits. Depending on how you structure your business, you can benefit from tax deductions and lower tax rates. The most common business structures include:

• LLC (Limited Liability Company): Offers personal asset protection and tax flexibility. LLCs allow company profits to be distributed directly to members without the company itself paying federal income taxes. This means profits are reported on members' personal tax returns, avoiding double taxation.
• Corporation (C-Corp and S-Corp): Suitable for artists seeking rapid growth and investment capital. C-Corps pay corporate income taxes but can offer shares to investors to attract capital. S-Corps allow income, losses, and other deductions to pass through to shareholders and be reported on their personal tax returns, also avoiding double taxation.

Asset Protection

Having a business in the United States can offer greater protection for your personal assets. In case of legal disputes or financial problems, your personal assets will be protected as they are separated from the company's assets. This separation can protect your personal belongings from the debts and obligations of the company.

Credibility and Professionalism

Operating under a corporate entity in the United States can increase your credibility and professionalism. This can open doors to new opportunities, collaborations, and more favorable contracts. Potential partners, investors, and clients often perceive a formally registered company as more reliable and stable.

Ease of International Business

The United States has an advanced financial system and robust infrastructure for managing international transactions. This can facilitate the management of your royalties and other income from multiple countries. Additionally, U.S. financial institutions offer advanced services that can help you manage your finances more efficiently and securely.

Claiming your royalties on Spotify requires following a series of key steps, from distributing your music through an aggregator to monitoring your income. Additionally, creating a business in the United States can offer you tax benefits, asset protection, and greater market credibility.

At Prodezk, we offer personalized service at every step of the way, ensuring a hassle-free experience in the U.S.