Updated: Nov 19, 2021
The idea of leasing music tracks, or "beats" as they get called nowadays is a pretty new concept, and the business hasn’t brought in new ways to handle that idea smoothly. A lot of the things in place in the music business are old, and struggle to deal with the digital age. To show you what I mean about being old, let’s look at the word “mechanicals”.
Ever seen a cowboy movie, where’s there a piano that plays music by itself in a saloon, and the music is on a paper roll with a bunch of holes in it? Mechanicals is the term that came from it being required to pay a publisher to reproduce music in a piano roll - THAT is what we’re dealing with here, so don’t be surprised your leased beats are going to have issues.
The two kinds of royalty.
Mechanical Royalties are paid for the right to reproduce a composition through the process of recording, manufacturing, and distributing the work. That would be…that old ass piano roll, then throughout history - sheet music, vinyl, tape, CD, or today - a digital version.
There’s a second kind of royalties called Performance Royalties. Again like the name, it started with live performances of a song, and still does. But in our case it also means when a song is played on radio, tv, in a bar, restaurant, or someone plays it on a streaming service.
The important paragraph.
When your music is played on a streaming service it generates a royalty of BOTH kinds if someone chooses to play that song. If the song is played on something like Pandora’s radio where the listener doesn’t choose, however - only the mechanical is paid. Read this again. You agreed your split on Distrokid, or whatever so everything's cool, right?
No. Distrokid (and most distros - not bashing The Kid, we love ‘em ) does NOT collect and pay out your performance royalties. They are a distributor, not a publisher. This is why you need to either have a publishing deal, set up a publishing company yourself, use a service like SongTrust or join a Performing Rights Organisation ( commonly called a “PRO” ) like BMI or ASCAP.
If you do not do this you are leaving money on the table. Why do you think Uncle Adam has a house? He never leaves money on the table.
In the US unless you have a publishing deal, or want to set up your own publishing company, join BMI it’s free and here is the link.
If you're in the UK - join the PRS
If you’re with me so far, congratulations, maybe you want to be in business of music after all and not just make random beats until your CBD business/crypto moons/server career takes off.
Now we know the two kinds of royalty, but we need to take a step back, and look at what you do. Each recorded song has two kinds of copyright:
The Publishing split
The Publishing is about the composition, so that’s your beat - part one, and the artists lyrics - part two. The Master is the finished master recording of the particular song that is made up of those two parts.
In the beat producer world what is unusual is there can be several compositions, and several masters using THE SAME BEAT.
It only really used to happen with novelty records, but now is very common, and why things like YouTube’s content ID can be a pain in the ass for both producers and artists - the old cowboy music business is not set up to deal with it. That's probably a big enough subject for another article...
This is where it’s up to you to take care of business in your lease agreement; pretty often everything is split 50/50 between artist and producer, or producer(s) depending on who did what.
It’s up to you what you choose to give up, or not, and how much but Uncle Adam here is going to tell you to take care of business up front every time and make everything super clear from the start.
You need to agree % the artist that uses your beat has to pay mechanicals to you, the producer.
You need to cover the publishing split to get those performance royalties and join the PRO. Register your beats when you create them.
Hope this helped, and if you ever need a world class mix, you know who to ask.