How to Claim Your Song Royalties

The music industry has experienced continuous growth, reaching its seventh consecutive year of increase in 2023. According to the BBC, global music revenues grew at the fastest rate in over two decades, reaching nearly $26 billion. This growth included the first increase in CD sales in the streaming era and 523 million paid subscribers to services like Spotify.

Claiming your song royalties is essential to ensure you get paid for your creative work. In this blog, we’ll explain how different platforms pay, how you can receive your payments, which platforms are most commonly used for receiving payments, and how having a business in the United States can benefit you.

How Different Platforms Pay

• Spotify: Uses a "pro-rata" model to pay artists. The revenue generated from subscriptions and ads is distributed among artists based on the number of streams they receive compared to the total streams on the platform. The average payment per stream on Spotify ranges from $0.003 to $0.005.
• Apple Music: Follows a similar model, paying approximately $0.00735 per stream. Payments are distributed monthly and based on the artist's market share.
• YouTube Music: Pays creators through its monetization program, which includes ad and subscription revenue. The average payment per stream is around $0.001.
• Amazon Music: Pays around $0.00402 per stream. Payments are distributed monthly and calculated based on the number of streams and the user’s subscription type.

How to Receive Your Royalties

Music Distributors

To receive your royalty payments, it’s essential to work with a music distributor that distributes your songs on streaming platforms. Some of the most popular include:

• TuneCore: Allows artists to retain 100% of their earnings and charges an annual fee per album or single.
• DistroKid: Charges a fixed annual fee and allows unlimited music uploads, retaining 100% of the earnings.
• CD Baby: Charges a fee per album or single and retains a small percentage of the earnings.

Rights Management Societies

Joining a rights management society is crucial for claiming public performance royalties. These organizations collect and distribute royalties when your music is played on the radio, television, and other public media.

• ASCAP (United States)
• BMI (United States)
• SACM (Mexico)
• SADAIC (Argentina)
• SGAE (Spain)

Most Used Platforms for Receiving Payments

• PayPal: One of the most widely used platforms due to its ease of use and global acceptance. It allows you to receive payments from distributors and rights management societies directly to your bank account.
• TransferWise (Wise): Offers competitive exchange rates and low fees for international transfers, making it ideal for artists receiving payments from multiple countries.
• Payoneer: Another popular platform that allows you to receive payments from streaming platforms and distributors. It offers the option to transfer funds to your bank account or use a Payoneer debit card.

Benefits of Having a Business in the United States

Tax Reduction

Creating a business in the United States, such as an LLC, can offer significant tax benefits. Income taxes can be lower compared to many Latin American countries, allowing you to retain more of your earnings.

Access to Financial Services

Having a business in the U.S. allows you access to a wide range of financial services, including business bank accounts and lines of credit, which can be difficult to obtain in other countries.

Credibility and Trust

A business registered in the United States can increase your credibility and trust among business partners and streaming platforms, facilitating collaborations and licensing agreements.

Simplification of International Payments

With a business in the U.S., you can simplify receiving international payments, avoiding high transfer fees and long wait times.

Claiming your song royalties is a crucial step to ensure you get fair pay for your creative work. Understanding how different streaming platforms work, how to receive your payments, and the benefits of having a business in the United States can make a significant difference in your income as an artist. By professionalizing your music career and protecting your rights, you can focus on what you love most: creating music.

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