For most U.S. songwriters and recordings artists, initial activity and success almost always comes from activity in the United States. Radio, television and Internet performances, record sales (both physical sales and downloads), synch licenses for songs in films, television, video games and advertising commercials – all of these generate royalties in the U.S. – sometimes large as in the case of a hit song or television theme - other times minimal as in the case of a webcast performance.
But what happens when your song is played on a radio station in Canada, the U.K. or Ireland, or is in an independent film released in movie theaters in France, Germany, Japan or Australia, or any other country of the world for that matter?
Are royalties being collected? And by whom? What do you have to do to get paid? Those are the questions you need answers to when dealing with any activity in the foreign marketplace.
Foreign Country Royalty Collection Organizations
Performances of U.S. writers’ works in foreign territories can be a good and sometimes major source of songwriter and composer income.
To collect it though you have to know what you are doing as every country of the world has its own procedures, policies and laws governing the licensing, performance and sale of music in its territory. In addition, every country has its own collection societies for the negotiation, collection and distribution of performance and mechanical monies – both for its own writer and publisher members as well as members of U.S. collection societies.
These foreign collection societies have payment rules many times very different from those in the U.S. in addition to sometimes taking significant deductions from U.S. writers and publishers royalties prior to sending the money back to the U.S. Some of these societies are very transparent whereas others are not.
Mechanical Royalties (Physical Record Sales and Downloads)
In practically every country in the world, there is a mechanical royalty society collecting for songwriters and music publishers for the sale of songs on physical singles and albums as well as downloads of single tracks and albums.
As opposed to the 9.1¢ statutory writer and publisher statutory rate paid by a record label for each song sold in the U.S., foreign countries normally base their payments on a percentage of the RSP (Retail Sales Price) or PPD (Purchase Price to Dealer) of the track or album. For example, in the U.K. the percentage for the sale of physical product is 8.5% of the dealer price of an album with Europe on a 9.009% formula. In Canada, the song rate is 8.3¢ Canadian per physical track sold.
If the song is sold as a download though, entirely different rates apply – a situation very different from the uniform U.S. rate of 9.1¢ for both physical and download sales. In Canada, the rate is 12.2% of the price paid by consumers and or subscribers whereas in the U.K., the rate is 8% of gross revenue.
Performance Royalties (Radio and Television)
In the U.S., 3 separate performing right organizations (known as PROs) – ASCAP, BMI, and SESAC – collect for songwriters, composers and music publishers for performances of their works on radio, television, live concerts, websites, airlines, etc.
Outside the U.S., each country has their own performing right organization negotiating fees and collecting royalties for the use of music in their territory. For example, SACEM collects in France, SOCAN in Canada, APRA in Australia and New Zealand, GEMA in Germany, SACM in Mexico, IMRO in Ireland and CASH in Hong Kong, to name but a few.
Through reciprocal agreements that ASCAP, BMI, and SESAC have with every major PRO of the world, U.S. writers’ works are represented and collected for in every country of the world with the money being sent by the local PRO to ASCAP, BMI, or SESAC depending upon which organization a U.S. writer belongs to.
Similarly, these agreements cover foreign country writers when their works are performed in the United States. For example, a U.K. writer member of the English Society PRS for Music or a Canadian writer member of SOCAN, would be covered by ASCAP, BMI, or SESAC in the U.S. with the money being forwarded to each writer’s foreign society after it has been collected.
To receive these monies, a U.S. writer must be a member of ASCAP, BMI, or SESAC. For foreign country writers, they must choose which PRO in the U.S. they want to collect for them. In the absence of a choice by the writer, the publisher will register the work based on its preference. If no choice is made, the song will default to ASCAP for collection and payment.
Money
Though most songwriters receive modest or little royalties for their songs performed outside the U.S., successful writers can make millions of dollars over the life of a song for foreign country performances and sales.
To give you an example of the type of monies being collected, in 2009 over 600 million dollars was forwarded to ASCAP, BMI, and SESAC for foreign performances of U.S. works. Most of the money is writer money as many publishers collect their money directly from each foreign collection society.
As to individual activity, a major worldwide hit song can generate well over $1,000,000 in foreign radio and television performance monies with a blockbuster feature film generating in excess of $500,000 composer royalties for foreign theatrical (movie theatre) performances alone during the initial year of activity. Putting these high end figures aside, it is important to know that tens of thousands of U.S. writers and publishers receive between $1 and $100,000 in foreign royalties each year for performances of their works on radio and television stations, live performances and website transmissions among many other types of uses.
Music Publishers
For many writers who have their own publishing companies or are signed to a U.S. publisher, they will make a deal with a foreign country publisher (a “sub-publisher”) to act on their behalf in that territory. The foreign sub-publishers register songs with the local collection societies, collect mechanical royalties, negotiate licenses and try to get new uses of a writer’s works (local recordings, television uses, etc.). These sub-publishers take a fee (based on a negotiated percentage of receipts) and send the rest of the money back to the U.S. publisher who then shares it with the writer.
Summary
Once your song is released outside the U.S., it is essential that you have some idea as to how things work in foreign territories. It is also essential that you have a representative (music publisher, lawyer, manager, etc.) who is experienced and knowledgeable in the ins and outs of foreign royalties. That is the only way that you will get what you are due – whether it is $10.00 or $10,000,000 – for the worldwide performances, licenses and sales of your works.
Never forget, real success is worldwide and you need to know how the business works outside of the United States.
© 2010 Jeff Brabec, Todd Brabec
Information contained in this article is from the Jeff and Todd Brabec book "Music, Money, And Success: The Insider's Guide To Making Money In The Music Business" (Schirmer Trade Books/Music Sales/505 pages/6th Edition). See also the Brabecs’ website: www.MusicAndMoney.com.
